Some relevant principles
41 In Trade Practices Commission v CSR Ltd (1991) ATPR 41-076; [1990] FCA 762 (Trade Practices Commission v CSR Ltd), in considering the imposition of a pecuniary penalty under the then Trade Practices Act 1974 (Cth), French J (as his Honour then was) said at 52,152-52,153:
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. Nor, if it be necessary to say so, is there any compensatory element in the penalty fixing process - Trade Practices Commission v. Mobil Oil Australia Ltd (1984) 4 FCR 296 at 298 (Toohey J.). 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.
…
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
3. The circumstances in which the conduct took place.
4. The size of the contravening company.
5. The degree of power it has, as evidenced by its market share and ease of entry into the market.
6. The deliberateness of the contravention and the period over which it extended.
7. Whether the contravention arose out of the conduct of senior management or at a lower level.
8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.
…
42 In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 French CJ, Kiefel, Bell, Nettle and Gordon JJ at [23]-[24] observed the following about civil penalty provisions generally:
23 Since 1974, the Commonwealth has enacted a considerable number of civil penalty provisions. Some of those provisions are contained in legislation which provides for both civil penalties and criminal penalties, as in the Conciliation and Arbitration Act and the Trade Practices Act previously referred to, while, in other cases, of which the BCII Act was an instance, the legislation provides only for civil penalties. In each case, however, the form of the civil penalty provisions is essentially similar.
24 In essence, civil penalty provisions are included as part of a statutory regime involving a specialist industry or activity regulator or a department or Minister of State of the Commonwealth (the regulator) with the statutory function of securing compliance with provisions of the regime that have the statutory purpose of protecting or advancing particular aspects of the public interest. Typically, the legislation provides for a range of enforcement mechanisms, including injunctions, compensation orders, disqualification orders and civil penalties, with or, as in the BCII Act, without criminal offences. That necessitates the regulator choosing the enforcement mechanism or mechanisms which the regulator considers to be most conducive to securing compliance with the regulatory regime. In turn, that requires the regulator to balance the competing considerations of compensation, prevention and deterrence. And, finally, it requires the regulator, having made those choices, to pursue the chosen option or options as a civil litigant in civil proceedings.
(footnotes omitted)
43 At [46] their Honours said:
… Middleton J and McKerracher J were correct in their view that there is an important public policy involved in promoting predictability of outcome in civil penalty proceedings and that the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers. As was recognised in Allied Mills and authoritatively determined in NW Frozen Foods, such predictability of outcome encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention.
44 At [55] their Honours endorsed the comments of French J in Trade Practices Commission v CSR Ltd at 52,152 (see [41] above) and his Honour's emphasis on the purpose of a civil penalty proceeding being primarily, if not wholly, protective in promoting the public interest in compliance. At [59] their Honours observed that once it was understood that civil penalties are not retributive but essentially deterrent or compensatory and therefore protective, there is nothing exceptional about a court approving an agreed settlement of a civil proceeding which involves the public interest provided that the court is persuaded that the settlement is appropriate.
45 In considering the imposition of a civil penalty the approach to be taken to the consideration and assessment of relevant factors in relation to each contravention is the "instinctive synthesis" approach. In Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205 (MT Solar) at [72] Foster J relevantly said that that process has the following attributes:
(a) There must be a weighing of all relevant factors, rather than starting from a predetermined figure and making incremental additions or subtractions for each separate factor (Markarian, at 373-375 [36]-[39] (per Gleeson CJ, Gummow, Hayne and Callinan JJ) and at 385-387 [69]-[73] (per McHugh J); and
(b) It is critical that the reasoning process involved in synthesising the penalty be transparent (Markarian at 373-375 [36]-[39] (per the plurality) and at 390 [84] (per McHugh J).
46 In circumstances where penalties for multiple contraventions are imposed, another relevant consideration is the totality principle which operates as a final check to ensure that the penalties to be imposed on a wrongdoer, when considered as a whole, are "just and appropriate": see MT Solar at [81]. In MT Solar at [82] Foster J said:
Consideration of the totality principle will not necessarily result in a reduction from the penalty considered appropriate prior to the application of that principle. However, in cases where the Court considers that the total penalties to be imposed are inappropriate, the Court should alter the final penalties to ensure that they are "just and appropriate". It is now recognised in the civil penalty context that the proper approach when applying the totality principle is to start by ascertaining the penalty which would be appropriate for each individual contravention and then to reduce the total of the amounts derived in this fashion for reasons of totality. It is undesirable to start with a single global total penalty and then to divide it among the individual contraventions in order to derive separate penalties.
47 To the extent that similar contraventions may be relevant to the determination of the applicable penalty in this case, I was informed by the parties that this was only the second civil penalty proceeding brought under the NVETR Act. The first such proceeding is the subject of the decision in Commonwealth of Australia v Restar [2016] FCA 657 (Restar). In that matter the Commonwealth claimed that Ms Restar had contravened s 125 and s 131 of the NVETR Act on 14 occasions. Ms Restar filed a defence admitting each of the allegations made against her. The Commonwealth sought declaratory relief and an order for the payment of pecuniary penalties. At [11]-[13] Flick J said:
11 The social context in which 2011 Act operates is of considerable importance. Its importance is only underscored by the degree of co-operation between the Commonwealth and the States and Territories.
12 The object of the legislation is to provide "vocationally-oriented, post-school qualifications".
13 As at 2014 there were 4,601 Australian providers made up of 3,815 registered training organisations and 786 non-registered training organisations. As at 2014, there were 3.9 million students enrolled in the scheme. Forty five per cent (45%) of the funding for those enrolled came from the Commonwealth and States; 55% came from private tuition fees.
48 The facts established that Ms Restar had fabricated 13 bogus qualifications to advance her own financial interest. In that context, Flick J turned to consider the appropriate penalty, noting that the Commonwealth sought a penalty in the range of $95,000 to $120,000. His Honour concluded that a penalty of $120,000 should be imposed. In considering general deterrence his Honour said at [40]:
Applied to the circumstances of the present case, and with reference to the need to fix an appropriate penalty to act as a general deterrent, it must be recognised that:
• the scale and nature of the industry means it is partly self-regulating, with limited resources available to the Regulator to conduct audits of each registered trading organisation; and
• there is a need to ensure confidence in the integrity of the industry - including the confidence of other entities involved in providing services, the students who seek out the qualifications, and those members of the public who depend upon receiving qualified assistance from those students once they have completed their courses.
The necessity to take such fundamental considerations into account follows from the mandate imposed by s 137(3) of the 2011 Act to have regard to "all relevant matters" - namely those matters which best promote the objects and purposes of the Act: cf. Pagasa.