History of contraventions and the Pattinson case
81 The applicant submitted that, in relation to the CFMMEU, the maximum penalty available for each contravention was appropriate, particularly in light of the union's history of contravention. The applicant points to comments such as those of Tracey J in The Broadway on Ann Case at [17]-[27]:
17. Over recent years I have become increasingly concerned about the ongoing misconduct of the CFMEU and its officials and the implications of this conduct when penalties are being determined. These misgivings have been expressed in a series of judgments.
18. In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407, I made the following comments:
106 The circumstances of these cases were not identical to those in the present case. They, nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.
107 The CFMEU is not to be punished again for its earlier misconduct. It is, however, to be punished more severely than it would have been had it had no adverse record or been responsible for only a few isolated incidents over a period of many years. Its continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, have not had a deterrent effect: cf Veen v R (No 2) (1988) 164 CLR 465 at 477-8 .
19. In Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1213 at [63] I said that:
The longer such recidivism continues the more likely it is that this consideration will carry greater weight than the principle that the maximum available penalty must be reserved for the worst possible offending.
20. More recently, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 at [32], I observed that:
Having regard to the history of offending by the CFMEU to which I have referred, it may be doubted that any penalty falling within the available range for contraventions of the kind presently under consideration would be "sufficiently high to deter repetition". Any penalty will be paid and treated as a necessary cost of enforcing the CFMEU's demand that all workers on certain classes of construction sites be union members.
21. Again, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2017] FCA 1555 at [53], I said:
In Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [63] I observed that the longer that the CFMEU's recidivism continued, the greater the weight which would be accorded to specific deterrence when fixing appropriate penalties.
22. Such comments (and many others to like effect by other members of the Court and the Federal Circuit Court) over recent years have appeared in published judgments and must be taken to be well known to the officials who constitute the governing councils of the CFMEU. In many of these cases penalties have been imposed because of the failure of CFMEU officials who hold entry permits under the Act to comply with the requirements of Part 3-4 of the FW Act. They have also involved contraventions of s 500 of the FW Act in the course of these site entries.
23. The contravening conduct has continued unabated to a point where there is an irresistible inference that the CFMEU has determined that its officials will not comply with the requirements of the FW Act with which it disagrees. If this results in civil penalties being imposed they will be paid and treated as a cost of the union pursuing its industrial ends. The union simply regards itself as free to disobey the law.
24. The Court will not, lightly, decide to impose the maximum available penalty. Each case must be considered on its merits and in a principled manner.
25. The features of the present case and the context in which they arise, which, in my view, warrant the imposition of the maximum available penalties on the CFMEU, are:
• The many decisions of the Court over the past 15 years in which the CFMEU has been found liable and penalised for failures to comply with entry requirements on building sites and for the misconduct of its officials whilst exercising rights of entry on those sites.
• The failure of the CFMEU to respond to these repeated findings by acknowledging error and implementing remedial measures.
• The absence of any contrition for the earlier offending.
• The absence of any contrition for the present offending.
• The ongoing willingness of the CFMEU to pay the pecuniary penalties imposed by the Court by drawing on its considerable financial resources.
• The fact that it was a State Divisional President of the CFMEU who was found to have engaged in multiple contraventions on the site.
• The blatant and public assertion by such a senior official that he would not comply with the notice requirements imposed by the FW Act.
26. The absence of contrition does not justify the imposition of a higher penalty than might otherwise be appropriate. It is, however, relevant, in considering the extent of the CFMEU's recidivism.
27. These considerations combine, in my view, to emphasise the objective seriousness of the CFMEU's conduct, acting through its officials. They bespeak deliberate abuse of the CFMEU's privileged position as a registered organisation in the Federal industrial relations system. They emphasise the need for general and specific deterrence to weigh most heavily in the process of instinctive synthesis in which the Court engages when determining civil penalties. They warrant the imposition of the penalties proposed by Logan J.
82 Justice Logan, in the same case, observed at [87]:
87. Approaching the subject of penalisation afresh and for all of the reasons given, I consider that the maximum penalty in respect of each contravention is warranted in the circumstances of this case. Being of this view, I have, in deference to the totality principle, asked myself whether, in total, such an overall penalty would be a disproportionate response in the overall circumstances of the case? So recalcitrant is the contravening conduct charged having regard to the past history in the tabulation and such is the importance of deterrence and compelling conformity with the requirements of the FWA my view is that only the most condign penalisation of a cumulative maximum punishment is warranted in the circumstances of this case. I would impose that so as to bring home emphatically to the CFMEU that, in its internal governance, it must force systemic behavioural change upon its Construction Division.
83 However, both comments of their Honours, and the submissions of the applicant, need to be viewed in light of the recent decision of the Full Court in Pattinson, where a five-member Full Court returned to general principles of the imposition of civil penalties, including the decision in The Broadway on Ann Case, and further examined the question whether a contravenor's history of contraventions could be taken into account in assessing the gravity of the contravention. At [25] the plurality of Allsop CJ, White and Wigney JJ referred to the reasons for judgment of French CJ, Kiefel, Bell, Nettle and Gordon JJ in the Agreed Penalties Case and continued:
25. …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"...
84 Notwithstanding this principle, as the Full Court noted, the High Court has repeatedly reiterated the basic principle of sentencing law 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 light of its objective circumstances (see for example Veen v The Queen (No 2) (1988) 164 CLR 465 at 477; [1988] HCA 14; Hoare v The Queen (1989) 167 CLR 348 at 354; [1989] HCA 33; Baumer v The Queen (1988) 166 CLR 51 at 57-58; [1988] HCA 67; Chester v The Queen (1988) 165 CLR 611 at 618; [1988] HCA 62; Walden v Hensler (1987) 163 CLR 561; [1987] HCA 54; Magaming v The Queen (2013) 252 CLR 381 at 397; [2013] HCA 40 at [51]). The Full Court at [71] in Pattinson further referred to the discussion of the Court of Appeal of New South Wales in Gilshenan v The Queen [2019] NSWCCA 313 at [60], where their Honours explained the interaction between principles of proportionality and deterrence in the following terms:
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.
85 Notwithstanding conflicting authorities to which the plurality in Pattinson referred, their Honours found at [90] that
90. … even if prior convictions can be taken into account in assessing the gravity or seriousness of the offending, the sentence is set by reference to all the circumstances, including the outward objective circumstances of the commission of the offence: that is, what happened. Thus prior convictions cannot distort the sentence to that which is disproportionate in the light of such objective circumstances of the offending (as opposed to the offender)…
86 Their Honours noted the importance of proportionality in the imposition of appropriate civil penalties, and the distinction between the civil and criminal laws in this respect (at [107]). As their Honours continued:
107. … It is part of the "balance" between the "insistence upon the deterrent quality of the penalty" and the "insistence" that the penalty not be greater than is necessary to achieve the object of deterrence, for such would not be deterrence but "oppression": see NW Frozen Foods 71 FCR at 293 ([96] above)…
87 In conducting the balancing exercise involving appropriate deterrence and appropriate proportionality, the plurality in Pattinson noted at [108] that the demonstrated willingness (and its degree or strength) of a contravenor to disobey the law (however that is derived admissibly) is or must be of significance to the assessment of what is reasonably appropriate in order to deter and within that task to what is proportionate. Their Honours continued:
108. … There is not more than one task called for by the statute. If we may respectfully adopt at this point what was said by Charlesworth J in Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525; 241 FCR 338 at 351 [66]-[69] in a case after the Agreed Penalties Case (HC):
66. Once it is accepted that civil penalties are not retributive, concepts of proportionality should not be applied for the purposes of serving broader objectives of punishment in the sense described in R v Hunter (1984) 36 SASR 101 at 103 (King CJ) (applied by Lander J in Ponzio (at [93])):
The basic concepts of justice which underlie the criminal law require that the punishment be fairly proportionate to the crime in accordance with the prevailing standards of punishment. Only when it meets that criterion can a sentence satisfy the sense of justice of the community which is expected in the criminal law and in the practice of the courts in applying the criminal law.
67. Proportionality is nonetheless a critical objective in exercising the discretion conferred by s 546 of the FW Act. That is because the degree of seriousness of a contravention is relevant to ascertain "the assessment of a penalty of appropriate deterrent value": CSR at [42]. A penalty of appropriate deterrent value is one that recognises that the maximum penalties prescribed in the statute are appropriately imposed in cases where the need for deterrence is the most pronounced. There remains, in addition, a discretion not to impose a penalty at all if the statutory purpose of deterrence would not be served by the imposition of one.
68. The seriousness of the conduct constituting the contravention is an important indicator of the need for deterrence in a particular case, but is not the sole indicator. Consistent with the reasoning of French J (as he then was) in CSR, in all cases it is proportionality in relation to the need for deterrence that must be achieved, having regard to all relevant circumstances, including the objective seriousness of the contravention before the Court.
69. It should also be recognised that penalties fixed for a deterrent purpose are intended to have an attitudinal effect: dissuasion. It is for this reason that any assessment of the seriousness of the conduct of the respondents places appropriate emphasis on the mental attitudes accompanying their physical acts.
(Emphasis in original.)
88 It follows that proportionality is a relevant factor in considering and fixing appropriate civil penalties for a contravention with the object of deterrence, however such factors as retribution, denunciation and rehabilitation are not (see Pattinson at [109]). To adopt the language of their Honours in Pattinson at [109]:
the process is whole and discretionary, and evaluative in character, to which objective aspects of the contravention and the subjective characteristics of the contravenor informing deterrence are relevant; and
the mental attitude of the contravenor is relevant.
89 The majority in Pattinson also examined the reasoning of the majority in The Broadway on Ann Case, in particular the observations of the majority in that case concerning the approach of the CFMMEU to compliance with the law. Allsop CJ and White and Wigney JJ observed at [134]:
134. Whilst [17]-[22] may perhaps express no more (in different, and perhaps stronger language) than was said by the Full Court in the Queensland Infrastructure Case at 254 FCR 101-103 [158]-[165] (see [112] above), the expression of the matter in [23] as an inference, expressed apparently in respect of any and all of the union's officials, in any and all of its branches, to any and all relevant provisions of relevant legislation, has the capacity to appear to express a binding feature of the circumstances of any particular future case. The danger is that the strength of the language and the characterisation of the past becomes seen and applied as almost irrefutable factual conclusions, conclusively drawn, by a judge on appeal, applicable to any and all future factual circumstances. This risks distorting the proper judicial task of fixing an appropriate penalty for the contravention in question taking account of all relevant circumstances attending the contravention, including material that reflects any attitude to disobedience to the provision, and the maximum penalty, all in aid of the objective of deterrence of a contravention of the kind before the court. The practical consequences of this danger to judges imposing civil penalties can be seen in Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 267 FCR 268, which is discussed below.
90 In respect of the findings of the majority in The Broadway on Ann Case, their Honours in Pattinson concluded:
149. Before turning to the dissenting judgment of Bromwich J, the following can be said to be clear from the reasons of Logan J (and thus also Tracey J) in point of expression of legal principle: The primary object of the imposition of a civil penalty is deterrence; in accordance with Veen (No 2) (which was treated as relevant and binding) the antecedent contravention history is relevant to understanding an attitude of disobedience and as such the seriousness of the contravention that is before the court and the appropriate deterrence called for in the imposition of the penalty; the penalty to be imposed is to deter a repetition of a contravention of the kind before the court; and the maximum penalty is for contravention of the kind (in its gravity and seriousness, including by reference to what antecedent contraventions show of a wilfulness to disobey the law) calling for, that is warranting, the most serious penalty by way of deterrence. With respect, such expression of principle is orthodox.
91 Finally, their Honours also referred to Full Court authorities after The Broadway on Ann Case, and followed observations of the Full Court in Parker (2019) 270 FCR 39; [2019] FCAFC 56 including:
339. As to the second consideration, being the use that was put by the primary judge to prior contraventions, especially in respect of the CFMEU, a court imposing a civil penalty is entitled to have regard to such prior contraventions in the exercise of the discretion, but that does not permit such a history to be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the contravention that is being considered: Veen (No 2) at 477. That is because a court should impose a penalty that is proportionate to the gravity of the contravention being sanctioned, and no more…
…
341. Thus, the role of any past contraventions is to be no more than a prism through which to view the instant contravention. This enables a court to assess whether, for example, the instant contravention is an "uncharacteristic aberration", or whether the contravener has, by the instant conduct, manifested "a continuing attitude of disobedience of the law". If the latter, as is clearly available to be concluded in this case, the heightened need for deterrence may indicate that a more severe penalty is warranted for the instant contravention. Nonetheless, that penalty must still fall within the applicable range that is otherwise considered appropriate for that contravention. If that is not carefully observed, the contravener may suffer the fate of being sanctioned anew for past contraventions, as the above quote from Veen (No 2) makes clear is not permitted.
342. Veen (No 2) also provides valuable guidance as to the role of the maximum penalty. The High Court's observations at 478 make it clear that the maximum penalty is reserved for contraventions falling within the worst category of cases for which that penalty is prescribed. This does not require characterisation as the worst possible case. However, a case is not in the worst category merely by reason that the contravener has a history of prior contraventions, although that history may assist in the proper characterisation of the instant contravention. Considerable caution may be required to avoid blurring this distinction. This is especially so when, as in this case, past contraventions are many in number, extend over a protracted period of time and the legislature has not seen fit to provide greater penalties for second and subsequent contraventions.
92 The majority in Pattinson concluded that whilst retribution had no place in respect of the assessment of a penalty with the primary object of deterrence, nonetheless the assessment of the character of the contravention includes all factors that can rationally go to its gravity and seriousness, including an attitude of displayed and continuing disobedience to the law, as part of a characterisation of the nature and character of what was done (at [191]).
93 I note that the minority Judges in Pattinson, Besanko and Bromwich JJ, agreed with the majority. Their Honours also observed:
230. 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.
231. 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.
94 In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The North Queensland Stadium Case) (No 2) [2021] FCA 105 Rangiah J helpfully summarised the findings of the plurality in Pattinson as follows:
29. The effect of Pattinson is that the Union's recidivism is a factor to be taken into account in assessing the level of penalty that is reasonably necessary to deter similar offending, but does not of itself require assessment of a penalty at the highest level. It is necessary to take into account all the circumstances that bear upon the character and seriousness of the contravention before the Court.
95 Taking these principles into account, I observe as follows. The CFMMEU's liability arises as a result of the individual respondents' acts. The maximum penalty which could be imposed on the CFMMEU for each contravention is $51,000. However, the penalties imposed on the CFMMEU should be reflective of the penalties imposed on the individual respondents. The CFMMEU's prior history of contraventions might warrant the penalty being increased to the upper range of what is appropriate for the relevant individual respondents' contravention, but the prior history cannot lead to a penalty that is disproportionate to the seriousness of the individual respondent's contravention: Veen v The Queen (No 2) at 477.
96 Taking these principles into account, but also noting that there is a significant case for deterrence in respect of a large and well-resourced union which has displayed no contrition and whose officials contravene the law, I consider the appropriate penalties to be imposed on the CFMMEU are as follows.
97 In relation to the contravention of s 500 of the FW Act arising from the conduct of Mr Myles on 27 June 2014, I consider that a penalty of 55% of the maximum is appropriate and proportionate. The penalty is accordingly $28,050.
98 In relation to the contravention of s 500 of the FW Act arising from the conduct of Mr Sutherland on 7 July 2014, I consider that a penalty of 40% of the maximum is appropriate and proportionate. The penalty is accordingly $20,400.
99 In relation to the contraventions of s 417 and s 500 of the FW Act arising from the conduct of Mr Bragdon on 17 July 2014, I consider that one penalty referable to both contraventions, being 80% of the maximum is appropriate and proportionate. The penalty is accordingly $40,800.
100 In relation to the contravention of s 500 of the FW Act arising from the conduct of Mr Griffin on 1 July 2014, I consider that a penalty of 40% of the maximum is appropriate and proportionate. The penalty is accordingly $20,400.
101 In relation to the contravention of s 500 of the FW Act arising from the conduct of Mr Griffin on 4 July 2014, I consider that a penalty of 40% of the maximum is appropriate and proportionate. The penalty is accordingly $20,400.