Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union
[2015] FCAFC 59
•1 May 2015
FEDERAL COURT OF AUSTRALIA
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59
Citation: Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 Parties: DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION and COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA File number: QUD 257 of 2013 Judges: DOWSETT, GREENWOOD AND WIGNEY JJ Date of judgment: 1 May 2015 Catchwords: INDUSTRIAL LAW – Building and Construction Industry Improvement Act 2005 (Cth) – unlawful industrial action – admitted contraventions – civil penalties – exercise of judicial discretion in sentencing – agreed penalties and submissions as to penalty – effect of Barbaro v The Queen Legislation: Building and Construction Industry Improvement Act 2005 (Cth) ss 3, 4, 38, 48, 49, 50, 51, 69
Commonwealth Criminal Code
Competition and Consumer Act 2010 (Cth)
Corporations Act2001 (Cth)
Customs Act 1901 (Cth) s 234
Evidence Act 1995 (Cth) s 191
Fair Work Act 2009 (Cth)
Federal Court of Australia Act 1976 (Cth) ss 20(1A), 37M, 37N
Federal Court Rules 2011
Petroleum Retail Marketing Sites Act 1980 (Cth)
Superannuation Industry (Supervision) Act 1993 (Cth)
Trade Practices Act 1974 (Cth)Cases cited: Attorney‑General for the Commonwealth v Alinta Limited (2008) 233 CLR 542
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR ¶41-815
Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] ATPR ¶42-449
Australian Competition & Consumer Commission v Colgate-Palmolive Pty Ltd [2002] ATPR ¶41-880
Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2014] ATPR ¶42-469Australian Competition and Consumer Commission v Flight Centre Limited (No 3) [2014] FCA 292
Australian Competition and Consumer Commission v Jewellery Group Pty Limited (No 2) [2013] FCA 14
Australian Competition and Consumer Commission v Mandurvit Pty Ltd [2014] FCA 464
Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345
Australian Securities and Investments Commission v Ingleby (2013) 275 FLR 171
Australian Securities and Investments Commission v Plymin (2003) 175 FLR 124
Barbaro v The Queen (2014) 305 ALR 323
Brown v Allweather Mechanical Grouting Co. Ld. [1954] 2 QB 443
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 216 CLR 161
Chipp (Minister for Customs and Excise) v Campbell Beaumont Trading Pty. Ltd. (1970) 44 ALJR 72
CMB v Attorney General for New South Wales (2015) 317 ALR 308
Commissioner for Consumer Protection v Susilo [2014] WASC 50
Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160
Director of Public Prosecutions (Cth) v Gregory (2011) 250 FLR 169
EPA v Barnes [2006] NSWCCA 246
Gould v Brown (1998) 193 CLR 346
Grocon Constructors (Victoria) Pty Ltdv Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134
H A Bachrach Pty Limited v State of Queensland (1998) 195 CLR 547
Harris v Caladine (1991) 172 CLR 84
Hili v The Queen (2010) 242 CLR 520
House v The King (1936) 55 CLR 499
Johnson v R (2005) 205 ALR 346
L. Vogel & Son Pty Limited v Anderson (1966) 120 CLR 157
Legal Profession Complaints Committee v Love [2014] WASC 389
Matthews v R [2014] VSCA 291
Mill v R (1988) 166 CLR 59
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] ATPR ¶41-993
Minister for Aboriginal Affairs v Peko‑Wallsend Ltd (1985 – 1986) 162 CLR 24
Morley v Australian Securities and Investments Commission (2010) 247 FLR 140
Naismith v McGovern (1953) 90 CLR 336
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285
Ojielumhen v The Queen [2014] ACTCA 28
Pearce v R (1998) 194 CLR 610
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
R v Bahsa (2003) 138 A Crim R 245
R v Bibaoui [1997] 2 VR 600
R v Finnie [2002] NSWCCA 533
R v Gallagher (1991) 23 NSWLR 220
R v MacNeil-Brown (2008) 20 VR 677
R v Hammoud (2000) 118 A Crim R 66
Rich v Australian Securities and Investments Commission (2004) 220 CLR 129
SingTel Optus v Australian Competition and Consumer Commission (2012) 287 ALR 249
The Queen v Apostilides (1984) 154 CLR 563
The Queen v White; ex parte Byrnes (1963) 109 CLR 665
Thorn v The Queen (2009) 198 A Crim R 135
Trade Practices Commission v CSR Ltd [1991] ATPR ¶41‑076
Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 5) (1981) 60 FLR 38
In the matter ofVault Market Pty Ltd [2014] NSWSC 1641
Veen v The Queen (No 2) (1988) 164 CLR 465
Waterside Workers’ Federation of Australia v J. W. Alexander Limited (1918) 25 CLR 434
Whitehorn v The Queen (1983) 152 CLR 657
Yorke v Lucas (1985) 158 CLR 661Date of hearing: 11 and 12 August 2014 Date of last submissions: 14 August 2014 Place: Brisbane Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 254 Counsel for the Applicant: Mr CJ Murdoch Solicitor for the Applicant: Norton Rose Fulbright Counsel for the Respondents: Mr E White Solicitor for the Respondents: Hall Payne Lawyers Counsel for the Intervener: Mr J Gleeson SC with Mr T Begbie Solicitor for the Intervener: Australian Government Solicitor Counsel for the Contradictor: Mr C Moore SC with Ms D Forrester
Table of Corrections 11 May 2015 The quote in the final sentence in paragraph 113 has been changed from ‘… ought not to be contravened’ to ‘… ought not to be countenanced’.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
FAIR WORK DIVISION
QUD 257 of 2013
BETWEEN: DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE
ApplicantAND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First RespondentCOMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Second Respondent
JUDGES:
DOWSETT, GREENWOOD AND WIGNEY JJ
DATE OF ORDER:
1 May 2015
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.the matter be adjourned until a date to be fixed;
2.costs be reserved; and
3.the parties have liberty to apply.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
FAIR WORK DIVISION
QUD 257 of 2013
BETWEEN: DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE
ApplicantAND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First RespondentCOMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Second Respondent
JUDGES:
DOWSETT, GREENWOOD and WIGNEY JJ
DATE:
1 May 2015
PLACE:
BRISBANE
REASONS FOR JUDGMENT
THE COURT
INTRODUCTION
In these proceedings the applicant (the “Director”) alleges that the first and second respondents (respectively, “CFMEU” and “CEPU”) contravened the Building and Construction Industry Improvement Act 2005 (Cth) (the “BCII Act”) and seeks pecuniary penalties and associated declaratory relief against them. It is accepted that the Director is entitled to seek such relief. The Commonwealth of Australia was granted leave to intervene and was heard in relation to issues arising out of the decision of the High Court in Barbaro v The Queen (2014) 305 ALR 323. The Director, CFMEU and CEPU supported the Commonwealth’s submissions. Counsel were also instructed to appear to contradict the Commonwealth’s position. We will refer to the notional party represented by them as the “Contradictor”. The Court has derived considerable benefit from their submissions.
the primary issue
The primary issue addressed in these reasons is a practice which has become common in proceedings for the imposition of a pecuniary penalty. Frequently, submissions are made by the parties, often jointly, nominating the actual figure to be adopted, or the range within which it should fall. In some cases, the parties urge adoption of an agreed figure. In Barbaro the majority of the High Court (French CJ, Hayne, Kiefel and Bell JJ) held at [39] that in criminal sentencing proceedings, the prosecution should not nominate the specific sentencing result or the range within which it should fall. Their Honours’ reasons included considerations related to the proper role of the judge in the sentencing process, including the difficulties inherent in balancing a wide range of considerations, public perceptions and the proper content of submissions.
In this case, the parties have agreed upon the penalties which, they consider, should be imposed. In these reasons we consider whether the decision in Barbaro should be applied in this case. Resolution of that question will determine the relevance of the parties’ agreement to the task of fixing the amounts of the penalties. For the reasons which appear below, we have concluded that the reasoning in Barbaro applies to these proceedings, and that we should therefore have no regard to the agreed figures in fixing the amounts of the penalties to be imposed, other than to the extent that the agreement demonstrates a degree of remorse and/or cooperation on the part of each respondent. Our reasons focus upon the similarity between the “instinctive synthesis” necessarily involved in both the sentencing task and the task with which we are faced, the fact that each process involves invocation of the coercive power of the State, the associated public interest and public perceptions as to the judicial process.
THE STATEMENT OF AGREED FACTS
The Director and the respondents have filed a document headed “Statement of Agreed Facts” (the “agreed statement”). It is said to have been made for the purpose of disposing of these proceedings and for the purposes of s 191 of the Evidence Act 1995 (Cth). In particular it:
·identifies the parties to these proceedings;
·identifies persons who, at relevant times, and in various capacities, acted as officers or agents of either CFMEU or CEPU;
·identifies four relevant enterprise agreements for the purposes of s 4 of the BCII Act, namely:
•the “Abigroup Agreement”;
•the “Building North Agreement”;
•the “Expanded Agreement”; and
•the “Watpac Agreement”;
·identifies the relevant employer for each of those enterprise agreements as follows, and respectively:
•Abigroup Contractors Pty Ltd (“Abigroup”);
•Laing O’Rourke Australia Construction Pty Ltd (“Laing O’Rourke”); and
•Watpac Construction (Qld) Pty Ltd (“Watpac”);
·sets out the circumstances of admitted breaches of the BCII Act at each of three development project sites in Brisbane, namely:
•the Queensland Children’s Hospital project site (the “QCH project site”);
•the Brisbane Convention and Exhibition Centre project site (the “BCEC project site”); and
•the Queensland Institute of Medical Research project site (the “QIMR project site”);
·states that in respect of those projects sites, Abigroup was the principal contractor for the QCH project site; Laing O’Rourke was the principal contractor for the BCEC project site; and Watpac was the principal contractor for the QIMR project site;
·states that on each project site the relevant principal contractor and named sub‑contractors were engaged in “building work” as defined in the BCII Act, and employed employees to perform such work, the principal contractors, the sub‑contractors and such employees being “building industry participants” as defined in s 4 of the BCII Act;
·states that on 24, 25 and 26 May 2011, employees of each employer engaged in unlawful industrial action (as defined in the BCII Act) at each of the QCH, QIMR and BCEC project sites;
·states that named officers or agents of CFMEU engaged in unlawful industrial action in contravention of s 38 of the BCII Act in that each was knowingly concerned in, or party to unlawful industrial action by employees;
·states that as a result CFMEU contravened s 38 of the BCII Act;
·states that named officers or agents of CEPU engaged in unlawful industrial action in contravention of s 38 of the BCII Act in that each was knowingly concerned in, or party to unlawful industrial action by employees; and
·states that as a result, CEPU contravened s 38 of the BCII Act.
Whilst the agreed statement alleges “unlawful industrial action” by employees at the QCH and BCEC project sites on 24 – 26 May 2011, para 102 alleges that employees at the QIMR project site failed to perform scheduled work on only 25 – 26 May 2011. However, at paras 96 – 100, the agreed statement alleges that employees stopped work at the QIMR project site on 24, 25 and 26 May 2011. No point was taken concerning this apparent discrepancy. Given the way in which the parties have conducted the case, it may not matter.
At paras 114 – 116, under the heading “Agreed declarations and penalties”, the agreed statement asserts:
114. The Parties consent to and agree to seek from the Court declarations that:
(a)… (CFMEU) contravened, by operation of section 69(1)(b) of the BCII Act, section 38 of the BCII Act with respect to the Industrial Action on the QCH, BCEC and QIMR Projects on 24 to 26 May 2011; and
(b)… (CEPU) contravened, by operation of section 69(1)(b) of the BCII Act, section 38 of the BCII Act with respect to the Industrial Action on the QCH and QIMR Projects on 24 to 26 May 2011.
115.Pursuant to section 49(1)(a) of the BCII Act and the admissions made in [the agreed statement], the Parties consent to and agree to seek from the Court:
(a)Orders pursuant to section 49(1)(a) of the BCII Act that … (CFMEU) pay a sum of $105,000 by way of pecuniary penalty in respect of the contraventions of section 38 of the BCII Act; and
(b)Orders pursuant to section 49(1)(a) of the BCII Act that … (CEPU) pay a sum of $45,000 by way of pecuniary penalty in respect of the contraventions of section 38 of the BCII Act.
116.The parties have agreed that, subject to the discretion of the Court to fix an appropriate penalty:
(a)The penalty amounts set out above, are satisfactory, appropriate and within the permissible range in all the circumstances; and
(b)The penalties payable by the Respondents be paid to the Commonwealth pursuant to section 49(5) of the BCII Act.
The agreed statement was signed by the solicitors for the parties and dated 29 November 2013. However these proceedings were commenced on 23 May 2013. Hence the relief claimed (including the agreed pecuniary penalties) reflects (or perhaps anticipates) the relief agreed to in the agreed statement. The agreed statement is attached to these reasons.
FIRST INSTANCE PROCEEDINGS IN THE FULL COURT
On 10 April 2014 the Chief Justice directed, pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth) (the “Federal Court Act”) that in connection with this application, the original jurisdiction of the Court should be exercised by a Full Court. Such a direction may be given if the Chief Justice considers that the matter is “of sufficient importance” to justify such a direction. Since the publication of the High Court’s decision in Barbaro on 12 February 2014, there has been considerable debate within this Court, and more generally, as to the effect of that decision upon established sentencing practices in criminal matters, and upon the approach taken in this Court to the fixing of pecuniary penalties. Such debate no doubt led to the Chief Justice’s direction. Hence, in these reasons we will initially deal with that question. We will then consider the appropriate relief in this case.
We propose to address a number of discrete topics before considering the relevant submissions concerning the decision in Barbaro. Those areas are:
·the history and nature of pecuniary (or civil) penalties;
·pecuniary penalties under the BCII Act;
·the practice allegedly adopted in this Court in fixing pecuniary penalties on the application of a statutory regulator;
·purposes of punishment;
·the role of a prosecutor and/or other prosecuting authority, and the similarities and differences between such role and that of a statutory regulator seeking a pecuniary penalty;
·the effect of the decision in Barbaro;
·cases in which the decision in Barbaro has been considered; and
·evidence from regulators.
THE HISTORY AND NATURE OF PECUNIARY PENALTIES
There is a helpful outline of the history of pecuniary penalties in the summary of the Solicitor-General’s submissions in Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 351 – 353. Much of that history is derived from an article by J Randy Beck, published in vol 78 of the North Carolina Law Review at 539, especially at 567. In summary, Beck identifies the use of proceedings for the imposition of pecuniary penalties as an instrument of law enforcement at times when there was limited governmental capacity to provide such enforcement. In effect, private persons were induced to seek the imposition of pecuniary penalties for breaches, in the expectation that they would share in the penalties imposed. Beck identifies examples of such use in Roman and Anglo‑Saxon law, and more frequent use in England after the Norman Conquest. Abuses appeared at an early stage. However the practice continued in England until relatively recently.
Chapter 4 of the New Zealand Law Commission report entitled Pecuniary Penalties: Guidance for Legislative Design (NZLC R133, 2014), dated August 2014, offers the following helpful summary of the features of pecuniary penalties:
4.11Pecuniary penalties are sought by the State against its citizens, acting in and on behalf of the public interest (rather than as a litigant in its own interests). In investigating conduct that can result in a pecuniary penalty, State enforcement bodies are armed with intrusive investigative powers to identify and establish breach. For the enforcement bodies in question, those powers are the same as, or may in some ways be more profound than, the powers they use in criminal investigations.
4.12This has a number of implications for how pecuniary penalties ought to be imposed. In particular, their design needs to give appropriate recognition to the potential imbalance between the parties concerned. In some circumstances, that imbalance will be less acute than others – for example because of the resources that well-funded defendants may have at their disposal. However, while many pecuniary penalty provisions have been designed with large corporate offenders in mind, they can also be imposed on individuals, sole traders, and small- and medium-sized enterprises.
4.13It is the Commission’s view that procedural protections should not be designed with the best-armed and most capable defendant in mind. Rather, they should protect the potentially vulnerable. As we emphasise repeatedly in this Report, however, this does not mean that the relaxation of procedural protections would never be warranted depending on the particular needs of some regimes.
4.14For immediate purposes, this feature of pecuniary penalties means that describing them as “civil” is inapt. Adoption of that term has been driven by the fact that the New Zealand court system exhibits a fundamental dichotomy between civil and criminal proceedings. Any matter that is not pursued in criminal proceedings is liable to be branded, by process of elimination, as “civil” within that dichotomy. In reality, the term “civil” relates to matters concerning citizens, and “civil law” is the branch of law that deals with the resolution of legal issues between private parties. Pecuniary penalties do not arise in this context: like criminal offences, they arise within the field of public law, which concerns the relationship between the State and its citizens. Therefore, application of the term “civil” is liable to mislead. In its submission, Bell Gully expressed concern that the use of that label risks encouraging the unthinking application of civil rules, and a perception that pecuniary penalties are an easy way to punish and deter, while neatly sidestepping the rules and protections of the criminal law. We agree that is a risk.
At paras 4.16 – 4.18 the report continues:
4.16Pecuniary penalties are one of a number of orders on the statute book designed to tackle illegal conduct. Others include: criminal penalties; infringement offences; administrative penalties; compensation orders; management bans; injunctions or cease and desist orders; orders for the disposal of property; the seizure of forfeited goods; and other orders that can follow criminal charges, such as diversion, reparation, and orders that seek to remove the proceeds of criminal offending or strip any financial gain. Those orders serve different purposes and place varying emphasis on the interests of denunciation, deterrence, protection of the public, rehabilitation, reparation of harm, stripping of profit and encouragement of compliance with the law. They have a varying impact on a person’s freedom, solvency, business and property interests, reputation, and employment opportunities. Any policy decision to introduce one or more of these orders into legislation must be taken in light of the purpose they serve, and their design must take account of their varying impacts.
4.17Pecuniary penalties are primarily concerned with deterring illegal conduct. In general, it can be said that they differ from many criminal offences in this respect because, while the criminal law aims to deter, its greatest emphasis is generally on denunciation. However, this does not mean that pecuniary penalties have no denunciatory impact or purpose. Pecuniary penalties deter by the threat of punishment. They single out a person or entity as having breached the law and inflict a negative consequence. Their purpose is also therefore both deterrent and denunciatory.
4.18Although they may be used in concert with other measures – for example, compensation orders and management bans – their impact is punitive. The vast majority of penalties play no role in providing compensation for victims or repairing harm. While many have the impact of stripping financial gain, that is not the measure of the penalty. It is clear from policy documentation, legislation and case law that the actual penalty imposed should exceed mere profit-stripping. Pecuniary penalties must also be distinguished from compensatory and profit-stripping measures because they can be imposed whether or not harm has been caused, and whether or not profit has been made as a result of the law-breaking activity. Mere breach is enough.
(Footnote references have been omitted.)
The decision in Barbaro concerned criminal proceedings. For present purposes, the question is whether that decision should be applied in proceedings for the imposition of pecuniary penalties. In effect, the majority held that in criminal sentencing proceedings the prosecution should not make submissions as to the appropriate sentencing range or ultimate sentencing outcome. We will say more about that decision at a later stage. The Commonwealth submits that Barbaro should not be applied to these proceedings on the ground that they are civil, not criminal, a proposition which was expressly rejected by the New Zealand Law Commission. We agree with the Commission’s view. In any event the cases do not support such a sharp distinction. In Naismith v McGovern (1953) 90 CLR 336, the High Court was concerned with proceedings at the suit of the Commissioner of Taxation, seeking penalties for “offences” involving alleged understatement of income in a tax return and/or providing a false tax return. The taxpayer sought an order for discovery. At first instance that application was declined upon the basis that discovery would be ordered in civil proceedings, “but not to aid the prosecution of an indictment or information, or to aid the defence to it”. On appeal, the Court (Williams, Webb, Kitto and Taylor JJ), at 340 – 341, considered whether proceedings for the recovery of a penalty should be characterized as being “criminal” or “civil”. Their Honours concluded that:
The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature.
In this context, “penal” presumably means, “[i]nvolving, pertaining to, or characterized by (a) legal punishment”. See The New Shorter Oxford English Dictionary (3rd ed, 1993). Their Honours did not refer to a slightly earlier decision of a Divisional Court (Lord Goddard CJ, Lynskey and Pearson JJ) in Brown v Allweather Mechanical Grouting Co. Ld. [1954] 2 QB 443, which decision was delivered on 5 February 1953. In that case, the Court considered a provision which imposed a penalty for using a motor vehicle for a purpose which attracted a higher rate of duty than that in accordance with which duty had been paid by the user. Although the word “offence” was not used in the sub‑section which imposed the penalty, that word was used in subsequent, procedural provisions. At 447 – 448, the Lord Chief Justice said:
I do not think that the mere fact that the word “offence” is used in subsection (2) shows that it is to be regarded as a criminal offence. A failure to do something prescribed by a statue may be described as an offence although Parliament does not impose a criminal sanction upon it, but a merely pecuniary sanction which is to be recovered as a civil debt. Justices, as is well known, have in very many cases power to order the recovery of sums of money. In section 65 of the Excise Management Act, 1827, one finds that excise penalties may always be recovered before justices of the peace, but there is no indication in the section that justices are empowered to imprison or to impose a fine. It simply gives them power to impose penalties. Of course, once penalties have been imposed, if they are not paid there may be proceedings under the Debtors Act and many other Acts, and possibly under the Summary Jurisdiction Acts, and a committal to prison may be made, but that is because the penalty has not been paid. It is not a punishment for the offence itself. It is a punishment for not paying, or a means of endeavouring to compel a defendant to pay a penalty, which is a different matter.
Passages in the judgment of the Master of the Rolls in Attorney-General v Bradlaugh, to which Mr. Brown directed our attention, fully support his argument. The Master of the Rolls points out in that case that where a penalty is imposed for doing a particular act, the penalty is the only sanction, and the recovery of the penalty, if that is the only consequence, does not make the prohibited act a crime. It was far more common in those days than it is nowadays to prohibit certain acts and to impose, as the sanction, the recovery of the penalty, which the Acts very often provided could be recovered by a common informer. There were many Acts of that kind on the statute book till last year, when the Common Informers Act was passed, which abolished that particular form of public nuisance. A well‑known example of the type of Act to which I have referred was the Sunday Observance Act, under which, if a person gave a theatrical performance or certain other entertainments on Sunday he was liable to a penalty which could be sued for, and used to be sued for in recent times, by a common informer, but no one ever suggested that a criminal act had been committed.
(Footnote references have been omitted.)
Proceedings for the imposition of a pecuniary penalty are “civil” in the sense that the standard of proof is that which generally applies in civil, rather than in criminal proceedings. However, as appears from the decision of the High Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129, at least some of the “privileges” which an accused person enjoys in criminal proceedings may also be available to a person against whom the imposition of a pecuniary penalty is sought. Further, at [28] – [38] their Honours point out the difficulties in distinguishing between “punitive” and “protective” proceedings, equating such difficulties to those experienced in trying to classify all proceedings as being either civil or criminal. Their Honours also refer to the reasons of Hayne J (Gleeson CJ and McHugh J concurring) in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 216 CLR 161. His Honour there concluded that arguments as to the appropriate standard of proof, based on classification of the relevant proceeding as either “civil” or “criminal”, “must fail”.
We conclude that there is no point in seeking to resolve the present dispute by reference to any such taxonomic exercise. These proceedings are penal in nature. However, as appears from both Labrador and Rich, we should look to the relevant legislation for any guidance as to the conduct of proceedings pursuant thereto.
PECUNIARY PENALTIES UNDER THE BCii ACT
Section 3 of the BCII Act provides:
3 Main object of Act
(1)The main object of this Act is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole.
(2) This Act aims to achieve its main object by the following means:
(a)improving the bargaining framework so as to further encourage genuine bargaining at the workplace level;
(b)promoting respect for the rule of law;
(c)ensuring respect for the rights of building industry participants;
(d)ensuring that building industry participants are accountable for their unlawful conduct;
(e)providing effective means for investigation and enforcement of relevant laws;
(f)improving occupational health and safety in building work;
(g)encouraging the pursuit of high levels of employment in the building industry;
(h)providing assistance and advice to building industry participants in connection with their rights and obligations under relevant industrial laws.
The term “civil penalty provision” is defined to mean:
(a) a Grade A civil penalty provision; or
(b) a Grade B civil penalty provision.The term “Grade A civil penalty provision” means:
(a)a section of this Act (other than a section that is divided into subsections) that has a note at its foot stating “Grade A civil penalty”; or
(b)a subsection of this Act that has a note at its foot stating “Grade A civil penalty”.
The term “Grade B civil penalty provision” means:
(a)a section of this Act (other than a section that is divided into subsections) that has a note at its foot stating “Grade B civil penalty”; or
(b)a subsection of this Act that has a note at its foot stating “Grade B civil penalty”.
We infer that the use of the word “civil” in the term “civil penalty provision” distinguishes such provisions from provisions which impose criminal liability.
Chapter 7 of the BCII Act is headed “Enforcement”. Part 1 is headed “Contravention of civil penalty provisions”. Under that heading ss 48, 49, 50 and 51 relevantly provide:
48 Definitions
(1) In this Part, unless the contrary intention appears:
appropriate court means:
(a)for a contravention of section 38—the Federal Court, the Federal Magistrates Court, a Supreme Court of a State or Territory or a District Court, or County Court, of a State; or
(b) for any other contravention—the Federal Court.
pecuniary penalty order means an order under paragraph 49(1)(a).
person, in relation to a contravention of a civil penalty provision, includes an industrial association.
(2)For the purposes of this Part, a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision. For this purpose, a person is involved in a contravention of a civil penalty provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
49 Penalties etc. for contravention of civil penalty provision
(1)An appropriate 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 penalty provision:
(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.
(2) The maximum pecuniary penalty is:
(a)for a Grade A civil penalty provision—1,000 penalty units if the defendant is a body corporate and otherwise 200 penalty units; and
(b)for a Grade B civil penalty provision—100 penalty units if the defendant is a body corporate and otherwise 20 penalty units.
(3) The orders that may be made under paragraph (1)(c) include:
(a) injunctions (including interim injunctions); and
(b)any other orders that the court considers necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets.
(4)If the contravention is a contravention of section 38, then the power of the court to grant an injunction restraining a person (the defendant) from engaging in conduct may be exercised:
(a)whether or not it appears to the court that the defendant intends to engage again, or to continue to engage, in conduct of that kind; and
(b)whether or not the defendant has previously engaged in conduct of that kind; and
(c)whether or not there is an imminent danger of substantial damage to any person if the defendant engages in conduct of that kind.
(5)A pecuniary penalty is payable to the Commonwealth, or to some other person if the court so directs. It may be recovered as a debt.
(6)Each of the following is an eligible person for the purposes of this section:
(a) the ABC Commissioner;
(b) an ABC Inspector;
(c) a person affected by the contravention;(d)a person prescribed by the regulations for the purposes of this paragraph.
(7)A regulation prescribing persons for the purposes of paragraph (6)(d) may provide that a person is prescribed only in relation to circumstances specified in the regulation.
50 Multiple proceedings for same conduct
(1)A court must not make a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.
(2)Proceedings for a pecuniary penalty order against a person are stayed if:
(a)criminal proceedings are started or have already been started against the person for an offence; and
(b)the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention.
The proceedings for the order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the order are dismissed.
(3)Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether an order under this Part has been made against the person.
51Evidence given in proceedings for penalty not admissible in criminal proceedings
Evidence of information given by an individual, or evidence of production of documents by an individual, is not admissible in criminal proceedings against the individual if:
(a)the individual previously gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of a civil penalty provision (whether or not the order was made); and
(b)the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the contravention.
However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.
Part 2 of Ch 7 is headed “Compliance etc. powers”. It deals with the powers of the Australian Building and Construction Commissioner and Deputy Commissioners and Australian Building and Construction Inspectors.
We infer that the pecuniary penalty regime prescribed by Pt 1 of Ch 7 is designed to contribute to the achievement of the objects identified in s 3, particularly in subss 2(b), 2(c), 2(d) and 2(e). The Director alleges that by virtue of s 48, the respondents breached s 38. Such a breach attracts a Grade A civil penalty. See also s 69.
A PRACTICE FOLLOWED IN FIXING PECUNIARY PENALTIES
In Barbaro the appellants argued that in their sentencing proceedings, the sentencing Judge had wrongly refused to allow the prosecution to propose a range within which the sentences should fall. The High Court held that the prosecution had no such duty and, further, that it should not have adopted that course. It is generally accepted that there are at least some similarities between the process by which a criminal sentence is quantified and the process for quantifying a pecuniary penalty. See, for example, the decision of Lander J in Australian Competition and Consumer Commission v Jewellery Group Pty Limited (No 2) [2013] FCA 14 at [39] – [41]. Hence it would be surprising if the High Court’s views in Barbaro were not at least arguably relevant to the process of imposing pecuniary penalties. In the present case a slightly different question arises. The parties have agreed upon the penalties. Thus we must consider the relevance of such agreement in the Court’s performance of its duty to fix penalties. An associated question is whether either party should be permitted to make submissions as to the specific amount of any penalty to be imposed.
NW Frozen Foods
The Commonwealth submits that in proceedings for the imposition of pecuniary penalties, there is a practice, “encouraged” by decisions of this Court, at first instance and on appeal, concerning submissions as to penalty. The so‑called practice is that, “regulator and respondent make agreed submissions as to what penalty amount would be appropriate”. We accept that such a course has been regularly followed. It has been frequently justified by reference to the decision of the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285. The Court there considered an appeal against a decision imposing a pecuniary penalty which was substantially in excess of that agreed by the parties, such agreed penalty having been communicated to the Judge. At 290 – 291 Burchett and Kiefel JJ said:
The contrast between ss 78 and 79 of the Act makes it quite clear that a penalty imposed under s 76 is a civil penalty, and that a contravention falling within the section is not to be regarded as a criminal offence. At the same time, the seriousness with which the law views the contraventions in question in this case is underlined by the very large sums which the Court is authorised to levy against a contravener. A consequence of the civil nature of a penalty under s 76 is that the onus of proof of the contravention is the civil onus — in contradistinction to the onus of proof beyond reasonable doubt generally borne by the prosecution in a proceeding brought to punish crime.
The Act places on the shoulders of the Court the responsibility to determine the “appropriate” penalty in each particular case, having regard to “all relevant matters” including the matters specified in the section. But effects upon the functioning of markets, and other economic effects, will generally be among the most significant matters to be considered as relevant, so that the Court is likely to be assisted greatly by views put forward by the Australian Competition and Consumer Commission, or by economists called on behalf of the parties. Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd, it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.
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.
The above extract identifies the following propositions which we accept as being correct and applicable for present purposes:
·the “responsibility” for fixing the penalty rests with the Court;
·there may be relevant considerations in respect of which expert evidence is necessary;
·such expert evidence may be given by agreed statement;
·the fixing of a penalty is not an “exact science”; and
·the parties may submit statements as to agreed facts and joint submissions.
The questions presently under consideration are whether, in such submissions, the parties may express “views” as to the “effects” of the facts, and as to the appropriate level of penalty.
Their Honours also observed that because fixing of the quantum of a penalty “cannot be an exact science”, the Court would, effectively, consider whether any agreed figure could be accepted as appropriate. This approach was said to give effect to an important public policy consideration, namely the public interest in saving resources. The perceived beneficial consequences of agreement as to penalty would, it was said, be jeopardized if corporations were to conclude that “proper settlements” were “clouded by unacceptable risks”. We infer that the last‑mentioned proposition implies that such jeopardy would arise if the parties considered that there was any significant possibility that the Court would not adopt the agreed penalty.
We make two points concerning this decision. First, the Full Court set aside the decision at first instance but not on the ground that the primary Judge had failed to adopt the agreed penalty. However, in considering the appropriate penalty to be imposed, the Full Court adopted the agreed penalty. Secondly, in NW Frozen Foods there was no challenge to the validity of the practice identified by Burchett and Kiefel JJ.
Mobil
The decision in NW Frozen Foods was considered by the Full Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] ATPR ¶41-993. That case concerned the imposition of a penalty pursuant to the Petroleum Retail Marketing Sites Act 1980 (Cth). At first instance, the matter came before Gyles J. The parties submitted a joint statement of facts, joint submissions and an agreed penalty, apparently relying on the decision in NW Frozen Foods. Gyles J noted that some Judges had expressed reservations about that decision and recommended that jurisdiction in the matter be exercised by the Full Court in respect of the following question:
Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?
The Chief Justice so ordered. The Full Court (Branson, Sackville and Gyles JJ) permitted appearances by the Public Interest Advocacy Centre (“PIAC”) and the Australian Competition and Consumer Commission (“ACCC”).
In examining the decision in NW Frozen Foods and various other decisions, the Court referred in some detail to criminal sentencing, suggesting that the two processes are, in some ways, related. At [74] their Honours said:
Thirdly, just as joint submissions are sometimes made in civil penalty cases, there are circumstances in which a criminal court is faced with what amounts to a joint submission by prosecution and defence as to the appropriate sentence. Often these cases involve a convicted person who has rendered significant assistance to the authorities and seeks a reduced sentence on that account.
Their Honours then discussed a decision of the New South Wales Court of Criminal Appeal, R v Gallagher (1991) 23 NSWLR 220. That case concerned the discounting of a sentence to reflect assistance rendered by the accused to the authorities. At a later stage, we will discuss that case in more detail.
At [77], their Honours continued:
The position of the Court where prosecution and defence agree on the appropriate sentence … has similarities to the position where regulator and contravenor jointly submit that a particular penalty should be imposed in a civil penalty case. Just as the criminal court will take into account the prosecution’s views on the appropriate sentence, so the court in the civil penalty case, as NW Frozen Foods explained, will take account of the regulator’s position. But in neither case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases). In each case, the Court should be satisfied that it is being given accurate, reliable and complete information on critical questions. If not satisfied that it has sufficient information to support the “agreed” approach, the Court can request the parties to provide additional evidence or information. If that information or evidence is not provided, the Court might well decide that it should impose a different sentence or penalty from that proposed by the prosecution or regulator (as the case may be). And, whatever the position in criminal cases, in a civil penalty case where there is no contradictor, the Court may request assistance from an amicus curiae or a potential intervenor pursuant to FCR, O 6 r 17.
Curiously, although the Full Court was discussing joint submissions, it seems to have perceived the value of such submissions to lie in the extent to which they reflect the “regulator’s position” rather than the fact of agreement between the parties. This is a matter of some importance. It suggests that the regulator is to enjoy a favoured status in proceedings for the imposition of a pecuniary penalty, to which proceedings it is a party. Such a proposition is extraordinary, particularly as there seems to have been no attempt to justify it by reference to any statutory provision. We should add that we doubt the correctness of the proposition that in criminal proceedings the sentencing judge will, “take into account the prosecution’s views on the appropriate sentence”, at least if it means more than that the Court will take into account submissions properly made by both parties. Of course the content of the prosecution’s submissions is now regulated by the decision in Barbaro.
Their Honours then indicated that at least part of the Court’s function was to be, “satisfied that it has sufficient information to support the ‘agreed’ approach” and suggested that if not so satisfied, it might seek further information. We will discuss this proposition at a later stage.
We should make a number of other points concerning the Full Court’s observations at [74] – [77]. The passage contains a fairly lengthy consideration of the reasons of Gleeson CJ in R v Gallagher (supra). One of his Honour’s concerns was the difficulties faced by a sentencing court when the prosecution and the defence take a common position which reflects a degree of co‑operation on the part of the accused. The majority of the High Court had a similar concern in Barbaro. However Gallagher was not a case in which the prosecution had made submissions as to a range of sentences or an ultimate sentencing outcome. Rather, it had conceded that the accused had provided substantial assistance in other investigations, of which assistance there was some evidence. The prosecution had also agreed that the extent of such assistance would justify a “discount” of “50 per cent”, upon which concession the sentencing Judge acted. On appeal the Court of Criminal Appeal concluded that he had erred in his treatment of the concession. In re‑sentencing, the Court rejected it.
We do not find, in the decision in Gallagher, any support for the proposition inherent in the observations at [77] in Mobil, that where, in criminal proceedings, the prosecution and defence agree on the appropriate sentence, “… the criminal court will take into account the prosecution’s views on the appropriate sentence”. In any event, in light of the decision in Barbaro, that proposition cannot now be accepted as correct. The discussion, in R v MacNeil-Brown (2008) 20 VR 677, of the prosecution’s role in sentencing prior to that decision, suggests that the proposition was not generally accepted, at least in Victoria. The sentencing Judge’s approach in Barbaro reinforces that view.
The basis for the decision in NW Frozen Foods
We acknowledge that the decision in NW Frozen Foods was based upon the approach taken by a number of highly respected former members of this Court. The ultimate source appears to have been the decision of Sheppard J in Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 5) (1981) 60 FLR 38, particularly at 41. In that case his Honour relied upon the first instance decision of Barwick CJ in Chipp (Minister for Customs and Excise) v Campbell Beaumont Trading Pty. Ltd., noted at (1970) 44 ALJR 72. At 41, Sheppard J observed that:
The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. That was the course adopted, perhaps in a less positive way, in a customs prosecution hearing in the original jurisdiction of the High Court: Chipp (Minister for Customs) v. Campbell Beaumont Trading Pty. Ltd. The court there accepted the parties’ view of the matter. This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices.
(Footnote references have been omitted.)
We note that Sheppard J proceeded upon the basis that the parties had reached agreement without knowing how the Court would treat their agreement. In that sense, the case was a long way from the position in NW Frozen Foods where it was said to be important that the parties be relieved of “unpredictable risks”.
Turning to Campbell Beaumont, in the ALJR note of the decision there is no reference to any submission or agreement as to penalty. However we have obtained a copy of the transcript of the Chief Justice's reasons. His Honour discussed the facts of the case at some length. At pp 11 - 12 he said:
… counsel for the third defendant took the course of suggesting to me a figure for penalty which he submitted I ought to find adequate in all the circumstances. It was a most substantial figure, namely, $1,000,000, which though far short of the maximum penalty possible is about thrice the amount of duty evaded in the transactions under challenge. Counsel for the other defendants concurred in the submission. Counsel for the plaintiff informed me that he had considered this figure, counsel for the third defendant having given him foreknowledge of the intention to propose it for my consideration. Having given the matter some thought counsel for the plaintiff informed me that it was the plaintiff’s view that such a penalty was adequate in all the circumstances. Indeed, counsel with some candour informed me that, had he had need to make a submission in that case, he for his own part doubted whether he would have pressed for any greater penalty if I had been able to find an intent to defraud the revenue.
Without endorsing this view of counsel for the plaintiff – and there is no present need to consider it one way or another – and after a good deal of consideration, I have come to the conclusion that a total penalty of $1,000,200 imposed on each and all the defendants is an adequate penalty both to mark disapproval of the defendants’ course of conduct and to protect the revenue against the evasion of duty and the making of false entries.
His Honour declared that each of the defendants was guilty of an offence under s 234(a) of the Customs Act 1901 (Cth) (the “Customs Act”), and that each defendant was guilty of an “offence” under s 234(d) of that Act. However the Chief Justice then imposed “a total penalty of $1,000,000 in respect of the offences under s 234(d) and a total penalty of $200 in respect of the offence under s 234(a)”. The “offence” under s 234(d) was “making a false entry”. The “offence” under s 234(a) was “evasion of duty”. It seems that each evasion of duty was brought about by the corresponding false entry. The defendants had made numerous false entries and had evaded duty by virtue of those entries. The nature of the relevant misconduct appears on pp 1 and 2 of the reasons. It is difficult to know whether the plaintiff had alleged a large number of separate breaches of each of ss 234 (a) and 234(d), or one breach of each provision with multiple particulars. Both declarations suggest the latter. However, at p 13 in fixing the penalty, Barwick CJ refers to offences “under s 234(d)” but to “the offence” under s 234(a). Given the nature of the case, there must have been the same number of offences under each of the subsections.
To the extent that Sheppard J suggested that the proceedings before Barwick CJ were “criminal”, his Honour may have been mistaken. The Chief Justice seems to have had doubts about the matter. The use of inverted commas around the word “convictions” on p 10 of his reasons suggests as much. The relevant provisions of the Customs Act as then in force suggest a distinction between “offences” and conduct contrary to s 234, under which the proceedings were brought. It is not necessary that we finally resolve this question.
The most that can be said about the decision is that the Chief Justice was satisfied to impose a penalty which, one suspects, was substantially higher than that expected by the prosecution, and perhaps higher than the figure which his Honour might otherwise have imposed. Whilst the Chief Justice did not treat the suggestion of a specific penalty by defence counsel as being in any way irregular, the statement that counsel, “took the course of suggesting … a figure”, may suggest that it was somewhat unusual. The prosecutor’s statement that he, “doubted whether he would have pressed for any greater penalty”, for a more serious offence may suggest that he might, in those circumstances, have made submissions as to a specific penalty. Alternatively, he may have meant that had the defence made the suggestion in connection with the more serious offence, he would not have submitted that it was inadequate. Clearly, the Chief Justice was not faced with the problems identified by the High Court in Barbaro.
Sheppard J seems also to have based his decision on an understanding of a practice in criminal proceedings by which the prosecution accepts a plea to a lesser charge than that initially preferred. However his Honour said nothing about any practice concerning submissions as to sentence.
The decisions in Allied Mills and Campbell Beaumont offer little support for the practice discussed in NW Frozen Foods. We have considered some, but not necessarily all of other cases in which Allied Mills was applied prior to the decision in NW Frozen Foods. We have found no further attempts to justify the relevant practice by reference to principle. Counsel have not suggested that any other cases assist in this regard.
Allied Mills and multiple offences
The decision in Allied Mills is relevant in one further respect. In these proceedings, the parties have agreed that for all of the numerous breaches established against each respondent, only one penalty should be imposed. It seems that such an approach is not infrequently taken in proceedings for the imposition of pecuniary penalties. The practice may have arisen out of the observation by Sheppard J in Allied Mills at 40, relying on the decision of Kitto J in L. Vogel & Son Pty. Limited v Anderson (1966) 120 CLR 157 at 161 and 164 ‑ 165, that:
Here, more than one breach is alleged and, by reason of the withdrawal of the defence, admitted, but it would not be appropriate to impose substantive penalties for each breach because each arises out of the one transaction, namely, the arrangement or understanding alleged in par. 12 of the amended statement of claim and the particulars appended thereto. That was the approach followed by Kitto J. in imposing penalties for breaches of the Customs Act … , in … Vogel … .
(Footnote references have been omitted.)
Sheppard J imposed one penalty for one offence. As he considered that the other offences arose out of the circumstances of that offence, he imposed no other penalty. We note that Sheppard J was counsel for the plaintiff in Vogel. However we are not sure his Honour was correct in his understanding of the approach taken by Kitto J. Kitto J said at 161:
A submission was made on behalf of the defendants that they ought not to be convicted of more than one offence in respect of each evasion of duty. It was said that in each case the importing with intent to defraud the revenue, the presentation of a false invoice as genuine, the making of a false entry and the production of a document or documents containing an untrue statement or untrue statements were merely steps by which the ultimate offence of evading payment of duty was committed. Each step was undoubtedly one of a connected series of steps, but each was a separate and distince (sic) piece of conduct for all that, and each involved its own deliberate contravention of the Act. Moreover, the ultimate step, the successful getting of the goods through the Customs without payment of full duty, far from being merely the sum of the means employed to that end, was itself a separate piece of conduct in furtherance of the general intent, for it resulted from the defendants’ deliberately putting aside the opportunity that still remained to them, even after what they had already done, to pay the full amount of duty.
I therefore convict the defendants of all the offences charged, and must observe the provisions of s. 243 (as it stood when the offences were committed) that the minimum pecuniary penalty for any offence was one-twentieth of the maximum which was prescribed in pounds, that is to say for an offence against s. 234 it was £5 or $10, and for an offence against s. 233 it was £25 or $50.
At 164 – 165 his Honour continued:
Consideration of the maximum penalties in a case to which s. 240 applies gives little assistance, if any, in deciding what penalty is appropriate to particular circumstances. Though the defendants’ fraudulent conduct has been continuous the amounts of duty evaded have varied greatly, being in some instances very substantial and in others comparatively small. All things considered I think that upon each charge of smuggling there should be a penalty of four times the amount of the duty evaded or intended to be evaded, and it will then be sufficient to impose minimum penalties in respect of the other offences. I append a schedule showing the penalty I impose in respect of each charge.
Thus it seems that Kitto J imposed penalties in respect of all offences. However that course appears to have been dictated by the prescribed minimum sentences. For the reasons set out above, we are unsure as to the approach taken by Barwick CJ in Campbell Beaumont. In any event, we consider that in this area, the criminal law now offers guidance.
In sentencing for multiple criminal offences, absent any specific statutory provision permitting a single global sentence, the Court must fix a sentence for each contravention. The Court must then consider the “totality principle”: Mill v R (1988) 166 CLR 59 at 63; Pearce v R (1998) 194 CLR 610 at [45] ‑ [49]; Johnson v R (2005) 205 ALR 346 at [18] ‑ [20]. Once an appropriate sentence is fixed for each offence, the Court must determine whether the sentences should be cumulative or concurrent in order to address the principle of totality. In other words once appropriate sentences are determined in relation to each individual offence, the aggregate must be reviewed to ensure that it is just and appropriate for all the offences. If not, the sentence should be adjusted by making some of the sentences concurrent or partly concurrent.
The totality principle applies to the fixing of fines: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704; EPA v Barnes [2006] NSWCCA 246 at [43] ‑ [50]. The Court must fix a fine for each offence and then review the aggregate, considering whether it is just and appropriate, as a reflection of the overall criminality. Such consideration may lead to moderation of the fine imposed in respect of each offence: Barnes at [49]. It is at this stage that it is relevant to consider matters such as whether the separate offences were part of a single course of conduct (or whether the offences may be grouped together in some way as representing separate courses of conduct) and whether there is an overlap between the legal elements of some of the offences.
There would appear to be no fixed, or single way to adjust fines to reflect the totality of the criminality. However it would, in most cases, be erroneous to select a single offence and fix a penalty for that offence which is appropriate to reflect the total criminality - and then impose nominal or lenient sentences in relation to the balance of the offences: Johnson at [26]; R v Hammoud (2000) 118 A Crim R 66 at [8] ‑ [10]; R v Bahsa (2003) 138 A Crim R 245 at [67]. The reason is that the nominal or lenient sentences for all the other counts would not be appropriate sentences for those charges.
In any event, the main point is that, however the sentences are adjusted to take into account the totality of the criminality, a court may not simply impose a single global sentence (in the absence of statutory authority for such a course). Authorities which make this point (in the context of criminal sentencing) include: R v Bibaoui [1997] 2 VR 600 at 603 ‑ 604 (Ormiston JA) and 607 (Tadgell JA); R v Finnie [2002] NSWCCA 533 at [54] ‑ [57]; Thorn v The Queen (2009) 198 A Crim R 135 at [39] ‑ [47].
In this case the agreed penalties are based upon the assumption that one penalty may be imposed for numerous infringements. The BCII Act offers no justification for that course. Section 49(1) authorizes the Court to make, “one or more of the following orders in relation to a person … who has contravened a civil penalty provision”. It seems to be accepted that the Court could impose a separate penalty for each infringement. If so, then there is no justification for imposing a penalty for one offence, the amount of which penalty has been inflated by reference to other offences.
This question was not addressed fully in argument. Having expressed these views, we also express our willingness to hear further submissions to contrary effect in any subsequent consideration of the appropriate penalties to be imposed in this case. If the Director makes submissions in support of the imposition of a single penalty for each respondent, we would expect that it would explain how that single figure was chosen, and not merely assert that there was a “single course of conduct”. If the relevant infringements really constitute a single course of conduct (which is at least doubtful here), that factor may be relevant to the consideration of the appropriate aggregate or total pecuniary penalty, which consideration might, in turn, lead to an adjustment of the penalties applied to each individual contravention. However we presently doubt whether it would be in accordance with principle to start at a single global figure (the agreed figure) and then work backwards to arrive at appropriate penalties for each contravention. Such an approach would appear to be contrary to the proper approach referred to in Pearce, Johnson and the other authorities in relation to totality.
Finally, we note that the “course of conduct” issue has been considered by the Full Court in the pecuniary penalty context: eg. Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1 at [35] ‑ [48]; SingTel Optus v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [51] – [55]. Nothing that we have said is inconsistent with anything said in those cases. However they may have been erroneously interpreted by some as justifying single global penalties where there is a course of conduct.
NW Frozen Foods, Mobil and Barbaro
As we understand Barbaro, the High Court was primarily concerned with the permissible content of the prosecution’s submissions as to sentence. In particular the majority held that it was not proper to include in such submissions any suggestion as to the appropriate length of sentence, or the range within which the sentence should fall. Any such suggestion would be merely an opinion. Submissions must address the evidence and the law. The right to make submissions does not include the right to offer opinions as to an appropriate outcome. In NW Frozen Foods Burchett and Kiefel JJ spoke of witnesses, agreed statements and joint submissions, clearly distinguishing between evidence and submissions. However in Mobil the Court spoke of taking account of the prosecution’s views on sentencing and the, “regulator’s position in fixing a pecuniary penalty”. In so doing their Honours seem to have proceeded on the basis that submissions might contain matters of opinion. Clearly, evidence, including expert evidence, may be received in order to inform the Court of relevant considerations concerning penalty. Evidence may be, and frequently is, received by consent. The parties may agree upon some or all of the relevant facts and make combined submissions. However, to the extent that a party wishes to make submissions as to any matter in issue, it must so do upon the basis of the available evidence. The point made by the High Court in Barbaro is that an opinion or view is neither evidence nor submission.
In Mobil, their Honours concluded that in criminal proceedings, the Court is not relieved from exercising its own judgment as to the “appropriate sentence” and that, in pecuniary penalty cases, the Court is not relieved from deciding whether the proposed penalty is “within the appropriate range”. One wonders why, in a criminal case, the obligation should be to impose the appropriate sentence whilst, in the case of pecuniary penalty proceedings, the responsibility may be partially transferred to the parties, so that the Court need only determine whether an agreed penalty is within the appropriate range.
The Court noted the two aspects of the decision in NW Frozen Foods to which we have already referred, namely:
·that the identified error in the primary Judge’s reasons was not linked to his Honour’s apparent refusal to give effect to the agreed penalty although, in exercising its discretion in fixing a new penalty, the Full Court chose to give effect to it; and
·that there was, in that case, no contradictor.
In NW Frozen Foods, the Full Court was not stating a principle, or resolving a matter in dispute between the parties. Rather, it was outlining and explaining an existing practice, the appropriateness of which was not challenged. In Mobil, the Full Court had to determine whether a judge, in imposing a pecuniary penalty, was bound to adopt the practice identified in NW Frozen Foods. The Court had the benefit of submissions from the interveners. However, ACCC broadly supported the decision in NW Frozen Foods, although it accepted that the Court retained a wider discretion than was indicated in that case. In particular ACCC accepted that:
In considering the appropriate penalty, the Court is not confined to considering whether the proposed penalty is within the permissible range in all the circumstances.
Such acceptance was somewhat undermined by the further observation that:
It is appropriate for the Court to approach the exercise of its discretion on the basis that it would be disinclined to depart from the figure identified in a joint submission when that amount is within the permissible range in all the circumstances, “other than in a clear case requiring a different penalty to be imposed”.
(See Mobil at [23].)
It is difficult to understand how, if the proposed penalty is, “within the permissible range in all the circumstances”, there can be a, “clear case requiring a different penalty to be imposed”.
In its submissions, PIAC expressed some concerns about the approach taken at first instance but seems to have accepted that the Court could:
•accept and act upon submissions contained in an agreed statement of facts; and
•receive joint submissions as to a range of orders that might properly be made on the basis of those admissions.
(See Mobil at [27] and [28].)
In Mobil, the Full Court considered numerous decisions in which the approach taken in NW Frozen Foods had been adopted or questioned. It identified the following benefits said to flow from that approach:
·avoidance of clogging of court lists with potentially complicated and lengthy litigation and attendant expense;
·the benefit to the community of early disposal of the proceedings; and
·avoidance of difficulties which the regulator might otherwise experience in proving its case.
Similar considerations are frequently taken into account in criminal sentencing. At [51] the Full Court said:
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 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.
In our view, this summary tends to blend propositions which emerge from NW Frozen Foods with inferences which do not necessarily flow from those propositions. We make the following points:
·If it is the Court’s responsibility to determine the appropriate penalty, we cannot see that it discharges that responsibility by considering whether an agreed figure falls within an appropriate range, particularly given the unsatisfactory nature of the concept of “range” as explained by the High Court in Barbaro.
·The determination of quantum of penalty may not be an exact science, but that proposition says nothing about whether the Court may adopt, as its starting point, a “figure chosen by the parties”.
·That there is a public interest in promoting settlement of litigation does not, of itself, justify the presentation to the Court of agreements as to penalty, submissions as to range or submissions as to the precise penalty to be imposed.
·In considering the “views of the regulator”, one must distinguish between evidence and submissions. If the regulator has expertise, then it must be the expertise of its officers and staff. To the extent that such a person is able to assist the Court, he or she should do so in accordance with the law of evidence, whether the information to be provided is “expert” evidence or otherwise. Such evidence may go in by consent, but it should be distinguished from submissions based on the evidence.
·As to the proposition that it may not be useful for the Court to consider whether it would have imposed the precise agreed penalty, the point is that the relevant legislation effectively directs the Court to do so. Such legislation may fix the upper limit, but otherwise leave the penalty to be determined by the Court in the exercise of its discretion. A court does not generally accept that the parties may, by their agreement, limit the exercise of its discretion. An appellate court would generally set aside any exercise of a discretion which reflected the acceptance of a fetter upon such exercise, which fetter was not imposed by the relevant legislation. If it is said that the regulator’s opinion, or an agreement between the parties is relevant to the exercise of the discretion, it can only be because, if required, evidence of such opinion or agreement would be admissible. The Court may not take advice from the regulator as to the exercise of its discretion.
At [58] in Mobil their Honours observed:
[T]here is nothing in NW Frozen Foods that is inconsistent with any of the following propositions:
(i)The Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range.
(ii)If the absence of a contradictor inhibits the Court in the performance of its duties under s 76 of the TP Act, s 13 of the Sites Act, or similar legislation, it may seek the assistance of an amicus curiae or of an individual or body prepared to act as an intervenor under FCR, O 6 r 17.
(iii)If the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matter to proceed as a contested hearing.
Similar propositions were advanced in argument in the present case. In our view, it is at least unorthodox to suggest that the parties may come to the Court with an agreed penalty, on the basis that if the Court is not willing to adopt it, they can go away and assemble information which may persuade the Court to change its mind. We accept that in practice, such an event occasionally occurs, but the practice should not be encouraged. The parties should not expect that the Court will proceed in that way.
The Full Court then considered cases in which the decision in NW Frozen Foods had been criticized, identifying the following concerns:
·the risk of coercion and therefore, injustice;
·that the absence of fully contested hearings on the merits may make it difficult to determine whether an agreed penalty is within the appropriate range; and
·the risk that the Court will be seen to be “rubber-stamping” the agreement.
The Court also considered a suggestion that the provision of a “range” would be an acceptable alternative to the approach taken in NW Frozen Foods. The Full Court seems to have derived the relevant criticisms from the reasons of Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR ¶41-815 and those of Weinberg J in Australian Competition & Consumer Commission v Colgate-Palmolive Pty Ltd [2002] ATPR ¶41-880. The Full Court rebutted them in detail. We do not necessarily accept that either these criticisms or the Full Court’s rebuttals are entirely persuasive. We will consider some of them at a later stage. As to the risk of “rubber‑stamping”, we understand such concern to focus on public perceptions, particularly the risk that the public will perceive “rubber‑stamping”. Although the Full Court dealt in some detail with the risk that a judge would “rubber‑stamp” an agreed figure, it seems not to have dealt with the problem of public perceptions.
After these reasons had been circulated in draft form our attention was drawn to an article by Ms Samantha Teong entitled, Stamping out rubber-stamp penalties? Determining an appropriate response to agreed penalties in civil penalty settlements (2015) 43 ABLR 48. It offers an insightful analysis of the problems with which we are dealing.
We have previously set out the question which was considered by the Full Court in Mobil. At [80] – [82] the Full Court said, concerning that question:
80.Identifying separate questions for determination in proceedings often gives rise to doubts as to the precise meaning of the question. These are not always profitable to pursue.
81.An affirmative answer to the Question as framed may imply that a trial Judge is obliged to take the proposed penalty as the starting point for analysis and to limit himself or herself to inquiring whether that particular penalty is within the appropriate range. An affirmative answer to the Question may also imply that the trial Judge is bound to consider the proposed penalty simply on the basis of information provided by the parties. For the reasons we have given, neither of these propositions should be accepted.
82.In our view, the Question should be answered as follows:
“Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980(Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission … (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?
Answer: No, but the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission … (1996) 71 FCR 285 disclose no error of principle.”
We do not really understand the point being made at [80]. We would have thought that it was for the Court to decide the meaning of the question posed, and then to answer it.
The overall effect of the decision in Mobil seems to have been that a Judge could, if he or she thought it appropriate, adopt the approach identified in NW Frozen Foods. Alternatively, he or she might take some other approach. We infer that the Full Court accepted that the parties might properly submit an agreed penalty.
We do not doubt that there are benefits in the practice of providing a statement of agreed facts, joint submissions and/or agreement as to penalty. However, whilst the Court should adopt practices designed to achieve efficiency in the dispatch of its work, such practices must not derogate from the proper performance of its duties. Hayne J observed in Labrador (supra) at [126] that there is a difference between matters of practice and procedure (which a court may prescribe) and the standard of proof which, absent statutory authority, a court may not vary. The Court may not, in the interests of efficiency or convenience, allow the exercise of its discretion to be fettered in a way not provided for in the legislation conferring the discretion. Nor may the Court take into account irrelevant considerations. We must decide whether, in this case, we would be performing the duty conferred upon the Court by the BCII Act if we were simply to consider whether the agreed penalty is, “within the permissible range”, even if it is not the penalty which we would have imposed, had there been no such agreement. We must also decide whether the fact of such agreement is, as a matter of law, a relevant consideration in the proper exercise of the Court’s discretion. In considering those matters, we must keep in mind public perceptions, as well as the law concerning the exercise of discretions and the law of evidence.
We accept that in NW Frozen Foods, Burchett and Kiefel JJ set out a well‑established practice and approved of it. We also accept that in Mobil, the Full Court held that a judge was not bound to adopt the practice approved in the former case. Both cases identify the perceived benefits of such an approach. In Mobil, the Full Court considered some of the criticisms of the practice but did not deal with concerns about public perception. Neither case addresses the extent to which it may be proper for the Court to accept limitations upon the extent of its duty to fix the appropriate penalty in each case.
PURPOSES OF PUNISHMENT
The second “fundamental” error identified by the Commonwealth is that instead of examining Parliament’s intention, the Contradictor seeks to identify the High Court’s intentions. It is said that the Contradictor has simply identified the concerns expressed in Barbaro and then “transplanted” them from criminal sentencing to the imposition of pecuniary penalties, without considering the differences between the two, which differences the Commonwealth claims to have identified. It is further said that the Contradictor fixes upon similarities between the two in order to justify the application of Barbaro for present purposes, whilst ignoring the differences. We reject this attack upon the Contradictor’s submissions. In our view the concerns addressed in Barbaro are relevant to both processes, and obviously so. Whilst the Commonwealth has identified differences between the two processes, it has not really attempted to explain how they lead to the conclusion that the High Court’s concerns should be disregarded for present purposes. The Contradictor points to the fact that a pecuniary penalty is imposed by way of punishment, rather than to effect compensation or protection. In this sense, it is similar to the passing of a sentence in criminal proceedings. Further, the process necessarily adopted in fixing the penalty involves the same instinctive synthesis as occurs in the sentencing process. In effect, the Commonwealth alleges a parliamentary intention which is said to be inconsistent with application of the principles in Barbaro, without offering any basis for inferring that intention.
The Commonwealth then submits that the Contradictor errs in treating the Court’s discretion to impose a pecuniary penalty as having some special status, the source of which is not demonstrated. It submits that the Contradictor asserts, as a self‑evident proposition, that any submission by the regulator as to penalty, “involves some form of inappropriate intrusion upon [the Court’s] discretion”. The Commonwealth submits that such “assumed special status” is not adequately explained. We discuss this matter below. As we understand the Contradictor’s position, it is simply that the Court’s discretion should not be limited other than to the extent provided for in the relevant legislation. Such an approach was prescribed by Mason J (as his Honour then was) in Minister for Aboriginal Affairs v Peko‑Wallsend Ltd (1985 – 1986) 162 CLR 24 at 39 – 40 as follows:
… What factors a decision‑maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statue expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors – and in this context I use this expression to refer to the factors which the decision‑maker is bound to consider – are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the facts to which the decision-maker may legitimately have regard: … By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject-matter, scope and purpose of the Act.
Brennan J said at 56:
Apart from express provision, a statute may impliedly require the repository of a power in deciding on its exercise to have regard to certain considerations. The subject-matter, scope and purpose of the statute must be considered to determine whether the repository is bound to have regard to any and what matters: … .
Gibb CJ, Deane and Dawson JJ agreed generally with Mason J.
The Commonwealth then makes three submissions concerning the “special status” which the Contradictor is said to have attributed to the Court’s discretion to impose a pecuniary penalty. First, it submits that the Contradictor errs in concluding that Barbaro applies to proceedings for the imposition of pecuniary penalties, by assuming that the concerns addressed in Barbaro are relevant in that process. It submits that the Contradictor looks to the decision in Barbaro, itself, to establish such special status. This is said to be a “bootstraps” argument. The Commonwealth submits that the Contradictor simply assumes that the concerns expressed by the majority in Barbaro are of equal concern for present purposes. We find it surprising that the Commonwealth should make such a submission in view of its own almost total failure to address the clear similarities between criminal sentencing and the imposition of pecuniary penalties. As we understand Barbaro, the majority in the High Court was concerned to ensure that only relevant considerations are taken into account in the sentencing process, to protect that process from pressures which might distort it and to uphold public perceptions as to the independence of the judicial decision‑maker. In our view, it is quite clear that these considerations apply to the proceedings for the imposition of a pecuniary penalty.
Secondly, the Commonwealth seeks to dismiss the alleged attribution of a special status to the discretion by attacking the proposition that the imposition of penalties, “is, like criminal sentencing, an exclusively judicial function”. It submits that various administrative actions such as disqualification from acting as a director, cancelling the registration of liquidators and imposing disciplinary sanctions, may be taken by regulators, and that such actions may have punitive aspects. As to the last mentioned example the Commonwealth refers to the decision of the High Court in The Queen v White; ex parte Byrnes (1963) 109 CLR 665. In that case it was submitted that the imposition of a statutory penalty upon a public servant by a superior officer was an exercise of the judicial power of the Commonwealth. The High Court held that power to impose a “fine” on a public servant was a power to deduct pay pursuant to legislation regulating the relationship between the Commonwealth and its servants, including disciplinary arrangements. In particular the process was not pursuant to any law of general application. Hence the provision did not involve an exercise of judicial power.
The Commonwealth did not challenge the Contradictor’s reliance on the observation by Griffith CJ in Alexander (supra). That case has been regularly cited in matters concerning the judicial power of the Commonwealth, particularly as authority for the proposition that a determination as to guilt of a criminal offence is inevitably an exercise of such power. See, for example, H A Bachrach Pty Limited v State of Queensland (1998) 195 CLR 547 at 562. It may be arguable that in Alexander, Griffith CJ was referring to penalties and punishments following conviction rather than to the imposition of pecuniary penalties. However the use of the words, “penalties” and “punishments”, suggests otherwise. In Harris v Caladine (1991) 172 CLR 84 at 147 Gaudron J suggested that Alexander, amongst other cases, establishes that, “the imposition of punishment for breach of the law”, is necessarily an exercise of the judicial power of the Commonwealth. See also Gould v Brown (1998) 193 CLR 346 at [67]. Crennan and Kiefel JJ seem to have said something to similar effect in Attorney‑General for the Commonwealth v Alinta Limited (2008) 233 CLR 542 at [160]. However, their Honours’ remarks, like those of Griffith CJ, may be arguably ambiguous.
That regulators perform functions which may be perceived as having punitive effect says little or nothing about the nature of a function to be performed by a court. It has long been accepted that the process in which a court imposes a pecuniary penalty has marked similarities to the process of passing sentence in criminal proceedings. It is not necessary that we finally determine whether the imposition of a pecuniary penalty is necessarily a judicial function. The similarities between the two processes are such that the decision in Barbaro may readily be seen as applying equally to both.
Thirdly, at para 9 of its submissions in reply, the Commonwealth submits that the Contradictor may attach special status to the discretion to impose a pecuniary penalty because of the distinction which it seeks to draw between the punitive purpose of pecuniary penalties and the protective or compensatory purpose of other forms of regulatory relief. It is true that at para 37 of its submissions, the Contradictor distinguishes between pecuniary penalties which comprise, “the primary sanction for contravention of the statutory norm”, involving the exercise of the coercive power of the state, and other remedies which serve a primarily protective or compensatory function. In our view orders in the first category cannot accurately be described as “punishment”, whilst pecuniary penalties are clearly penal in nature. They mark the community’s displeasure concerning breaches of its laws. Below, we say a little more about this aspect.
At para 10 the Commonwealth points to the award of exemplary damages as being equivalent to the imposition of a pecuniary penalty. It submits that in civil proceedings, the parties may make submissions as to the quantum of such an award. Of course, it may be that any such submission is also nothing more than an opinion. It is difficult to see how it could be anything else. Perhaps such a submission should not be made. In any event awards of exemplary damages are infrequent and are generally adjuncts to compensatory claims. We doubt whether any real assistance can be derived from a consideration of the practice concerning such awards.
In para 11, the Commonwealth submits that it is not possible to distinguish clearly between pecuniary penalties and “other civil law discretions”. It submits that:
·the instinctive synthesis of various factors, which is a characteristic of criminal sentencing (and, we consider, of fixing a pecuniary penalty) is involved in the exercise of many other discretions;
·many forms of discretionary relief, other than the imposition of a pecuniary penalty may lead to serious consequences for the affected party; and
·the fact that the parties cannot simply consent to a particular penalty is not distinctive in that in exercising other discretions, courts require that they be “independently satisfied about aspects of (proposed) orders”.
As to instinctive synthesis, we accept that in the exercise of many other discretions, the Court must weigh up numerous factors. However, in our experience, very few, if any involve the extent of the discretion involved in sentencing and, perhaps to a lesser degree, in fixing a pecuniary penalty. Most other discretionary decisions depend upon evidence as to the question of actual loss, or evidence as to likely future conduct which may cause harm to others. The factual considerations are limited, both in nature and scope. In fixing a penalty, the Court is concerned with a much wider range of considerations. As to seriousness of consequences, we accept that many judicial and administrative decisions may have such consequences for the affected parties. However the particular seriousness of criminal sentencing is the fact of proven criminal misconduct, with the consequential effect on reputation and associated questions. The sentencing process takes these matters into account. To a lesser extent, the same is true of the imposition of a pecuniary penalty.
As to the question of consent orders, a court exercising a discretion in connection with any form of compensation might well act upon an agreement between the parties. It may be obliged to do so. After all, such agreement will generally have resolved the matter in dispute, or at least an aspect of it. Further, such an order will not affect any interests other than those of the parties, provided that the order, or the way in which it is made is not likely to result in public misconceptions concerning the integrity of the judicial process.
It is true that in exercising other, non‑compensatory discretions, the Court may also refuse to make an order by consent. In this regard, the Commonwealth points to Mareva injunctions and Anton Piller orders. Such orders are usually, at least initially, made ex parte. For that reason, the Court will take special care to ensure that the terms of such an order go no further than is necessary in order to achieve the relevant purpose. Any other approach would be unfair to the person against whom the order is made, and contrary to the public interest, in that it might bring the administration of justice into disrepute. When the affected parties are heard, such orders may be made by consent.
It is also true that in granting injunctions and making declarations by consent, the Court exercises special care. In the case of injunctions such care is designed to ensure that the terms are sufficiently clear to enable enforcement. If, because the terms of an injunction are insufficiently clear a party escapes punishment for contempt, faith in the judicial system will be undermined. In the case of declarations, the courts have traditionally sought to prevent abuse of the remedy by ensuring that any declaration will serve a useful purpose. The courts have long perceived that unnecessary or ineffective declarations may, in the longer term, lead to the remedy’s losing its utility.
Thus good pragmatic reasons sometimes lead courts to decline to make orders by consent. However we are presently concerned with the effect of the conferment of jurisdiction to impose a pecuniary penalty pursuant to the BCII Act. Nothing in the Act suggests that the Court is to do other than impose the penalty which it considers to be appropriate in the circumstances.
Paragraphs 12 and 13 of the Commonwealth’s submissions lack any logical basis. In para 12 the Commonwealth asserts that the making of submissions as to penalty, “including on an agreed basis”, is, “entirely consistent with Parliament’s intention”, although it does not identify the asserted intention or the basis for inferring it. Making submissions as to penalty may be consistent with Parliament’s intention that a regulator perform certain functions, but that proposition does not lead to the conclusion that the performance of such functions is authorized by the relevant legislation. If Parliament’s intention cannot be achieved without the performance of that function, then it may be concluded that Parliament has authorized such performance. However if Parliament’s intention can be achieved without the performance of that function, then it cannot necessarily be assumed that Parliament has authorized such performance. We have, on numerous occasions, pointed to the fact that the Commonwealth has not, by reference to the BCII Act, identified any basis for inferring that the Director is to have any particular status, or play any particular role in proceedings for the imposition of a pecuniary penalty, other than as a party.
The conclusion, in para 13, that the Contradictor errs in, “treating the penalty discretion as having some special status which precludes the making of submission as to the result”, is without substance. Further, the Contradictor does not assert that submissions as to penalty may not be made.
The Commonwealth asserts that any limit placed upon submissions concerning pecuniary penalties may lead to limits upon submissions concerning other forms of regulatory relief. We have previously indicated our general acceptance of the distinction between penalties and compensatory and protective orders. We see nothing in Barbaro which might lead to difficulties in making submissions based on the evidence with respect to any remedy.
At paras 14 – 16 the Commonwealth discusses the decisions in NW Frozen Foods and Mobil. The Commonwealth submits that the term “available range”, as used in Barbaro, does not have the same meaning as the term “permissible range”, used in NW Frozen Foods and Mobil. We reject that submission. In Barbaro the High Court was discussing a range of sentences beyond which successful appeal was likely, and within which successful appeal was not likely. The word “available” might be used to describe either that “range” or the range prescribed by Parliament. It is clear that the High Court used the expression with the former meaning. The term “permissible range” may also have had either of those meanings. Again, it is clear that in NW Frozen Foods and Mobil, it had the former meaning.
At para 16, the Commonwealth submits that the Contradictor erroneously submitted that NW Frozen Foods and Mobil held that a court was obliged to adopt an agreed penalty unless it was manifestly inadequate or manifestly excessive, and that such a proposition constrained or fettered the Court’s discretion. Elsewhere in these reasons, we discuss the effect of each decision.
At paras 17 – 19, the Commonwealth discusses the problems addressed in Barbaro at [29] – [33]. We generally accept the Contradictor’s submission which, in these paragraphs, the Commonwealth rejects. Our reasons appear elsewhere. Finally, at paras 20 ‑ 22, the Commonwealth submits that we should accept the regulators’ views that agreements as to penalty will often be central to resolution of matters of this kind. It submits that in proceedings for the imposition of a pecuniary penalty, the parties may contend for a particular outcome or range of outcomes and may agree on matters, small or large, and that such agreement does not bind the Court, but may be taken into account and relied upon “where appropriate as a fact”. We accept that the amount of any penalty may be a relevant consideration in negotiations between the regulator and the relevant offender. However it will not be the only consideration. Experience and common sense suggest that many factors influence such negotiations. We accept that the parties to proceedings for the imposition of a pecuniary penalty may agree facts. It does not follow that they may advance opinions in the form of submissions, or that any agreement is relevant to the process of fixing the amount of penalty, save to the extent that it demonstrates remorse or some such mitigating factor.
The Commonwealth submits that perceived procedural differences between criminal and civil proceedings should lead to our not applying the decision in Barbaro for present purposes. It is said that the regulator must, “choose to plead and pursue particular relief (including pecuniary penalties)”. On the other hand, the prosecution, “does not seek a sentence as the relief to which it, as a party, claims to be entitled”. The prosecution, it is said, “presents the case that may result in a conviction, and the Court passes sentence as a consequence of that outcome”. It is said that as the regulator has a “more engaged” role in relation to the pecuniary penalty than has the prosecution in relation to a sentence, “this should afford a different approach in relation to the submissions that address that relief”. This submission seems to imply that the “more engaged” role of the regulator may justify an unidentified approach to the imposition of pecuniary penalties which differs from that adopted in criminal sentencing. However no attempt has been made to explain why that “more engaged” role should lead to the view that the considered opinion in Barbaro has no relevance to the pecuniary penalty process.
We do not accept that criminal procedure is, in principle, necessarily different from civil procedure. Both are conducted as adversarial proceedings in the long tradition of the common law. Both are generally conducted by counsel who have, with some qualifications, the same roles in both kinds of proceedings. Both are conducted according to largely similar rules of procedure and evidence. The demise of the jury in most civil cases has led to apparent differences between civil and criminal trials, as has the tradition of oral pleading in criminal cases. This is not the occasion for a detailed examination of the history of civil and criminal proceedings in the Court of Queen’s Bench and in Australian courts. For present purposes, we see no basis for treating any identified procedural differences as a basis for declining to apply the reasoning in Barbaro. The similarities between the sentencing process and that for imposing a pecuniary penalty are obvious and compelling.
As to the proposition that the prosecution does not seek relief to which “it” is entitled, we point out that the Director does not do so either. Any penalty is, prima facie, to be paid to the Commonwealth. Given the very high penalties imposed in some pecuniary penalty cases, any perception that a regulator is “entitled” to a penalty might further exacerbate concern about its capacity to make a dispassionate assessment of the relevant sentencing circumstances. Even if the penalty goes to the Commonwealth and not the regulator, the latter may be driven by a need to maximize results in order to meet government expectations, or there may at least be a public perception to that effect.
CONCLUSIONS
Some of the Commonwealth’s submissions imply that this Court is presently engaged in making a policy decision as to the form which submissions should take where pecuniary penalties are sought. We do not perceive our task to involve policy‑making. Rather, we seek to identify the applicability or otherwise of the decision in Barbaro to proceedings for the imposition of a pecuniary penalty pursuant to the BCII Act, and therefore the way in which these proceedings should be conducted. We accept that the Commonwealth’s interest goes beyond issues associated with the BCII Act. However, whilst the material set out in Mr Blunn’s affidavit is interesting, it is not particularly helpful. At least some of the regulators seem simply to insist upon the right to make submissions as to range, as well as submissions as to specific penalties or as to agreed penalties.
We do not accept at face value assertions as to the dire consequences of forbidding submissions which identify a range of penalties, nominate specific penalties or urge the adoption of agreed penalties. We are not aware of any suggestions that the decision in Barbaro has significantly reduced pleas of guilty in criminal cases. Until quite recently in Victoria, the prosecution was not involved in the sentencing process. The only reason for its more recent involvement appears to have been the increased availability of Crown appeals against sentence. Again, we are not aware of any suggestion that under the earlier regime, pleas of guilty were discouraged by the absence of any likelihood that the prosecution would make submissions as to sentence. As counsel for the Contradictor pointed out in submissions, there are many good reasons for resolving litigation. Most litigants, including accused persons in criminal proceedings, make decisions about the conduct of their litigation without the benefit of any degree of certainty as to outcome. With the assistance of their lawyers, they seek to identify the advantages and disadvantages of resolving the matter other than by going to trial. One might wonder why a respondent in proceedings for the imposition of pecuniary penalties should expect any greater degree of certainty as to the ultimate outcome.
Apart from the generalized views of the regulators, we see no reason to conclude that the exclusion of submissions as to range, agreed penalty or a specific outcome would necessarily discourage joint submissions as to the facts of the case, identification of relevant comparable cases and the proper approach to fixing the penalty. The regulator may have to provide carefully prepared evidence, and counsel may have to make considered submissions. The Court expects such assistance.
In the course of submissions it has been suggested that there is a dearth of reported penalty cases. That proposition seems to be inconsistent with the view expressed by the Full Court in Mobil at [66] - [67]. Nonetheless, we are inclined to think that the proposition is correct. If so, the situation reflects the extent to which these matters have been resolved by consent. Where a penalty has been fixed in that way, the decision may not be treated as helpful in future cases, save to the extent that it indicates a position adopted by a regulator to which it should be held in later cases.
We accept that in the short term, there may be inconvenience and perhaps increased expense to regulators and respondents in cases where agreed penalties, or agreed ranges have already been identified. We do not expect that such additional cost will be significant. We have already said much about why we consider that the decision in Barbaro should inform our approach to the agreed statement. Primarily, we consider that the sentencing process, and that in which a pecuniary penalty is imposed are very similar in nature. In particular, both address punishment by the State, and both require an assessment of a wide range of considerations which interact in complex ways. Hence each involves the instinctive synthesis to which we have referred. We consider that the concerns identified in Barbaro are relevant to the pecuniary penalty process. The impermissible expression of an opinion as to the amount of the penalty reflects a well‑established limitation upon the ambit of a party’s right to make submissions. Further, the difficulty in understanding the method by which any such opinion is formed is as real in pecuniary penalty cases as it is in criminal sentencing, as is the risk that such opinions may compromise the sentencing process and/or create a public perception of such compromise.
Insofar as concerns submissions as to the range within which the penalty should fall, it is equally as inappropriate in pecuniary penalty cases as in criminal sentencing. The High Court has made it clear that statutory discretions are not to be limited other than by reference to the relevant statute. It is difficult to identify any other statutory discretion conferred upon a court which has been limited in the way in which the decisions in NW Frozen Foods and Mobil have limited the discretion to fix a pecuniary penalty. When examined, the historical basis for that limitation is not grounded in principle.
As to an agreed penalty, we have previously indicated that any admission of liability may be a relevant consideration in sentencing or imposing a pecuniary penalty. Willingness to submit to the imposition of a substantial penalty may also be relevant in that way. However, even if the offender nominates a substantial figure as the penalty to which it will submit, the Court must still fix the appropriate penalty, taking into account such contrition as well as all other relevant considerations. As we have said, any such agreement is no more than an expression of a shared opinion, and therefore inadmissible. As we have also said, the amount of the agreed penalty may simply reflect the point at which each party considers that it is in its interest to agree. In either case, the agreed amount offers no assistance in fixing the amount of the appropriate penalty.
Finally, we do not dismiss the concerns of the regulators as to the importance of negotiations and agreements in the enforcement of the various statutes pursuant to which pecuniary penalties may be imposed. However we do not accept that the problem is as great as the regulators suggest. The adversarial system depends upon the capacity of professional advocates to explain the most complicated of legal and factual situations by reference to the evidence and the law. The issues to be ventilated in pecuniary penalty cases may be complex, but they are not amongst the most complex matters which this Court regularly considers. We expect that regulators and offenders will continue to seek to reach agreement as to factual matters and as to the application of the law. As to uncertainty of outcome, we consider it to be the inevitable consequence of entrusting the pecuniary penalty process to the judiciary. NW Frozen Foods and Mobil establish that it is for the Court to fix the penalty. That proposition has been constantly repeated in subsequent cases. In these proceedings, no party has suggested otherwise. Once that proposition is accepted, the only remaining question is as to the relevance, to the Court’s consideration, of submissions as to ultimate penalty or range of penalties, or the fact of any agreement as to penalty. In Barbaro, the High Court held that statements as to ultimate outcome or range were merely expressions of opinion and therefore could not properly be advanced in submissions. There can be no justification for taking a different view in pecuniary penalty proceedings.
We appreciate that the views which we have expressed are inconsistent with the long established, although perhaps imprecise practice described in NW Frozen Foods and Mobil. We depart from that practice only because the decision in Barbaro, in our view, requires that we do so.
OUR APPROACH TO THE PRESENT CASE
We are exercising the original, and not the appellate jurisdiction of the Court. Thus the focus of our consideration is not the correctness of orders already made, but the approach to be taken to this case. We do not necessarily seek to establish general rules as to the conduct of such proceedings.
First, we must consider the status of the agreed statement. To the extent that the document states “agreed facts”, we accept that it should be treated as providing the factual matrix upon which our instinctive synthesis will be based, leading to the quantification of the relevant pecuniary penalties. Paragraphs 1 – 113 provide that factual matrix. Paragraphs 114 – 116 disclose facts only in the sense that they demonstrate:
·that each respondent consents to a declaration that its conduct was in contravention of the BCII Act;
·that “subject to the discretion of the Court” CEPU and CFMEU consent to the imposition of pecuniary penalties in the amounts specified, which penalties are said to be “satisfactory, appropriate and within the permissible range in all the circumstances”; and
·that the penalties be paid to the Commonwealth.
As we have said a respondent’s acceptance of liability and willingness to submit to the imposition of a substantial pecuniary penalty are relevant considerations in fixing such penalty, but not as to the actual amount. Barbaro establishes that in criminal sentencing, the relevant considerations are statutory prescriptions as to sentence, the facts of the case, the relevant sentencing principles and comparable sentences. Each of those matters has an analogue in the process of fixing a pecuniary penalty.
We accept that the respondents have co‑operated to the extent that, at some time before the filing of the originating application in this matter, they conceded that they had contravened the BCII Act and agreed to the proposed orders. However the conduct in question occurred in May 2011. The application was filed in May 2013. We know nothing about the dealings between the Director and the respondents during that period. We do not know when the respondents’ willingness to admit liability was communicated to the Director, or the stage which the investigation had reached at that time. We know very little about the conduct comprising the contraventions. In connection with the QCH project site, the relevant conduct appears at paras 27 – 37 of the agreed statement. For the BCEC project site, the particularized conduct appears at paras 54 – 72. For the QIMR project site, the relevant conduct appears at paras 91 – 101. All that we really know concerning the QCH project site is that:
·CEPU and CFMEU were publicizing concerns about sham contracting;
·on 24 May 2011, representatives of both respondents attended at the QCH project site;
·they told employees that there would be no work on that day;
·they told an Abigroup representative that they intended to convene a meeting of QCH employees;
·they did so and addressed the meeting;
·they issued to some attendees a pro forma letter concerning sham contracting;
·some QCH employees voted to cease work for 72 hours;
·work was scheduled for each of 24, 25 and 26 May 2011;
·the majority of QCH employees did not work on those days; and
·the respondents’ four representatives “took the action pleaded … over 24, 25 and 26 May 2011”.
The actions at the BCEC project site were a little more involved, but the actions were similar to those at the QCH project site. Only CFMEU representatives were involved in the conduct at the BCEC project site. The agreed facts concerning the QIMR project site are similarly limited.
There is little detail concerning the meetings or the documents which were circulated. There has been no attempt to demonstrate that there was any real cause for concern about sham contracting. A particular concern is the absence of any explanation of the basis upon which the respondents accept responsibility for the conduct of their representatives. We are not told whether the representatives were on a frolic of their own, or whether they were foot soldiers, carrying out the grand strategy of their leaders. If it is the former, then one might wonder why the representatives are not, themselves, subject to applications for the imposition of pecuniary penalties. If it is the latter, then the respondents’ conduct in involving their representatives in unlawful conduct might be a circumstance of aggravation.
In each case, it is alleged that the relevant action “adversely affected” the relevant head contractor in its capacity as a building industry participant, but nothing is said about the nature or extent of such adverse effect, save for such inferences as can be drawn from the fact that work on each site was stopped for an extended period of time. Perhaps the parties consider the allegation of adverse effect to be merely a condition precedent to liability but, of course, it is also relevant to the question of punishment. The head contractors may be able to seek compensatory remedies. Should such an application be made, the Court may have to ensure that no question of double punishment arises. Nonetheless, detriment to others must be taken into account in fixing a penalty.
We also note that there is some suggestion that the conduct at all project sites might be treated as comprising one course of conduct, so that the overall penalties should be reduced. We are more inclined to think that co‑ordinated coercive action at three sites, all of which involved projects being undertaken for the Queensland Government, might be a circumstance of aggravation.
The submissions made by the Director and the respondents demonstrate that submissions concerning agreed penalty or agreed penalty range are no more than expressions of opinion. The process by which the agreed penalties were formulated has not been explained. We have not been told how the relevant considerations were weighed, or how the relevant principles have been taken into account. The absence of any description of the reasoning process no doubt demonstrates the insuperable difficulties inherent in providing such a description, as identified in Barbaro. As previously observed, the Director actually applied, in the originating application, for penalties in the agreed amounts. It is hard to see how such an approach can be reconciled with the often‑stated proposition that it is for the Court to identify the appropriate penalty.
We should also say something about the use of prior decisions in fixing penalties. Despite the not infrequent suggestion, in pecuniary penalty cases, that earlier decisions are of little value, the criminal sentencing process makes substantial use of such decisions. In our view, the development of a consistent approach to the fixing of pecuniary penalties necessitates reference to prior decisions. If there are insufficient prior decisions to provide assistance in the process of fixing a pecuniary penalty, that situation may well have been created by the “practice” which we are presently considering. It would be odd if the absence of helpful case law should be used as a basis for resisting any change to that practice.
Where, as here, an offender has an ongoing, not to say dominant role in the domain to which the pecuniary penalty regime applies, there may be a number of cases which demonstrate the offender’s history of compliance or non‑compliance. We have a schedule of penalties previously imposed upon the respondents, but in many instances, there is little detail upon which to form any view as to the seriousness of the misconduct in question. Prior decisions imposing penalties on the relevant offender or other offenders are also used in the process of instinctive synthesis, leading to identification of the appropriate penalty. Again, it is necessary that the Court have details of the case in order to enable a comparison between the circumstances of earlier decisions and those of the case under consideration. The previous decisions provided to us in this case show a range of penalties from one or two thousand dollars to over $1 m. The Court might reasonably expect a little more discernment in identifying the relevant decisions, and a little more detail in the submissions concerning them.
The views which we have expressed may result in the parties wishing to reconsider their respective positions. For that reason, we propose to adjourn this matter to allow them to consider our reasons. The matter will be listed for further hearing on a date to be fixed. If necessary, a Judge will hear any application for directions. Any application for costs may be made at a later stage. We grant liberty to apply.
I certify that the preceding two hundred and fifty-four (254) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Dowsett, Greenwood, Wigney. Associate:
Dated: 1 May 2015
170
24
12