Pattinson v Australian Building and Construction Commissioner
[2020] FCAFC 177
•16 October 2020
FEDERAL COURT OF AUSTRALIA
Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177
Appeal from: Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654 File number: VID 1220 of 2019 Judges: ALLSOP CJ, BESANKO, WHITE, WIGNEY AND BROMWICH JJ Date of judgment: 16 October 2020 Catchwords: INDUSTRIAL LAW – civil penalties – agreed contraventions – false or misleading statement about an obligation to engage in “industrial activity” – determination of appropriate penalty – principles relating to imposition of pecuniary penalties – whether principle of proportionality, drawn from criminal law, is applicable – discussion of principle of proportionality as applied in criminal law – whether history of contravening should inform the court’s assessment of an appropriate penalty in the instant case – whether imposition of maximum penalties to serial recidivist justified – whether total penalty manifestly excessive – whether cooperation can be treated as a factor in mitigation warranting a discount on penalty where unaccompanied by contrition Legislation:
Fair Work Act 2009 (Cth) ss 347(a), 349(1), 363, 545, 546, 547
Cases cited: A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466
Amos v McCarron [2017] ACTSC 6
Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 267 FCR 268
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; 249 FCR 458
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262
Australian Building and Construction Commissioner v Hassett [2019] FCA 855
Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972
Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383; ATPR ¶41-815
Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2016] FCA 1516; 118 ACSR 124
Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; 258 FCR 312
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) [2007] FCAFC 146; 161 FCR 513
Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd (No 2) [2016] FCA 698
Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (No 5) [1998] FCA 310; ATPR ¶41-628
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640
Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560
Australian Securities and Investment Commission v Adler [2002] NSWSC 483; 42 ACSR 80
Barbaro v The Queen [2014] HCA 2; 253 CLR 58
Baumer v The Queen [1988] HCA 67; 166 CLR 51
Bensegger v The Queen [1979] WAR 65
Benter v Western Australia [2005] WASCA 245
Birch v Fitzgerald (1975) 11 SASR 114
Bugmy v The Queen [1990] HCA 18; 169 CLR 525
Cain v Glass (No 2) (1985) 3 NSWLR 230
Cassell & Co Ltd v Broome [1972] AC 1027
Chester v The Queen [1988] HCA 62; 165 CLR 611
Comcare v Banerji [2019] HCA 23; 372 ALR 42
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; 265 FCR 208
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner & Anor [2018] HCASL 380 (5 December 2018)
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97; 264 FCR 155
Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner [2016] FCAFC 184; 247 FCR 339
Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461
Dirbass v The Queen [2018] VSCA 272
Director of Public Prosecutions v Ottewell [1970] AC 642
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436
Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525; 241 FCR 338
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331
Dixon v Price (1996) 135 FLR 27
Dobson v Tasmania [2017] TASCCA 19; 269 A Crim R 222
Eldridge v Bates [1989] SASC 1268; 51 SASR 532
Elhassan v The Queen [2018] NSWCCA 118
Elias v The Queen [2013] HCA 31; 248 CLR 483
Ellis v The Queen [2005] NTCCA 1; 154 A Crim R 450
Flight Centre Limited v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68
Gapes v Commercial Bank of Australia Ltd [1979] FCA 62; 38 FLR 431
Gilshenan v The Queen [2019] NSWCCA 313
Gommesen v The Queen [2012] NSWCCA 226
Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462
Hili v The Queen [2010] HCA 45; 242 CLR 520
Hillier v Director of Public Prosecutions (NSW) [2009] NSWCCA 312; 198 A Crim R 565
Hoare v The Queen [1989] HCA 33; 167 CLR 348
Ibbs v The Queen [1987] HCA 46; 163 CLR 447
Keating v Western Australia [2007] WASCA 98; 35 WAR 1
Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14
Magaming v The Queen [2013] HCA 40; 252 CLR 381
Markarian v The Queen [2005] HCA 25; 228 CLR 357
Marshall v Llewellyn (1995) 79 A Crim R 49
Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33; 248 FCR 1
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; 256 CLR 104
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285
Papaconstuntinos v Holmes à Court [2012] HCA 53; 249 CLR 534
Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39
Police v Cadd [1997] SASC 6187; 69 SASR 150
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543
R v Baumer (1989) 40 A Crim R 74
R v Bukvic [2010] SASC 195; 107 SASR 405
R v Dole [1975] VR 754
R v Haji-Noor [2007] NTCCA 7; 21 NTLR 127
R v Kilic [2016] HCA 48; 259 CLR 256
R v McInerney (1986) 42 SASR 111
R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566
R v Mulholland (1991) 1 NTLR 1; 102 FLR 465
R v O’Brien [1997] 2 VR 714
R v Omar (1991) 55 A Crim R 373
R v Tait [1979] FCA 32; 46 FLR 386
R v Thompson (1975) 11 SASR 217
R v Tyday [2006] NTSC 29
R v Way [2004] NSWCCA 131; 60 NSWLR 168
R v Young [1990] VR 951; 45 A Crim R 147
Reynolds v Wilkinson (1948) 51 WALR 17
Ryan v The Queen [2001] HCA 21; 206 CLR 267
Scott v Davis [2000] HCA 52; 204 CLR 333
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249
Smith v The Queen [2011] NSWCCA 163
Stokes v The Queen [2020] SASCFC 9
Sultan v Svikart (1989) 96 FLR 457; 42 A Crim R 15
Tabbah v The Queen [2019] NSWCCA 324
Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR ¶41-076
Trade Practices Commission v Mobil Oil Australia Limited [1984] FCA 403; 4 FCR 296
Transport Workers Union of Australia v Registered Organisations Commissioner [2018] FCAFC 203; 267 FCR 40
Veen v The Queen [1979] HCA 7; 143 CLR 458
Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465
Walden v Hensler [1987] HCA 54; 163 CLR 561
Wardrop v The Queen (unreported, High Court of Australia, Barwick CJ, 23 May 1979)
Weininger v The Queen [2003] HCA 14; 212 CLR 629
Wong v The Queen [2001] HCA 64; 207 CLR 584
Division: Fair Work Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 234 Date of hearing: 30 July 2020 Counsel for the Appellants: Ms R Doyle SC with Mr P Boncardo Counsel for the Respondent: Mr J L Bourke QC with Mr M Follett Solicitor for the Respondent: MinterEllison
Table of Corrections 18 October 2021 At [234], reference to Australian Building and Construction Commissioner v Powell [2019] FCA 972 corrected to Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972 ORDERS
VID 1220 of 2019 BETWEEN: KEVIN PATTINSON
First AppellantCONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
Second Appellant
AND: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER
Respondent
JUDGES:
ALLSOP CJ, BESANKO, WHITE, WIGNEY AND BROMWICH JJ
DATE OF ORDER:
16 OCTOBER 2020
THE COURT ORDERS THAT:
1.The appeal be allowed and the Notice of Contention be dismissed.
2.Orders 1 and 2 of the Court made on 14 October 2019 be set aside and in lieu thereof it be ordered that:
(a)The first respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act 2009 on 13 September 2018 in the sums of $4,000 and $500.
(b)The second respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act 2009 on 13 September 2018 in the sums of $38,000 and $2,000.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
ALLSOP CJ, WHITE AND WIGNEY JJ:
Introduction
This appeal raises a number of important questions as to the proper approach to the determination of the appropriate level of civil penalties in any particular case, in particular the proper approach where a contravenor can, from the relevant circumstances, including its record of prior contraventions, be inferred to have demonstrated an unwillingness to obey a statute, whether generally, or in relation to certain provisions.
The primary judge approached the imposition of civil penalties perceiving a difference in operative principle as expressed in a number of Full Court decisions. In particular, he perceived error in the expression of principle by Besanko and Bromwich JJ in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39 (with which expression of principle Reeves J agreed), and in the expression of principle by Bromwich J in dissent in an earlier Full Court appeal of Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Broadway on Ann) [2018] FCAFC 126; 265 FCR 208. The primary judge saw the correct approach exhibited in the reasons of the majority in Broadway on Ann (Tracey and Logan JJ) in preference to the approach of Bromwich J in dissent in the outcome of the appeal, and in preference to the most recent considered Full Court decision in Parker.
The first and substantive ground of the appeal was that the primary judge erred by failing to approach the imposition of civil penalties on the second appellant (the union) by characterising the nature, seriousness or gravity of the instant contraventions by reference only to the objective characteristics of the contraventions and without regard to the union’s history of contravention of the statute. The error, it was submitted, was to be found in a misunderstanding by the primary judge of the relevant principle drawn from sentencing in the criminal law, and by reason of that misunderstanding a penalty was imposed that was disproportionate to the nature and gravity of the contravention in question.
In a notice of contention, on the hypothesis that the second appellant’s approach to assessing the appropriate penalty was correct, by reference to existing principle, the Commissioner sought to have recast the relevant operative principle to remove entirely, or to subordinate, any such principle of proportionality.
Both the notice of appeal and notice of contention require the addressing of matters of general principle in their historical development, the examination of the statutory provisions in question, and the examination, largely chronologically, of decisions of the Court relevant to the resolution of the arguments.
Importantly in the above, and not just as part of dealing with the notice of contention, it will be necessary to consider the place of the statutorily mandated maximum penalty in the light of the object of civil penalties, and in the context of what might be called the “recidivist” contravenor.
The primary judgment and the debate about proportionality in the Court
Arising from what has been seen as a difference in approach in Broadway on Ann compared to cases such as Parker, generated by the judgment below, a difference of opinion amongst judges of the Court has been expressed as to the place of the principle of proportionality in the imposition of civil penalties. Involved in this difference of opinion are different understandings and applications of what such a principle involves. It is therefore necessary to be cautious as to the use of the expression lest it become a label and distract analysis, and the proper explication, of principle.
The question said to be raised by the appeal is whether a contravenor’s history of contraventions can be taken into account in assessing the gravity of the contravention. That is important because it was submitted by the second appellant that it is from the assessment of the gravity of the contravention (objectively assessed) that the range of possible proportionate penalties is obtained, within which range the contravenor is placed according to considerations relevant to him, her, or it, such as prior offending and an apparent unwillingness to comply with the law.
A brief discussion of the judgment below suffices for present purposes to reveal the issue on appeal. The events in question occurred in September 2018 at a building site in Frankston, Victoria, which was occupied by a contractor (Multiplex) in charge of a project to build accommodation for Monash University.
Mr Pattinson was an employee of Multiplex who worked on the site. He was also an officer of the second respondent, the union (the CFMMEU), and was the union delegate on the site.
In September 2018, a subcontractor was engaged to install solar panels at the site. Two employees of the subcontractor attended the site to carry out the necessary work. On that day (13 September) Mr Pattinson spoke to the subcontractor’s employees in substance as recounted by the primary judge at [15]–[16] of his reasons:
15 … They arrived early that morning, whereupon they attended an induction session overseen by Mr Pattinson (in his capacity as a delegate of the Union’s at the Site). During the course of that session, Mr Pattinson enquired of one of the SEA employees, “Are you union? Do you have a ticket for your fees? Have you paid your fees?” or words to that effect. The SEA employee replied, “No, we’re not a union-based company so we don’t have our ticket,” or words to that effect. It is not in dispute that neither of the SEA employees was, in fact, a member of the Union.
16 Mr Pattinson then spoke to the SEA employees about their obligation to join an industrial association. The Commissioner’s amended statement of claim dated 5 June 2019 contains detailed particulars of that conversation. The respondents’ amended defence admits the effect of what was said but, as is to be expected, is silent as to whether or not the particulars are accurate. It is accepted that the effect of the discussion was that Mr Pattinson represented to each of the SEA employees that, in order to perform the work that they were at the Site to perform, they had to become a member of an industrial association …
The two subcontractor employees did not work on the site on that day, inferentially and uncontroversially, because of what Mr Pattinson had said. Before the primary judge, the statements were accepted by the appellants to be misrepresentations knowingly or recklessly made that were false or misleading and contrary to s 349(1)(a) of the Fair Work Act 2009 (Cth), the terms of that section being as follows:
(1) A person must not knowingly or recklessly make a false or misleading representation about either of the following:
(a) another person’s obligation to engage in industrial activity;
It was accepted that by this body of events there were two contraventions (one for each of the employees) by both Mr Pattinson and by the union, as to the latter by the operation of s 363(1)(b) and s 363(3) of the Fair Work Act.
The admission as to liability by the appellants is to be understood by reference to the combined operation of s 349(1)(a) and s 347(a) which provide relevantly that a person engages in industrial activity if he or she becomes or does not become a member of an industrial association. Thus, to tell the two employees that they were obliged to join the union if they were to work on the site was false or misleading for the purposes of s 349(1)(a). The contravening conduct can be seen as in furtherance of the union’s preference for work sites to be “no ticket, no start” sites: that is all workers on site being union members.
The question before the primary judge was the appropriate penalties to be imposed upon Mr Pattinson and the union. The maximum penalties for each contravention were 60 penalty units ($12,600) for Mr Pattinson and 300 penalty units ($63,000) for the union.
The primary judge described the contentions of the parties in [25] of his reasons as follows:
… The Commissioner contends that the [contraventions] should attract penalties at or approaching the maximum in respect of the Union (that is, a total of, or near, $126,000.00), and of between $4,000.00 and $6,000.00 per contravention ($8,000.00-$12,000 in total) for Mr Pattinson. The respondents contend that they should attract penalties “…proportionate to contraventions that are objectively below the mid-range of seriousness.”
In submissions before this Court senior counsel for the appellants more fully described the submissions made below as follows:
The appellants submitted that the objective seriousness of the contravening conduct fell below the middle of the spectrum of seriousness. The contravening conduct involved a single representation; was not systematic or part of a wider campaign; was deliberate but not pre-planned; and did not result in any economic or other material loss to anyone. The appellants accepted that the CFMMEU’s history of contravening conduct heightened the need for deterrence, but submitted that it did not bear on the assessment of the objective gravity of the instant contraventions, nor did it operate to transform the character of those contraventions. The utilitarian value of the appellants’ cooperation with the respondent in resolving the matter at an early stage was pointed to as a matter in mitigation.
The last sentence of this submission (the utilitarian discount) is the subject of the second ground of appeal.
The primary judge accepted that there was no evidence of any economic loss or any material loss arising from the contraventions. His Honour also concluded that the contravening conduct was not at the upper end of a scale of seriousness if assessed independently of the union’s history. The parties were in agreement on this last point. The primary judge concluded that the union’s history was relevant in assessing the gravity or seriousness or nature or character of the contravention. Having regard to the union’s recidivism, the instant contraventions were, in his Honour’s view, contraventions of the gravest kind. At [71]–[72] and [83]–[86] of his reasons the primary judge stated the following:
71 Civil penalties have only one objective: deterrence. The court is charged, simply enough, with fashioning a penalty that serves to deter, both generally and specifically, the conduct in respect of which it is levelled.
72 If the only way to deter even the most objectively inoffensive conduct (so assessed without reference to historical context) is to impose a penalty at or approaching the maximum amount available, then the imposition of anything less would necessarily result in a failure to achieve the only object to which the imposition of civil penalties is directed. That acknowledged, it is not apparent to me how a civil penalty that is fashioned at (and not beyond) a level that is necessary in order to deter the repetition of particular conduct might ever be impugned as disproportionate to its nature or gravity (or seriousness or character). To phrase that proposition as a question: how can a penalty be disproportionate to the nature or gravity of the conduct in respect of which it is imposed if it is no more than what is necessary to achieve the only objective that its imposition is meant to achieve?
…
83 It follows, in my view, that in assessing the nature, character and seriousness (and/or gravity) of the Union’s Agreed Contraventions, regard may properly be had to its history of contravening conduct. That history is, on any view, not flattering. Many judges of this court have commented upon it: often in unambiguously scathing terms; always, it seems, to little if any avail. I do not relish the prospect of adding my name to the long list of judicial officers whose exasperated admonitions appear to have been met with studied indifference; and, perhaps on one occasion, with public dismissal as the invalid mutterings of snobbish hypocrites who “call us criminals [and] all sorts of things [and] fine us millions of dollars [despite having] probably never done a day’s work in their li[ves]”: Victoria International Container Terminal Ltd (t/as VICT) v Maritime Union of Australia [2017] VSC 762, [21] (McDonald J).
84 Regardless, I should make clear that I regard the Union’s Agreed Contraventions—viewing them, as I do, against the backdrop of its sorry record of statutory contravention—as very much of the gravest, most serious kind. It is bad enough that it should so casually intrude upon rights of free association so valued by societies of conscience; much worse that it should do so, yet again, in deliberate defiance of the law that it has been told time and time again that it must obey. Its behaviour in this case—and many others before it—admits only of the following conclusions, namely that:
(1)it favours a policy of “no ticket, no start” and holds that philosophy (if not the achievement of its industrial objectives more broadly) as preferable to the law of the land—see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235, [23], [28] (Tracey J);
(2)it appears to be wholly unmoved by the prospect that it might be forced yet again to dig into its members’ “big pots of gold” in the name of “fight[ing] the good fight”—to use the terminology that features in Victoria International Container Terminal Ltd (t/as VICT) v Maritime Union of Australia & Anor [2017] VSC 762, [23] (McDonald J); and
(3)it regards doing so as an acceptable cost of the way that it conducts its affairs—the misconduct in this case is but the latest example of the Union’s strategy “…to engage in whatever action, and make whatever threats, it wishes, without regard to the law, and then, once a prosecution is brought, to seek to negotiate its way into a position in which the penalties for its actions can be tolerated as the price of doing its industrial business”: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436, [142] (Mortimer J).
85 The position of Mr Pattinson is not as repellent. As is recorded above, Mr Pattinson has not previously been found to have contravened the FW Act or its predecessors. Unlike some of his colleagues, he is not—and, one hopes, will not soon become—a recidivist who thumbs his nose at the requirements of the law. Nonetheless, given his long-held position and rank within the Union, it is patently absurd to conclude anything other than that he did what he did out of fealty to his Union’s policy of enforcing a “no ticket, no start” regime at the construction sites over which it wields influence. That he embarked down the path that he did reflects poorly upon him.
86 Those conclusions stated, Mr Pattinson’s Agreed Contraventions were much more serious than what might otherwise call for a proverbial slap on the wrist. Mr Pattinson is merely the latest foot soldier in what seems to be the Union’s war against free association on Australian building sites. There have been others like him—the Commissioner referred to them, fairly and pithily, as “institutionalised human agents”—who, in the past, have stood ready to do as he did (and worse). One might be forgiven for doubting that there might not be others who stand ready to do similar things in the future. It is important that the penalty that is imposed upon Mr Pattinson is fashioned at a level that is sufficient to deter repetition of the conduct not only by Mr Pattinson but also by the network of other delegates and officers of the Union who might themselves be minded to enforce its anachronistic “no ticket, no start” philosophy. …
The appellant agreed with the conclusion of the primary judge that he was faced with conflicting authority, but submitted that he should not have departed from cases such as Parker, that Broadway on Ann was incorrect as a matter of principle, and that the history of contraventions could not be taken into account in assessing the nature and gravity of the contravention in question. There were no grounds of appeal upon the reasoning or findings that his Honour made, which were extensive, as to what could be drawn from the prior contravening of the union. For instance, there was no appeal from findings of the kind made in [84(1)], [84(2)] and [84(3)] above about the union’s attitude to the law. The appeal was concerned with the approach in assessing the gravity of the contravening and the misuse of the principle of proportionality and also whether the penalty imposed on the union was excessive. Ground 1 of the notice of appeal was as follows:
1. The primary judge erred in so far as his Honour:
1.1held (J[82], [83]) that the Court could take into account the second appellant’s history of contravening conduct in determining the nature, character, seriousness and / or gravity of the instant contraventions;
1.2 failed to first identify the applicable range of penalties for the instant contravention, without regard to the second appellant’s history of contraventions, before next taking into account that history for the purpose of assessing where, within that applicable range, the penalty should fall;
1.3 held that the second appellant’s history of contravening conduct may convert contraventions that the parties had agreed (J[68]) and the Court had found were not at the upper end of the scale of seriousness, to contraventions the nature, character and seriousness of which was “very much the gravest, most serious kind” (J[84]);
1.4 failed to follow and apply Full Court authority that was binding on him, namely the decision in Parker v ABCC (2019) 365 ALR 402;
1.5 held that it was open to him (J[69]) to decide for himself which of the competing analyses of the Full Court to prefer, and in so doing, concluded that the reasoning of the majority in The Broadway on Ann Case [2018] FCAFC 126 was to be preferred to the decision in Parker v ABCC (2019) 365 ALR 402;
1.6 held that a penalty at or close to the maximum was appropriate with respect to the second appellant;
1.7 imposed a penalty on the second appellant which was manifestly excessive in all the circumstances.
We will defer an examination of the primary judge’s treatment of Broadway on Ann and Parker until after we have discussed those cases.
Preliminary comment
Notwithstanding that these reasons will, of necessity, examine closely the reasons of a number of judgments, it should be borne in mind at all times that reasons of judges are not words of a statute, and the warning of Lord Reid in Cassell & Co Ltd v Broome [1972] AC 1027 at 1085 of the danger of placing reliance on the literal words of particular judgments instead of searching for the applicable principle should be heeded: see Cain v Glass (No 2) (1985) 3 NSWLR 230 at 248; Scott v Davis [2000] HCA 52; 204 CLR 333 at 370 [108]; Ryan v The Queen [2001] HCA 21; 206 CLR 267 at 272 [15]; Papaconstuntinos v Holmes à Court [2012] HCA 53; 249 CLR 534 at 548 [29]; and Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33; 248 FCR 1 at 17 [57].
The importance of the statute
It is necessary to bear in mind at all times two propositions that cannot be, and were not, in contest. First, the now familiar regulatory remedy of the civil penalty is a creature of statute. The Court has no power to impose a penalty as a remedy for a breach of a legislative provision without statutory authority. Secondly, the scope of the Court’s power and the subject of the penalty are matters of statutory construction.
These propositions, especially the second, are not merely concerned with meaning and text. They involve the recognition that Parliament invests the courts with authority to impose penal sanctions on persons in aid of a statutory object based on principles of application whether contained within the statute or in the law against the background of which the statute can be seen to be enacted.
The clarification by the High Court of the object of civil penalties
To these two propositions can be added a third, derived from the reasons for judgment of French CJ, Kiefel, Bell, Nettle and Gordon JJ in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Agreed Penalties Case (HC)). There, in distinguishing the proper approach to the determination of civil penalties from sentencing under the criminal law, and in particular the lack of relevance of Barbaro v The Queen [2014] HCA 2; 253 CLR 58 to the process of the imposition of civil penalties, their Honours adopted what had been said by the Chief Justice when a judge of this Court in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR ¶41-076 at 52,152, to the effect that the principal, if not only, object of penalties was “to deter repetition by the contravenor and by others who might be tempted to contravene the Act”. In CSR, French J was referring to the Trade Practices Act 1974 (Cth) and the provisions there (in Pt IV) dealing with economic regulation. The Court in the Agreed Penalties Case (HC) was applying the proposition to penalties under a statute concerned with industrial relations, the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act). As the plurality in the Agreed Penalties Case (HC) said at 258 CLR 506 [55] “the purpose of a civil penalty … is primarily if not wholly protective in promoting the public interest in compliance [with the statute]”.
This third proposition derived from the Agreed Penalties Case (HC) settled what had been perceived to be a difference of view in this Court as to the object of the imposition of civil penalties. That difference of view was discussed by Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383; ATPR ¶41-815 at [4]–[13], in particular at [7] where his Honour said:
The third matter concerns the purpose of imposing penalties. There is as yet no concluded view on the object of the imposition of penalties for a contravention of Pt IV. It is only when this issue is finally resolved that there can be a degree of certainty in deciding the appropriate level of penalty in a particular case. At the moment there are two competing views, although the application of the principles of each school of thought may overlap. Some favour the view that deterrence, either specific or general, is the sole criterion. Others say that retribution is an important element.
The view that deterrence was the sole object of the imposition of the penalty was attributed by Finkelstein J to French J in CSR in the passage approved in unqualified terms by the plurality in the Agreed Penalties Case (HC) 258 CLR at 506 [55] where the plurality stated:
No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 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.
(Footnotes omitted.)
The view that retribution was relevant as one of the objects of the imposition of a civil penalty could be seen in a number of cases. For example, in Australian Competition and Consumer Commissionv J McPhee & Son (Australia) Pty Ltd (No 5) [1998] FCA 310; ATPR ¶41-628, Heerey J said that while deterrence was a primary object of the imposition of civil penalties, concepts of moral responsibility long known to the criminal law were involved. His Honour said at 40,891:
While there has been a clear policy decision by Parliament that contraventions of the laws against anti-competitive conduct contained in Pt IV are not criminal offences, nevertheless s 76 imports into the penalty fixing process concepts of moral responsibility long known to the criminal law. In other words, the sources of the substantive provisions of Pt IV are doubtless economic policy and theory, but the penalties for contraventions are to be applied in a moral universe. Sheppard J said in Trade Practices Commission v Axive Pty Ltd (1994) ATPR ¶41-368 at 42,974 that:
… ordinary sentencing principles … apply notwithstanding that this is not a criminal prosecution.
…
By moral considerations I do not mean some kind of saccharine piety. The marketplace is, and is meant to be, a tough place. But the norms imposed by Pt IV, and in particular the prohibition of price-fixing, by now are to be seen as part of fair, honest and ethical business behaviour. Price-fixing, and in particular the kind of collusive bidding which was attempted in the present case, is a form of cheating. There is no reason why this aspect of the contravening conduct does not form part of the nature and extent of the act within the meaning of s 76(1). Also relevant is the conduct of those involved insofar as it involves factors like deliberation, knowledge of wrongdoing and concealment. Most if not all of these factors would fall within a consideration of the nature and extent of the act or the circumstances in which the act took place.
Further, in Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543, Lander J (with whom Jessup J agreed) said the following at 559–560 [93]:
There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.
The Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331 (Agreed Penalties Case (FC)) sought at 357–359 to reconcile the views of French J in CSR and Lander J in Ponzio. Importantly, the Full Court qualified what French J had said, restricting it to penalties under the Trade Practices Act, saying the following at 229 FCR 357 [65]–[66]:
65 In CSR, French J was concerned with penalties to be imposed pursuant to Pt IV of the Trade Practices Act 1974 (Cth). We do not understand his Honour to have said that all pecuniary penalties are imposed purely for the purpose of deterrence. He was speaking solely of penalties imposed pursuant to that legislation and, we suspect, making two points:
Ÿthat corporations which breach the provisions of Part IV are likely to be overwhelmingly motivated by commercial considerations; and
Ÿthat in order to make potentially profitable, but unlawful conduct unappealing as a business choice, a substantial penalty or threat of such penalty is necessary.
66 We doubt whether French J intended to propound the broad proposition which the Commonwealth advances. Even if his Honour meant that as a matter of statutory construction, the purpose of Pt IV penalties was purely deterrence, there can be no justification for extending that view to all other statutory regimes which provide for such penalties. The relevant legislation will provide the most reliable basis for identifying Parliament’s purpose.
The submissions put by the Commonwealth to which the Full Court was referring was recorded by the Court at [64], as follows:
The Commonwealth submits that there is a fundamental distinction between criminal punishment and the imposition of a pecuniary penalty. It is said that they serve different purposes. The Commonwealth submits that the distinction reflects a “principle” said to have been established by the decision of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd [1991] ATPR ¶41-076. It submits that the case establishes that the purpose to be served by the imposition of a pecuniary penalty is general and specific deterrence. …
The Agreed Penalties Case (FC) (and the High Court on appeal) was concerned with the BCII Act (for present purposes, a statute that can be seen as cognate with the Fair Work Act as involving industrial relations). The Full Court in the Agreed Penalties Case (FC) saw in the relevant statute considerations that made retribution and rehabilitation relevant. Before citing Ponzio 158 FCR at 559–560 [92]–[94] with approval, the Full Court said the following at 229 FCR 357–358 [67]:
At least some of the goals referred to in s 3 of the BCII Act – promoting respect for the rule of law, ensuring respect for the rights of building industry participants and ensuring accountability for unlawful conduct – go beyond mere deterrence. The promotion of respect for the rule of law and the rights of others suggests an element of education and rehabilitation. The term “ensuring accountability” implies recognition of any failure to behave in accordance with the law. Neither the Trade Practices Act (nor its successor) nor the BCII Act operates in isolation from the broader legal system. Respect for the rule of law necessitates a clear expression of the community’s displeasure concerning unlawful conduct. Save in the most trivial of cases, any breach of the law must be seen as an affront to the dignity of the community in which the law operates, and by which it is established. Repeated failure to deal with such breaches may undermine the whole legal system. In marking community displeasure, the imposition of an appropriate penalty is an act of retribution. Similar comments apply to the notions of respect for the rights of building industry participants and accountability for unlawful conduct. Although the goals have been tailored to reflect the subject matter dealt with by the BCII Act, they are based on concepts which are fundamental to respect for, and enforcement of law in any civilized community.
The Commonwealth had submitted that Ponzio 158 FCR at 559–560 [92]–[94] was wrong. That submission was rejected by the Full Court, the Court saying at 229 FCR 359 [71]:
… However, a pre-eminent purpose [deterrence] need not be the sole purpose. We consider that in any system of penalties the various identified purposes of punishment [retribution, rehabilitation and deterrence] will have greater or less relative significance, depending upon the type of misconduct in question, its prevalence at a particular point in time, difficulty of detection, potential for causing damage and many other considerations.
It is to be noted that in Ponzio at [93], Lander J referred to punishment (as well as deterrence and rehabilitation) as a purpose for imposing a penalty (thereby equating punishment with retribution), whereas the Full Court in the Agreed Penalties Case (FC) at [71] referred to the purposes of punishment in any system of penalties as including retribution (as well as deterrence and rehabilitation).
The High Court rejected the Full Court’s views, and stated, with clarity, that retribution and rehabilitation have no part to play as objects of the imposition of civil penalties: the object of civil penalties being entirely protective in promoting compliance, through deterrence (specific and general).
The questions of moral responsibility (“long known to the criminal law” as Heerey J said in McPhee) are bound up with notions of retribution and denunciation by the characterisation of the morality of the wrong as relevant to the appropriate nature of the response in punishment for the contravention (and in this sense, offending). The inaptness of the intrusion of moral judgments beyond the content of the relevant statute in the context of the imposition of civil penalties was commented upon by French J in CSR at 52,151 when his Honour said the following in relation to s 46 of the Trade Practices Act:
But characterisation of contravening conduct in terms of a morality larger than that which is defined by the legislative purpose is misplaced.
It is unnecessary to dwell further on these matters beyond saying that it is of some importance in the dispassionate and independent discharge of the court’s function in the resolution of disputes and the administration of justice that the exercise of judicial power does not appear to be clouded or compromised by the use of language foreign to the task of deterrence, involving expressions of moral denunciation that are not drawn from the statute and that the High Court has said are foreign to the judicial task of assessing and imposing an appropriate penalty.
The place of punishment
The terms of the High Court’s reasons have led to some discussion as to whether civil penalties are to be characterised as punishment: see the cases to which the Court referred in the Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (Queensland Infrastructure Case) at [99] set out below at [110]. The discussion has both a substantive and a semantic perspective. As a matter of substance, if by the word “punishment” is meant retribution, the plurality was clear. It is a consideration foreign to the relevant purpose or object of the imposition: protection of the public interest by promoting compliance with the statute by deterrence. As a matter of semantics, the remedy is penal: a penalty, albeit civil in character. The ordinary meaning of the word “penalty” includes “a punishment imposed for breach of law, rule, or contract” and of “penal” includes “punitive; prescribing or enacting the punishment of an offence or transgression”: The Shorter Oxford English Dictionary on Historical Principles (3rd ed, Oxford Clarendon Press, 1986) at 1542–1543.
If one recognises that the imposition of the civil penalty or the imposition of punishment in the nature of a civil penalty has only one object or purpose: the protection of society in promoting the public interest by compliance with the relevant law by putting a price on contravention sufficiently high to deter repetition by the contravenor or by others who might be tempted to contravene, then perhaps little utility and no error can be seen in viewing a civil penalty as a form of punishment. Given, however, the clarity of the view of the majority in the Agreed Penalties Case (HC) as to the object of imposition of a civil penalty, to avoid confusion and the risk of error, it is better not to describe the function of the imposition of a civil penalty as punishment, lest notions of retribution intrude. Also, the nature of the provision, contravention of which may result in the imposition of a civil penalty, is relevant to consider. As French J said in CSR at 52,151 the provisions of Pt IV of the Trade Practices Act are “of a regulatory rather than penal character”. Whilst the remedy is a penalty, and so correctly to be called penal, the purpose or object of its imposition is protective to bring about regulatory compliance by deterrence. The same may be said about the substantive provisions of industrial relations legislation, such as the Fair Work Act, as Parliament’s expression of the appropriate rules of engagement of the community in the labour market, to be regulated in accordance with the statute.
Principles of sentencing in crime
Sentencing principles attending the imposition of punishment for breach of the criminal law have, for many years, played an important part in the development and application of principle concerned with the imposition of civil penalties, in particular the principle of proportionality as discussed most notably in Veen v The Queen [1979] HCA 7; 143 CLR 458 (Veen (No 1)) and Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 (Veen (No 2)) and the method of reaching the relevant amount of the penalty by a process of evaluation in the nature of an “instinctive synthesis”: Markarian v The Queen [2005] HCA 25; 228 CLR 357. The extent to which principles of sentencing in criminal law are applicable, or properly adapted, to the imposition of civil penalties depends upon both the content of the statutory provisions providing for the civil penalty and upon the consequences of the different objects and purposes served by punishment for crime and imposition of civil penalties.
The principle of proportionality, retribution, and the humanising of criminal sentencing
An understanding of Veen (No 2) and related cases is critical to understanding the principle of proportionality in criminal sentencing and is important to the resolution of this appeal. Before coming to Veen (No 2), it is instructive to say something of “retribution” and its place in criminal sentencing. Justice French in CSR referred to “the Old and New Testament moralities that imbue much of our criminal law”. What is “retribution”? It is defined by the Macquarie Dictionary (rev ed, Macmillan Publishers, 1985 (1981)) as “1. requital according to merits or deserts, esp for evil. 2. Something given or inflicted in such requital. 3. Theological the distribution of rewards and punishments in a future life.” The Shorter Oxford English Dictionary defines “retribution” as:
1. Repayment, recompense, return, for some service, merit etc. Now rare. 2. Day of r., the day on which divine reward or punishment will be assigned to men …; also generally any day of punishment …; Recompense, in another life, for one’s good or bad deeds in this world. 3. A recompense for, or requital of, evil done; return of evil
One can see in those meanings the elements of a notion of proportionality: “according to merits or deserts”. Indeed, in modern times, the notion of retribution became a feature of English law of punishment for crime to civilise or make more humane the perceived evils of a system of punishment based on what Radzinowicz and Turner referred to as “a crude utilitarianism aiming at the reduction of crime through terror”: Radzinowicz L and Turner JWC, “Punishment (1) Outline of Developments Since the 18th Century” in Radzinowicz L and Turner JWC (eds), The Modern Approach to Criminal Law: Collected Essays (MacMillan & Co, 1945) p 39. The terror to which they referred was real. In its form in the late eighteenth century and early nineteenth century the object of deterrence through terror was captured in a work of history (Mackenzie, History of the Nineteenth Century, 10th ed, pp 77–78) to which Radzinowicz and Turner referred at op cit p 39:
If a man injured Westminster Bridge, he was hanged. If he appeared disguised on a public road, he was hanged. If he cut down young trees; if he shot rabbits; if he stole property valued at five shillings; if he stole anything at all from a bleach field; if he wrote threatening letters to extort money; if he returned prematurely from transportation; for any of these offences he was immediately hanged.
Thus, the place of retribution in criminal sentencing is not to be seen necessarily as some harsh moralistic feature of the law embodying revenge, whether, as French J said in CSR, “within the sense of the Old and New Testament moralities that imbue much of our criminal law”, or otherwise. Rather, as Radzinowicz and Turner say at op cit p 40:
Speaking generally, the study of this first stage of our criminal policy establishes the conclusion that there was no acceptance of any principle that the severity of punishment should be equated to the gravity of the offence. This principle became prominent in the second stage, when the doctrine of retribution took a leading place in contemporary thought on penal questions, and therefore it was felt that the crimes had to be graded according to their gravity and the punishments correspondingly graded so as to fit the crime in each case. The major assumption on which this conception rests is that every individual in the State has certain fundamental rights as a human being, which should not be forfeited by the fact that he may have committed a crime.
One can see in such a discussion the foundation of a principle of proportionality in sentencing for crime. The retributive element in a sentence may, however, also reflect “the community’s expectation that the offender will suffer punishment and that particular offences will merit severe punishment”: Ryan 206 CLR at 283 [46] (per McHugh J). The proper recognition of this retributive element may also be seen to be related to maintaining public confidence in the administration of justice: R v Dole [1975] VR 754 at 769 and Ryan 206 CLR at 283 [46]. It is a form of justice based on equality: cf Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462.
As discussed below, that retribution can be seen as the (or a) source of the principle of proportionality does not necessarily lead to a conclusion that it is the only source of a principle based on reasonableness and proportion of response in the infliction of penal consequences for a statutory wrong.
The principle of proportionality in the criminal law and Veen (No 1) and Veen (No 2)
The principle of proportionality, its meaning and its difficult practical application can be seen in Veen (No 1) and Veen (No 2). The facts and circumstances of these cases are a tragic and brutal world away from the imposition of civil penalties to deter non-compliance with regulatory provisions in industrial relations or economic life. That difference in context does not, however, make applicable principle derived from Veen (No 2) any less binding; but it does assist in appreciating the caution required in transplanting words in reasons for judgment from one context to another.
In February 1975, Mr Veen, then twenty years of age, killed a man by repeated stabbing. He was convicted of manslaughter on the ground of diminished responsibility. The circumstances of the human tragedy of the crime, and of Mr Veen’s life, need not be recited in full detail, beyond saying that he had experienced a deprived life as an Aboriginal man who from childhood had suffered physical and sexual abuse, and from alcohol addiction. His abnormality of mind and reduced emotional control brought about by alcohol abuse were heightened when he was provoked or took alcohol. The fatal incident arose after the victim made a racial insult after having sexual relations with Mr Veen, who was working as a prostitute. The victim was ferociously and repeatedly stabbed. Mr Veen was sentenced to life imprisonment, the sentencing judge saying that he had “to be imprisoned for the protection of the community from his own uncontrollable urges”: see Veen (No 1) 143 CLR at 459. The High Court overturned the Court of Criminal Appeal’s refusal to interfere with Mr Veen’s sentence. The High Court (by majority) in Veen (No 1) allowed the appeal and substituted a sentence of 12 years imprisonment (his incarceration having commenced in 1975). Mr Veen was released on licence in January 1983, having been a model prisoner (“a good worker; very quiet, never a problem”: Veen (No 2) 164 CLR at 469). In October 1983 (but nine months after his release), Mr Veen repeatedly stabbed another man in similar circumstances. Once again, he was convicted of manslaughter by reason of diminished responsibility and once again he was sentenced to life imprisonment. Once again the Court of Criminal Appeal dismissed an appeal against sentence. This time, the High Court, by majority in Veen (No 2), dismissed the appeal.
At the centre of the debate in both Veen (No 1) and Veen (No 2) was the inter-relationship between the operation of the principle of proportionality and the protection of the community, and whether to sentence Mr Veen to life imprisonment could be seen as proportionate to his crime, or whether it could only be seen, in all the circumstances, as preventative detention without statutory warrant. Thus, it was not a question of specific or general deterrence, but protection of society by preventative detention that concerned the Court.
In Veen (No 2) Mason CJ, Brennan, Dawson and Toohey JJ at 164 CLR 473–474 referred, in the context of explaining proportionality, to the “illuminating controversy” in Res Judicatae, vol 6 (1953) between Mr CS Lewis, Dr Norval Morris, Dr Donald Buckle and Prof JJC Smart. As their Honours said at 473, the thesis advanced by CS Lewis “was that the retributive theory of punishment – punishing an offender because he deserves it – prevents the injustices which may be involved in detaining an offender in order … to protect society or to reform the offender”.
The majority said the following about the status of the principle at 472:
The sentencing principle which his Honour laid down [speaking of the sentencing judge in Veen (No 1)] is that a sentence should be “proportionate to the gravity of the offence” unless, perhaps, the applicant’s history warrants some departure from the principle. He then determined the appropriate proportionate sentence by reference to all the circumstances of the case. The principle of proportionality was not the point of divergence between the majority and minority [in the High Court in Veen (No 1)], however, for that principle was embraced expressly by Mason J (with the agreement of Aickin J). The majority decision in Veen [No. 1] reflected their Honours’ assessment of the particular circumstances of the case; ...
The principle of proportionality is now firmly established in this country. It was the unanimous view of the Court in Veen [No.1] that a sentence should not be increased beyond what is proportionate to the crime in order merely to extend the period of protection of society from the risk of recidivism on the part of the offender …
(Footnotes omitted.)
Veen (No 2) reveals the subtlety and importance of the inter-relationship between propensity, past offending and a proportionate sentence. After rejecting, at 472–473, the English approach of permitting a sentence greater than the principle of proportionality would allow in certain circumstances if the protection of the community warranted it, the majority said the following at 164 CLR 473:
It is one thing to say that the principle of proportionality precludes the imposition of a sentence extended beyond what is appropriate to the crime merely to protect society; it is another thing to say that the protection of society is not a material factor in fixing an appropriate sentence. The distinction in principle is clear between an extension merely by way of preventive detention, which is impermissible, and an exercise of the sentencing discretion having regard to the protection of society among other factors, which is permissible. …
It was at this point in their reasons that the majority referred to the “illuminating controversy” (see [49] above) and the place of the retributive theory of punishment as the source of the principle of proportionality. At 474, the majority referred to the “plea” of CS Lewis in the concluding reply set out at 164 CLR 473–474 expressed in CS Lewis’ rich language:
All I plead for is the prior condition of ill desert; loss of liberty justified on retributive grounds before we begin considering the other factors. After that, as you please. Till that, there is really no question of ‘punishment’. We are not such poltroons that we want to be protected unconditionally, though when a man has deserved punishment we shall very properly look to our protection in devising it.
The majority then continued at 474:
The plea has been heard by the courts of this country, by adopting the principle of proportionality and by having regard to the protection of society as a factor in determining a proportionate sentence. It must be acknowledged, however, that the practical observance of a distinction between extending a sentence merely to protect society and properly looking to society's protection in determining the sentence calls for a judgment of experience and discernment.
The basic difference between the majority and the minority in Veen [No. 1] lay in the differing assessments of what was the appropriate proportionate sentence. No judgment would have given support to a sentence exceeding what was truly proportionate. …
The derivation of the principle of proportionality from the retributive object of punishment is seen in Veen (No 2) 164 CLR at 473–474.
The majority in Veen (No 2) at 477–478 dealt with two further (and related) principles, described as subsidiary for the resolution of that appeal, which are of central importance to this appeal: the antecedent criminal history (here, antecedent contraventions) and the place of the maximum penalty.
As to antecedent criminal history of an offender, the principle of proportionality played the same important role. It is necessary to set out the whole passage on this first (subsidiary) principle at 164 CLR 477–478:
… [T]he antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell [[1970] AC 642 at 650]. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner’s claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community’s understanding of what is relevant to the assessment of criminal penalties.
In Director of Public Prosecutions v Ottewell [1970] AC 642 at 650, Lord Donovan said “Or, it may be that repetition has itself increased the gravity of the offence.” These passages from Veen (No 2) are a clear statement that the consideration of prior offending or propensity is not limited to limiting or refusing any claim for leniency. Such prior offending may show moral culpability or propensity to offend or a continuing attitude of disobedience to the law, and so reveal the need for specific deterrence. Such an attitude of continuing disobedience may warrant, through retribution, deterrence and protection of society, a “more severe penalty”. But it is retribution, deterrence and protection from “offences of a like kind”. Such factors cannot be given such weight as to lead to a penalty “disproportionate to the gravity of the instant offence”. As seen below these passages have given rise to a difference of view as to whether prior offending can affect the assessment of the gravity of the offending, or whether it is a matter going to punishment of the offence, the gravity of which is assessed without regard to prior offending. The difference of view (in the context of sentencing in crime) reflects the central debate in this appeal.
What was said as to the first subsidiary principle was reinforced by the place of the maximum penalty. The majority said at 164 CLR 478:
The second subsidiary principle material to this case is that the maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is prescribed: Ibbs v. The Queen [(1987) 163 CLR 447 at 451–52]. That does not mean that a lesser penalty must be imposed if it be possible to envisage a worse case; ingenuity can always conjure up a case of greater heinousness. A sentence which imposes the maximum penalty offends this principle only if the case is recognizably outside the worst category.
The “worst type of case” was expressed in Ibbs v The Queen [1987] HCA 46; 163 CLR 447 at 451–452 by Mason CJ, Wilson, Brennan, Toohey and Gaudron JJ by reference to the reasons of Brennan, Deane and Gallop JJ in the Full Court of this Court on appeal from the Supreme Court of the Northern Territory in R v Tait [1979] FCA 32; 46 FLR 386. In expressing the principle by reference to two decisions of Dwyer CJ and Burt CJ in Reynolds v Wilkinson (1948) 51 WALR 17 and Bensegger v The Queen [1979] WAR 65, respectively, Brennan, Deane and Gallop JJ said at 46 FLR 398 (in a passage recently restated by the High Court in R v Kilic [2016] HCA 48; 259 CLR 256 at 265 [18]):
That principle requires that both the nature of the crime and the circumstances of the criminal be considered in determining whether the case is of the worst type.
(Emphasis added.)
As to the maximum penalty see also Elias vThe Queen [2013] HCA 31; 248 CLR 483 at 494–495 [27].
Running throughout Veen (No 2) is the place of proportionality. Its source lies in the place of retribution for the gravity of the offending. The appropriate sentence, for the instant offence, is reached by a process which may have regard to prior offending in what it demonstrates about culpability, an attitude of disobedience to the law and the extent to which the community needs to be protected or the offender deterred. Such considerations are relevant to a sentence proportionate to the kind of case, judged by the nature of the offending and the circumstances of the offender.
The maximum penalty is not just a limit on power, it provides a statutory indication of the punishment for the worst type of case, by reference to which the assessment of the proportionate penalty for other offending can be made, according to the will of Parliament.
The passages in Veen (No 2) at 477–478 are at the centre of the disagreement in this case. They must be understood by reference to, and in the light of, contemporaneous and later High Court decisions. They have not been free from disagreement otherwise in the criminal sentencing context. It is appropriate to spend a little time examining that disagreement because it mirrors the points of disagreement in the arguments on appeal, albeit in the context of the imposition of the civil penalty.
Nine months after delivery of Veen (No 2), in Baumer v The Queen [1988] HCA 67; 166 CLR 51 (Baumer (HC)) the Court (Mason CJ, Wilson, Deane, Dawson and Gaudron JJ, all of whom had sat in Veen (No 2)) dealt with the subject of the relevance of prior convictions in the context of a dangerous driving offence in the Northern Territory. The sentencing judge (Asche J) had said, “What increases the seriousness of this particular offence is the literally appalling record of the accused as far as prior offences in relation to driving are concerned.” He had then observed that people with the propensity of the applicant to continue to commit driving offences must be “kept away” for the protection of society: see 166 CLR at 53. The Court in allowing the appeal and setting aside the order of the Court of Criminal Appeal that had dismissed the appeal said at 57–58:
In the present case, therefore, the task of the sentencing judge was to evaluate the circumstances of the offence in their entirety, including the influence of alcohol, and to determine an appropriate term of imprisonment having regard to the prescribed maximum of eleven years and to the possible range of offences to which it applied. His Honour purported to proceed in this way. However, the manner in which his Honour performed the task is open to question in two respects. We have already referred to his Honour’s observation that “the literally appalling record” of the applicant increased the seriousness of the offence. If this means no more than that such a record would make it difficult to view the circumstances of the offence or of the offender with any degree of leniency then, of course, such a remark would be understandable and unobjectionable. It would clearly be wrong if, because of the record, his Honour was intending to increase the sentence beyond what he considered to be an appropriate sentence of the instant offence. Similarly, his Honour’s observation that people with the propensity of the applicant to continue to commit driving offences must be “kept away” for the protection of the public is open to misunderstanding. Propensity may inhibit mitigation but in the absence of statutory authority it cannot do more. In applying a section like s. 154, the sole criterion relevant to a determination of the upper limit of an appropriate sentence is that the punishment fit the crime. Apart from mitigating factors, it is the circumstances of the offence alone that must be the determinant of an appropriate sentence.
(Emphasis added.)
Six months later, in Hoare v The Queen [1989] HCA 33; 167 CLR 348 at 354 in a South Australian appeal involving an offence of armed robbery, the Court (Mason CJ, Deane, Dawson, Toohey and McHugh JJ) said:
[A] basic principle of sentencing law is that a sentence of imprisonment imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances …
(Emphasis in original.)
This proposition just referred to in Hoare was footnoted by reference to Veen (No 2) at 472 (the plurality), 485–486 (Wilson J), 490–491 (Deane J) and 496 (Gaudron J): that is, the whole Court. To similar effect see Chester v The Queen [1988] HCA 62; 165 CLR 611 at 618 (citing Veen (No 1) 143 CLR at 467, 468, 482–483 and 495, Veen (No 2) 164 CLR at 472–474 and 485–486, and Walden v Hensler [1987] HCA 54; 163 CLR 561) where the need for sentences for criminal offences to be proportionate to the circumstances of the offence was described as a “fundamental principle”, as it was by McHugh J in Markarian 228 CLR at 385 [69] and in Ryan 206 CLR at 283 [48].
In Weininger v The Queen [2003] HCA 14; 212 CLR 629 at 640 [32] Gleeson CJ, McHugh, Gummow and Hayne JJ said:
A person who has been convicted of, or admits to, the commission of other offences will, all other things being equal, ordinarily receive a heavier sentence than a person who has previously led a blameless life. Imposing a sentence heavier than otherwise would have been passed is not to sentence the first person again for offences of which he or she was earlier convicted or to sentence that offender for the offences admitted but not charged. It is to do no more than give effect to the well-established principle (in this case established by statute) that the character and antecedents of the offender are, to the extent that they are relevant and known to the sentencing court, to be taken into account in fixing the sentence to be passed. Taking all aspects, both positive and negative, of an offender's known character and antecedents into account in sentencing for an offence is not to punish the offender again for those earlier matters; it is to take proper account of matters which are relevant to fixing the sentence under consideration.
In Markarian 228 CLR at 389–390 [83], McHugh J said:
… in Veen [No 2], as I have indicated, this Court affirmed that the ultimate control on the judicial sentencing discretion is the requirement that the sentence be proportionate to the gravity of the offence committed. In pursuit of other sentencing purposes, a judge may not impose a sentence that is greater than is warranted by the objective circumstances of the crime.
In Magaming v The Queen [2013] HCA 40; 252 CLR 381 at 397 [51] French CJ, Hayne, Crennan, Kiefel and Bell JJ said:
… The sentence imposed must be proportionate in the sense that it properly reflects the personal circumstances of the particular offender and the particular conduct in which the offender engaged when those circumstances and that conduct are compared with other offenders and offending.
From the above, there may possibly be seen to be a distinction between the “gravity” or seriousness of the offence and the “objective circumstances” of the offence: see Odgers S, Sentence (2nd ed, Longueville Media, 2013) at 112–118 [3.79]–[3.85]. The existence of the distinction may depend on the meaning of objective circumstances, as to which see R vMulholland (1991) 1 NTLR 1; 102 FLR 465 at 478–791, referred to below. In any event, if the criminal history of an offender can increase the seriousness or gravity of the offence by illumination of moral culpability or a continuing attitude of disobedience to the law, it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the crime considered in the light of its objective circumstances: Veen (No 2) 164 CLR at 477 and Hoare 167 CLR at 354. So, even if the gravity of the crime can be affected by antecedent criminal history on one reading of Veen (No 2) (at 477 (including but not limited to the approval of Ottewell [1970] AC at 650) and at 478 by reference to Ibbs and through it Tait) would indicate, the sentence must be proportionate to that gravity considered in the light of the objective circumstances. Thus, the prior offending cannot unmoor or untether the sentence from the crime’s objective circumstances.
The view has been taken in New South Wales, by Spigelman CJ writing for the New South Wales Court of Criminal Appeal in R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566 at 573 [22] (McClellan CJ at CL, Grove, Barr and Bell JJ concurring) that (notwithstanding considerations of the kind referred to above in the preceding paragraph) “prior convictions do not themselves play a role in determining the ‘gravity of the offence’ which, as Hoare confirms, turns on the ‘objective circumstances’ of the offence. This understanding is confirmed in Baumer.” This appears to be the accepted view in New South Wales: Gommesen v The Queen [2012] NSWCCA 226 at [1], [2] and [50]; Hillier v Director of Public Prosecutions (NSW) [2009] NSWCCA 312; 198 A Crim R 565 at [8]–[20]; Smith v The Queen [2011] NSWCCA 163 at [1], [26] and [72] (a case concerned with offences committed whilst the offender was on bail); Elhassan v The Queen [2018] NSWCCA 118 at [1], [2] and [13]–[14]; Tabbah v The Queen [2019] NSWCCA 324 at [1], [105] and [146]; and Gilshenan v The Queen [2019] NSWCCA 313 at [60] where the matter was put with clarity by Johnson J (on behalf of the Court, Macfarlan JA and Cavanagh J concurring):
The principles in Veen v The Queen (No. 2) and Baumer v The Queen (1988) 166 CLR 51; [1988] HCA 67 at [13]-[14] have been taken to establish that the principle of proportionality requires the upper boundary of a proportionate sentence to be set by the objective circumstances of the offence which circumstances do not encompass prior convictions: R v McNaughton (2006) 66 NSWLR 566; [2006] NSWCCA 242 at [24]. However, as was said in Veen v The Queen (No. 2), an antecedent criminal history is not relevant only to an offender’s claim of leniency. If an offender manifests in the commission of the offences for which sentence is to be passed “a continuing attitude of disobedience of the law”, then “retribution, deterrence and protection of society” play a part on sentence, although not in a manner which allows imposition of a sentence which is disproportionate to the objective gravity of the offences.
There was a clear disagreement with the above by RS Hulme J in Hillier at [107]–[110]. His Honour’s views that the record of prior offences could be taken into account in assessing the gravity of the offending were more in line with some of the cases referred to below, such as R vOmar (1991) 55 A Crim R 373, Mulholland and R vYoung [1990] VR 951; 45 A Crim R 147. That disagreement recognised, however, that the relevance of the past offending could not take the sentence beyond the gravity judged by relevant factors which must (given Hoare) be considered in the light of the crime’s objective circumstances.
It may be thought, however, that merely to refer to “prior convictions” may mask the more relevant, and a more nuanced, question (being the one to which the plurality in Veen (No 2) at 477 referred) as to whether “antecedent criminal history is relevant … to show … whether the offender has manifested in [the] commission of the instant offence a continuing attitude of disobedience to the law”. The characterisation of such a consideration as not related to the gravity of the offence does not strike one as necessarily self-evident.
The view expressed in McNaughton, and the other New South Wales cases reflects the views of respected commentators: Fox R and Freiberg A, Sentencing: State and Federal Law in Victoria (2nd ed, Oxford University Press, 1999) at 227 [3.510] and the position in Victoria: R v O’Brien [1997] 2 VR 714 at 718 and Dirbass v The Queen [2018] VSCA 272 at [47]–[55].
A different approach to McNaughton has arisen from a wider view as to the meaning of the phrase “objective circumstances” in this context (reflecting perhaps what Wilson J said in Veen (No 2) at 486–87: “the ease with which obscurity of meaning can infect this area of discourse”). In this respect, the views of the Victorian Court of Criminal Appeal in Young [1990] VR 951 and the Northern Territory Court of Criminal Appeal in Mulholland (1991) 102 FLR 465 are relevant. In Young the Court (Young CJ, Crockett and Nathan JJ) rejected a two-stage approach based on a first stage excluding matters personal to the offender: see [1990] VR 954–960, especially 960. This rejection was not disapproved by Dawson, Toohey and Gaudron JJ in Bugmy v The Queen [1990] HCA 18; 169 CLR 525 at 535–536. That discussion by the Victorian Court of Criminal Appeal carried with it an implicit rejection of the proposition that the seriousness or gravity of the offending could be assessed without regard to considerations that were personal to the offender and which bore upon culpability: see [1990] VR at 960. In Mulholland, Angel J (with whom Asche CJ agreed) rejected the proposition that the circumstances of the instant offence which bore upon its gravity did not include prior offending. This view reflected the proposition that the circumstances of the crime, whether one calls them objective or not, include matters personal to the offender which can be seen to bear upon the gravity of the crime. The relevance of such matters was expressed as follows at 102 FLR 477–478 in rejecting a submission that prior offences could not be looked at in coming to a proportionate sentence from the objective circumstances of the offending:
I think there is an error in the submission and I think it is this: it overlooks that the previous offence of the respondent is a circumstance of the instant offence which bears upon the gravity of the instant offence.
Had a hypothetical disinterested bystander witnessed the respondent’s actions, his actus reus, he might have observed little different to the actus reus of the previous offence of the respondent. However, to say the hypothetical disinterested bystander observing only the actus reus, observes the circumstances of the offence is to ignore circumstances relevant to the criminal intent, the mens rea, of the respondent. The fact that the respondent was a convicted rapist at the time of the instant offence demonstrates, prima facie, an increased animus and culpability for the instant offence which ipso facto is deserving of greater punishment – and this is so quite apart from any question of a general propensity to re-offend after the time of sentencing. To impose a higher punishment a second time round is not a matter of adding anything to a so-called objective sentence; it is not a matter of punishing twice for the earlier offence: it is merely recognising that the prior offence is a circumstance relevant to the mens rea of the offender in committing the instant offence and that there is prima facie increased criminal culpability pertaining to the instant offence. The instant offence demonstrates an added disregard for the law, an added disregard for society in general and a further disregard for a particular member of society (the new victim) in particular. These matters reflect, in the absence of particular exculpatory facts, a more calculated animus in the case of the instant offence, and as I have said, this is so quite apart from any question of propensity to re-offend yet again. When courts speak of the circumstances of the offence they do not mean what the hypothetical disinterested bystander sees and hears at the scene. That is not exhaustive of the circumstances of the offence. The offence is constituted by the actus reus and the mens rea of the offender. So far as consideration of the mens rea of the offender is concerned, the hypothetical disinterested bystander is confined to what is said and done in his presence. There can be many factors relevant to the mens rea that are disclosed to the hypothetical disinterested bystander. The offender’s mental state at the time of the actus reus is not only to be inferred from the actus reus itself. It can be inferred as much from a proven pre-existing propensity to commit the offence as from a previously stated intention, made elsewhere, to commit the offence. When it is said the punishment must fit the crime, the punishment must fit both the actus reus and the mens rea constituting the crime. A pre-existing propensity to commit a like offence is relevant to the issue of mens rea of the instant offence. A propensity to re-offend in like manner yet again, attracts additional but different considerations apropos the protection of the public.
Justice Angel saw this approach as supported by Veen (No 2) at 477–478 and did not consider that anything in Baumer (HC) or Hoare was intended to qualify what had been said in Veen (No 2) at 477–478. In this respect Angel J disagreed with what Kearney J had said in Sultan v Svikart (1989) 96 FLR 457; 42 A Crim R 15 (see below). Justice Angel also drew support from Young [1990] VR at 960.
The above approach has not been reflected uniformly in the Northern Territory. Before Mulholland, in the remitted appeal of Mr Baumer in the Court of Criminal Appeal (R vBaumer (1989) 40 A Crim R 74 (Baumer (CCA))), Nader J expressed the matter in a manner conformable with the views of Angel J in Mulholland at 79:
It is permissible when considering the gravity of the offence itself to have regard to the appellant’s criminal record, not so as to increase an otherwise proper sentence, but as revealing, to some extent, the appellant’s state of mind at the time of the commission of the offence. His record tends to show him as a person who, when he offended, was somewhat contemptuous of any law to the contrary.
Justice Kearney, however, after referring to what the High Court had said in Baumer (HC), expressed the matter conformably with the New South Wales cases, as follows at 40 A Crim R 84–85:
It follows as a corollary that it is improper to increase a sentence beyond the upper limit called for by the circumstances of the crime, because of an accused’s criminal record. It is unjust to do so, because the accused would thereby be punished again for offences for which he had already been punished. However, the fact that an accused has a criminal record is a ground for refusing to mitigate the sentence called for by the circumstances of the offence; the rationale is that by his persistence in criminal conduct he may be regarded as not having responded to previous punishment, his prospects for rehabilitation may thus be regarded as poor, and the deterrent effect of some more moderate punishment negligible. An accused’s criminal record may also be treated as evidence of his character – a matter always in issue – and thus indicative of the extent to which society needs to be protected from him; it may also be treated as evidence of the nature and extent of any relevant intention.
…
I consider that his Honour’s observation that the appellant’s record “increases the seriousness of this particular offence” may fairly be construed in its context as indicating an approach to sentencing in which the appellant’s record was treated as a factor which increased the seriousness of the crime beyond that warranted by the circumstances of its commission. In the light of what the High Court said (Baumer at 345) such an approach involves appealable error in terms of House (1936) 55 CLR 499 at 505, vitiates the exercise of his Honour’s sentencing discretion, and enables this Court to exercise its own discretion in substitution.
After Baumer (CCA), Kearney J reiterated his views in Sultan v Svikart 96 FLR at 461–462, with which Angel J (and Asche CJ) disagreed in Mulholland. Justice Kearney maintained his views in Marshall v Llewellyn (1995) 79 A Crim R 49 at 53, saying:
It follows, I think, from the passage emphasised above that “the gravity of the instant offence’ which, in accordance with the proportionality principle stated in Veen (No 1) (1979) 143 CLR 458 controls the upper limit of the sentence which may be imposed, is to be assessed without taking into account “the antecedent criminal history of [the] offender”. The gravity of an offence is assessed by reference to its “objective circumstances”; see Hoare (1989) 167 CLR 348 at 354. They set the limit to the sentence which may be imposed; within that limit:
… the interplay of other relevant favourable and unfavourable factors – such as good character, previous offences, repentance, restitution, possible rehabilitation and intransigence – will point to what is the appropriate sentence in all the circumstances of the particular case
as Deane J put it in Veen (No 2) at 491; 249.
The “objective circumstances” exclude matters personal to the offender such as his prior criminal history. Insofar as the analysis by Angel J in Mulholland (1991) 102 FLR 465 at 477-479, with which Asche CJ agreed, may involve treating a prior criminal record as one of the “objective circumstances” of an offence, thereby raising the upper limit of the sentence which may be imposed, I respectfully disagree with it.
In reaching those views Kearney J drew support from King CJ in R v McInerney (1986) 42 SASR 111 at 113 and disagreed with the Full Court of this Court (Morling, Neaves and Foster JJ) in R vOmar (1991) 55 A Crim R 373 at 379–380, on appeal from the Supreme Court of the Australian Capital Territory, which had stated at 379:
Furthermore, Omar’s prior criminal record was relevant to an evaluation of the seriousness of the offence in respect of which sentence was being imposed. It was not relevant merely to subjective considerations weighing for or against leniency. It has been made clear in Veen (No 2) (1988) 164 CLR 465; 33 A Crim R 230 that this is the correct approach.
In Dixon v Price (1996) 135 FLR 27 at 30–31 Mildren J disagreed with Kearney J relying on Veen (No 2) at 477–478, saying:
In my view, it is entirely artificial to assess the criminality of an offender by excluding from the objective circumstances prior offences, where they illuminate the offender’s moral culpability for the instant offence. Indeed, it is common for the legislature in this Territory and elsewhere to prescribe higher maximum penalties where the offender has a prior conviction for the same offence. The moral culpability of this offender is, in my view, illuminated by the fact that he has five prior convictions for the same offence over a very short period and for which he has received sentences of imprisonment (including the maximum penalty) in the past.
The fact that a prisoner has a prior conviction for the same offence may be treated as part of the objective circumstances of the offences is recognised not only in Mulholland and Omar to which Kearney J referred, but also by the Court of Criminal Appeal when re-sentencing in R v Baumer (1989) 40 A Crim R 74 per Nader and Kearney JJ.
In Ellis v The Queen [2005] NTCCA 1; 154 A Crim R 450 at 455, R vTyday [2006] NTSC 29 at [12] and R vHaji-Noor [2007] NTCCA 7; 21 NTLR 127, Angel J maintained his views.
In South Australia, the New South Wales position has been followed in Stokes v The Queen [2020] SASCFC 9 at [80] with express citation of, and agreement with, Gilshenan at [60] by Lovell J, with whom Peek J agreed. Absent statute, the position in South Australia was expressed before Veen (No 2) by King CJ in McInerney 42 SASR at 113, as follows:
… The cardinal rule is that while good character may operate to reduce the sentence which the facts of the crime would otherwise attract, bad character cannot increase it. A person is not to be punished, or punished again, for crimes other than the crime for which sentence is being passed. Offences committed prior to sentence for the offence under consideration may affect the sentence in two ways. They may diminish or abrogate any leniency by reason of good character. They may, moreover, lead to a greater sentence than would otherwise be imposed, although within the proper limits indicated by the facts of the immediate crime, for the purpose of personal deterrence; the prisoner's record may indicate that greater punishment is needed to protect the public by deterring him from further crime. Where the other offences have been committed before the commission of the immediate offence, their relevance is clear in the generality of cases. The offender has committed the offence not as a first offender but as a person whose character is affected by previous offending. He must be sentenced against the background of his record … The effect of the prior offences is more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies.
(Footnote omitted.)
Ground 2 of the notice of appeal was in the following terms:
2. The primary judge erred in so far as his Honour:
2.1 determined (J[92], [95]) that the appellants should not receive any material discount on penalty by reason of their admissions and co-operation rendering a trial unnecessary;
2.2 held (J[92], [93]) that cooperation is only to be treated as [a] factor in mitigation warranting a discount on penalty where accompanied by contrition or evidence that the contravener has had a realisation that their conduct is “wrong and ought not be repeated”;
2.3 erred by requiring (J[93], [94]) that cooperation be accompanied by evidence of motive (either contrition or a realisation that the contravening conduct is wrong and ought not be repeated), when cooperation requires no more than evidence of the utilitarian value of cooperative conduct, and does not invite an inquiry into motive.
There is force in the criticism of the primary judge’s approach in ground 2. The Full Court in the Queensland Infrastructure Case 254 FCR at 102–103 [163]–[165] described the correct way to approach the utilitarian (as opposed to contritional) feature of early cooperation:
163 About the only thing that could be said in favour of the CFMEU, other than that the conduct was related to genuine concerns about sham contracting, is that it cooperated with the Commissioner in relation to these proceedings by admitting the contraventions and reaching agreement in relation to the facts. Importantly, the admissions and agreed facts were also not withdrawn after the initial agreement in relation to the penalty amounts was withdrawn by the Commissioner. There is no doubt that the CFMEU should receive credit for this cooperation. From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows willingness on the part of the CFMEU to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceedings were not defended saved the community the expense of a potentially lengthy contested hearing.
164 It is, however, doubtful in all the circumstances that the CFMEU’s cooperation with the regulator could really be said to demonstrate contrition or remorse. In some respects the cooperation reflects nothing more than an acceptance of the inevitable. The CFMEU did not adduce any evidence of contrition or remorse. Indeed, there was not even an expression of contrition or remorse in its submissions. There was no evidence from which it could be inferred that the CFMEU intended to change its ways. There was certainly no suggestion, let alone evidence, to the effect that the CFMEU intended to set up any systems, processes, procedures or education to ensure that its officers did not encourage unlawful industrial action in the future.
165 The principles in relation to taking admissions and cooperation into account are well-known and do not need to be repeated. It is sufficient to note that the authorities make it clear that it is not necessary for the Court to specify a specific discount or percentage discount in respect of cooperation.
The same can be seen in NW Frozen Foods 71 FCR at 291 (per Burchett and Kiefel JJ) where their Honours said:
There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention.
The same can be said in this field of regulation. See also the Agreed Penalties Case (HC) 258 CLR at 504 [46].
The reasons of the primary judge link the utilitarian value of the (here early) admissions and the connected public policy involved on the one hand, and contrition on the other. The two concepts, of course, may be related on the facts of any particular case. But they do not involve the same legal concept or consideration. There were early admissions and utilitarian value from them, but there was no contrition. The latter does not diminish the legitimacy of consideration to the public policy involved in recognising admissions, especially early admissions.
Ground 2 of the notice of appeal is made out.
The reimposition of penalties
Given that ground 1 has been made out (in part) in respect of the second appellant and ground 2 has been made out in respect of both appellants, the orders made by the primary judge imposing the penalties should be set aside. All parties urged this Court to re-exercise the discretion in the imposition of penalties. Submissions by the parties were sparse.
There was no appeal from individual findings made by the primary judge. Nevertheless, the facts are in tolerably short compass. They require no overly elaborate reasoning. The essence of what occurred is set out [11] and [12]. Mr Pattinson admitted that he knew of or was recklessly indifferent to the misleading nature of his representation. That admission has the equivocation that is obvious, which was raised with counsel on the appeal. The imposition of penalties should be approached on the basis that Mr Pattinson was at least reckless as to the false or misleading character of his statement to the sub-contractor’s two employees that they had to join the union to work on the site.
There was a single event or episode or “instance” as the primary judge referred to it, but there were two contraventions. In the circumstances, in order not to penalise twice for the same contravening care must be taken in imposing a penalty for each contravention.
The primary judge considered (at [113] of the reasons) that it would not be appropriate to impose penalties totalling in excess of the maximum for a single contravention. His Honour, correctly, with respect, did not conclude that there was only one contravention; rather there were two, but in the circumstances and in the events that had happened it would be to punish twice for the same conduct to impose penalties for the two contraventions of more than the maximum for one.
This is not a review of the approach of the primary judge. The orders his Honour made imposing penalties are to be set aside. It is for this Court to reimpose penalties. There is no call for any detailed discussion of the proper approach to the notion of course of conduct or totality here, in particular in the light of the lack of submissions on the matter. Reference need only be made to: Cahill 194 IR 473–472 [39]–[42]; ACCC v Cement Australia 258 FCR at 447–448 [421]–[424]; Yazaki 262 FCR at 294–296 [226]–[237]; Transport Workers Union of Australia v Registered Organisations Commissioner [2018] FCAFC 203; 267 FCR 40 at 56–59 [84]–[91]; Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262 at 266 [10]–[12] and 287–289 [123]–[132]; and the Queensland Infrastructure Case 254 FCR at 90–100 [108]–[149].
The contravening involved one body of representations in a short period of time to two people in company. It cannot be seen to be separate repeated incidents. Nevertheless, two people were misled and there were two contraventions. The order of magnitude of the overall contravening is appropriately contemplated by looking at the seriousness of one body or episode of contravening conduct, although some recognition should be given to the fact that two people were involved and two people were told that they could not work at this site unless they were financial members of the union. This was false. It should not be thought, however, that one clear statement to a gathering of any number of people in which such a reckless or deliberate false statement was made would be viewed as reasonably only attracting penalties by reference to a single episode of conduct. The multiple contraventions in such circumstances may make relevant the kind of consideration to which Beach J referred in Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd [2016] FCA 698 at [25] referred to with approval in Yazaki 262 FCR at 295 [231].
As to Mr Pattinson, looking at the matter as a whole and not employing two stages, his contravening was at least reckless. His conduct amounting to the contraventions was reasonably accurately summarised by senior counsel in the first two sentences of the submission set out at [17] above. Care must attend the use of phrases such as “range” or “spectrum”, but Mr Pattinson’s behaviour and its consequences can be seen as less than the most serious of contraventions, at least in terms of surrounding or consequential circumstances. It must, however, be recognised that the relevant provision (s 349(1)(a)) does not contain within it a range or penumbra of conduct such as one finds in s 500 (“hinder or obstruct … or act in an improper manner”). Here, the prohibition is knowingly or recklessly making a false or misleading misrepresentation about a relevant matter. Mr Pattinson did so. The constituent elements of the contravention were fully engaged. To a degree, beyond the submission put by senior counsel as to the lack of serious surrounding or consequential circumstances, not much can be said other than that there was cooperation, but no contrition.
Mr Pattinson was not a senior union official, but he had been a site delegate since 1997. The primary judge found (at [85] of the reasons) that Mr Pattinson “did what he did out of fealty to his union’s policy of enforcing a ‘no ticket, no start’ regime at the construction sites over which it wields influence”. There was no challenge to this finding. Mr Pattinson had, however, no history of contravening. There was no evidence put before the Court of Mr Pattinson’s assets and his ability to pay. No personal payment order was sought. We make no assumption about who will pay any penalty. The penalty is imposed on Mr Pattinson. There was no evidence of any loss from the conduct: see [101] of the primary judge’s reasons. The subject matter of the false or misleading statement was the important matter of freedom of association: the freedom to join or not to join an industrial organisation which freedom is protected in Div 4 of Pt 3-1 of the Fair Work Act. That freedom is a general one protecting both employees and employers in the conduct of their affairs and working lives. That the two employees of the subcontractor do not appear, at least objectively, to have exhibited a response that led to any confrontation as may occur in other circumstances does not mean that the essential character of the contravention (the knowing or reckless making of a false representation) has not been fully and completely made.
In all the circumstances including the objective nature of the conduct, recognising the nature of the conduct as substantially one short episode to two people in company, albeit two contraventions to be dealt with, recognising the need to avoid double imposition of penalty for essentially the same contravening, having close regard to the maximum penalty of $12,600 for a contravention, recognising the importance of the subject matter of the representation, the lack of any proof of loss caused to anyone, a lack of prior contravening by Mr Pattinson and giving due allowance for the important public policy of cooperation, albeit without any contrition, we consider that an appropriate penalty for the object to deter contraventions of this kind would be penalties for the two contraventions of $4,000 and $500 in a total of $4,500. We would consider these penalties as appropriate to deter Mr Pattinson and others in his position from repetition of such contravening conduct.
In coming to the above figure we have had broad regard to the level of penalties reflected in what might be called the “no ticket, no start” cases referred to at [35] of the primary judge’s reasons. Care needs to be exhibited in attempting to be in any way precise in relation to, or taking too much from, other contravening conduct in other cases. Some of these cases revealed conduct significantly more serious in character, at least in what might be called surrounding or consequential circumstances, than Mr Pattinson’s conduct here. Nevertheless, they give some assistance in consideration of what is appropriate.
Turning to the union, and looking at the matter as a whole and not employing two stages, the acts and state of mind of Mr Pattinson are to be attributed to the union by s 363. The surrounding and consequential circumstances remain unchanged: there was no proof of loss caused to anyone, there was a single representation (recklessly at least made) to two people in company, without any evidence of this event being part of any particular pattern of behaviour by Mr Pattinson himself. That, however, does not set some range beyond which the penalty upon the union cannot be imposed. The events and conduct in question can be seen to be more serious or grave in the hands of or attributed to the union. Mr Pattinson, and so the union, through s 363, knew or was reckless as to the falsity of the representation. The subject matter of the representation was important and has been a feature of the union’s conduct in the past, as revealed in the cases to which the primary judge refers at [35] of his reasons. There was no complaint made or appeal about the primary judge’s finding at [88] that the union had a “no ticket, no start” policy at Australian construction sites. The cases referred to in [35] of the reasons of the primary judge support his Honour’s conclusion of the existence in the past, including the recent past, of such a policy.
In the light of the history of contravening conduct in attempted enforcement of the union’s policy, the absence of any evidence of contrition or that the policy has been changed or ended, the character and gravity of the contravening conduct in the hands of the union is more serious than it is for Mr Pattinson, and the call for deterrence is heightened by that seriousness. It can be taken that the contravening in question (though on the evidence, Mr Pattinson’s first contravention) is an example of a continuation of a policy framed and implemented in direct opposition to the statutory policy of freedom of association under Div 4 of Pt 3-1 of the Fair Work Act and reflects a willingness in that respect to contravene the statute. Taking such matters into account, but also having regard to the nature of the objective circumstances of what actually occurred including the single episodic nature in the exchange with two people in company, but recognising that there were two contraventions, the lack of any proof of financial impact on anyone, the public policy in the cooperation shown, and the maximum penalty for one contravention of $63,000, we consider that an appropriate penal response in aid of the object of deterrence would be to impose upon the union penalties for the two contraventions of $38,000 and $2,000 totalling $40,000.
None of the penalties need to be reduced in the light of the totality principle. They are in our view appropriate.
There was no appeal by the Commissioner against the refusal of the primary judge to make declarations. Accordingly it is not necessary to address this part of his Honour’s reasons.
In these circumstances, the orders that we would make are:
1.Appeal allowed and Notice of Contention dismissed.
2.Orders 1 and 2 of the Court made on 14 October 2019 be set aside and in lieu thereof it be ordered that:
(a)The first respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act on 13 September 2018 in the sums of $4,000 and $500.
(b)The second respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act for the two contraventions of s 349(1)(a) of the Fair Work Act on 13 September 2018 in the sums of $38,000 and $2,000.
I certify that the preceding two hundred and twenty-five (225) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop and Justices White and Wigney. Associate:
Dated: 16 October 2020
REASONS FOR JUDGMENT
BESANKO AND BROMWICH JJ:
We agree with the orders proposed by the Chief Justice, White and Wigney JJ and with the reasons for making those orders. We wish to add to those reasons as follows.
The possible approaches that could be taken to the role of prior contraventions in the task of imposing a civil penalty for a further contravention may be summarised as follows:
(1)Prior history is not relevant to the characterisation of the seriousness or gravity of the instant contravening conduct and only plays a role in deciding where in the range of already appropriate penalties that conduct falls. This is the argument advanced by the appellants, and rejected by the Chief Justice, White and Wigney JJ, and by us.
(2)Prior history can inform the seriousness of the instant contravening conduct to the extent of justifying the imposition of the maximum penalty for conduct that is not of itself of that character, because of the primacy of the role of deterrence. This is the approach urged upon us by the respondent’s notice of contention, being in substance what the primary judge in fact did despite his Honour’s comments perhaps suggesting the contrary. This unavoidably entails putting the principle of proportionality identified in Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 (Veen No 2) to one side. It is an approach that is contrary to any persuasive authority or the proper understanding of the relevant principles of civil penalty imposition derived from criminal sentencing, and is also rejected by the Chief Justice, White and Wigney JJ, and by us.
(3)Prior history may be relevant to an assessment of the seriousness or gravity of the instant contravening conduct, but neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to the contravening conduct itself, having regard to the maximum penalty provided. This is directly supported by the principles stated in Veen No 2, especially at 477–8, as analysed by the Chief Justice, White and Wigney JJ. This is the correct approach.
There was no material difference in the expression of the principles concerning the role of prior contraventions in fixing a civil penalty by the majority as compared to Bromwich J in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Broadway on Ann) [2018] FCAFC 126; 265 FCR 208 and in our joint judgment in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39, which accord with (3) above. The difference was in the application of those principles. The application of those principles by the majority in Broadway on Ann, and by the primary judge in this case, was plainly wrong for the reasons identified by the Chief Justice, White and Wigney JJ. The approach taken by the primary judge was also contrary to the weight of appellate and single judge authority in this Court. It was contrary to the manner in which the principles in those decisions are to be applied having regard to the principle of proportionality derived by close analogy with the approach to criminal sentencing taken in Veen No 2. His Honour was not at liberty to disregard that lineage of decisions, nor to misapply them. We agree with what the Chief Justice, White and Wigney JJ say about that matter (at [187]–[188]).
The primary judge at [53] correctly identified the similarity between the judgment of Bromwich J in Broadway on Ann and our judgment in Parker in relation to the application of the principles based on Veen No 2. However, in the primary judgment his Honour erroneously attributed to us in Parker (at [53], [63] and [67]), and to Bromwich J in Broadway on Ann (at [46]) a view that prior contravening history is never relevant either to the assessment of the seriousness of a contravention, or to the determination of the range within which a penalty may properly fall. That interpretation would also be to reject, rather than to apply, Veen No 2.
Rather, as we endeavoured to explain in Parker at [341]–[342] and [348], and as Wheelahan J correctly recognised in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 at [96], in properly applying Veen No 2, prior contravening history may be able to be demonstrated to be relevant to an assessment of the seriousness or gravity of the instant contravening conduct. However, neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to contravening conduct itself, having regard to the maximum penalty. That is, prior contraventions may be illuminating in properly characterising what has happened, including the extent of the need for deterrence. This may in turn assist in determining both the appropriate range within which a penalty may be imposed, and in determining where within that range the penalty to be imposed should fall.
The proper role of relevant prior contraventions is therefore in assisting with better understanding what has taken place and how it should be assessed. This can include having regard to how that history informs the need for deterrence in the context of the maximum penalty, but falls short of changing what has happened in the instant case because the effect of taking that additional step would be to penalise again for what has happened in the past. This is the subtle but fundamental difference between characterising what has happened, which is conventional and permissible, and changing the character of what has happened, which is impermissible because it has the effect of at least in part imposing a penalty for what has been sanctioned previously. It is the injustice of the latter approach that is precluded by the principle of proportionality identified in Veen No 2. The contrary conclusion that imposing a disproportionate civil penalty in this sense is permissible is a matter only for the High Court to decide or for the legislature to enact.
The primary judge referred to the fact that the High Court refused special leave to appeal in Broadway on Ann [2018] HCASL 380, implying that the High Court endorsed the application of principle by the majority in that case. That implication does not withstand scrutiny, either in principle or in fact. The High Court has made it clear that the reasons for refusing an application for special leave, which is no more than an application to commence proceedings and which does not of itself constitute proceedings inter partes, create no precedent and are not binding authority on anyone: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; 256 CLR 104 at [52], [111]–[112], [119]. As Barwick CJ said in Wardrop v The Queen on 23 May 1979, immediately after refusing special leave to appeal on behalf of a bench of five justices of the High Court, including two future Chief Justices (Barwick CJ, Gibbs, Stephen, Mason and Aickin JJ):
I think I should take the opportunity to say again that when this court refuses special leave, its refusal does not indicate that the court endorses judgments below or their reasons. The court simply does not grant special leave and nothing more than that can be taken from its refusal.
In any event, Gordon and Edelman JJ’s reasons for refusing special leave to appeal in Broadway on Ann, a decision made on the papers, were that the application raised no question of principle of general importance sufficient to warrant a grant of special leave and that the proposed appeal would not enjoy sufficient prospects of success to warrant a grant of special leave. The first conclusion is unsurprising given that there was no divergence between any of the judges in Broadway on Ann in the conventional statement of principle. As to the second conclusion, although we do not have the benefit of the summaries of argument that were before the High Court, we readily infer that the applicant union, being the present second appellant, was advancing the same or a similar argument as it did in this appeal. That argument is unanimously rejected by this Court.
The final point that we wish to make also concerns the primary judge’s interpretation of Parker. His Honour at [63] agreed with Bromberg J in Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972 at [30] that Parker in some way required a two stage penalty imposition process, whereby prior contraventions were not relevant to ascertaining the appropriate range within which a penalty could be imposed, but only where that penalty should fall within such a range independently determined. We wish to make it clear that, in our view, Parker affords no support or sanction for such an approach, let alone requiring it to be adopted. To the contrary, we consider that such an approach is contrary to Parker and contrary to the correct application of principle as explained by the Chief Justice, White and Wigney JJ. A two stage approach to penalty imposition precludes prior contraventions being relevant to the assessment of the seriousness or gravity of the instant contravening conduct and is therefore incorrect and should not be followed.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Besanko and Bromwich. Associate:
Dated: 16 October 2020
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