Ramsay and ANOR v Menso and ANOR (No.2)
[2018] FCCA 1808
•28 June 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RAMSAY & ANOR v MENSO & ANOR (No.2) | [2018] FCCA 1808 |
| Catchwords: INDUSTRIAL LAW – Contravention of FW Act –pecuniary penalty –penalty to be paid to the Commonwealth. |
| Legislation: Fair Work Act 2009 (Cth), s.546(3) |
| Cases cited: Mason & Harrington Corporation Pty Ltd t/as Pangea Restaurant & Bar [2007] FMCA 7 |
| First Applicant: | ANDREW RAMSAY |
| Second Applicant: | ANTHONY STOTT |
| First Respondent: | SUSAN MENSO |
| Second Respondent: | Z GROUP PTY LTD |
| Intervener: | AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
| File Number: | BRG 327 of 2016 |
| Judgment of: | Judge Vasta |
| Hearing date: | 28 June 2018 |
| Date of Last Submission: | 28 June 2018 |
| Delivered at: | Brisbane |
| Delivered on: | 28 June 2018 |
REPRESENTATION
| Counsel for the Applicants: | Mr W. Friend and Mr C. Massy |
| Solicitors for the Applicants: | Hall Payne Lawyers |
The First Respondent appearing on her own behalf
| Counsel for the Intervener: | Mr A. Herbert |
| Solicitors for the Intervener: | Australian Building and Construction Commissioner |
ORDERS
AND UPON THE DECLARATION OF THE COURT:
A. That pursuant to s.545 of the Fair Work Act 2009 (Cth) (the “FW Act”) that the First Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants entry to the Site on 11 December 2015.
B. That pursuant to s.545 of the FW Act that the First Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants attempt to enter the Site in the company of Mr Ian Williamson on 11 December 2015.
C. That pursuant to s.545 of the FW Act that the First Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants attempt to the Site after the arrival of Sergeant Conrad Greenwood from the Queensland Police Service on 11 December 2015.
D. That pursuant to s.545 of the FW Act that the Second Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants entry to the Site on 11 December 2015.
E. That pursuant to s.545 of the FW Act that the Second Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants attempt to enter the Site in the company of Mr Ian Williamson on 11 December 2015.
F. That pursuant to s.545 of the FW Act that the Second Respondent contravened s.501 of the FW Act by refusing or unduly delaying the First and Second Applicants attempt to the Site after the arrival of Sergeant Conrad Greenwood from the Queensland Police Service on 11 December 2015.
THE COURT ORDERS ON A FINAL BASIS:
That for the contravention of s.501 of the FW Act by the First Respondent, and referred to at “A” above, the First Respondent pay a pecuniary penalty in the sum of $500.00 to the First and Second Applicants.
That for the contravention of s.501 of the FW Act by the First Respondent and referred to at “B” above, the First Respondent pay a pecuniary penalty in the sum of $9,000.00 to the Commonwealth.
That for the contravention of s.501 of the First Respondent and referred to at “C” above, the First Respondent pay a pecuniary penalty in the sum of $9,000.00 to the Commonwealth.
That for the contravention of s.501 of the Second Respondent and referred to at “D” above, the Second Respondent pay a pecuniary penalty in the sum of $2,500.00 to the First and Second Applicants.
That for the contravention of s.501 of the Second Respondent and referred to at “E” above, the Second Respondent pay a pecuniary penalty in the sum of $45,000.00 to the Commonwealth.
That for the contravention of s.501 of the Second Respondent and referred to at “F” above, the Second Respondent pay a pecuniary penalty in the sum of $45,000.00 to the Commonwealth.
That the pecuniary penalties with respect to Orders 1 to 7 above be paid within 90 days from the date of these Orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 327 of 2016
| ANDREW RAMSAY |
First Applicant
| ANTHONY STOTT |
Applicant
And
| SUSAN MENSO |
First Respondent
| Z GROUP PTY LTD |
Second Respondent
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
Intervener
REASONS FOR JUDGMENT
(Ex tempore)
On 12 April 2016, the Applicants, Andrew Ramsay and Anthony Stott, applied to this Court for declarations to be made against the Respondent, Susan Menso and her company, Z Group Pty Ltd. In addition, the application also asked for the Court to then impose pecuniary penalties.
This matter proceeded to a full hearing on 13, 14, and 15 June 2017. On 23 June 2017, I delivered my reasons for judgment, which dismissed the application. The Applicants appealed that decision, and the Full Court, on a construction of the statute, then ordered that the order that I made be vacated and, instead, made the declarations that had been sought.
The first contravention occurred when Ms Menso refused entry to Mr Stott and Mr Ramsay.
The second contravention occurred in this way; Mr Williamson of the Queensland Workplace Health and Safety unit had been contacted and came to the site. He explained the situation and the legal obligations of Ms Menso. She still, nevertheless, refused entry.
The third contravention occurred after the police were then contacted and two police officers came to the site. They looked at all of the documentation, all of the material, and told Ms Menso that she had to allow the Applicants entry onto the premises. She still refused to do so. After a deal of time, she then relented and allowed the two Applicants entry onto the premises.
Those, and many of the other surrounding facts are contained in the reasons for judgment that I delivered on 23 June 2017. Having regard to the fact that the declarations have now been made in respect of that factual scenario, it now is my duty to impose pecuniary penalties.
I will be imposing the pecuniary penalties on the two Respondents, and I have had regard to all of the relevant authorities that annunciate the principles involved in setting the quantum of such penalties; particularly, in Mason & Harrington Corporation Pty Ltd t/as Pangea Restaurant & Bar [2007] FMCA 7, where the Court spoke of a series of factors that should be taken into account.
Ms Menso has given me a submission today that seeks to, in some ways, still argue the toss. She speaks of the fact that she has been set up; and she has conflated what has been done to her by Workplace Health and Safety Queensland with the right of the Construction, Forestry, Mining and Energy Union (“the CFMEU”) to come and inspect the property, as long as they have complied with the legislation.
The claim of being set up was something that I looked at in the original decision, especially having regard to the fact that I accepted the evidence of Mr Calvin Fredrickson, who saw contractors deliberately sabotaging parts of the scaffolding and then taking photos. Those persons, quite menacingly, told Mr Fredrickson to leave the area.
He gave his evidence here in Court, and I commented upon the behaviour of the two Applicants while he was giving evidence. I said, commencing at paragraph 87:
“87. The behaviour of the two Applicants was such that it was not unreasonable to conclude that the intimidation was done out of a “consciousness of guilt”. If this was the motivation for the intimidating of Mr Frederickson, that would tend to support any theory of a “setup”.
88. But disquiet is not sufficient for me to come to any firm conclusion as to this notion of a set up. On the evidence before me, I conclude that the First Applicant did have a reasonable suspicion that a contravention had occurred at the Cordelia Street site.”
That really puts paid to any notion of a set up.
However, those are matters for me to take into consideration when looking at the overall behaviour of the Respondent, Ms Menso.
The first contravention does have to be put into its context. Whilst Ms Menso had not ever had dealings with either Mr Ramsay or Mr Stott before this date, she did have quite an acrimonious relationship with CFMEU, in conjunction with the Workplace Health and Safety unit. The clear evidence of Ms Menso was that she felt that the two were “in cahoots”.
Notwithstanding that, there was not any evidence before me that would tend to, in any way, corroborate that belief by her. However, I did have some sympathy for the position of Ms Menso.
At paragraphs 63 to 69, I said this regarding the exercise of the power:
“63. As long as both Applicants have acted in accordance with the requirements of the State legislation, they have the protection of s.501 of the FW Act because both of the Applicants were holders of entry permits issued by the Fair Work Commission and were WHS permit holders under the State legislation,.
64. This may seem a curious result. The positions that pertain to both Federal and State regimes can be contrasted and the differences are apparent.
65.If a FWC permit holder wishes to exercise their right of entry, they must give proper notice of their intention to exercise that right. If that proper notice has not been given, then the protections of s.501 do not apply.
66. If a WHS permit holder wishes to exercise the right of entry, there is no need to provide proper notice of their intention to exercise that right. However, if a person denies, or impedes, entry to the site, under s.144 of the WHS Act, there is no penalty if that person can prove that they had a reasonable excuse for their actions.
67. Therefore if the power been exercised was solely a Federal power, then the First Respondent was entitled to 48 hours’ notice before there would be a right of entry. If it were State power that was being exercised, then she had the protection of being able to withhold permission for entry if she had a reasonable excuse. But because the State power was being exercised by a Federal permit holder, the result is that the Federal protections apply.
68. Obviously, any contradiction between Federal laws and State laws must be resolved in favour of the Commonwealth. One of the difficulties for the First Respondent to accept in this case is that the exercise of both State and Federal rights at the same time leads to a conclusion that no one had ever explained to her before. Her confusion because of these “hybrid” regimes is quite understandable.
69. But the combination of being both a Federal permit holder and a State permit holder and then exercising their State power means that there does not have to be any notice given and any refusal results in Federal sanctions. It is totally understandable why such a concept would not be able to be understood by most persons in the construction industry.”
I say that because the initial situation was, at first blush, rather odd. The worksite had just been visited by officers from WHS. They had conducted an inspection of the premises and had given verbal orders as to what was to occur from a safety perspective.
The two Applicants arrived knowing that WHS officers were just leaving. There was no effort made by the two Applicants to ascertain from WHS what had just occurred, even though a coordinated approach from both WHS and CMFEU would have ensured that the safety of workers was paramount.
Instead, the two Applicants simply approached Ms Menso and sought entry. Ms Menso relied upon her mistaken belief that the Applicants needed to give her notice. I have previously commented upon this aspect.
As I noted in my original reasons, the two Applicants were more concerned with flexing their muscles than ensuring the safety of the workers.
When all of those factors are taken into account, this first contravention was not an illustration of Ms Menso blatantly disregarding the law. However, she did offend against the law and there must be an appropriate penalty imposed.
There is quite a deal of contrast, then, between that contravention and the second contravention which is in a totally different category.
Notwithstanding that Mr Williamson was a person for whom Ms Menso had no particular fondness, he came there on the day, and was very calm and explained the situation quite properly to Ms Menso. It is obvious to me, on viewing the video, that he was a person that should have been listened to. The failure to allow entry after Mr Williamson had attended puts that contravention into the highest form of breach.
The third contravention that occurred once the police were called is extremely serious. The only matter that mitigated that breach was that the First Respondent, Ms Menso, eventually relented and allowed entry after that initial refusal. The observations that I made at paragraphs 120 through to 128 of my original reasons are still apposite.
In assessing the penalty, I am of the view that for the first breach, the appropriate penalty is one of $500.00 for Ms Menso, and $2,500.00 for Z Group Pty Ltd.
For the second contravention, I am of the view that the appropriate pecuniary penalty is one of $9,000.00 for Ms Menso, and $45,000.00 for Z Group Pty Ltd.
For the third contravention – as I say, which would be in the worst category but for the fact that there had been a relenting by Ms Menso – is also $9,000.00 for Ms Menso, and $45,000.00 for Z Group Pty Ltd
It seems to me that those penalties reflect the seriousness with which this Court views deliberate contraventions of the Fair Work Act 2009 (Cth) (“the Act”). The Act needs to be administered in such a way that allows for industrial harmony to occur. That will occur only if persons on all sides of industrial matters ensure that their duty to obey the law is paramount. For that reason, it is necessary for the Courts to impose strict penalties if persons do not comply with their obligations.
The question, then, is to whom should these substantial penalties be paid?
The Applicants submit that the penalties should be paid to them. There is reliance upon the authority of Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, a decision of Tracey, Barker and Katzmann JJ. In that decision, the Court goes through the origin of penalty orders as distinct from compensation, and it traces the history in quite a compelling way.
In that case, the Applicant was a person who was not backed by any organisation or group. He took this action as an individual. When Justice Mortimer heard the matter at first instance, Her Honour did not order the pecuniary penalty to be paid to that Applicant. It seems that Her Honour may have had a view that to award the payment to that Applicant would result in an unjustified “windfall”. That Applicant then appealed that decision to the Full Court.
What the Full Court did, in my reading of the decision, is really look at how it is that the discretion ought to have been applied. The Court noted that there was a “symmetry” between the persons or entities that could apply for the imposition of a penalty and the persons or entities to whom the court may order that the penalties be paid.
The Court noted that the “usual order” is for payment of the penalty to be given to the person or organisation that applies for the penalty. The court looked at a number of authorities especially Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170.
At paragraph 101, the Court said:
“101. Given the legislative history of ss 539(2) and 546(3) of the FW Act… we consider that the power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant.”
At paragraph 116, the Court said:
“116. In this appeal… the policy considerations of s 546(3) ‘speak loudly’ in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If Mr Sayed had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.”
Paragraph 117:
“117. It is as clear today, as it was in 1904, that unions will not always, or invariably, be the prosecutor in an enforcement proceeding under industrial legislation. Yet the principle adopted by the primary judge would have the effect of stultifying civil penalty proceedings by persons affected by a contravention who are not backed by industrial power of one sort or another.
There is, in any event, something problematic about not applying the ‘usual order’ because of an apprehended ‘windfall’ to the successful applicant. In the joint judgment of Branson and Lander JJ in Plancor, at [69] their Honours considered that neither the total penalty actually imposed in that case, nor the amount of the penalty likely to be imposed on reconsideration, was sufficient to give rise to concerns about a ‘windfall’. Having just referred to what Finkelstein J said in CPSU v Telstra, suggesting a ‘windfall’ factor may be relevant to the exercise of the power in that case, their Honours made the observations about the concept of ‘windfall’… “
The Court, then, went on to look at how the discretion was applied in that case, coming to these conclusions at paragraph 120 and 121:
“120. To the extent that the primary judge appears to have drawn a distinction, at[88][89], between a case prosecuted by a union or other representative organisation and one prosecuted by the person directly affected by the contravention(s), we fail to see how that distinction, of itself, should lead to any immediate assumption or conclusion that the individual, by contrast to an organisation, has not, or has not necessarily, incurred significant time, trouble and lost opportunity costs in maintaining the prosecution, so that in the absence of some disentitling feature, the usual order for payment of the penalty to the prosecutor is appropriate.
121. Furthermore, it is not apparent to us why the receipt of a penalty should not operate as an incentive to an affected person to bring a prosecution like this under the FW Act. After all, Wilcox noted in Finance Sector Union, it ensures the enforcement of the legislative scheme. Moreover, as Jessup J put it in Murrihy, this incentive to bring and maintain such a proceeding makes it more likely that the applicable provisions of the FW Act ‘will be more than mere words on the statute book’. As Gray J said in Plancor, the question of ‘profit’ does not arise on a proper construction of the power.”
In that case, the Court allowed the appeal, and varied the order so that the penalties payable would be payable to that applicant.
The Applicants in this case also rely then upon what Her Honour Justice Mortimer then said the next time this question was before Her Honour. In Milardovic v Vemco Services Proprietary Limited [2016] FCA 244, commencing at paragraph 40, Her Honour said:
“40. Were I free to do so, I would, in the exercise of the Court’s discretion under s 546(3), order that the penalty be payable to the Commonwealth rather than to Mr Milardovic. However, that course is not open to me following the Full Court’s decision in Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC4. The Full Court’s decision requires the Court to make an order that Vemco pay the penalty the Court has imposed on it to Mr Milardovic.
That the Full Court’s decision in Sayed requires me to make such an order arises from several aspects of the Full Court’s reasons.”
And her Honour then goes through those matters, and then says, at paragraph 45:
“45. Accordingly, I consider I am bound to make an order pursuant to s 546(3) of the Fair Work Act, that the penalty I have imposed is payable to the applicant.”
Mr Friend QC, who appears for the Applicants, has submitted that I am bound by that decision of the Full Court, and the subsequent decision of Mortimer J is one that shows why it is that I am bound by that decision.
Respectfully, I disagree that I am bound at all.
What I take from Sayed is that the Court there acknowledged that there is a discretion under s.546(3), but that the primary judge had erred in the exercise of that discretion.
Section 546(3) states that:
“(3) The Court may order that the pecuniary penalty, or part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.”
The way in which Mortimer J has interpreted Sayed (Supra) means that s.546(3) now does not allow a discretion for the Court to exercise; in effect, that the subsection should now be interpreted as mandating that the Court must order that the pecuniary penalty be paid to the Applicant, unless there is some overriding reason for the Court not to do so.
With the greatest of respect to Her Honour, I do not accept that the decision in Sayed (Supra) has gone that far so as to remove the discretion from the Court. It matters not in this case whether Mr Ramsay and Mr Stott are prosecuting this matter of their own accord, or are doing so with the relative might of the CFMEU behind them. The principle is still the same.
In this case, the gravamen of the contravention has been because of the actions of persons who were not the prosecutors; that is, Mr Williamson and Sergeant Conrad Greenwood.
As I have found in my original reasons, this really is a matter where the behaviour of the Applicants was not wholly consistent with what I would have expected if the true concern was that of the safety of the workers. Now, while none what I have observed derogates from the rights that the Applicants were exercising that day, it is simply that the situation of the Applicants is in a far different category to that of most other Applicants seeking relief under the Act in relation to the second and third contraventions.
The gravamen of the second and third contraventions is that the First Respondent blatantly disregarded persons in authority. Those persons in authority coolly and calmly explained to the Respondent what her obligations were under the law.
The question is whether, in all of the circumstances, I should exercise my discretion in favour of the payment of the pecuniary penalties to the Applicants or to the Commonwealth? I do note that the Australian Building and Construction Commissioner, who has intervened in these proceedings, does not make any submissions on this matter, and he is content if I make the sort of the order that the Applicants have asked for.
As I say, this is a matter that is in my discretion. There are three distinct contraventions and the same order as to payment of the pecuniary penalties does not necessarily have to be the same in respect of all three contraventions.
The first contravention revolves around the two Applicants exercising their rights under the state WHS legislation. In bringing this matter to the Court in the manner in which they have done, they have allowed the Court to see the manner in which the First Respondent has complied with the industrial legislation. What the Full Court said in Sayed (Supra) is a very strong guide as to how I should exercise my discretion in relation to this first contravention.
The second and third contraventions revolve around a blatant disregard for authority. The evidence of Mr Williamson and the actions of Sergeant Greenwood that I have seen on the video has illustrated to me the attitude to the authority of the law that the First Respondent has.
As I have earlier said, the Court is imposing the large pecuniary penalties to ensure that it is well and truly noted, by all who are subject to the Act, that it is a necessary part of the structure of our society that persons comply with this Act, and because of the disruption to society when people do not comply with this Act, such heavy penalties ought be imposed.
The purpose of pecuniary penalties was discussed by the High Court in Commonwealth of Australia v Director, Fair Work Building Industry Assessment [2015] HCA 46. At paragraph 55 of that judgment, the Court said:
“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.’”
In this matter, it is not just contravening the Act that must be deterred but also the recalcitrance in listening to Mr Williamson and Sergeant Greenwood.
In my view, that is a very major factor in weighing how the discretion, as to whom the Court should order that the penalties be paid in relation to the second and third contraventions, should be exercised. The real persons offended against by the First Respondent in relation to the second and third contraventions are the community of this nation. It is to them that these penalties should be paid. This conclusion is consistent with the reasoning in Sayed (Supra).
The section allows me to pay part of the penalty to a particular organisation or a particular person, or to the Commonwealth and the circumstances of this case illustrate why such a discretion is actually needed.
In this case I order that the pecuniary penalty for the first contravention – that is, the $2,500.00 the Z Group will have to pay, and the $500.00 that Ms Menso will have to pay, should be paid to Mr Ramsay and Mr Stott, the Applicants.
The other pecuniary penalties, that is the $9,000.00 and $45,000.00 in both contraventions 2 and 3, are ordered to be paid to the Commonwealth.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Vasta
Date: 27 July 2018
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