Hill v St Anthony's Tennis Club (No 2)
[2023] FedCFamC2G 269
•12 April 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hill v St Anthony’s Tennis Club (No 2) [2023] FedCFamC2G 269
File number(s): SYG 2827 of 2020 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 12 April 2023 Catchwords: INDUSTRIAL LAW – assessment of pecuniary penalty for contravention of s 340(1) of the Fair Work Act 2009 (Cth) – pecuniary penalty ordered.
COSTS – whether applicants acted unreasonably or vexatiously in relation to the claims on which they failed – application for costs dismissed.
Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 340(1), 539(1), 539(2), 546(1), 546(2), 546(3)(c)
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97
Hill v St Anthony's Tennis Club [2023] FedCFamC2G 29
Hill v St Anthony's Tennis Club (No 2) [2021] FCCA 1745
Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4
Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2022] FedCFamC2G 595
The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076
Division: Fair Work Number of paragraphs: 32 Date of hearing: 5 April 2023 Place: Sydney The First and Second Applicants: First applicant in person, and on behalf of the second applicant, by telephone Solicitor for the Respondent: Mr S Alexander of Alexanders Lawyers ORDERS
SYG 2827 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ANDREW JAMES HILL
First Applicant
AJH LEISURE PTY LTD
Second Applicant
AND: ST ANTHONY'S TENNIS CLUB ABN 69 475 998 584
Respondent
order made by:
JUDGE MANOUSARIDIS
DATE OF ORDER:
12 April 2023
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay a pecuniary penalty in the sum of $12,000 for its contravention of s 340(1) of the FW Act referred to in the declaration made on 25 January 2023.
2.Pursuant to s 546(3)(c) of the FW Act the respondent pay the pecuniary penalty referred to in order 1 to the second applicant within 28 days after the day on which these orders are pronounced.
3.The respondent’s application for costs is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 25 January 2023 I published reasons for judgment (earlier reasons) on the basis of which I declared that the respondent (SATC) contravened s 340(1) of the Fair Work Act 2009 (Cth) (FW Act) on 30 August 2020 by dismissing the contract of services (Contract) SATC had entered into with the second applicant (AJH) because the first applicant, Mr Hill, an employee of AJH, had exercised a workplace right by commencing a proceeding in the Fair Work Commission (FWC).[1] I also set the matter down for directions on 15 February 2023 on the question of penalty.
[1] Hill v St Anthony's Tennis Club [2023] FedCFamC2G 29
On 15 February 2023 I directed the parties file and serve evidence and submissions on the question of penalty, and I set the matter down for hearing on penalty on 5 April 2023. The parties filed affidavits and written submissions, and on 5 April 2023 I heard oral submissions on the question of penalty. I also heard an application SATC made for costs.
In these reasons for judgment I consider whether I should make an order under s 546(1) of the FW Act that SATC pay a pecuniary penalty for its contravention of s 340(1) of the FW Act and, if so, the amount of the penalty I should order SATC pay. I also consider SATC’s application for costs.
POWER AND PRINCIPLES OF ASSESSMENT
Power
Under s 546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes s 340(1) of the FW Act.
Subsection s 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”.
The maximum penalty units specified in the table in s 539(2) of the FW Act for the contravention of s 340(1) is 60 penalty units. Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit as at 30 August 2020, when SATC engaged in the contravening conduct, was $222. That means the maximum penalty that may be imposed on SATC is $66,600.
Principles[2]
[2] I repeat here what I said in Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2022] FedCFamC2G 595, at [13]-[30]
Object of making orders under s 546(1) of the FW Act
In Australian Building and Construction Commissioner v Pattinson the plurality of the High Court observed that civil penalty provisions of the kind enacted in s 546(1) of the FW Act have a “statutory function of securing compliance with provisions of the [statutory] regime”;[3] that “whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty . . . is primarily if not wholly protective in promoting the public interest in compliance”;[4] that the “principal, and . . . probably the only, object of the penalties . . . is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act”;[5] and that “deterrence is the “principal and indeed only object” of the imposition of a civil penalty: “[r]etribution, denunciation and rehabilitation have no part to play”.[6] In short, the task of assessing an appropriate penalty under s 546(1) of the FW Act is to assess a “penalty of appropriate deterrent value”.[7]
[3] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [14], quoting from the judgment of the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [24]
[4] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55]
[5] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152
[6] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [16], quoting from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97, at [19]
[7] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The objective of deterrence, however, must be considered having regard to “the need for deterrence in respect of the particular case”.[8] The purpose of s 546(1) of the FW Act is “the deterrence of future contraventions of a like kind by the contravenor and by others”;[9] and an “appropriate” penalty “is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case”.[10]
[8] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46]
[9] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [10] (my emphasis)
[10] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46] (my emphasis)
Assessing penalty for single contravention – factors
The plurality in Pattinson recognised that, when assessing an appropriate penalty under s 546(1) of the FW Act, the Court may have regard to a number of factors that are relevant to assessing what is necessary for deterrence in respect of the particular contravention in question. That is apparent from the plurality referring,[11] with approval, to the following passage from the judgment of French J in Trade Practices Commission v CSR Ltd:[12]
[11] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[12] Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152‑52,153
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1.The nature and extent of the contravening conduct.
2.The amount of loss or damage caused.
3.The circumstances in which the conduct took place.
4.The size of the contravening company.
5.The degree of power it has, as evidenced by its market share and ease of entry into the market.
6.The deliberateness of the contravention and the period over which it extended.
7.Whether the contravention arose out of the conduct of senior management or at a lower level.
8.Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.
The plurality in Pattinson characterised these as factors that “informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value”,[13] further noting the following:[14]
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case.
[13] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[14] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [19] (footnotes omitted)
Courts have often considered relevant to the assessment of penalties the factors Mowbray FM identified in Mason v Harrington Corporation Pty Ltd.[15] These factors are:
[15] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7. In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 at [14] Tracey J adopted this same list of factors as “potentially relevant and applicable”.
(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 party committing the breach;
(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.
Application
Nature and extent of the contravention, and circumstances in which it occurred
The contravention consisted of SATC terminating the Contract because Mr Hill exercised a workplace right by applying to the FWC in relation to what he alleged was bullying by SATC. The earlier reasons reveal there was a long running dispute between Mr Hill and members of SATC’s committee of management (Committee) about the system by which SATC would let out its tennis courts, the terms on which SATC would do so, the terms on which Mr Hill, through AJH, would hire SATC’s tennis courts, and the role, if any, Mr Hill would continue to play in relation to the management of the tennis courts. The earlier reasons also reveal that before Mr Hill applied to the FWC the Committee was considering terminating the Contract. As I concluded in the earlier reasons, however, SATC did not discharge the burden that lay on it to prove SATC did not terminate the Contract because Mr Hill had applied to the FWC.
The nature of SATC’s contravention, therefore, is serious; SATC took adverse action against its subcontractor because an employee of SATC’s subcontractor availed himself of a right to apply to the FWC.
In its written submissions, SATC submits that SATC’s contravention was not intentional, or flagrant. This submission ignores the nature of the conduct that constitutes a contravention of s 340(1) of the FW Act. The subsection proscribes conduct that is engaged in for a particular proscribed reason, or for reasons that include as a substantial reason the proscribed reason. In those circumstances, it makes no sense to say that a person who engaged in contravening conduct for a proscribed reason did so unintentionally.
The applicants, in their written submissions, submit the Committee disregarded the advice given by Mr Nell on 5 May 2020. That is a reference to the email Mr Nell sent to Mr Souksavath I have summarised in paragraph 61 of the earlier reasons. Mr Nell’s advice was to the effect that SATC had to respect the contractual relationship it had with AJH. SATC’s decision to terminate the Contract was consistent with that advice because SATC purported to terminate the Contract by giving AJH reasonable notice. The applicants have not alleged that in doing so SATC breached the Contract. Mr Nell’s advice, on the other hand, did not relate to obligations SATC may have had under the FW Act. The evidence to which I refer in the earlier reasons, therefore, is incapable of supporting the contention that, in contravening s 340(1) of the FW Act, SATC did not follow, or otherwise disregarded, advice Mr Nell had given.
The amount of loss or damage caused
In the earlier reasons I concluded that SATC would have terminated the Contract by 30 September 2020, and AJH had failed to prove any loss. Mr Hill, in an affidavit he made on 7 March 2023, says that he has been able to maintain a relatively steady level of income for AJH, but he further says that, had the Contract remained on foot, AJH would have continued to earn income under the Contract in addition to the income AJH has in fact earned. This submission ignores the finding I made in the earlier reasons that SATC would have terminated the Contract by 30 September 2020 in any event without contravening the FW Act.
That SATC’s contravening conduct has not been shown to have caused AJH any economic loss is a factor for assessing the penalty at the lower scale.
Nature of SATC’s business
SATC is a modest undertaking. It operates a complex comprising of four tennis courts it leases from a church. As I discuss later, these matters are relevant to determining the class by reference to which the need for general deterrence is to be assessed.
Specific and general deterrence
Mr Souksavath has sworn an affidavit in which he said that SATC has decided that it would seek legal advice before making any decisions that deal with employment, contract or legal issues. Mr Souksavath has also deposed there is no history of SATC having contravened the FW Act on any other occasion. I accept this evidence; and, on the basis of it, I am satisfied that the penalty that is to be assessed need not incorporate an element for specific deterrence.
On the other hand, it is necessary to impose a penalty for general deterrence. The amount for general deterrence is to be assessed, however, by reference to the class of persons who are to be deterred from engaging in contravening conduct “of a like kind” to that in which SATC had engaged in. That class of persons would be persons who conduct a business of a similar nature and scope as the business SATC conducted in 2020, and which it appears to continue to conduct. A relatively small penalty would be sufficient to generally deter such persons from engaging in contravening conduct of a like kind to that I found SATC had engaged in.
Other matters
SATC submits that it manifested contrition by making an offer, in its solicitor’s letter dated 1 March 2021, to settle the applicants’ claims by the payment of $3,392.[16] This does not manifest any contrition by SATC. The letter does not acknowledge that SATC had contravened s 340(1) of the FW Act. Mr Souksavath, in his affidavit apologises for SATC’s contravention of the FW Act; but he offers the apology to the Court, not to AJH, the victim of SATC’s contravening conduct.
[16] The letter is annexure “G” to the affidavit of Mr S Souksavath made on 21 March 2023.
In their written submissions the applicants submit that a pecuniary penalty should be imposed on each of Mr Souksavath and Mr Tesara on the basis they are persons involved in SATC’s contravention of s 340(1) of the FW Act. The applicants did not make any claim against Mr Souksavath and Mr Tesara and, for that reason, there is no basis on which any order can be made against them in relation to SATC’s contravention of s 340(1) of the FW Act.
Assessment
The applicants submit that $46,169.97, together with interest under s 547(1) of the FW Act, would be the appropriate penalty. SATC, on the other hand, submits that SATC should not be ordered to pay any pecuniary penalty or, in the alternative, the penalty should be set at a modest level.
Having regard to the matters I have identified, and in particular the nature of SATC’s contravening conduct, AJH’s not establishing it suffered any loss because of the contravention, and the purposes of general deterrence being served by a relatively modest penalty, I am satisfied that $12,000 is the appropriate penalty for SATC’s contravention of s 340(1) of the FW Act.
Subsection 547(1) of the FW Act does not apply to an order for the payment of a pecuniary penalty; and I therefore will not order that interest be paid on the $12,000.
To whom penalties should be paid
Subsection 546(3)(c) of the FW Act provides that the Court may order that a pecuniary penalty be paid to a “particular person”. AJH is in the position of the applicant in Sayed v Construction, Forestry, Mining and Energy Union:[17]
In this appeal . . . the policy considerations of s 546(3) “speak loudly” in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If [the applicant] had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.
[17] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, at [116]
It is appropriate, and I therefore propose, to make an order under s 546(3)(c) of the FW Act that SATC pay to AJH the penalty I propose to order SATC pay.
SATC’S APPLICATION FOR COSTS
In its written submissions SATC submits that a significant portion of the proceeding was instituted vexatiously and without cause. The basis of this submission is the contention that Mr Hill failed in his claims and AJH substantially failed in its claims. That a party may fail in his or her claim or defence by itself is incapable of supporting a finding that the claim was brought or the defence was maintained vexatiously or unreasonably.
In any event, I am satisfied that the claims on which Mr Hill and AJH failed had been reasonably brought. I first identified those claims in reasons for judgment I published on 30 July 2021.[18] I concluded that the applicants’ claims were reasonably arguable.
[18] Hill v St Anthony's Tennis Club (No 2) [2021] FCCA 1745
I have also considered whether the applicants acted unreasonably in not accepting the offer of settlement SATC made by its solicitor’s letter dated 1 March 2021. I am satisfied the applicants did not act unreasonably. AJH succeeded on the claim that SATC contravened s 340(1) of the FW Act; and the orders I propose to make will place AJH in a better position, and Mr Hill in a no worse position, than they would have been had they accepted SATC’s offer of settlement.
DISPOSITION
I propose to order that SATC pay to AJH a pecuniary penalty in the sum of $12,000, and that it pay that amount to AJH within 28 days after the day on which I pronounce orders.
I will also order that SATC’s application for costs be dismissed.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 12 April 2023
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