Minister for the Environment v Ayre Conditioning Pty Ltd
[2013] FCA 1408
•20 December 2013
FEDERAL COURT OF AUSTRALIA
Minister for the Environment v Ayre Conditioning Pty Ltd [2013] FCA 1408
Citation: Minister for the Environment v Ayre Conditioning Pty Ltd [2013] FCA 1408 Parties: MINISTER FOR THE ENVIRONMENT v AYRE CONDITIONING PTY LTD File number: VID 591 of 2013 Judge: MORTIMER J Date of judgment: 20 December 2013 Catchwords: ADMINISTRATIVE LAW — Contraventions of reporting requirements under s 46A of Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995 (Cth) — no pecuniary penalties sought — whether declaratory relief should be granted when compliance subsequently achieved after proceedings commenced but prior to hearing — declarations granted — order made for reduced costs. Legislation: Clean Energy Act 2011 (Cth) s 100(1)
Evidence Act 1995 (Cth) s 191
Federal Court of Australia Act 1976 (Cth) s 21
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 (Cth) ss 4A, 4B
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 (Cth)
Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Cth) ss 3, 8C, 8D, 16, 46A, 56, 65AA, 65AC, 69(2), 69ACFederal Court Rules 2011 (Cth) r 40.08
Ozone and Synthetic Greenhouse Gas Management Regulations 1995 (Cth) reg 901
Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Various Matters) Regulation 2013 (Cth) Sch 3Kyoto Protocol to the United Nations Framework Convention on Climate Change
Montreal Protocol on Substances that Deplete the Ozone Layer
United Nations Framework Convention on Climate Change
Vienna Convention for the Protection of the Ozone LayerCases cited: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union (1932) 47 CLR 1
Australian Competition and Consumer Commission v Artorios Ink Co Pty Ltd (No 2) [2013] FCA 1292
Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (in liq) [2005] FCA 1212
Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2011] FCA 204
Australian Securities and Investments Commission v Wellington Capital Ltd (2013) 94 ACSR 293
Australian Securities and Investments Commission v Wellington Capital Ltd (2012) 91 ACSR 514
Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission (1981) 148 CLR 121
Bale v Mills (2011) 81 NSWLR 498
Cruse v Multiplex Ltd (2008) 172 FCR 279
El Greco (Australia) Pty Ltd v Mediterranean Shipping Company SA [2003] FCA 747
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421
Minister for Environment v Rothenberger Australia Pty Ltd [2013] FCA 1023
NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90
Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53
Seafish Tasmania Pelagic Pty Ltd v Burke, Minister for Sustainability, Environment, Water, Population and Communities [2013] FCA 782
Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076
Truth about Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591Woolf, Lord and Woolf, Jeremy, The Declaratory Judgment (4th ed, Sweet & Maxwell, 2011)
Date of hearing: 6 December 2013 Date of last submissions: 13 December 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 102 Counsel for the Applicant: Ms K Walker Solicitor for the Applicant: Norton Rose Fulbright Australia Counsel for the Respondent: Mr P Bravender-Coyle Solicitor for the Respondent: Dandanis & Associates
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 591 of 2013
BETWEEN: MINISTER FOR THE ENVIRONMENT
ApplicantAND: AYRE CONDITIONING PTY LTD
Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
20 DECEMBER 2013
WHERE MADE:
MELBOURNE
THE COURT DECLARES THAT:
The Respondent, by not submitting a quarterly report before the 15th day after the end of a quarter for the periods October to December 2012, January to March 2013 and April to June 2013, breached s 46A of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Cth) and reg 901 of the Ozone and Synthetic Greenhouse Gas Management Regulations 1995 (Cth).
THE COURT ORDERS THAT
1.The respondent pay the applicant’s costs of and incidental to the proceeding up to and including 2 September 2013.
2.The respondent pay 80% of the applicant’s costs of and incidental to the proceeding after 2 September 2013.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 591 of 2013
BETWEEN: MINISTER FOR THE ENVIRONMENT
ApplicantAND: AYRE CONDITIONING PTY LTD
Respondent
JUDGE:
MORTIMER J
DATE:
20 DECEMBER 2013
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION AND SUMMARY
This proceeding concerns a failure by the respondent on three occasions between October 2012 and the middle of July 2013 to lodge quarterly returns under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Cth) (the Ozone Act) in relation to its importation of equipment containing ozone depleting substances (ODSs) and/or synthetic greenhouse gases (SGGs). The applicant alleges those failures constitute contraventions of s 46A(3) of the Ozone Act. Despite such contraventions constituting an offence, and also being a civil penalty provision under the Ozone Act, the applicant seeks relief only by way of declaration in relation to the contraventions.
Although I have reservations about the method by which the applicant has chosen to enforce the respondent’s obligations under the Act, for the reasons that follow, the applicant is entitled to the relief sought. There will be reduced orders for costs in the applicant’s favour.
KEY STATUTORY PROVISIONS
Section 13(6A) of the Ozone Act prohibits the import of ODS equipment or SGG equipment (as defined in the Act by ss 8C and 8D of the Ozone Act) without a licence. Irrespective of the holding of a current licence, there is a separate reporting obligation imposed on any person who imports ODS equipment or SGG equipment.
Section 46A of the Ozone Act relevantly provides as follows:
…
(3) If:
(a) a person imports ODS equipment or SGG equipment during:
(i) the quarter beginning on 1 July 2012; or
(ii) a later quarter; and(b) the import is not covered by paragraph 13(6A)(b);
the person must, before the 15th day after the end of the quarter, give the Minister a report in accordance with the regulations.
…
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1), (2), (3) or (4); and
(b) the person omits to do an act; and
(c) the omission breaches the requirement.
Penalty: 60 penalty units.
(6) An offence under subsection (5) is an offence of strict liability.
(7) Subsections (1), (2), (3) and (4) are civil penalty provisions.
Regulation 901 of the Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995 (Cth) (the Ozone Regulations) sets out the information that must be contained in a report under s 46A(3), as follows:
…
(3) The report must state the following:
(a) the name and address of the person;
(b) the combination of numbers, letters or symbols used to provide a unique identifier for the licence granted to the person under section 16 of the Act;
(c) the quarter to which the report relates;
(d) the number of units in each category of ODS equipment or SGG equipment that the person manufactured, imported or exported during the quarter;
(e) the total amount of each kind of HFC, PFC or sulfur hexafluoride in metric tonnes, that the person manufactured, imported or exported during the quarter;
(f) for the relevant category of ODS equipment or SGG equipment mentioned in subregulation (4) manufactured, imported or exported by the person during the quarter--the total amount of each kind of the following substances contained in the equipment:
(i) HFC;
(ii) PFC;
(iii) sulfur hexafluoride;
(iv) any substance referred to in any of Parts I to VIII of Schedule 1 to the Act.
Although no source in the statute or the regulations was nominated, and s 46A(3) on its terms imports no such obligation, the Minister submits that a report is required even if no ODSs or SGGs were imported during the quarter (known as a “nil report”). The scheme is administered on that basis.
The information provided pursuant to the reporting requirements under s 46A(3) is utilised in the calculation of the levy payable under ss 4A and 4B of the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 (Cth) (Import Levy Act), which uses the number of tonnes of SGGs or ODSs imported as part of the formula for calculating the levy payable.
The objectives and purposes of the legislative scheme have further relevance to the Court’s discretion to grant relief, and this is discussed at [70] to [71] below.
FACTS
The parties filed and relied upon an agreed statement of facts in relation to the proceeding, which provides the evidentiary foundation under s 191 of the Evidence Act 1995 (Cth) for many of the following findings to be made. A key agreed fact in respect of each of the three reporting periods upon which the applicant relied was to the effect that the respondent did not submit the requisite quarterly report by the due date. In that sense, by the trial of this matter there was no dispute between the parties about the fact of the respondent’s non-compliance. There remained some dispute about the circumstances of it, what relief (if any) should be given and what orders should be made by the Court in respect of the costs of the proceeding.
The applicant also read three affidavits from Mr Matthew Dadswell, the Assistant Secretary of the Environmental Standards Branch of the Department. Those affidavits annexed documents concerning the course of the respondent’s non-compliance and the Department’s attempts to secure compliance.
The respondent read an affidavit from Mr Albert Nisman, a director of the respondent, which sought to explain some of the circumstances of the non-compliance.
The alleged contraventions concern the reporting periods of October to December 2012, January to March 2013 and April to June 2013.
Background
The respondent, Ayre Conditioning Pty Ltd (Ayre Conditioning), is a corporation incorporated under the Corporations Act 2001 (Cth). From 23 April 2009, it has carried on business importing household air conditioners. Mr Albert Nisman was the director of Ayre Conditioning at all relevant times and ran the business. On 12 August 2010, the respondent was granted a “Pre-Charged Equipment Licence” (licence number PCE0117626) in accordance with the provisions of s 16 of the Ozone Act.
The Pre-Charged Equipment Licence was current between 1 January 2010 and 31 December 2011 and the respondent submitted all relevant quarterly reports for that period.
On 12 April 2012, the respondent was granted an ODS/SGG Equipment Licence (licence number: EQPL35455025) via the Department’s Ozone Licensing and Reporting System (OLaRS) for the period between 12 April 2012 and 11 April 2014, in accordance with the provisions of s 16 of the Ozone Act. The respondent was notified of the licence grant by an emailed letter on 12 April 2012. This letter also informed the respondent of the reporting obligations imposed by s 46A(3) of the Ozone Act.
On 7 September 2012, the respondent submitted a quarterly report for the period April to June 2012, which was required to be submitted prior to 15 July 2012. This report was accepted by the Department without any further action being taken. An automatic reminder email was sent to the respondent’s nominated email address about the next quarterly report, which was due to be lodged prior to 15 October 2012. The respondent complied with its obligations for this quarterly report by lodging the report on 3 October 2012.
It was after the lodgement of that report that the non-compliance which resulted in this proceeding began.
The October to December 2012 quarterly report was required to be lodged prior to 15 January 2013. The respondent was reminded of this by the usual automatic reminder in early January 2013. The report was not submitted by that date. Another automatically generated reminder letter was sent a couple of days after the due date, prompting the respondent to lodge the overdue report. Mr Dadswell deposed, and I accept, that on 11 February 2013 a letter was sent by registered post to the respondent warning of compliance and enforcement action if the October to December 2012 quarterly report was not lodged. This letter was returned to the Department as unclaimed a few days later.
In respect of the possible consequences of non-compliance, the letter stated:
Failure to submit an accurate and complete quarterly report by the due date may be a breach of section 46 and/or 46A of the Act and penalties of up to 60 penalty units, currently $10 200 for individuals and $51 000 for companies, may apply. In addition to financial penalties, a licence may be cancelled if the licensee is no longer a fit and proper person to hold a licence, or has contravened a condition of the licence (for example, by not submitting a quarterly report).
Please note that if any levies are due for this quarter, they are payable by 1 March 2013. Failure to pay by this date will result in a 30% penalty per annum being applied to any outstanding levies, calculated daily.
If your outstanding quarterly report is not received within 10 days of the date of this letter your case will be referred to the Environment Standards Compliance and Enforcement section to be considered for enforcement action.
Another warning letter was sent on 6 May 2013, but was also not delivered. The Department attempted unsuccessfully to contact Mr Nisman by telephone.
In the meantime, the January to March 2013 quarterly report was due to be lodged prior to 15 April 2013, but was not.
With the October to December 2012 report remaining outstanding, and the January to March 2013 report also overdue, on 20 May 2013 an officer of the Department (Ms Voght) managed to contact Mr Nisman via telephone to confirm receipt of the final warning letter dated 6 May 2013. Mr Nisman advised Ms Voght the telephone line was unclear and that he would return the call. Despite a similar conversation later in the day, and an apparently similarly bad line, Mr Nisman did not return Ms Voght’s call.
There is no evidence that the final warning letter, or the first letter, were ever received by Mr Nisman. However, I find that he was well aware the respondent was overdue in lodging its quarterly reports for both October to December 2012 and January to March 2013. Apart from the Department’s evidence of email letters sent and telephone calls made, Mr Nisman’s own evidence provides a foundation to find that he was aware of the respondent’s obligations under the Ozone Act and had been ensuring, more or less, the respondent complied with them.
However, during the early part of 2013, there were personal circumstances affecting him which clearly derailed his attention from the respondent’s lodgement obligations under the Ozone Act. I discuss those matters in more detail below.
Ms Voght telephoned Mr Nisman again on 20 June 2013, and confirmed the postal address of the respondent. The nominated address has remained the postal address for the respondent, and Mr Nisman’s home address, at all relevant times.
The two reports remaining overdue, this proceeding was commenced by Originating Application on 26 June 2013 and served on the respondent on 2 July 2013. The proceeding thus originally concerned only these two overdue quarterly reports. It sought injunctive relief compelling the respondent to file the reports, and declaratory relief in respect of the respondent’s two contraventions of s 46A.
The proceeding had, I infer, the desired effect. On 3 July 2013, the respondent submitted a nil report for the October to December 2012 reporting period. However Mr Nisman used the wrong licence number: he used the Pre-Charged Equipment Licence PCE0117626, which had expired. Although the Department’s system automatically accepted the report and an automatically generated letter was sent to the respondent by email to inform it that the report had been submitted, the Department then followed up with Mr Nisman on 16 July 2013 about the fact the report referred to an expired licence. The need for the report to be re-lodged referring to the correct licence was reiterated to the respondent (and Mr Nisman) in an email also sent on 16 July 2013.
It was in this email that the Department also told the respondent that two further reports (for the January to March 2013 and April to June 2013 reporting periods) had not been lodged. Thus, by mid-July 2013, there had been further non-compliance, with the April to June 2013 quarterly report falling due on 15 July 2013 and it also not being lodged.
Mr Nisman arranged for the respondent to lodge, eventually, on 17 July 2013 a nil report for the October to December 2012 reporting period under the correct and current licence held by the respondent, identified as EQPL35455025.
Mr Nisman had also attempted, on 30 July 2013, to lodge a report for the January to March 2013 quarterly period. However, he used the wrong form and the Department emailed him on 8 August 2013 to tell him the attempted lodgement was not accepted.
Consistently with the encouraging effect of the existence of this proceeding, on 2 September 2013, the respondent submitted a quarterly report for the January to March 2013 reporting period, using the correct reporting form. This was also the date of an unsuccessful mediation in this proceeding, conducted by a Registrar of this Court.
Again, consistently with the encouraging effect of the existence of this proceeding, Mr Nisman ensured the respondent lodged the quarterly nil report for July to September 2013 on time and using the correct form. There is no evidence before the Court of any subsequent non-compliance by the respondent.
Although many of the agreed facts related to the sending rather than the receipt of reminder letters, notifications that quarterly reports were due, overdue reminders and the like, I infer that the respondent, and Mr Nisman, received the letters sent by email. The evidence shows no change in the relevant email address, nor reveals any other reason why these emails would not have been received. The evidence does reveal, both directly and by inference, why it might have been that Mr Nisman did not attend to the lodging of these reports on the respondent’s behalf, despite the regular reminders.
Mr Nisman was cross-examined on some aspects of his affidavit, in particular about alternative ways he could have ensured the respondent filed its reports on time. Notwithstanding the cross-examination, and the frustration he showed with the fact the Department had brought litigation against his company for failing to lodge forms on time, I find the evidence in his affidavit to be generally reliable and not in material conflict with the applicant’s evidence. He deposed to lodging the report on behalf of the respondent for the periods April to June 2012 and July to September 2012 electronically, using a spreadsheet which could be downloaded from the Department’s website. He deposed to the fact that, when he attempted to use that method to lodge the (late) return in February 2013, the spreadsheet was not there anymore. He gave evidence that he tried to use that method “on a number of occasions” to lodge the October to December 2012 return but the spreadsheet was not there. It was pointed out to him in cross-examination that there was at all times another option to lodge electronically without attaching a spreadsheet. While he somewhat begrudgingly accepted that fact, it is clear that, for whatever reason, Mr Nisman did not spend the time, or take the care he might have, to look at and use the website in a way which would have allowed him (on the respondent’s behalf) to make use of the alternative electronic lodgement, and enable the respondent to comply with its reporting obligations under the Ozone Act.
Mr Nisman gave evidence, which I accept, that during the first half of 2013 his marriage broke down. This caused him considerable stress and anxiety and he was, in his own words, “distracted from attending to the administrative aspects of running the business”. He also lost the services of his mother in law in the respondent’s business. Previously, she had performed tasks such as the lodging of the quarterly reports under the Ozone Act. The breakup of his marriage meant there were times when he was not at the matrimonial home, over which his wife has put a caveat. On his evidence these times included the times when the applicant’s letters by registered mail were delivered and his then wife refused to sign for them. Mr Nisman’s evidence was that this explained why he did not receive the letters of demand sent by the Department by registered mail to his address. There is no evidence to suggest he was not receiving the emails sent by the Department, and he was served with the application made in this proceeding. It was after service of that application that Mr Nisman took steps to have the respondent remedy the defaults in lodging the returns.
Nevertheless, these events explain the breakdown in what had previously been, and what again has become, substantial compliance by the respondent with its reporting obligations under the Ozone Act.
The effect of the evidence, in summary, in relation to the contraventions of s 46A, is:
(1)for the period October to December 2012, the report was due on 15 January 2013, and:
(a)it was first lodged on 17 July 2013, six months late;
(b)it had inserted the incorrect licence number and it was lodged in the correct form on 2 September 2013;
(c)the amount involved was nil.
(2)for the period January to March 2013, the report was due on 15 April 2013, and:
(a)it was lodged four and a half months late;
(b)it was in the incorrect form and lodged in the correct form on 2 September 2013;
(c)the amount was $4,641.98.
(3)for the period April to June 2013, the report was due on 15 July 2013, and:
(a)it was lodged two and a half months late;
(b)it was in the incorrect form and lodged in the correct form on 2 September 2013;
(c)the amount was $17,421.98.
(4)for the period June to September 2013, the report was due on 15 October 2013, and:
(a)it was lodged one day early;
(b)it was a nil report.
ASPECTS OF THE LEGISLATIVE SCHEME RELIED ON BY THE APPLICANT
The applicant submitted, and I accept, that the Ozone Act is part of a scheme to ensure Australia’s compliance with its international obligations under the Vienna Convention for the Protection of the Ozone Layer (Vienna Convention), the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol), the United Nations Framework Convention on Climate Change (FCCC) and the Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto Protocol).
Each of these instruments is in force for Australia, and is directed at related but different aspects of environmental protection in relation to the ozone layer and the effects of greenhouse gas emissions. Each of the international instruments imposes reporting obligations on Australia. For example, Art 4 of the Vienna Convention requires states parties to facilitate and encourage the exchange of scientific, technical, socio-economic, commercial and legal information relevant to the Convention, including imports and exports of specified substances. The Montreal Protocol Art 7 imposes reporting obligations on states parties in relation to the production, imports and exports of ODS. Article 4 of the FCCC requires states parties to report periodically on emissions by sources, including SGG, not covered by the Montreal Protocol. The Kyoto Protocol continues the reporting requirements of the FCCC by setting binding emissions targets.
The applicant submitted, and I accept, that the Ozone Act is part of a broader legislative scheme, including the Import Levy Act and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 (Cth). These Acts impose levies in relation to the manufacture and import of ODSs and SGGs. The applicant further submitted, and I accept, that the Clean Energy Act 2011 (Cth), regulating carbon emissions, interacts with the scheme of the Ozone Act because the levies imposed by the two levy Acts are calculated, in part, by reference to the per unit charge applicable under s 100(1) of the Clean Energy Act 2011 (Cth) for the issue of a carbon unit.
The relevant objectives of the Ozone Act are set out in s 3:
(a)to institute, for the purpose of giving effect to Australia’s obligations under the Vienna Convention and the Montreal Protocol, a system of controls on the manufacture, import and export of substances that deplete ozone in the atmosphere; and
(b)to institute, and to provide for the institution of, specific controls on the manufacture, import, export, distribution and use of products that contain such substances or use such substances in their operation; and
…
(d)to provide controls on the manufacture, import, export and use of SGGs, for the purposes of giving effect to Australia’s obligations under the Framework Convention on Climate Change and the Kyoto Protocol; and
(e)to promote the responsible management of scheduled substances so as to minimise their impact on the atmosphere.
The applicant submitted, and I accept, that the Ozone Act gives effect to its objects through a variety of means. Part III of the Ozone Act contains licensing requirements for the manufacture, import and export of various SGGs and ODSs and equipment containing such substances. Part IV of the Ozone Act provides for quotas in relation to HCFCs. HCFC is an ozone depleting substance, defined in s 7 as “a hydrochlorofluorocarbon referred to in Part V of Schedule 1”. Parts V and VI of the Ozone Act and Sch 4 provide for control of the manufacture and import and export of scheduled substances and equipment using such substances, including air conditioning equipment. Part VIII provides for enforcement of the Ozone Act, including by way of inspections and monitoring, seizure, injunctions, forfeiture of goods, offences and civil penalty provisions. It will be necessary to return to some of the provisions in Part VIII in discussing the nature of this Court’s jurisdiction. Part VIIIA provides for the continuation of the Ozone Protection and SGG Account and for the crediting to that account of amounts received from levies under the two levy Acts.
Part VII, which contains the key provisions in this proceeding, provides for reporting and record-keeping by licensees. It appears that there have been reporting requirements in the Ozone Act since its inception, although there have been some significant changes. Section 46A, for example, was previously part of s 46 rather than a stand-alone provision. The amendments from time to time do not alter the approach which should be taken to the place of s 46A in the legislative scheme, including its role in achieving the objectives of the legislation and, ultimately, assisting with compliance by Australia with its international obligations, especially in respect of reporting.
The applicant submits that the reporting requirements in the Ozone Act — including those in s 46A — are central to the administration of the Ozone Act. They are the means by which the Parliament has enabled the applicant to obtain information concerning the substances regulated by the Ozone Act. That information is said by the applicant to be relevant to the operation and objects of the legislative scheme in three ways. First, information contained in reports lodged under s 46A is used to calculate the import levy payable under the Import Levy Act. Without timely and accurate information the import levy cannot be calculated and, in turn, revenues for which Parliament has provided cannot be collected in the time frames contemplated by the scheme. Second, information contained in reports lodged under s 46A assists the Minister and his Department in compiling accurate information concerning the volume of ODSs and SGGs present in Australia (whether by manufacture or import), in turn enabling the development and implementation of domestic policy concerning those substances. Third, information contained in reports lodged under s 46A may be relevant to Australia’s reporting obligations under the four international conventions to which the Ozone Act is directed at giving effect: the Vienna Convention, the Montreal Protocol, the FCCC and the Kyoto Protocol. The applicant submits that reporting by states parties in relation to amounts of ODSs and SGGs is an important aspect of those international conventions. I accept those submissions, although those matters are not determinative of the appropriate relief where contraventions of s 46A are established.
There are two final features of the scheme which should be noted. First, the Ozone Act provides, in s 69(2), for penalties to be payable on the late payment of levies due under the Act. Thus, the scheme as a whole makes its own provision for late payment of levies by those who, because of a failure in reporting obligations, preclude the timely calculation by the Department of the levy payable on imported goods, and so preclude also the timely payment of that levy.
Second, s 65AA of the Ozone Act provides for regulations to be made enabling enforcement of certain obligations under the Ozone Act by way of infringement notice. The provision applies both to offences and civil penalty provisions of the Ozone Act. Section 46A is amongst the offences specified. Such regulations were made on 12 December 2013 and the relevant provisions will come into force on 1 March 2014: see Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Various Matters) Regulation 2013 (Cth) Sch 3.
THE KEY ISSUES AND THE PARTIES’ SUBMISSIONS
The respondent admits the three contraventions of s 46A. On the principal issue in this proceeding — whether declaratory relief should be granted by the Court — the parties agreed that the Court had jurisdiction and power under s 21 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) to grant a declaration alone. The question in issue was whether it should do so, in exercise of its discretion.
The applicant submits that the range of remedies available to the regulator under the Act, including criminal penalties and civil penalties, demonstrates the importance Parliament has placed on ensuring compliance. The inclusion of these mechanisms in the Act, the applicant submits, does not exclude the ability of the Court to grant declaratory relief by itself, where that is what the applicant chooses to apply for and the Court considers such relief appropriate. Parliament allows for a range of responses to breach, from more “heavy-handed” responses that are appropriate for more egregious breaches, to less dramatic responses. This proceeding and the relief sought is at the lesser end of that spectrum, the applicant submits.
The respondent submits that it was open to Parliament to include in the legislative scheme a mechanism, similar to that available to the Commissioner of Taxation under the Taxation Administration Act 1953 (Cth), whereby penalties could be imposed for minor breaches (such as late reporting) without the assistance of the Court. There is nothing in the Act, the respondent submits, that suggests the Parliament intended the applicant to pursue such minor contraventions in Court. The fact that s 56 of the Ozone Act provides for this Court to grant injunctions, and no such provision exists for the granting of declarations, must indicate that Parliament did not envisage the Court would grant declarations as the sole form of relief for contraventions of the Act.
As to the grant of declaratory relief, the respondent submits that, given it had complied with its obligations under the legislation by 2 September 2013, there are no “foreseeable consequences” that will flow from the declaration sought. The respondent relies on a passage from Gaudron J in Truth about Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at [52], where her Honour states:
There may be cases where a bare declaration that some legal requirement has been contravened will serve to redress some or all of the harm brought about by that contravention. Ainsworth v Criminal Justice Commission was such a case. But a declaration cannot be made if it “will produce no foreseeable consequences for the parties”. That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a matter for the purposes of Ch III of the Constitution. And as it is not a matter for those purposes, it cannot engage the judicial power of the Commonwealth.
The respondent submits a declaration in a case such as this serves no public interest, or utility of an objective nature. This legislative regime, and s 46A in particular, is not a provision directed at protecting the public: rather, it is a reporting obligation between a regulated entity and government. It means that the applicant for the declaration must go further than adducing evidence that a right has been infringed. It must satisfy the Court that the declaration will serve some purpose. The respondent relied on a passage from Lord Woolf and Jeremy Woolf, The Declaratory Judgment (4th ed, Sweet & Maxwell, 2011), where the authors observe at [4-91] (p 165):
If a declaration will still serve some purpose, then the court will be favourably disposed to granting declaratory relief. If, however, the declaration would serve no purpose the court might well take the view that it was unreasonable for the claimant to continue with the action and in these circumstances refuse to grant declaratory relief.
A further passage was also relied on by the respondent, on the basis that there may have been a historical debate about non-compliance, which was remedied at the latest on 2 September 2013. The respondent relied on the following passage from The Declaratory Judgment at [4-82] (p 162) :
The fourth class consists of cases in which the issue has ceased to be of any practical significance. In the foregoing three classes it was premature to adjudicate on the issue. In the present class it is the other way round: the issue was mature for adjudication, but it has passed the stage of maturity, and it is by now a dead issue.
In answering that submission, the applicant referred to the decision in Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (in liq) [2005] FCA 1212, where Lander J said (at [146]):
It is appropriate to make declarations in circumstances to vindicate a party’s claim, and or to serve the public interest in clearly spelling out the contravening conduct.
(citations omitted.)
A regulator has, the applicant submits, a real interest in ensuring compliance with the Act by not only the person subject to the proceedings, but also others who are required to comply with the Act. Like civil and criminal penalties, the applicant submits, declarations “send a message” to others who have such an obligation. In that sense, the applicant submitted, the declaration has utility. It also serves, the applicant submits, two important purposes in relation to the enforcement of s 46A: first, it operates as a reminder to the respondent of the importance of compliance with reporting requirements, and a deterrent for repeat breaches; second, the applicant is able to publicise such declarations as a reminder and deterrent to other persons required to report under s 46A (whether manufacturers or importers).
The respondent’s conduct demonstrates, the applicant submits, a lack of appreciation of the seriousness of its breaches of the Ozone Act. These matters reinforce the need for a declaration to serve the first purpose identified by the applicant.
If this were a civil penalty proceeding, that submission would no doubt be more obviously couched in the language of specific and general deterrence, because that is what is meant. The use of the concept of “deterrence” in ordinary civil proceedings where only declaratory relief is sought has some disconformities about it, which are discussed further below.
The respondent accepts that there may be a deterrent effect in the making of declarations against the respondent business as the contravenor, rather than Mr Nisman himself. The proceeding has already had a personal deterrent effect, the respondent submits, simply by requiring Mr Nisman to participate in the proceedings, attend Court, and be subject to cross-examination.
In relation to the first purpose identified by the applicant, the respondent contends it would be an abuse to grant a remedy as a “reminder” where it was, in reality, for the purpose of punishment. A more effective “reminder” would be a costs order. According to the evidence, the respondent had a taxable income of less than $100,000 in the last financial year. This is not to say that a declaration might not serve such a purpose in other circumstances. For example, a costs order against a large refrigeration manufacturer or importer might be quite insignificant in relation to its operating expenses and revenue, and a declaration may be more appropriate for this purpose, because it is a public marking of the Court’s disapproval. Here, as I understood the submissions, the respondent submitted that publication by the applicant of the declaration made by the Court would have a significant reputational effect on the respondent and its business, one which would be disproportionate to the contraventions. A costs order alone would, it was submitted, be more proportionate.
The respondent contends that some breaches were technical, none were serious and the public interest was never affected. The amounts of money which were not reported on time were comparatively small and sometimes a nil report was filed. None of the contraventions were flagrant and wilful, and the public was not (and could not have been) adversely affected by the respondent’s conduct. Regulators, such as the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority, the Australian Competition and Consumer Commission and the applicant in this case frequently seek orders in respect of serious breaches or contraventions of the legislation that they administer. The breaches usually affect the public or a section of the public in quite a serious way. The analogy the respondent sought to draw was with income tax returns and business activity statements (BASs). Although the Commissioner of Taxation has applied for declarations in relation to whether certain transactions are in accordance with the legislation he administers, there does not appear to be any reported case of the Commissioner seeking declarations in relation to the late lodging of income tax returns and BASs. If he did, the respondent contends that this Court would be overwhelmed with such applications. The respondent submitted the Court should be concerned whether it will be flooded by trivial applications for declarations whenever a small importer, whether he is ill or suffering for depression or for whatever reason, fails to lodge his or her report on time merely because the applicant wants a declaration on his Department’s website and where no public interest has been adversely affected.
The applicant contested the proposition that these breaches were trivial, and not serious. The October to December 2012 report was filed some six months after the due date; the January to March 2013 report was filed some four and a half months late; and the April to June 2013 report was filed some two and a half months late. Each of them was filed only after the applicant issued proceedings against the respondent. The matters set out in the affidavit of Mr Nisman by way of explanation for the breaches of s 46A neither remove nor excuse the breaches and are no basis for resisting the grant of relief.
The applicant sought to rely on the decision in Minister for Environment v Rothenberger Australia Pty Ltd [2013] FCA 1023, as support for the proposition that relief by way of declaration only has been granted by this Court under the Ozone Act. The respondent submits that Rothenberger is distinguishable as it relates to orders made by consent of the parties. That is not the case here. All that can be taken from Rothenberger, the respondent submits, is that the Court came to the view that it had jurisdiction to make the orders in the form sought by the parties.
The applicant submits in response that there is a distinction between orders sought by consent and the Court deciding to make those orders, quoting Perram J in Rothenberger ([2013] FCA 1023 at [3]):
In situations where contravention of legislative provisions may result in the breach of an obligation or exposure to penalties, the setting out of the basis of liability and the basis for the grant of relief is desirable.
(citations omitted.)
The respondent conceded in oral argument that one of the purposes of the reporting requirements under s 46A is for the assessment and calculation of levies to be imposed. However, the respondent submits that it is not necessary for the reports to have been lodged in the correct form for a levy to have been calculated. By way of example, counsel for the respondent referred to the quarterly report submitted in the incorrect form by the respondent on 30 July 2013. That report produced an estimated total import levy of $17,496.68, calculated on the basis of the information provided by the respondent, albeit in the incorrect form. This, the respondent submits, demonstrates that the information need not have been submitted in the correct form by the respondent in order for the legislative purpose of calculating the import levy to be achieved.
In response, the applicant submits that it may be inferred from Mr Dadswell’s evidence that, although the system is able to generate an estimated levy for the person uploading the information, where the information is not provided in the correct form, that information is not made available to the Department, such that an invoice can be generated.
The applicant did accept that if the evidence demonstrated a reason for non-compliance, then this was a relevant factor in the Court’s discretion whether to grant a declaration.
SHOULD THE COURT GRANT THE DECLARATIONS SOUGHT?
The respondent accepted in argument that a costs order against it should be made, but submitted the costs order should compensate the applicant only for his costs up to and including the mediation on 2 September 2013, because that was the date on which the respondent finally complied with its outstanding obligations and the need for the continuation of this proceeding, the respondent submitted, evaporated. In other words, the respondent invites the Court to refuse to grant substantive relief of any kind, and simply to make a limited costs order in favour of the applicant.
The applicant, on the other hand, seeks declaratory relief, and during the hearing submitted the most appropriate form of declaration would be to make separate declarations in respect of each contravention of s 46A. The applicant also seeks the usual order as to costs of the proceeding.
It is uncontroversial that this Court has a wide discretionary power to make declarations under s 21 of the Federal Court Act. Noting that it is “neither possible nor desirable to fetter the broad discretion”, Gibbs J set out in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438 the following threshold requirements that should in general be satisfied before the direction is exercised: the question must be a real and not a theoretical one; the person raising it must have a real interest to raise it; and there must be a proper contradictor. Relief will not be granted if “the Court’s declaration will produce no foreseeable consequences for the parties”: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582.
I accept that all those matters are satisfied in the present proceeding. The respondent’s eventual compliance, and agreement as to the three contraventions, do not render the question raised in this proceeding hypothetical: it is grounded in facts proved by admissible evidence about the respondent’s non-compliance with s 46A of the Ozone Act. Admission or agreement to material facts do not, of themselves, render the matters raised in a proceeding hypothetical. The use of the term “hypothetical” suggests a situation which is removed from the actual, or factual, conduct of the parties in question at the time the proceeding is brought. That is not this case.
The applicant, as the responsible Minister and effectively the regulator of the legislative scheme established under the Ozone Act, has a real interest in seeking relief. This interest is strengthened because of the interaction between reporting and compliance obligations under the Ozone Act and Australia’s international obligations, especially its international reporting obligations. The respondent clearly is, and has acted as, a proper contradictor in the proceeding.
Nor is this a case where a declaration will produce no foreseeable consequences for the parties. For the respondent, the consequence will be the Court’s recognition, and implicit disapproval of its contraventions. The declaration may be published by the applicant, which may have an adverse reputational effect on the respondent: one which no doubt the applicant would say the respondent has brought upon itself by its contraventions. A consequence for the applicant is to uphold the need for compliance with the regulatory scheme chosen by the Parliament. This is not a case where declaratory relief would be inappropriate because there was never any controversy between the parties — the kind of case described by Goldberg and Jessup JJ in Cruse v Multiplex Ltd (2008) 172 FCR 279 at [56] in these terms:
This was not an instance where parties, substantially in agreement from the outset, have simply had recourse to the judicial process for the purpose of securing the stamp of authority to arrangements as to which there is no dispute.
Satisfaction of the matters so far referred to simply makes declaratory relief available and appropriate at the level of general principle. None of those matters go to the question whether, on the facts as found, declaratory relief is appropriate in a given case. The time at which the Court exercises its discretion is the time after trial, on the basis of the evidence before it. The complexion of a proceeding may well have changed since the proceeding was initiated. The Court looks to the circumstances as they exist at the time it comes to make its decision and asks, in that context, if the relief sought is appropriate (assuming an applicant has otherwise established an entitlement to that relief).
The arguments the applicant has made about the availability and appropriateness of declarations are the kind usually made in the context of a civil penalty proceeding. In such a context, declaratory relief is well recognised and used as one of the forms of relief granted. That is often because it serves the purpose of identifying the basis of the liability found and, in turn, the basis for the penalties imposed: see Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [95]; Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2011] FCA 204 at [35]. That is not the purpose declaratory relief could serve in this proceeding.
When declaratory relief is granted without the imposition of a penalty in a civil penalty proceeding, there may be a particular reason: see, eg, Australian Competition and Consumer Commission v Artorios Ink Co Pty Ltd (No 2) [2013] FCA 1292; Australian Competition and Consumer Commission v EDirect Pty Ltd [2012] FCA 1045, where each respondent corporation was in liquidation and the imposition of a penalty could have had consequences for creditors. In other circumstances, there may be a purpose served in explaining the kinds of conduct which contravene a particular legislative prohibition, as is often the case in consumer law: see Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 98 per Sheppard J, Foster and Hill JJ agreeing. This function is served both in respect of other potential contraveners (for example, other corporations engaged in similar business) and in respect of the general public who may be affected by misrepresentations, or by misleading and deceptive conduct.
None of those considerations apply to the current proceeding. Section 46A is a very simple provision. The circumstances in which it will be contravened will also be simple. They call for no explanation by way of example through declaratory relief. No entity subject to s 46A will learn anything from the declarations granted in this case about the circumstances in which s 46A will be contravened that are not obvious from its terms. No member of the public is affected or involved in the failure to lodge a report with the Department, and there is no wider interest served by a declaration in informing the public about conduct which may affect the public and which the Court has found to be unlawful.
Nor is this a proceeding such as Ainsworth 175 CLR 564, where other kinds of relief were not available and there was a specific purpose to be identified in the declaratory relief granted by the Court: namely, “a declaration [to] be made in terms indicating that the appellants were denied natural justice”: at 582.
Although it is correct to say that the decision in Rothenberger [2013] FCA 1023 provides an example of the Court exercising its discretion to grant declaratory relief only under this legislative scheme, the parties were in that case agreed on the grant of declaratory relief. While that agreement did not relieve the Court of its own task of determining a basis for liability and the appropriateness of the relief sought, it nevertheless means there was no active contest before the Court about what value a declaration had.
After the hearing in this proceeding, and after the parties had filed supplementary submissions in accordance with leave granted, the applicant sought by email to draw the Court’s attention to two additional authorities. Although the communication disavowed any status as a submission, it was in fact a further submission, made without leave. Such a practice is impermissible, as courts have said on many occasions: NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 at [192]; Bale v Mills (2011) 81 NSWLR 498 at [57]-[61]; Seafish Tasmania Pelagic Pty Ltd v Burke, Minister for Sustainability, Environment, Water, Population and Communities [2013] FCA 782 per Logan J.
Neither of the cases advances the applicant’s argument in any event. The first case, Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission (1981) 148 CLR 121, concerned the seeking of a declaration to settle a dispute about whether the appellant was required to comply with the provisions of Div 5 of Pt IV of the Companies Act 1961 (NSW) before offering to the public the subscriptions or purchase of interests under agreements relating to the purchase, planting and care of pine trees in plantations. The defendants had sought, and were granted, both injunctive and declaratory relief at first instance.
The second case, Australian Securities and Investments Commission v Wellington Capital Ltd (2013) 94 ACSR 293, concerned the validity of the transfer of 41% of the assets of a managed investment scheme. It is clear from the decision at first instance ((2012) 91 ACSR 514) that ASIC originally sought orders in the nature of mandatory injunctions as well as declarations. On appeal, ASIC limited itself to seeking declarations, which the Full Court granted. The reasons identified by the Full Court at [88]-[89] underline the distinction between that case and the present one. Wellington Capital was clearly a case where the Court saw utility in identifying particular conduct as contravening the Constitution of a managed investment scheme, where the Constitution under consideration took a form commonly used by managed investment schemes.
Neither of these cases speaks of “deterrence”, which was a key feature of the applicant’s submissions in this Court, and a troubling one in an ordinary civil proceeding. In neither of these cases is it obvious that there was a clear alterative course of either prosecution or civil penalty proceedings. These cases simply confirm the well-established proposition that this Court has a declaratory jurisdiction available to it, which it may use in appropriate cases. They do not advance the applicant’s argument about why the current case is an appropriate one for declaratory relief.
If there are grounds for the grant of declaratory relief in this case, they are very narrow and can be reduced to the proposition stated by Goldberg and Jessup JJ in Cruse 172 FCR 279 at [59]:
In the case of the fourth respondent, however, the appellant did not seek, and we shall not impose, a penalty. On the other hand, we do not think that an order dismissing the proceeding as against the fourth respondent would accurately or appropriately reflect the outcome of the proceeding as against him. We do not accept that the reasons of the court alone will provide a sufficient public record of the way in which the appellant’s application was resolved in relevant respects. As Lee J said in Midland Brick 207 ALR 329, there is some utility in using the declaration to define and publicise the type of conduct that constitutes a contravention of the WR Act. In our view, that utility is more obvious in a situation in which contraventions are admitted or have been found, in which no other relevant orders are to be made, and in which, therefore, the only formal record of the disposition of the proceeding, absent the making of a declaration, would be a dismissal thereof.
A similar proposition was made by the authors of The Declaratory Judgment at [4-08] (pp 127-128):
A judge may disapprove of the institution of declaratory action but, in the absence of any satisfactory ground for its dismissal, may be compelled to make the declaration claimed. Llandudno Urban DC v Woods is an interesting example. There, the claimant local authority claimed a declaration that the defendant, a clergyman, was not entitled to hold services without their consent on a seashore vested in them under a lease form the Crown, and an injunction to restrain him from so doing. Cozens-Hardy J., whilst pointing out that the services represented a harmless user of the shore and stating that he was “bound to say that this action (is) wholly unnecessary, and one which ought not to have been brought”, felt unable to refuse the grant of the declaration asked for, though he declined to grant an injunction or to make any order as to costs.
This Court is placed in a position close to that clearly not enjoyed by Cozens-Hardy J in Llandudno. Since the applicant has chosen to press this case to its conclusion notwithstanding the respondent’s compliance some three months ago, some kind of substantive relief becomes necessary to avoid dissonance between the findings about the existence of contraventions and the outcome of this proceeding. A dismissal of the application would not accurately reflect the Court’s findings on the respondent’s contraventions of s 46A. A costs order — of whatever kind — is no substitute for substantive relief. Indeed, it follows upon the granting of substantive relief.
This outcome is brought about by the failure of the applicant to undertake any of the specific kinds of proceedings contemplated by the legislative scheme of the Ozone Act. The applicant took none of the action which it warned the respondent about in the correspondence referred to in paragraph [19] above, although that correspondence nominated at least three avenues for enforcement. The letter did not nominate the kind of proceedings which the applicant eventually decided to institute. In that sense, although the respondent is responsible for the non-compliance which began this course of events, the unusual and undesirable circumstance facing the Court in considering whether to grant relief is largely of the applicant’s own making.
Either the conduct of a potential respondent is conduct requiring enforcement for which the statute provides or it is not. To choose to incur on behalf of the Commonwealth the very substantial costs of a full piece of litigation in this Court, and to impose equivalent kinds of costs on a respondent, to seek nothing more than a statement of an obvious contravention, seems undesirable. There are penalties to be paid under the levy legislation for late payment of levies, so this aspect of the contravention has also been separately addressed by the Parliament, and declaratory relief has no impact or effect on the fact there has been delay in making levy payments.
Where Parliament provides for at least three different kinds of enforcement of obligations it has created (and with infringement processes coming into effect in early 2014, there will be at least four), it is preferable a regulator use the methods Parliament has expressly contemplated. Civil penalty proceedings do not always ultimately involve the imposition of a pecuniary penalty. If they do, it need not be a large one. Other relief is often also appropriate. What is important is that proceedings of that kind are the method Parliament has contemplated for the enforcement of obligations it has created. I do not accept the proposition that civil penalty proceedings are inevitably a “heavy-handed” approach.
It is undesirable to introduce further into the general declaratory jurisdiction of this Court notions borrowed from the criminal law, such as deterrence, and to have the Court act as if it is addressing the twin purposes of punishment and protection it may address in a civil penalty proceeding (see Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152 per French J), about which much careful jurisprudence has been developed so that it can be consistently applied to those subjected to such proceedings.
With those reservations, and given that the alternative of no substantive relief is inappropriate to the conduct as proved and the findings made, there will be a declaration in the terms sought in the amended application. No further formulation was pressed other than a general submission that a separation out of each contravention might be desirable. While I accept in some circumstances such a course is desirable, in this case the statutory provision and the contraventions are so straightforward that no separation is necessary.
COSTS OF THE PROCEEDING
The respondent made detailed submissions on costs. The oral hearing having taken longer than expected, the Court granted leave to the applicant to file written submissions after the conclusion of oral argument, addressing the matters raised by the respondent, and also granted leave for the respondent to file a reply. Both parties filed submissions in accordance with the leave granted.
The parties agree on the following matters in relation to costs:
1)Regardless of the outcome of the proceeding, the Applicant should have his costs up to and including 2 September 2013, on a party–party basis.
2)Costs after 2 September 2013 should follow the event, on a party–party basis.
The issue expressly raised by the respondent and on which the parties made submissions is whether, if the Court orders the respondent to pay the applicant’s costs, the costs should be reduced by application of r 40.08 of the Federal Court Rules 2011 (Cth). The question posed by that rule is whether “the proceeding … could more suitably have been brought in another court or tribunal”.
The respondent nominated, and made submissions about, the suitability of the Federal Circuit Court of Australia, the County Court of Victoria and the Magistrates’ Court of Victoria. It submitted each of these courts possessed jurisdiction to grant injunctions and declarations, being the relief initially sought by the applicant in this proceeding. Relying on, amongst other authorities, the decision of Kiefel J in El Greco (Australia) Pty Ltd v Mediterranean Shipping Company SA [2003] FCA 747, the respondent submitted the purpose of the rule is to discourage the bringing of actions which could be brought in lower courts and less expensively. In El Greco, a faint submission was put about the application of the former equivalent rule because the quantum of compensation ordered was only $63,570. Her Honour found the proceeding had involved important and reasonably complex questions and regardless of quantum had been appropriately brought in the Federal Court.
The applicant in this case made two submissions. First, and somewhat surprisingly, that there was no other “suitable court” because injunctive relief of the kind initially sought was not available in another court. Second, that the nature of the proceeding meant this Court was a suitable jurisdiction, such that the rule should not be applied.
The proposition underlying the first submission by the applicant is that s 56 of the Ozone Act operates effectively to exclude the jurisdiction of other courts to grant injunctions restraining contraventions of the Ozone Act. This is despite, as the applicant acknowledged, the express conferral of jurisdiction by the Ozone Act on state and territory courts in respect of civil penalty proceedings, and generally (for example, criminal offences).
The applicant relies on the principle of construction set out in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union (1932) 47 CLR 1 at 7. He submits that the Ozone Act “provides only one avenue for the pursuit of injunctive relief, namely the Federal Court”, and that the express saving for which s 56(8) provides (“the powers conferred on the court under this section are in addition to, and not in derogation of, any powers of the court, whether conferred by this Act or otherwise”) supports the applicant’s construction because it confirms the provision otherwise operates to derogate from the powers of other courts.
It is somewhat surprising for the applicant as regulator of this scheme to make a submission contending that only this Court has the remedy of injunction available to it. The applicant’s construction does not advance the regulatory purposes of the scheme as a whole because it places a significant constraint upon the kinds of relief which could be granted in various courts having jurisdiction under the Act. The fact that Parliament has expressly chosen in ss 69C and 69D to invest jurisdiction more broadly tells against this construction. More particularly, the express conferral on state and territory courts of jurisdiction in relation to payment of civil penalties (s 65AC) is a textual and contextual indication that Parliament intended all designated courts to have available to them the same full range of powers in a civil penalty proceeding as the authorities make plain this Court possesses.
Section 56 is found in Div 2 of Pt VIII, which concerns enforcement. Division 1 concerns powers of inspectors appointed under the Ozone Act, search and seizure, the issuing of warrants and the like. Division 2 contains only s 56. Section 56 (in particular ss 56(5) and (6)) broadens out in several respects the circumstances which, in equity, would authorise the granting of an injunction. It clearly adds to the powers of the Federal Court, but there is no basis for construing it as derogating from the powers of other designated courts in respect of civil penalty provisions. This is how the provision would need to be read for the applicant’s contention to succeed. In my opinion, what Parliament intends is that, if injunctive relief is necessary (for example, to preserve evidence, or in circumstances of some urgency) the Federal Court will have available to it the widest of injunctive powers. There is no need to go further and, in the absence of clear words and clear purpose, imply into this scheme an intention to remove well-established powers from the Federal Circuit Court, and the various state and territory courts, especially when Parliament has expressly conferred jurisdiction on those courts, including in civil penalty proceedings.
There is real force in the respondent’s argument that this Court is not a suitable court and r 40.08(b) should apply to this proceeding. The respondent’s contraventions were obvious, and s 46A is itself a simple provision. The contraventions were minor and were remedied some three months before the hearing. Given the respondent’s previous history of compliance, eventual compliance might have reasonably been expected. The applicant’s characterisation of the importance of this scheme as a whole cannot be doubted, but that characterisation says nothing about whether these particular contraventions needed to be dealt with in this Court. There is some force in the respondent’s observation about what might occur if the Commissioner of Taxation were to take a similar approach to contraventions of the income tax legislation, in respect of late filing of income tax returns.
Balanced against this is the fact that there have been few proceedings for contraventions of the Ozone Act and the jurisdiction is, in that sense, relatively new. There may be merit in consideration being given in the future to more cost-effective methods of enforcement, through the use of courts with fee scales that impose a more proportionate costs burden on respondents whose conduct, although non-compliant, is not at the serious end of the scale.
Reconciling these considerations, in my opinion it is appropriate to require the respondent to pay only a proportion of the applicant’s costs in this Court after 2 September 2013. I fix that proportion at 80%. That reflects an acceptance by the Court of the respondent’s agreement to be liable for all the applicant costs on a party–party basis up to 2 September 2013, while also recognising two matters. First, the respondent sought to resolve the substantive matter in this proceeding, being its non-compliance with its reporting obligations under s 46A. It resolved those matters fully by 2 September 2013 and on the evidence thereafter has observed its obligations under s 46A. Second, the applicant did not choose to issue proceedings in a Court where the costs burden on all parties (including the Commonwealth) may have been reduced. The applicant should not be fully compensated for his costs in this Court after the time at which the principal object of this proceeding (compliance) had been achieved.
The applicant stated in his further submissions that he sought an opportunity to be heard “if the Court was minded to depart from the usual course, or from the position as agreed between the parties” on costs. The Court requested in writing before the hearing that both parties come to the hearing prepared to address the question of costs. The applicant was then given leave to file written submissions on costs, having heard and seen the respondent’s arguments. The applicant made submissions about a proportional allocation of costs. The applicant has had ample opportunity to put submissions on costs, and recognised the possibility that one way in which the Court’s discretion might be exercised could be a proportional allocation of costs. If the orders made in this matter are seen to depart from what the applicant describes as an “agreement”, as reproduced at [91] above, which in my opinion they do not, then no further opportunity for submissions would be justified in any event given the considerable resources already expended by the parties on this case, and the burden already imposed on the respondent by this proceeding for what are, in my opinion, minor contraventions of the Ozone Act.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate:
Dated: 20 December 2013
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