Green Engineering (Vic) Pty Ltd v Deputy Commissioner for Consumer Affairs - [2016] SASC 162

Supreme Court of South Australia
(Magistrates Appeals: Criminal)
GREEN ENGINEERING (VIC) PTY LTD v DEPUTY COMMISSIONER FOR CONSUMER AFFAIRS
[2016] SASC 162
Judgment of The Honourable Justice Doyle (ex tempore)
20 October 2016
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
PROFESSIONS AND TRADES - LICENSING OR REGULATION OF OTHER PROFESSIONS, TRADES OR CALLINGS - ELECTRICAL CONTRACTORS AND ELECTRICIANS
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE
The appellant pleaded guilty to and was convicted in the Magistrates Court of one contravention of s 6 of the Plumbers, Gas Fitters and Electricians Act 1995 (SA) (count 1), three contraventions of s 76(a)(i) of the Australian Consumer Law (counts 2-4) and one contravention of s 158(7) of the Australian Consumer Law (count 6). For these offences and utilising s 18A of the Criminal Law (Sentencing) Act 1988 (SA) the Magistrate imposed an overall fine of $105,000, which he explained represented the total of 10 per cent of the maximum penalties applicable in respect of each offence, reduced by 30 per cent on account of the appellant’s pleas of guilty.
The appellant appealed against the sentence on the grounds that the sentence was manifestly excessive, the Magistrate failed to apply totality principles and the Magistrate erred in adopting a mechanical approach involving the imposition of a fine calculated by reference to a uniform proportion of the applicable maximum penalty for each count.
Held per Doyle J, allowing the appeal:
1. The Magistrate erred in applying a uniform approach of 10 per cent of the relevant maximum penalty to determine the fine for each offence.
2. The sentence imposed in relation to count 6 was manifestly excessive.
Plumbers, Gas Fitters and Electricians Act 1995 (SA) ss 4, 6; Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) ss 76(a)(i), 158(7); Criminal Law (Sentencing) Act 1988 (SA) s 18A; Fair Trading Act 1987 (SA) s 8A, referred to.
House v The King (1936) 55 CLR 499; Markarian v The Queen (2005) 228 CLR 357; R v Donald; R v Pitt; R v Whitaker [2016] SASCFC 117; Bendikov v Parkes [2008] SASC 248; R v Bandjak (2011) 109 SASR 315; Pearce v The Queen (1998) 194 CLR 610, considered.

GREEN ENGINEERING (VIC) PTY LTD v DEPUTY COMMISSIONER FOR CONSUMER AFFAIRS
[2016] SASC 162
Magistrates Appeal
DOYLE J (ex tempore):

On its pleas of guilty the appellant was convicted in the Magistrates Court of one contravention of s 6 of the Plumbers, Gas Fitters and Electricians Act 1995 (SA) (the PGE Act), three contraventions of s 76(a)(i) of the Australian Consumer Law (the ACL) and one contravention of s 158(7) of the ACL.
For these offences and utilising s 18A of the Criminal Law (Sentencing) Act 1988 (SA) (the Sentencing Act), the Magistrate imposed an overall fine of $105,000, which he explained represented the total of 10 per cent of the maximum penalties applicable in respect of each offence, reduced by 30 per cent on account of the appellant's pleas of guilty.
The appellant appeals against the sentence imposed by the Magistrate on various grounds, which may be summarised as follows:
·    The sentence imposed was manifestly excessive (ground 1).
·    The Magistrate failed to apply totality principles (ground 2).
·    The Magistrate erred in adopting a mechanical approach involving the imposition of a fine calculated by reference to a uniform proportion of the applicable maximum penalty for each count (ground 3).
·    Despite adverting to a number of important features of the offending in his sentencing remarks, the Magistrate failed to take account of those matters (and other matters) when determining the sentence to be imposed (ground 4).
Background
The appellant operates a business supplying and installing solar systems. It operates out of Victoria, but also conducts business in South Australia. The appellant used two types of sales representatives in carrying out its customer sales, being internal sales representatives who dealt with responses by consumers to advertisements, and contractors involved in unsolicited door-to-door sales. In general terms, the appellant supplied the materials necessary for the solar systems and then would arrange for a licensed electrician to undertake the necessary electrical work involved in the installation process.
Throughout the period relevant to the offending the subject of these proceedings, the appellant was a registered electrical contractor in Victoria. However, and despite being eligible to apply for and hold a South Australian licence under the relevant mutual recognition legislation, it did not hold an electrical contractor's licence under the PGE Act. The appellant has since, on 17 August 2015, obtained a South Australian licence.
On 12 July 2016 the appellant pleaded guilty to the following charges:
· Count 1: Between 25 September 2014 and 28 June 2015, the appellant carried on business as an electrical contractor when it was not authorised to do so by a licence issued under Part 2 of the PGE Act, contrary to s6(1)(a) of that Act. The maximum penalty for this offence is a fine of $250,000.
· Count 2: On 28 April 2015, being a dealer who made an unsolicited consumer agreement with a consumer, Maxine Carman, failed to give information as to the consumer’s right to terminate the agreement within the termination period, namely 10 business days, contrary to s 76(a)(i) of the ACL. The maximum penalty for this offence is a fine of $50,000.
· Count 3: On 30 June 2015, being a dealer who made an unsolicited consumer agreement with a consumer, Beverley Fitzsimmonds, failed to give information as to the consumer’s right to terminate the agreement within the termination period, namely 10 business days, contrary to s 76(a)(i) of the ACL. The maximum penalty for this offence is a fine of $50,000.
· Count 4: On 29 June 2015, being a dealer who made an unsolicited consumer agreement with a consumer, Karen Heness, failed to give information as to the consumer’s right to terminate the agreement within the termination period, namely 10 business days, contrary to s 76(a)(i) of the ACL. The maximum penalty for this offence is a fine of $50,000.
· Count 6: Between 25 September 2013 and 10 September 2015, being a person in trade or commerce who accepted payment for the supply of services from Marianne Peat, failed to supply all the services within a reasonable time, contrary to s 158(7) of the ACL. The maximum penalty for this offence is a fine of $1,100,000.
The prosecution tendered no evidence on count 5 on the Complaint. Counts 7 to 11, which involved charges of failing to attend compulsory conciliation conferences in relation to various identified consumers as required by the Commissioner for Consumer Affairs,[1] were dealt with by way of the imposition of fines in the amount of $315 (the expiation fee) for each offence.
[1] Contrary to s 8A of the Fair Trading Act 1987 (SA).
The appellant was sentenced on the basis of an agreed summary of facts provided to the Magistrate and appended to the Magistrate's sentencing remarks. While I have had regard to the entirety of that summary of facts, it is not necessary for me to set it out in detail. It is sufficient for me to note the following matters by way of overview.
Count 1 comprised four instances of carrying on business as an electrical contractor without authorisation. The conduct the subject of the charge occurred between September 2014 and June 2015 when sales representatives purporting to act on behalf of the appellant entered into contracts for the sale and supply of solar systems. The first instance involved a sales representative attending the home of the consumer (Mr Bradbrook) in accordance with an appointment he made after seeing an advertisement by the appellant. The second, third and fourth instances involved unsolicited attendances at the consumers' homes by the sales representatives. The consumers on these three occasions were Ms Carman, Ms Fitzsimmonds and Ms Heness, with the conduct in relation to their agreements also being the subject of counts 2, 3 and 4 respectively.
On each occasion the consumer entered into an agreement to purchase a solar system for prices that varied between the consumers, being $5,150 for Mr Bradbrook, $8,500 for Ms Carman, $12,500 for Ms Fitzsimmonds and $9,200 for Ms Heness. The first three of these agreements were subsequently terminated by the consumers. No work was carried out and no money changed hands. The only qualification to this was a deposit of $515 paid by Mr Bradbrook, which was later refunded after the agreement had been terminated.
Only the agreement with Ms Heness was seen through to completion. Her system was installed two days after she entered into her agreement with the appellant. The electrical work was carried out by a licensed electrician. Ms Heness has not made any complaint about the installation of her solar system or otherwise.
I have mentioned that the appellant was not at the relevant time licensed in South Australia to perform work as an electrical contractor. Despite work only being carried out in relation to one agreement and despite the use of a licensed electrician in relation to that work, nevertheless the appellant's operations constituted by these four dealings were in breach of s 6 of the PGE Act because the appellant was, by entering into the contracts for the supply and installation of the solar systems, “organis[ing] or arrang[ing] for the performance of” regulated work.[2]
[2] See the s 4 definition of “perform” in the PGE Act.
Counts 2, 3 and 4 involved breaches of s 76(a)(i) of the ACL, which requires that consumers be advised of their right to terminate an unsolicited consumer agreement within the termination period, which was 10 days. The agreements entered into with each of Ms Carman, Ms Fitzsimmonds and Ms Heness involved pro forma agreements from contract pads used by the sales representatives which were intended for solicited sales and specified a five day cooling off period rather than the mandatory 10 days.
Count 6 involved a contravention of s 158(7) of the ACL, which prohibits accepting payment for goods or services not supplied within a reasonable time. The agreed factual basis for this offence was that in September 2013 a Ms Peat entered into a contract with a sales representative acting on behalf of the appellant for the supply and installation of a solar system at her Whyalla property. The contract price was $5,500, plus $800 to fit angled mounting brackets for the system. Ms Peat paid a $500 deposit on the day she signed the contract. She was assured by the sales representative that the system would be installed in December 2013 in order to take advantage of a feed-in tariff scheme which was available until 29 January 2014. The sales representative also informed Ms Peat that installation of the mounting brackets would require council approval but that the appellant would deal with this process. The appellant did not attend to, or follow up, council approval, and as at May 2014 the installation had still not taken place. In September 2015 the respondent facilitated a conciliation of the outstanding issues, and the appellant agreed to pay for engineering drawings and council fees. The installation was thereafter completed and the balance of the contract sum paid by Ms Peat in about June 2016. The appellant also undertook to pay Ms Peat an amount equivalent to the solar tariff for a period of three years. Accordingly, the appellant's contravention of s 158(7) lay in its receipt of a $500 deposit for work that was not carried out for just short of three years.
The Magistrate’s approach to sentence
After identifying the offences pleaded to, and their maximum penalties, the Magistrate referred to the nature and policy of the relevant legislation. He observed the need for the community to have confidence in those who are working in the electrical industry and hence the need for the licensing regime. For these reasons, both personal and general deterrence were significant factors in the sentencing exercise.
The Magistrate noted, however, that the offending in question was “towards the lower end of the scale of such matters.” He also noted that the appellant was licensed in Victoria and eligible for licensing in South Australia at the relevant times; that all electrical work had in fact been carried out by qualified electricians; that any losses in the form of deposits or tariffs had already been refunded or paid by the appellant; that at least in recent times the appellant had been fully cooperative, including through his pleas of guilty and frankness with the court; and that the appellant had no history of offending.
In relation to the circumstances of the offending, the Magistrate took into account the appellant's submission that the sole director of the appellant, Mr Ye, had been in the United States between August 2014 and May 2015 in an attempt to establish a business over there. During that period he left the running of the business in Australia largely to his management staff in Melbourne. He was not informed of any issues with consumers during the period he was away, and only became fully aware of the issues the subject of these proceedings in July of 2015. By that time he had already dismissed the customer service manager for failing to attend the compulsory conciliation conferences that were the subject of counts 7 to 11.
The Magistrate then addressed the various offences separately, summarising in general terms the circumstances in which they occurred. After addressing the penalties imposed in respect of counts 7 to 11 (being convictions and fines of $315 in respect of each), the Magistrate turned to the remaining counts. His sentencing remarks were as follows:
I turn to address counts 1, 2-4 inclusive, and 6.
I remind myself of all of the circumstances of this matter and note the substantial maximum penalties that can apply to each of these counts. No doubt convictions need to be recorded on each count and the appropriate penalty is a monetary penalty.
In general terms, I accept defence counsel’s submissions that in many respects the offending is towards the lower end of the scale for such matters. Having made that comment I remind myself of the policy of the legislation in question and the need for a strict licencing regime.
Ultimately, I have resolved to impose a monetary penalty that represents a sum equivalent to 10% of the maximum for each count. I also wish to make it clear that I intend to apply a sentencing discount of 30% to reflect the entering of guilty pleas.
I note the circumstances of count 1. I further note that counts 2-4 inclusive are similar in nature to one another. I also note the circumstances of count 6. In relation to count 6, I note the efforts ultimately made by the defendant company and note that the matter has finally resolved without there being any actual financial loss to the customer. I further note that the defendant company has met the ‘extra’ costs referred to by defence counsel. Having noted all those matters, however, I remain conscious of the significant delay and inconvenience to the customer.
These sentencing remarks need to be transparent and it needs to be clear as to how I have arrived at my final penalty. I have ultimately resolved to impose one fine to cover all these remaining counts. That fine will be in the sum of $105.000. This figure has been arrived at in the following manner:
If I was to deal with each count individually and impose a fine equivalent to 10% of the maximum, then on count 1 I would impose a fine of $25,000, count 2 a fine of $5,000, count 3 a fine of $5,000, count 4 a fine of $5,000 and on count 6 a fine of $110,000. Those individual penalties would then total a sum of $150,000. The defendant company is then entitled to a sentencing discount of 30% due to the entering of guilty pleas, thereby reducing the amount in question to $105,000. Rather than impose individual penalties on each count, I have resolved to utilise Section 18A and impose the one penalty.
Accordingly, on these remaining counts, the defendant company will be convicted and fined $105,000 for the reasons detailed above.
The appeal
I have summarised the four grounds of the appeal at the outset of these reasons.
An appeal against sentence is of course subject to the principles in House v The King.[3]Those principles are well known and do not require detailed consideration. It is sufficient for present purposes to note the summary of those principles by the plurality in Markarian v The Queen:[4]
As with other discretionary judgments, the inquiry on an appeal against sentence is identified in the well-known passage in the joint reasons of Dixon, Evatt and McTiernan JJ in House v The King, itself an appeal against sentence. Thus is specific error shown? (Has there been some error of principle? Has the sentencer allowed extraneous or irrelevant matters to guide or affect the decision? Have the facts been mistaken? Has the sentencer not taken some material consideration into account?) Or if specific error is not shown, is the result embodied in the order unreasonable or plainly unjust? It is this last kind of error that is usually described, in an offender’s appeal, as “manifest excess”, or in a prosecution appeal, as “manifest inadequacy”.
[3] House v The King (1936) 55 CLR 499 at 504-505.
[4] Markarian v The Queen (2005) 228 CLR 357 at [25] (omitting citations).
Analysis
In my view the appellant has established two interrelated errors in the Magistrate's exercise of his sentencing discretion.
The first relates to the Magistrate's approach to the sentence imposed, involving the use of a uniform proportion of 10 per cent of the relevant maximum penalty for each offence, and is a reflection of the third ground of appeal. In my view this involved an error of principle. The second relates to the penalty imposed in respect of count 6. I consider that the starting point for this offence (a fine of $110,000) was manifestly excessive.
The errors are interrelated because the error in principle has in my view resulted in a penalty in respect of count 6 which was manifestly excessive in that it was outside the range of sentences that might reasonably have been imposed given the circumstances relevant to that offence.
In applying a uniform approach of 10 per cent of the relevant maximum penalty to determine the fine for each offence, the Magistrate both overemphasised the relevance of the maximum penalties and adopted an approach that did not have adequate regard to the facts and circumstances of the individual offences.
While the maximum penalty is a relevant consideration, its relevance is generally confined to its use as a yardstick, and by way of comparison between the worst possible case and the case before the court. I refer in this respect to the consideration of the relevance of the maximum penalty in Markarian v The Queen.[5]
[5] Markarian v The Queen (2005) 228 CLR 357 at [30]-[31].
It is significant in this case that while counts 2, 3 and 4 involved similar conduct, contraventions of the same provision and the same maximum penalty, this was not true of counts 1 and 6. Those counts involved quite different conduct, quite different legislative provisions and quite different maximum penalties. In those circumstances, the imposition of fines, or a total fine, determined by reference to a uniform proportion of 10 per cent of the maximum penalty applicable in respect of each offence involved error.

Although the Magistrate included reference in his sentencing remarks to various of the circumstances relevant to the individual offences, the methodology he ultimately adopted, as evidenced by his sentencing remarks, did not reflect an approach referable to those individual considerations. It was a methodology that was applied uniformly to each offence. This approach not only failed to focus appropriately on the individual offences, but also focused unduly on the applicable maximum penalties.
The importance of fixing a penalty in a case involving multiple offences that nevertheless reflects the facts and circumstances of each of the individual offences was very recently emphasised in the decision of the Court of Criminal Appeal in R v Donald; R v Pitt; R v Whitaker.[6] It was also a matter considered in Bendikov v Parkes.[7] The former of these two cases also emphasised that the utilisation of s 18A of the Sentencing Act does not sideline the usual principles applicable in the sentencing process. To the contrary, those principles remain relevant in guiding the sentencing discretion. Here, in circumstances where the Magistrate chose for quite appropriate reasons of transparency to reveal the underlying structure of the sentence he imposed under s 18A, his Honour's remarks reveal a misapplication of those principles.
[6] R v Donald; R v Pitt; R v Whitaker [2016] SASCFC 117.
[7] Bendikov v Parkes [2008] SASC 248 at [16].
The flaw that I have identified in the Magistrate's approach appears to both explain, and also be illustrated by, a consideration of the penalty imposed in respect of count 6. While regard must be had to the maximum penalty applicable in respect of that count ($1.1 million), it is my view that a starting point of $110,000 is excessive once regard is had to the nature and circumstances of the conduct in question and the circumstances of the appellant. The conduct in question, while deserving of a conviction and fine, was at the low end of the scale of seriousness. It is also relevant that the appellant had no prior history of offending, and has since made appropriate restitution to the consumer involved. I consider that a starting point of a fine of $110,000 prior to the reduction for the plea of guilty is out of proportion to the appellant's offending constituted by count 6. It is outside of the range of penalties that might reasonably have been imposed for that offence.
Resentencing
Having identified two errors, including an error of principle that infected the entire sentencing process, and bearing in mind that the Magistrate ultimately utilised s 18A of the Sentencing Act to impose a single sentence in respect of each of counts 1, 2, 3, 4 and 6, it is appropriate that I exercise the sentencing discretion afresh in respect of each of these counts.
It is unnecessary in that context for me to address the balance of the grounds of appeal.
In exercising the sentencing discretion afresh, I have had regard to the circumstances of the offending, and those relevant to the appellant, set out earlier in these reasons. I have also had regard to the maximum penalties applicable in respect of each count.
I acknowledge the importance of personal and general deterrence in regulatory offending, and the importance of ensuring that companies such as the appellant do not regard fines imposed for offences such as the present as merely a cost of doing business.
Nevertheless, the appellant's offending is at the lower end of the scale. While not licensed to carry out electrical contracting work in South Australia, it is relevant that the appellant was licensed in Victoria. It is also relevant that the appellant’s offending in respect of count 1 was inadvertent in the sense that the director of the appellant did not appreciate at the time that the requirements of the PGE Act extended to the appellant’s role in agreeing to sell and supply solar systems in South Australia. It is also relevant that the offending did not result in work being carried out other than by a licensed electrician, and has not resulted in any consumer suffering any apparent loss beyond some level of inconvenience. It must be taken into account that the appellant has effected appropriate restitution, and has not profited from the relevant dealings. The mitigatory significance of restitution is conveniently summarised in R v Bandjak.[8] It is also, of course, relevant that the appellant has no history of offending.
[8] R v Bandjak (2011) 109 SASR 315 at [20], [80].
There is an overlap between the circumstances of count 1, and counts 2, 3 and 4, in that three of the four dealings relied upon in support of the carrying on of business involved in count 1 were with the consumers the subject of counts 2, 3 and 4. However, the gravamen of the offences is different. The essence of count 1 is the carrying on of business as an electrical contractor when not licensed to do so and hence the entirety of the dealings, and agreements entered into, with the consumers in question. The focus of counts 2, 3 and 4, on the other hand, is more specific. The focus of those counts is on the failure to advise those consumers (prior to entering into agreements with them) of the correct cooling-off period applicable in respect of unsolicited sales.
Bearing all of the matters in mind that I have mentioned, I consider it appropriate to impose a fine of $25,000 in respect of count 1, reduced by 30 per cent to $17,500 on account of the appellant's plea of guilty.
In relation to counts 2, 3 and 4, I have outlined the circumstances of each of the relevant dealings earlier in these reasons. While the circumstances differed slightly, I do not consider that they differed between each other materially in terms of their seriousness, particularly when one's focus is appropriately upon the conduct constituting the offence rather than the dealings with each of the consumers more generally. This narrow focus is appropriate and necessary to ensure that there is no double punishment in accordance with the principles in Pearce v The Queen,[9] applied in Bendikov v Parkes.[10]
[9] Pearce v The Queen (1998) 194 CLR 610 at [40].
[10] Bendikov v Parkes [2008] SASC 248 at [16].
The offending in respect of each involved a failure by the sales representative to inform the consumer of their entitlement to a 10 day cooling-off period given the unsolicited nature of the sales, albeit that the agreement signed by each did include a five day cooling-off period. The offending was the result of sales representatives retained by the appellant rather than, for example, a senior member of the appellant's management team or, indeed, the sole director of the appellant.
I consider it appropriate to impose a fine of $3,000 in respect of each of counts 2, 3 and 4. Again, I would reduce each by 30 per cent on account of the appellant's pleas of guilty, resulting in fines of $2,100 for each count.
In relation to count 6, while the delays involved were significant, I nevertheless regard this conduct as also being at the lower end of the scale of seriousness for this type of offence. The appellant has made appropriate restitution. I impose a fine of $30,000 in respect of this conduct, again reduced by 30 per cent to reflect the appellant's plea of guilty to $21,000.
That results in total fines of $44,800 after the reductions for the pleas of guilty.
I do not consider there to be any need or room for adjustment of the fines I would impose to reflect the principles of totality or concurrency. In my view, the total of the fines I would impose adequately reflects the nature and circumstances of the appellant's overall offending.
Conclusion
For the reasons set out, I allow the appeal. I set aside the sentence imposed by the Magistrate. In lieu thereof, and after making allowance for a 30 per cent reduction in respect of each on account of the appellant's pleas of guilty, I impose fines of $17,500 for count 1, $2,100 for count 2, $2,100 for count 3, $2,100 for count 4 and $21,000 for count 6, giving a total fine of $44,800.