BARBARO V THE QUEEN
113 As is apparent from the above reasons, I have approached the question of appropriate penalty in accordance with my approach in AGL Sales, consistent with many other decisions in this Court. This involved considering and taking into account the joint submissions of the parties as to 'agreed' penalty.
114 However, it is appropriate that I make mention of the recent decision of the High Court of Australia in Barbaro v The Queen; Zirilli v the Queen (2014) 88 ALJR 372; [2014] HCA 2 ('Barbaro'), having the benefit of submissions from the ACCC on the impact of that decision, and having reached my own conclusions on its application to civil penalty proceedings of the type now before me. I appreciate that there is no contradictor.
115 On a broad reading of the majority reasoning in Barbaro, and taking in isolation some of the comments made, it might be thought that the Court should not take into account the submissions of the parties as to the 'agreed' penalty amount in civil penalty proceedings. However, I do not consider the decision goes that far or that it implicitly overrules Full Court authority applied on numerous occasions in this Court.
116 It is important to consider the context of the argument presented in Barbaro. All judicial statements must be read having regard to the circumstances of the proceeding before the court, the issue or issues before the court, and consistently with the authorities considered by the court in arriving at its ultimate conclusion.
117 The arguments presented the High Court were summarised by the majority (French CJ, Hayne, Kiefel and Bell JJ) at [3] - [5] as follows:
3 The applicants submitted that the sentencing hearing was unfair because the sentencing judge (King J) said at the outset that she did not seek, and would not receive, any submission from the prosecution about what range of sentences she could impose upon each applicant. The applicants further submitted that the sentencing judge thereby precluded herself from taking account of a consideration relevant to sentencing.
4 The applications to this Court were argued on the basis that the sentencing judge made no factual or legal error in fixing either the separate sentences imposed for the offences admitted or the total effective sentences imposed. In particular, the applications proceeded from the premise that the sentences imposed were not manifestly excessive. Yet each applicant argued that the prosecution should have been permitted (or even required) to submit to the sentencing judge that the sentences should be fixed within ranges the upper limits of which were less than the head sentences which were imposed on each applicant and less than the non parole period fixed in Mr Barbaro's case.
5 The prosecution, it was argued, should have been permitted (or required) to do this for two reasons. First, plea agreements had been made and the matters had been "settled" on the basis of what the prosecution had said to be its views of the available sentencing range for each applicant. Second, the applicants could have used these views to their advantage in the course of the sentencing hearing had the prosecution been permitted to put them forward.
118 The "two flawed premises" immediately identified by the majority at [6] and [7] were:
6 … The first is that the prosecution is permitted (or required) to submit to a sentencing judge its view of what are the bounds of the range of sentences which may be imposed on an offender. That premise, in turn, depends on the premise that such a submission is a submission of law. For the reasons which follow, each premise is wrong.
7 The prosecution's statement of what are the bounds of the available range of sentences is a statement of opinion. Its expression advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed. That being so, the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge.
119 In elaborating upon its conclusion, and this was the main focus of the High Court, the High Court considered a practice developed in Victoria as a result of statements made by the Victorian Court of Appeal in R v MacNeill-Brown (2008) 20 VR 677 ('MacNeill-Brown'). In MacNeill-Brown the majority had held that it formed part of the duty owed by the Crown to courts in Victoria to make submissions on the available range of sentences. That decision, in turn, must be understood by reference to a long history of judicial development and academic debate regarding the proper role of a prosecutor in the sentencing process, discussed in MacNeill-Brown itself.
120 It was the particular practice described in MacNeill-Brown, specific to prosecutors in the criminal sentencing context, which the majority in Barbaro said should cease. The majority in Barbaro rejected the central reasoning in MacNeill-Brown and said that it should no longer be followed.
121 One basis of the argument in Barbaro proceeded from the proposition that natural justice had been denied, even though every opportunity had been given to the applicants before the High Court to put their case and make submissions before the trial judge. The applicants did not contend that there was any factual or legal error in the sentences imposed or that they were manifestly excessive. Their argument was in essence that the trial judge's refusal to follow the practice in MacNeill-Brown denied them procedural fairness. Accordingly, the High Court was asked to consider that practice in a context in which a failure to apply it rendered no unfairness to an accused and no inconvenience to the trial judge
122 Barbaro was not concerned with a case where the trial judge actually took into account a suggested range of penalty, upon the receipt by the Court of an agreed statement of facts and legal submissions in support thereof, and this was contended to be in error. The High Court was only concerned with the refusal of the trial judge to receive a statement from the prosecution about the range of sentences thought by the prosecutor to be appropriate. The argument of the applicants was effectively that the trial judge was under a requirement in exercising her discretion in sentencing to take into account a prosecution submission as to the range of appropriate sentences, characterised by the majority of the High Court as the mere expression of opinion.
123 One of the matters discussed by the High Court was the "sentencing task". A difficulty with a party making a submission to the sentencing judge in a criminal case about the range of sentences was identified as follows:
36 If a party makes a submission to a sentencing judge about the bounds of an available range of sentences, the conclusions or assumptions which underpin that range can be based only upon predictions about what facts will be found by the sentencing judge. In some cases, there may be little controversy about the facts. But that will not always be so. In the present cases, for example, counsel for Mr Zirilli told the sentencing judge that the prosecution accepted that Mr Zirilli's guilty plea indicated his remorse. Presumably the range of sentences which the prosecution indicated in correspondence with Mr Zirilli's lawyers reflected this view of the matter. But the sentencing judge did not accept that Mr Zirilli was remorseful. Necessarily, then, the range of sentences proffered by the prosecution was fixed on a false basis.
37 This serves to demonstrate that bare statement of a range tells a sentencing judge nothing of the conclusions or assumptions upon which the range depends. And if, as will often be the case, counsel who appears for the prosecution on a sentencing hearing was not responsible for deciding what range would be proffered, the judge will have little or no assistance towards understanding why the range was fixed as it was.
38 If a sentencing judge is properly informed about the parties' submissions about what facts should be found, the relevant sentencing principles and comparable sentences, the judge will have all the information which is necessary to decide what sentence should be passed without any need for the prosecution to proffer its view about available range. If the judge is not sufficiently informed about what facts may or should be found, about the relevant principles or about comparable sentences, the prosecution's proffering a range may help the sentencing judge avoid imposing a sentence which the prosecution can later say was manifestly inadequate. But it will not do anything to help the judge avoid specific error; it will not necessarily help the judge avoid imposing a sentence which the offender will later allege to be manifestly excessive. Most importantly, it will not assist the judge in carrying out the sentencing task in accordance with proper principle .
124 Also, as the majority of the High Court indicated, merely stating the bounds of the available range of sentences states no proposition of law, but is a statement of opinion (see [42] ff).
125 I do not consider the ratio or any seriously considered dicta in Barbaro require that I depart in this civil penalty proceeding from the approach previously taken in this Court as to the receipt and taking into account of submissions made by the regulator (or for that matter another party) as to the appropriate penalty.
126 Barbaro was a case about criminal custodial sentencing, not about the imposition of civil penalties. Necessarily, the proceedings before the trial judge in Barbaro required her Honour to apply the provisions of Pt 1B of the Crimes Act 1914 which govern the sentencing of federal offenders. As the High Court observed, Pt 1B provides the fundamental starting point for the sentencing of offenders for federal offences. This is not the relevant starting point in the current proceedings.
127 As I have indicated, the High Court in Barbaro was considering a particular practice occurring in criminal trials in Victoria which had developed as a result of the majority decision in MacNeill-Brown.
128 The High Court made no statements about whether or how the approach dictated by Barbaro in criminal proceedings might apply in the civil penalty context, nor on how it may impact upon the practice adopted over many years relating to the receipt and consideration of joint submissions by the parties on penalty and agreed statement of facts in civil penalty proceedings.
129 I appreciate that "sentencing principles" applicable to criminal proceedings have been referred to by analogy in undertaking the task of determining the appropriate penalty in civil penalty proceedings: see eg ACCC v Liquorland (Australia) [2005] ATPR ¶42-070 at [68] in the context of s 76 of the Trade Practices Act 1974 (Cth); and TPG Internet Pty Ltd v ACCC (2012) 210 FCR 277 at [145] - [146] and ACCC v Marksun Australia Pty Ltd [2011] FCA 695 at [90] - [91] in the context of s 224 of the ACL. However, the reference to such sentencing principles merely directs a court to consider just that, sentencing principles. In sentencing in a criminal context, a court is to weigh all the relevant factors, arrive at a single result taking account of them all, and adopt an "instinctive synthesis": see eg Wong v The Queen (2001) 207 CLR 584 per Gaudron, Gummow and Hayne JJ at [74] - [76]. These basic principles can readily be seen to apply in determining an appropriate civil penalty. Nevertheless, all sentencing principles must be applied in context. That is, sentencing principles must be applied to give effect to the purpose of the legislation which gives rise to the relevant contraventions found by the court, whether it be for example, in an industrial law, consumer law, taxation law, or corporations law context. Of course, a sentencing judge must take into account any specific matters referred to by the Legislature.
130 Then, it is to be recalled in the situation confronting me, I have not just been provided with a "bare" statement of range of penalties, or specific penalty, which tells the judge nothing of the conclusions or assumptions upon which the proposed penalty depends (a problem referred to in Barbaro). I have the advantage of submissions of law and an agreed statement of facts (which I regard as sufficient for my task), which go beyond the mere bare expression of opinion by a prosecutor.
131 Further, there is still binding Full Court authority in the civil penalty context which supports the practice of civil regulators making submissions as to penalty amount, based upon agreed statement of facts and joint legal submissions from the parties indicating an 'agreed' penalty.
132 In NW Frozen Foods Burchett and Kiefel JJ surveyed authorities on agreed penalties and concluded that a regulator and respondent could jointly propose specific penalty amounts to the Court. Their Honours emphasised that (provided the Court was satisfied that the proposed amount was appropriate) there was a strong public interest in imposing that penalty, even if the Court may otherwise have selected a different figure for itself.
133 The effect of NW Frozen Foods was given further consideration by the Full Court in Mobil Oil, where Branson, Sackville & Gyles JJ surveyed the relevant authorities, including several which had criticised the reasoning in NW Frozen Foods. Their Honours went on to uphold the approach outlined in NW Frozen Foods and to explain and support the reasons for that approach.
134 The principles in NW Frozen Foods and Mobil Oil have been followed and applied in subsequent civil penalty cases in the Federal Court.
135 As I discussed in AGL, the Victorian Court of Appeal in ASIC v Ingleby (2013) 275 FLR 171 has recently departed from the approach taken in in NW Frozen Foods and Mobil Oil (although not on the question of whether a submission could be made as to an appropriate penalty amount). That decision has not been followed in the Federal Court, where NW Frozen Foods and Mobil Oil continue to be regarded as binding authority: see for example AGL Sales at [12]-[44]; ACCC v Luv-a-Duck Pty Ltd [2013] FCA 1136 at [13]; ACCC v Hewlett-Packard Australia Pty Ltd [2013] FCA 653 at [13]; ACCC v HP Superstore Pty Ltd [2013] FCA 1317 at [18]; ACCC v Avitalb Pty Ltd [2014] FCA 222 at [18] ff; Tax Practitioners Board v Shanahan [2013] FCA 764 at [17]; ACCC v P & N Pty Ltd [2014] FCA 6 at [3]; ACCC v Koyo Australia Pty Ltd [2013] FCA 1051 at [5].
136 I observe that at least two decisions of the judges of this Court have indicated that there seems to be very little difference (if any) between the approach as identified in Ingleby and that set out in NW Frozen Foods, as explained in Mobil Oil: see ACCC v Artorios Ink Co Pty Ltd (No 2) [2013] FCA 1292 at [87] per Mortimer J and Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 1014 at [32] and [33] per Gordon J.
137 I consider also that there are important differences between the criminal sentencing context and the civil penalty context, and the position of the crown prosecutors and regulators.
138 Undoubtedly, some processes or practices adopted in the criminal jurisdiction could be applied in the civil jurisdiction: see generally Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 and ACCC v Flight Centre Limited (No 3) [2014] FCA 292 ('Flight Centre'). However, there are differences between a criminal prosecution and a civil penalty proceeding brought by a civil regulator which need to be considered, and which necessarily impact upon the appropriate processes and practices to adopt in each respective jurisdiction.
139 Crown prosecutors have a distinctive function and obligations deriving from the character of a prosecution. They have a duty to present the case for the Crown independently of the interests of any person or agency. It is not their function to seek a particular outcome. They therefore proceed in a fashion which is quite different from that of a party to a civil proceeding with a particular interest in the outcome.
140 A regulator bringing a civil penalty proceeding stands in a different position than that of a prosecutor in a criminal proceeding. By its very establishment and functions, such a regulator does not have, and is not expected to have, the independent role and characteristics of the prosecutor. Unlike the prosecutor, the regulator will generally have conducted the investigation which led to the proceedings, dealt with the respondent in relation to those investigations, and instructed its own lawyers and counsel to represent it in the proceedings. The regulator typically has responsibility for all aspects of the regulatory sphere including administering its statutory regime, investigating breaches, enforcing breaches through non-judicial processes (such as enforceable undertakings) and through judicial processes such as obtaining penalties, injunctions, and remediation orders.
141 The separate and distinct role of a prosecutor is clearly illustrated when a regulatory agency refers a brief for criminal prosecution to the Director of Public Prosecutions. It is then that the special independence, role and functions of the prosecutor become engaged.
142 It is the very nature of a civil regulatory proceeding that the regulator contends for a particular outcome (often not confined to civil penalties but including injunctions, disqualification orders, and compensation orders). The very purpose of the proceedings brought by the regulator is to secure a particular regulatory outcome. Accordingly, the very process undertaken by a civil regulator makes it a party with a different interest and different functions from a criminal prosecutor.
143 In fact, the specialist role of a regulator is one of the reasons why the Full Court has supported the practice of submissions being made as to the appropriate penalty amount: see NW Frozen Foods at 298F and Mobile Oil at [51].
144 As I have already alluded to, there may also be different purposes in imposing a criminal sentence and civil penalty in the context of a particular legislative scheme, particularly in relation to deterrence.
145 A principal object of imposing a pecuniary penalty is deterrence. Broader considerations apply in imposing a criminal custodial sentence.
146 This primary purpose for imposing civil penalties is one of the key reasons why the Full Court of the Federal Court has adopted the approach of encouraging submissions as to agreed penalty amounts.
147 Of course, deterrence is not the only purpose to be served by the imposition of a civil penalty, but it is a primary purpose.
148 As the High Court recently observed in ACCC v TPG Internet Pty Ltd (2013) 88 ALJR 176 per French CJ, Crennan, Bell and Keane JJ at [65]:
General and specific deterrence must play a primary role in assessing the appropriate penalty in cases of calculated contravention of legislation where commercial profit is the driver of the contravening conduct.
149 The acceptance of agreed penalty amounts (providing always that the Court undertakes its duty to fix the appropriate penalty) increases the certainty of outcome for regulators and wrongdoers. This increases the predictability of outcomes for regulators and respondents and makes it more likely that proceedings will be resolved by agreement in an appropriate way and under the supervision of the Court. This in turn improves deterrence by encouraging the implementation of corrective measures and freeing up the resources of the regulator.
150 In light of the above observations, I do not consider that the High Court intended to exclude, in a civil context, the making of submissions (joint or otherwise) by the parties as to appropriate orders to make (not just as to penalty, but also as to injunctions and disqualification orders). Without specific mention and consideration, I do not conclude that the High Court implicitly overruled the earlier Full Court decisions of NW Frozen Foods and Mobil Oil.
151 The ACCC brought to my attention two recent decisions which have applied Barbaro. In Flight Centre at [56], Logan J (without the benefit of argument) purported to apply Barbaro, and did not take into account the ranges of penalty referred by the parties in civil penalty proceedings. His Honour, with respect, seemed to assume the correctness of the application (by analogy) of Barbaro to the civil penalty proceeding before him. In these circumstances, I do not consider I need follow the approach taken by Logan J, having reached a different view after receiving submissions on the matter (albeit without a contradictor) and coming to my own conclusion: see the principles enunciated in CSR Ltd v Eddy (2005) 226 CLR 1 at [13].
152 The other recent decision was that of Grocon v Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134 ('Grocon'). On 31 March 2014, Cavanough J held that he was bound to follow Barbaro in the course of imposing penalties for contempt. The proceedings before his Honour involved mainly a series of criminal contempts. The parties had made submissions as to the appropriate penalties to be imposed for a number of findings of contempt. The parties were subsequently invited to make submissions about the effect of Barbaro. The parties agreed with the trial judge's provisional conclusion that Barbaro required him to completely disregard all submissions that suggested particular figures or ranges. Accordingly, Cavanough J did not need to consider the matter further. As that decision reveals, the imposition of penalties for contempt (in the main criminal contempt), was treated as closely comparable with (if not equivalent to) criminal sentencing. I do not regard the decision in Grocon as relevantly touching upon the correct approach to undertake in this proceeding. In any event, I am bound by the principles propounded by the Full Court in NW Frozen Foods and Mobil Oil, which I do not regard as having been overruled by the High Court in Barbaro.