Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union
[2012] FMCA 916
•8 October 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION & ANOR | [2012] FMCA 916 |
| INDUSTRIAL LAW – Penalties – breach of s.38 of the Building Construction Industry Improvement Act 2005 – unlawful industrial action – lack of remorse – prior history – no significant loss or disruption to work. |
| Building and Construction Industry Improvement Act 2005 ss. 4, 5, 36, 38, 49, 57, 69, 826 Building and Construction Industry Improvement Amendment (Transition to Fair Work) Regulations 2012; sub-regulation 2.3 Fair Work (Building Industry) Act 2012 Fair Work (Registered Organisations) Act 2009 s.27 Workplace Relations Act 2009; s.27, Schedule 1 |
| Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 Cahill v Construction, Forestry, Mining and Energy Union (No.4) (2009) 189 IR 304 Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 Leighton Contractors Pty Ltd & Anor v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993; [2004] FCAFC 72 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 Re Trade Practices Commission v Roddy Farrow Also Known As Ronald Frederick and Trade Practices Commission and Jim Spatharos Also Known As Dimitrios Spatharos [1990] FCA 74 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 Webb v O’Sullivan [1952] SASR 65 |
| Applicant: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
| First Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Respondent: | MATTHEW HUDSON |
| File number: | MLG 1583 of 2010 |
| Judgment of: | Riley FM |
| Date of last submission: | 10 September 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 8 October 2012 |
REPRESENTATION
| Counsel for the Applicant: | Justin L Bourke SC and Clare Sullivan |
| Solicitors for the Applicant: | Hunt & Hunt |
| Counsel for the First Respondent: | None |
| Solicitors for the First Respondent: | Slater & Gordon Lawyers |
| Counsel for the Second Respondent: | None |
| Solicitors for the Second Respondent: | Slater & Gordon Lawyers |
ORDERS
Having regard to the admissions made by the respondents in the statement of agreed facts and admissions filed in this proceeding and having regard to the written submissions on penalty filed by the parties:
A penalty of $7,500.00 be imposed on the second respondent in respect of one contravention of s.38 of the Building and Construction Industry Improvement Act 2005 by reason of encouraging unlawful industrial action on 13 March 2009 at the Rosso Apartments in Carlton.
A penalty of $17,500.00 be imposed on the first respondent in respect of one contravention of s.38 of the Building and Construction Industry Improvement Act 2005 by reason of being vicariously liable for the conduct of the Second Respondent referred to in order 1 above.
The penalties imposed upon the Respondents be paid into the Consolidated Revenue Fund within 30 days of this order.
There be no order as to costs.
The proceeding be otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1583 of 2010
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
Applicant
And
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
First Respondent
And
| MATTHEW HUDSON |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns the penalties to be imposed for certain contraventions of the Building Construction Industry Improvement Act 2005. The parties filed a statement of agreed facts and a minute of proposed consent orders. The parties agreed on the amount of the penalties that they submitted were appropriate in this case. The parties put forward somewhat different reasons in support of the proposed orders.
The proposed orders are as follows:
1. A penalty of $7,500.00 be imposed on the Second Respondent in respect of one contravention of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth) by reason of encouraging unlawful industrial action on 13 March 2009 at the Rosso Apartments in Carlton.
2. A penalty of $17,500.00 be imposed on the First Respondent in respect of one contravention of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth) by reason of being vicariously liable for the conduct of the Second Respondent referred to in paragraph 1 above.
4. The penalties imposed upon the Respondents be paid into the Consolidated Revenue Fund within 30 days of this order.
5. There be no order as to costs.
6. The proceeding be otherwise dismissed.
The agreed facts set out below are taken verbatim from the document filed by the parties.
Agreed facts
The Applicant
The applicant was:
a)an Australian Building and Construction Inspector appointed pursuant to s.57 of the Building Construction Industry Improvement Act 2005 (Cth) (BCII Act); and
b)authorised, pursuant to s.49 of the BCII Act, to make application under that section for penalties for contraventions of s.38 of the BCII Act.
On 1 June 2012, the Office of the Fair Work Building Industry Inspectorate replaced the Office of the Australian Building and Construction Commissioner by reason of the proclamation of the Fair Work (Building Industry) Act 2012 (Cth).
The statutory position of Director of the Fair Work Building Industry Inspectorate accordingly replaced the position of the Australian Building and Construction Commissioner.
The BCII Act (and these proceedings) continue in force by reason of sub-regulations 2.3(1) and (3) of the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Regulations 2012 (Cth).
The CFMEU
The CFMEU is, and was, at all material times:
a)an organisation registered under the Workplace Relations Act 2009 (Cth) (WR Act) and by operation of s.27, Schedule 1 of that Act, a body corporate able to be sued in its registered name;
b)an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and by operation of s.27 of that Act, a body corporate able to be sued in its registered name;
c)an organisation within the meaning of s.4(1) BCII Act;
d)an industrial association within the meaning of s.4(1) BCII Act; and
e)a building industry participant within the meaning of s.4(1) BCII Act.
Hudson
Hudson was, at all material times:
a)a member of the CFMEU;
b)an employee of the CFMEU;
c)a building industry participant within the meaning of s.4 of the BCII Act;
d)an organiser of the CFMEU;
e)an officer of the CFMEU for the purposes of ss.4 and 826 of the WR Act; and
f)acting in his capacity, and within the scope of his authority, as an employee, organiser and/or officer of the CFMEU.
The Contractors
Buildcorp Commercial Pty Ltd (Buildcorp), at all material times:
a)was a constitutional corporation for the purposes of s.4 of the BCII Act;
b)was a building industry participant for the purposes of s.4 of the BCII Act;
c)was a building employer within the meaning of that term in s.4 of the BCII Act;
d)was responsible for the construction of apartments known as the Rosso apartments at 264 Drummond Street, Carlton in Victoria (Carlton site); and
e)engaged Jelena Hall Pty Ltd (Jelena Hall) and the following contractors:
Metro Ceramics Pty Ltd (Metro Ceramics);
Lifetsyle Kitchens Aust Pty Ltd trading as Lifestyle Cabinets;
Prostut Pty Ltd;
Meaden Building Services Pty Ltd;
4One5 Pty Ltd;
Kelvin Way Pty Ltd;
Chevron Glazing (Victoria) Pty Ltd;
McKenna & Sons Painting and Maintenance;
Iron Eagle;
CCS Building Services Pty Ltd;
Plumbco Plumbers Pty Ltd;
Perfect Australian Wardrobes and Shower Screens; and
Access Platform Systems Pty Ltd –
to provide labour at the Carlton site on 13 March 2009.
Jelena Hall, at all material times:
a)was a constitutional corporation for the purposes of s.4 of the BCII Act;
b)was a building industry participant for the purposes of s.4 of the BCII Act;
c)was a building employer within the meaning of that term in s.4 of the BCII Act;
d)employed building employees within the meaning of that term in s.4 of the BCII Act to perform work at the Carlton site; and
e)
was a party to and bound by the Jelena Hall and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 (the Jelena Hall EBA) that had a nominal expiry date of
31 March 2008.
The contractors referred to at sub-paragraph 10(e) above, at all material times:
a)save for McKenna & Sons Painting and Maintenance, Iron Eagle and Perfect Australian Wardrobes and Shower Screens were constitutional corporations for the purposes of s.4 of the BCII Act;
b)were a building industry participants for the purposes of s.4 of the BCII Act;
c)were building employers within the meaning of that term in s.4 of the BCII Act; and
d)employed building employees within the meaning of that term in s.4 of the BCII Act to perform work at the Carlton site.
At all material times, building work, within the meaning of that term in section 5 of the BCII Act, was required to be performed in accordance with the terms and conditions prescribed by the following industrial instruments:
a)in respect of Jelena Hall, the Jelena Hall EBA; and
b)in respect of the contractors referred to at sub-paragraph 10(e) above, their applicable building enterprise agreements within the meaning of that term in s.4 of the BCII Act.
The failure to perform building work
On Friday 13 March 2009 Hudson attended at the Carlton site.
At about 11:45 am, on Friday, 13 March 2009, a meeting took place of the 44 employees of Jelena Hall and the contractors (referred to at sub-paragraph 10(e) above) (referred collectively as the workers) on Drumond Street, Carlton in front of the Carlton site (the workers’ meeting).
At all relevant times, one or more of the workers were members of the CFMEU.
During the course of the workers’ meeting, Hudson encouraged the workers to take strike action for the remainder of that working day by ceasing to perform any further work that day and by leaving the Carlton site after the workers’ meeting.
After the workers’ meeting 22 of the workers took strike action on
13 March 2009 by not performing any further work and leaving the Carlton site for the remainder of the day.
The failure of the workers to continue performing building work on
13 March 2009 was “building industrial action” within the meaning of s.36(1) BCII Act.
Hudson’s industrial motivation was to disrupt the performance of work at the Carlton site by encouraging the workers to take the building industrial action.
At all times, the building industrial action was not “excluded action” within the meaning of that term in s.36 of the BCII Act.
By encouraging the workers to fail to perform building work, Hudson engaged in “unlawful industrial action” in contravention of s.38 of the BCII Act.
There was no significant loss or disruption of work due to the unlawful industrial action on 13 March 2009.
The conduct of Hudson was conduct of an officer of the CFMEU within the meaning of s.69(3) BCII Act, acting in that capacity, and was therefore conduct of the CFMEU pursuant to s.69(1) BCII Act. The CFMEU had no direct knowledge of the conduct of Hudson referred to above.
Admitted contraventions of s.38 of the BCII Act by the CFMEU and Hudson
Hudson admits that by his conduct on 13 March 2009, he contravened s.38 of the BCII Act.
The CFMEU admits that by the operation of s.69 of the BCII Act, the admitted conduct of Hudson is the conduct of the CFMEU and accordingly, the CFMEU admits that it has contravened s.38 of the BCII Act.
Proposed penalties
The parties agree that in all the circumstances, the following penalties in relation to the respondents are appropriate and within the permissible range:
a)$17,500.oo for the CFMEU for one contravention of s.38 of the BCII Act; and
b)$7,500.00 for Hudson for one contravention of s.38 of the BCII Act.
Court’s approach when the parties have agreed on penalty
When the parties have agreed on penalties, the court is by no means bound to impose the agreed penalties. The court should itself consider the permissible range of penalties in all of the circumstances of the case. If the agreed penalties fit within the permissible range, it would be appropriate for the court to make orders imposing those penalties.
This was explained in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993 at [53] to [60], albeit in the context of a trade practices case:
53. The following propositions emerge from the reasoning in NW Frozen Foods[1]:
[1] [1996] FCA 1134; (1996) 71 FCR 285
(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.
54 Five further points should be made.
55 First, the rationale for giving weight to a joint submission on penalty is said by the Court to be the savings in resources for the regulator and the Court, as well as the likelihood that a negotiated resolution will include measures designed to promote competition. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, "Determining the Appropriate Role for Charge Bargaining in Part IV of the Trade Practices Act" (1996) 4 Comp & Cons LJ 69, at 72-74. Of course the arguments in favour of negotiated settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty.
56 Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties’ proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range.
57 Thirdly, as has been noted, the appellant in NW Frozen Foods admitted contravening the TP Act and had reached agreement with the ACCC upon the facts to be put before the Court. There was no suggestion that the admissions or statement had been tailored or modified to reflect the difficulties faced by the ACCC in proving its case. The Full Court therefore acted on the basis of clear admissions and a detailed statement of agreed facts setting out how the contraventions had occurred. Accordingly, the decision is consistent with the views expressed by the New Zealand High Court in Milk Corporation. Those views are, with respect, correct in principle.
58 Fourthly, as the Full Court in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2002] ATPR 41-851, has pointed out, the regulator should always explain to the Court the process of reasoning that justifies a discounted penalty. In that case, the ACCC and two contravenors produced an agreed statement of facts, supplemented by affidavit evidence, but they disagreed as to the appropriate penalty. The trial Judge had previously imposed agreed penalties on other offenders, which the Full Court apparently thought were somewhat low (at 44,543 [51]), and had taken these penalties into account in determining the appropriate penalties to be imposed on the two remaining contravenors. The Full Court made the following observations (at 44,549 [56]):
"[w]here the Commission proposes to the Court an agreed penalty which is calculated taking into account a substantial discount from what would otherwise be considered the appropriate penalty so as to reflect a degree of co-operation, it would be desirable that the Commission disclose the process by which the discounted penalty has been arrived at. In particular, it would be of assistance to the Court, particularly where there are other proceedings pending, to hear submissions on the range of appropriate penalties and the discount which it is proposed should be allowed to take into account the level of co-operation afforded by the offender. Had that been done in the present case, the learned primary judge would have been able to form a view as to the appropriate range of penalty absent co-operation and have then been in the position to calculate an appropriate discount to take into account the exceptional level of co-operation afforded by QIS [one of the offenders]. It is only in this way that a comparison could properly be made between the penalty payable where the offender had offered a high level of co-operation and the penalty payable where the level of co-operation was of a lesser magnitude."
59 These observations are consistent with the approach in NW Frozen Foods. The Full Court in Ithaca Ice was plainly aware of the reasoning in NW Frozen Foods, since it considered the factors discussed in that case as relevant to the quantum of penalty. It follows that a court considering an "agreed" penalty is entitled to expect the regulator to explain the basis on which a discount from the otherwise appropriate penalty has been calculated having regard to the contravenor’s co-operation and, for that matter, other relevant factors. (For endorsement of this approach, see Australian Law Reform Commission, Principled Regulation: Federal Civil and Administrative Remedies in Australia (ALRC 95, 2002), pars 30.81 ff.)
60 Fifthly, there 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.
Maximum penalty
The maximum penalty for the first respondent’s breach is $110,000. The proposed penalty of $17,500 is about 15.9% of the maximum penalty.
The maximum penalty for the second respondent’s breach is $22,000. The proposed penalty of $7,500 is about 34% of the maximum penalty.
Approach to determining penalty
A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14]. That list is as follows:
(a)The nature and extent of the conduct which led to the breaches.
(b)The circumstances in which that conduct took place.
(c)The nature and extent of any loss or damage sustained as a result of the breaches.
(d)Whether there had been similar previous conduct by the respondent.
(e)Whether the breaches were properly distinct or arose out of the one course of conduct.
(f)The size of the business enterprise involved.
(g)Whether or not the breaches were deliberate.
(h)Whether senior management was involved in the breaches.
(i)Whether the party committing the breach had exhibited contrition.
(j)Whether the party committing the breach had taken corrective action.
(k)Whether the party committing the breach had cooperated with the enforcement authorities;
(l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
(m) The need for specific and general deterrence.
The court must of course be mindful of the caution expressed by Buchanan J in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [91] as follows:
Check lists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. There is no suggestion in the present case that the learned magistrate made any relevant error in her identification of the matters which she should consider in fixing penalties.
The court will firstly consider the circumstances of the case under the various headings suggested by Mowbray FM, and then consider whether any other matters are relevant.
The nature and extent of the conduct which led to the breach
As stated above, the second respondent breached s.38 of the BCII Act, which prohibits unlawful industrial action. By operation of s.69 of the BCII Act, the conduct of the second respondent is taken to be the conduct of the first respondent.
The breach resulted in 22 workers taking strike action from 11.45 am on 13 March 2009 until the end of the working day. The second respondent’s actions were a deliberate breach of s.38 of the BCII Act.
The circumstances in which that conduct took place
The breach occurred on a building site.
The nature and extent of any loss or damage sustained as a result of the breaches
The applicant conceded that the breach did not result in a significant loss or a significant disruption of work.
Whether there had been similar previous conduct by the respondent
Previous contraventions by the first respondent are set out in annexure A to these reasons. In summary, the first respondent has been involved in 33 breaches of s.38 of the BCII Act, and 18 breaches of other industrial legislation involving unlawful industrial action.
The breaches occurred between October 2002 and August 2010.
The penalties imposed on the second respondent for the s.38 breaches ranged from $5,000 for a contravention on a single date to $120,000 for contraventions on five dates.
Previous contraventions by the second respondent are set out in annexure B to these reasons. In summary, the second respondent has breached s.38 of the BCII Act on four previous occasions and s.43 of the BCII Act on one occasion. The previous breaches occurred between August 2008 and April 2009. The penalties imposed on the second respondent ranged between $2,000 and $5,000.
Whether the breaches were properly distinct or arose out of the one course of conduct
There was only one breach in the present case.
The size of the business enterprise involved
This factor is not relevant in the present case.
Whether or not the breaches were deliberate
In view of the previous breaches by the second respondent of s.38 of the BCII Act, there can be no doubt that the breaches in this case were deliberate on his part. However, the parties agree that the first respondent had no direct knowledge of the conduct of the second respondent. Consequently, the breach cannot be seen as deliberate on the first respondent’s part.
Whether senior management was involved in the breach
This factor is not relevant to the present case.
Whether the party committing the breach has exhibited contrition, corrective action and co-operation with the authorities
The respondents have cooperated with the authorities by admitting the breach, entering into an agreed statement of facts, and agreeing with the regulator on a penalty. This has relieved the regulator of the time, effort and cost of preparing for and running a hearing. Consequently, the regulator has been able to devote the saved time, effort and cost to the investigation and prosecution of other matters. This cooperation warrants some reduction in the penalty that would otherwise be appropriate.
There is no evidence before the court of any contrition or corrective action on the part of the respondents.
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
This factor does not arise in this case.
The need for specific and general deterrence
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union 171 FCR 357 at [37] that:
Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur.
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93]:
In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217.
Similarly, in CPSU v Telstra Corporation Limited (2001) 108 IR 228 at 230-231, Finkelstein J said:
… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and act as a warning to others not to engage in similar conduct ….
The applicant argued that the need for specific deterrence in the case of the second respondent was not as great as the need for specific deterrence in the case of the first respondent. Nevertheless, the second respondent has a significant history of similar breaches in the recent past.
The second respondent made no particular submission to the effect that the court could have confidence that the respondents will not offend again in the future. On the contrary, the lack of any express remorse on the respondents’ parts tends to suggest that, in the absence of a significant penalty, the respondents may well offend again in the future.
The respondents submitted that the bringing of the proceedings in this case is in itself a specific deterrent. The respondents referred to Ponzio v B&P Caelli Constructions Pty Ltd & Ors (2007) FCA 1221 at [25], [31], [34] and [35]; Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [138] and [164] per Jessup J but see Lander J at [102]; Pine v Expoconti Pty Ltd [2005] FCA 1434 per Kenny J at [15]-[16]; Pine v Casello Constructions Pty Ltd (2005) FCA 1854 per North J at [9]; Ponzio v D&E Airconditioning Pty Ltd (2005) FCA 964 per North J at [20], [29] and [30]; Furlong v Maxim Electrical Services (Aust) Pty Ltd (No. 3) (2006) FCA 1705 per Marshall J at [20].
Allowing for that matter, the respondents’ histories call for significant weight to be given to the requirement of specific deterrence.
In relation to general deterrence, the respondents submitted that the negotiated outcome in this case freed the regulator to pursue other cases, which in itself has a deterrent effect: Mobil at [55]. Accepting that, there remains a need for a significant penalty to discourage others from engaging in the same type of conduct.
Other issues
The second respondent submitted that:
the principle of parsimony seeks to prevent the imposition of punishment in excess of that required to achieve defined social purposes.
The second respondent referred to Webb v O’Sullivan [1952] SASR 65 where Napier CJ stated at [66]:
The courts should endeavour to make the punishment fit the crime and the circumstances of the offender, as nearly as may be. Our first concern is the protection of the public, but, subject to that, the court should lean towards mercy. We ought not to award the maximum which the offence will warrant, but rather the minimum which is consistent with a due regard to the public interest.
The applicant, in reply, denied that there was any principle in sentencing of parsimony. The applicant cited no authority in support of that proposition. The applicant said that the court has a broad sentencing discretion, and the sentence should be neither manifestly excessive nor manifestly inadequate.
Whether or not the sentencing principle quoted above from Webb v O’Sullivan is properly described as the principle of parsimony, it has been described as the golden rule of sentencing. In Re Trade Practices Commission v Roddy Farrow Also Known As Ronald Frederick and Trade Practices Commission and Jim Spatharos Also Known As Dimitrios Spatharos [1990] FCA 74 (19 March 1990), Von Doussa J at [42] set out the quotation above from Webb v O’Sullivan after saying:
It is as well to remember the so called golden rule of sentencing exemplified in South Australia by the well known remarks from the judgment of Napier C.J. in Webb v. O'Sullivan (1952) SASR 65, which are incorporated in the … judgment of King C.J. in Yardley v. Betts(1979) 22 SASR 108 at 112-113 … .
In the absence of reference to any authority to the contrary, I accept that, even if I am not bound by Von Doussa J’s statement of principle, I at least ought to follow it.
The second respondent submitted that:
Prior contraventions of a different character should not be considered as relevant prior contraventions or relevant prior conduct: See Leighton Contractors Pty Ltd & Anor v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 at 390 and Stuart-Mahoney v CFMEU [2008] FCA 1426 at [44].
In assessing any previous contraventions the Respondents submit that the proper approach is that set out by her Honour Justice Kenny in Cahill v CFMEU (No.4) (2009) 189 IR 304 at 320 para. [69].
The relevant passage from Leighton is as follows:
67.… It is not appropriate to consider all contraventions of any industrial legislation by any Branch of the first defendant anywhere in Australia. The first defendant is a very large organisation that operates throughout Australia. Branches, Divisions, officers and representatives of the first defendant are involved in dealings with employers in relation to industrial matters every day. It is inappropriate to take account of conduct of the first defendant through various Branches, Divisions and officers or representatives that is of a different character than the contravening conduct in question and are contraventions of different legislation. In those circumstances and having regard to the difference in nature between the contraventions in this case and the matters giving rise to the proceedings referred to by the Commissioner, those other offences should not be given the weight given to them by the Commissioner.
The relevant passage from Stuart-Mahoney (per Tracey J) is as follows:
Similar previous conduct
44.This consideration is derived from the decision of Branson J in Coal & Allied Operations. In the present case, the applicant invites the Court to have regard to previous contraventions by the CFMEU of the WR Act in determining the appropriate penalty for the CFMEU’s contraventions of the BCII Act. Similar previous conduct demonstrates that the respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Conduct which is of a different character does not assist this assessment see: Leighton Contractors Pty Ltd v Constructions, Forestry, Mining and Energy Union (2006) 164 IR 375 at [67]. Similar conduct which has been found to contravene other legislative provisions will have potential relevance. In this case, any previous contraventions of the provisions of Part 9 of the WR Act which relate to unlawful industrial action and coercion are relevant in determining the appropriate penalty.
The relevant passage from Cahill is as follows:
69.In summary, the history referred to above shows that the Union, through its representatives at various levels around the country, has a history of engaging in coercive conduct relevantly similar to the kind in question in this case. I would not, however, accord equal weight to all parts of this history, especially having regard to the fact that not all elements of this history are to be treated as prior contraventions and many elements relate to events outside Victoria and also at a level that might be thought more indicative of local than national concern. Further, as the respondents submitted, it must be borne in mind that, from 1999 to date, the Union, whether or not considered from the relevant divisional perspective, had a considerable spread of activities – from large to small – all over the country.
The applicant submitted in reply that:
a)it is a matter for the court to determine what weight it gives to previous contraventions of industrial legislation; and
b)the court is not constrained to look only at previous contraventions of a similar nature.
The applicant relied on Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at [61] to [62] where Gilmour J said:
Prior relevant contraventions
61.Barker J in Australian Building & Construction Commissioner v Construction Forestry Mining & Energy Union (No 2) (City Square) (2010) 199 IR 373 summarised at [47] the agreed applicable principles in that case. These are discussed as follows:
(a) Similar prior contraventions may be taken into account in assessing penalty, but cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention. To do so would be to impose a fresh penalty for past contraventions: Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477.
(b) However, similar previous contraventions may demonstrate that a respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Previous contraventions may demonstrate that the respondent has manifested in the commission of the latest contravention a continuing attitude of disobedience of the law. In such a case, "retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted": Veen (No 2) at 477.
(c) A sentencing court looks to the general record of conduct of the offender, his attitude to the law as disclosed by such conduct, apparent attempts at rehabilitation and similar considerations. Repeated conduct of a particular kind may lead to an identified need to provide some particularly persuasive form of deterrent against similar future conduct: Temple v Powell[2008] FCA 714; (2008) 169 FCR 169 at [64].
(d) A respondent is not to be punished again for the prior conduct. Prior conduct may diminish leniency by reason of good character, having an upward effect on penalty, albeit within the proper limits indicated by the circumstances of the immediately contravening conduct: R v McInerney(1986) 42 SASR 111 at 113.
(e) The effect of prior contravening conduct is more cogent if it has been the subject of conviction. If not, the prior conduct is still relevant but perhaps of less weight: McInerney at 113.
(f) Whether previous misconduct by branches in other states of a national organisation is relevant to fixing a penalty is a question of logic. In some cases, a pattern of conduct across the country may suggest a national culture of misconduct: Temple v Powell at [63].
(g) The quality of the conduct and its relevance to the industrial behaviour which the instant legislation seeks to address is determinative, not whether the prior conduct arose under different legislation or different provisions of the instant legislation: Stuart-Mahoney v CFMEU at [44] to [46].
(h) Prior relevant conduct includes that of officials from other branches of the union: Williams v Construction, Forestry, Mining and Energy Union (No 2)[2009] FCA 548; (2009) 182 IR 327 at [19]- [25]. However, Barker J in City Square at [48] accepted that contraventions in other branches of the CFMEU, while relevant, are to be given less weight than contraventions within the branch in question.
62.Past conduct cannot operate so as to increase the penalty beyond that which would be appropriate to the conduct in question: Temple v Powell at [63].
I accept the recent statement of the law as set out by Gilmour J.
The cases mentioned above do not, it seems to me, reflect any great difference of principle, but some slight differences of emphasis.
The amount of the penalties for the breach
In all of the circumstances of this case, I consider that the penalties proposed by the parties are within the permissible range. I consider that it is appropriate in this case to impose the penalties proposed by the parties. The principal reasons for so concluding are that the histories of the respondents, and their lack of remorse, call for a penalty giving considerable weight to specific deterrence but, on the other hand, the breach did not result in any significant loss or disruption to work. There will be orders accordingly.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Riley FM
Date: 8 October 2012
“A”
Schedule of contraventions by the CFMEU of the Building Construction Industry Improvement Act 2005 and related legislation involving unlawful industrial action.
| Decision | Contravention of BCII Act or related legislation | Dates of contraventions | Penalties applied to CFMEU |
| ABCC v Graauwmans & CFMEU MLG912/2011 | s38 | 17 August 2010 | $30,000 |
| Alfred v CFMEU [2011] FCA 556 | s38 /s44 | 19-28 May 2010 | 69. $100,000 |
| Woodside Burrup Pty Ltd v CFMEU [2011] FCA 949 | s38 | 1 and 2 December 2009 | $71,500 |
| Hogan v Jarvis, Temoho and CFMEU BRG1101/2010 | Presume s38 | 26-30 November 2009 | $36,300 |
| Australian Building and Construction Commissioner v CFMEU [2010] FCA 784 [2011] FCAFC 29 | s38 | 15 July 2009 | $40,000 |
| ABCC v CFMEU [2011] FCA 810 | s38 | 5, 6, 8, 24 and 25 June 2009 | $120,000 |
| Wotherspoon v CFMEU, Reardon and Hudson [2010] FMCA 786 | s38 | 1 April 2009 | $22,500 |
| John Holland v CFMEU, Travers, O’Grady and Reardon [2009] FMCA 1248 | s38 | 24 March 2009 | $23,000 |
| John Holland Pty Ltd v Benstead & CFMEU [2009] FMCA 1065 | s38 | 11 March 2009 24 March 2009 | $25,000 |
| Williams v AMWU, CFMEU, Powell, Mavromatis & Pizarro [2010] FCA 754 | s38, s 43, s44 | 5 February – 29 April 2009 | $535,000 – s 43 $76,000 – s 38 |
| ABCC v CFMEU and McDonald (No 2) [2011] FCA 1518 | s38, s44 | 16 January 2009 2 February 2009 24 June 2009 20-21 August 2009 | $154,000 – s 38 $38,500 – s 44 |
| ABCC v CFMEU and Reardon [2012] FCA 189 (penalty decision) | s38 | 20 November 2008 | $50,000 |
| Gregor v CFMEU; Cozadinos v CFMEU [2011] FCA 808 | s38, s43 | October 2008 November 2008 December 2008 February 2009 March 2009 | $85,000 – s 38 $218,000 – s 43 |
| Gregor v Berardi and CFMEU [2010] FMCA 805 | s38 | 7 October 2008 | $25,000 |
| Flynn v CFMEU and FeehanMathers v CFMEU and Feehan [2011] FMCA 32 | s38 | 30 May 2008 15 July 2008 | In Flynn - $17,000 |
| Wotherspoon v CFMEU & Ors [2010] FCA 111 [2011] FCA 158 (penalty judgment) | s38 | 23 May 2008 14 August 2008 28 August 2008 | $48,250 |
| Heyman v CFMEU, Washington, Hudson and Spernovasilis [2011] FMCA 145 | s38 | 21 May 2008 | $30,000 |
| White v CFMEU [2011] FCA 192 | s38 / s 43 | 16 May 2008 28 May 2008 | $105,000 |
| Wotherspoon v CFMEU, Stephenson and Slater [2010] FMCA 184 | s38 | 30 April 2008 | $25,000 |
| White v CFMEU and McLoughlin [2010] FMCA 693 | s38 | 19 February 2008 | $38,500 |
| Cozadinos v CFMEU [2011] FMCA 284 | s38 | 7 April 2011 | $30,000 |
| Gregor v CFMEU and Berardi [2009] FMCA 1266 | s38 | 19 July 2007 | $7,500 |
| Cozadinos v CFMEU & Anor [2008] FMCA 1591 [2009] FMCA 272 | s 38 | 19 March 2007 | $5,000 |
| Cozadinos v CFMEU, Berardi and Mates [2010] FCA 48 | s 38 / s43 | 8 March 2007 | $20,000 – s 38 |
| Cruse v CFMEU and Anor [2009] FCA 787 | s38 | 6 October 2006 | $10,000 |
| Cruse v CFMEU & Anor (2009) 182 IR 60; [2009] FMCA 236 | s38 | 25 September 2006 | $27,500 |
| Stuart v CFMEU | s38 / s 44 | $25,000 (for s44 breach – no separate penalty for s38 breach) | |
| Duffy v CFMEU [2008] FCA 1804 (No 2) [2009] FCA 299 | s38 | 20 October 2005 | $5,500 |
| Alfred v Wakelin (No 1) [2008] FCA 1455 (CFMEU) | s38 | 15-18 October 2005 10-11 November 2005 | $8,000 |
| Stuart-Mahoney v CFMEU (2008) 177 IR 61; [2008] FCA 1426 | s 38 / s 43 | 6-13 October 2005 | $35,000 – s 43 |
| Cruse v CFMEU & Anor [2007] FMCA 1873 | s 38 | 22-24 September 2005 | $35,000 |
| Temple v Powell [2008] FCA 714; (2008) 169 FCR 169; (2008) 173 IR 189 | s38 / s. 178 WRA / s. 170MN WRA | 17 August 2005 25 August 2005 | $12,000 – s 38 $5,000 – s 178 WRA $1,000 – s 170MN WRA |
| Leighton Contractors Pty Ltd v CFMEU (No 4) [2006] WASC 317; (2006) 164 IR 375 | s38 | 9 March 2005 – February 2006 | $90,000 |
| Martino v CFMEU and Maher (No. T02692326) | s. 170NC WRA | 26 October 2004 28 October 2004 | $13,500 |
| Cahill v CFMEU [2008] FCA 495 | ss. 187AB(1)(a) and 187AB(1)(b) WRA | 11 May 2004 13 May 2004 14 May 2004 18 May 2004 | $4,000 |
| A & L Silvestri Pty Ltd v CFMEU [2007] FCA 1047 (liability) [2008] FCA 466 (penalty) | s. 170NC WRA | 20 October 2003 21 October 2003 | $5,500 |
| Ponzio v B & P Caelli Constructions Pty Ltd [2006] FCA 1221 (first instance) [2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444 | s. 187AB(1)(a) WRA / s. 187AB(1)(b) WRA | 5 August 2003 6 August 2003 25 August 2003 26 August 2003 | $5,000 |
| Pine v Multiplex Constructions (Vic) Pty Ltd; Cruse v Multiplex Limited [2005] FCA 1428 (Multiplex) [2007] FCA 2015 (CFMEU first instance) [2008] FCAFC 179; (2008) 172 FCR 279; (2008) 177 IR 189 (appeal) | 187AB(1)(a) and 187AB(1)(b) WRA | 5 August 2003 6 August 2003 | $2,500 |
| Alfred v Walter Construction Group Limited [2005] FCA 497 (penalty) | s. 170NC WRA | April 2003 | $7,500 |
| Alfred v CFMEU (D8498/02) | s. 170NC WRA | 14-15 October 2002 | $2,000 |
“B”
Schedule of contraventions of the Building Construction Industry Improvement Act 2005 by Matthew Hudson
| Decision | Contravention of BCII Act | Dates of contraventions | Penalties |
| Wotherspoon v CFMEU (No 2) [2011] FCA 158 | s38 | 28 August 2008 | $2,500 |
| Gregor v CFMEU & Ors [2011] FCA 808 | s38 s43 | 16 October 2008 29 November 2008 12 December 2008 12 and 15 December 2008 12 and 13 February 2009 Between 18 and 2 March 2009 | $5,000 $5,000 $2,000 $5,000 $5,000 $5,000 |
| Heyman v CFMEU, Washington, Hudson and Spernovasilis [2011] FMCA 145 | s38 | 21 May 2008 | $5,000 |
| Wotherspoon v CFMEU, Reardon and Hudson [2010] FMCA 786 | s38 | 1 April 2009 | $2,500 |
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