Whether the Court can take into account the utilitarian value of the appellants' admissions
67 The respondent submits that Pattinson (HC) establishes that the sole purpose of imposing a pecuniary penalty is to deter future contraventions. The respondent argues that admissions made by a contravener can only be relevant to the extent they relate to deterrence, and they will not relate to deterrence unless they can be seen as going to the character of the contravener. It is submitted that as the "utilitarian value" of admissions is not, of itself, relevant to character, it is irrelevant to the assessment of the appropriate penalty.
68 The respondent relies upon Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383, where Stone and Buchanan JJ held at [76] that a discounted penalty should not be available simply because a contravener has spared the community the cost of the contested trial. The respondent submits that in the absence of evidence, it cannot be assumed that the appellants' motivation for making their admissions is to facilitate the course of justice, rather than, for example, to spare themselves the cost of a hearing.
69 The appellants rely upon the judgment in Pattinson (FFC), where the Full Court held at [210] that the absence of contrition did not diminish the legitimacy of recognising the public policy involved in recognising admissions. The appellants submit that Pattinson (HC) did not controvert that aspect of Pattinson (FFC). It may be noted that the appellants have not sought to argue that discounting a penalty to reflect the utilitarian value of admissions is compatible with the purpose of deterrence.
70 An examination of the decided cases shows that contraveners' admissions have been taken into account to reduce civil penalties in three ways. First, in some cases, admissions have been found to reflect remorse on the part of the contravener. Second, in some cases, admissions have been taken to reflect a willingness of the contravener to facilitate, or cooperate in, the course of justice. Third, in some cases, penalties have been reduced to reflect the public interest in the saving of public resources brought about by admissions.
71 As to the first of these factors, there is no suggestion by the appellants that their admission of the contraventions in this case demonstrates contrition. The second factor has been described as, "an acknowledgement that the charge has been rightly laid and evidenc[ing] a preparedness by the offender to relinquish his or her right to contest the charges and to submit to punishment": Director of Public Prosecutions (Cth) v Thomas (2016) 53 VR 546 at [7]. The third factor is commonly described as reflecting the "utilitarian value" of admissions.
72 There is some difference in the authorities as to whether utilitarian value is a distinct basis for reducing a penalty, or is better regarded as an aspect of willingness to facilitate the course of justice. In Signato, Gleeson CJ, Gummow, Hayne and Callinan JJ at [22] drew a distinction between the two:
A person charged with a criminal offence is entitled to plead not guilty, and defend himself or herself, without thereby attracting the risk of the imposition of a penalty more serious than would otherwise have been imposed. On the other hand, a plea of guilty is ordinarily a matter to be taken into account in mitigation; first, because it is usually evidence of some remorse on the part of the offender, and second, on the pragmatic ground that the community is spared the expense of a contested trial. The extent of the mitigation may vary depending on the circumstances of the case.
73 However, in Cameron, Gaudron, Gummow and Callinan JJ, after referring to Siganto, held:
11 It should at once be noted that remorse is not necessarily the only subjective matter revealed by a plea of guilty. The plea may also indicate acceptance of responsibility and a willingness to facilitate the course of justice.
…
13 It is difficult to see that a person who has exercised his or her right to trial is not being discriminated against by reason of his or her exercising that right if, in otherwise comparable circumstances, another's plea of guilty results in a reduction of the sentence that would otherwise have been imposed on the pragmatic and objective ground that the plea has saved the community the expense of a trial. However, the same is not true if the plea is seen, subjectively, as the willingness of the offender to facilitate the course of justice.
14 Reconciliation of the requirement that a person not be penalised for pleading not guilty with the rule that a plea of guilty may be taken into account in mitigation requires that the rationale for that rule, so far as it depends on factors other than remorse and acceptance of responsibility, be expressed in terms of willingness to facilitate the course of justice and not on the basis that the plea has saved the expense of a contested hearing.
74 It can be seen that in Cameron, the plurality regarded the making of admissions which save the community the expense of a trial as reflecting a willingness to facilitate the course of justice. To similar effect, in DPP (Cth) v Thomas, the Victorian Court of Appeal explained at [7]:
A willingness to facilitate, or co-operate in, the course of justice is manifested by an offender's plea of guilty. The plea, by its very nature, constitutes an acknowledgement that the charge has been rightly laid and evidences a preparedness by the offender to relinquish his or her right to contest the charges and to submit to punishment. The offender's willingness to follow that course, often described in the authorities as 'co-operation', vindicates the course of justice, saves the community the expense of a trial and releases witnesses from the ordeal of a trial. These considerations provide the primary basis for the discount for a plea of guilty.
75 On the other hand, in Mornington Inn Pty Ltd v Jordan, Stone and Buchanan JJ, drew a distinction between a contravener's willingness to facilitate the course of justice and the sparing of the community the expense of a trial. Their Honours held:
76 … Nevertheless, in our view, it should be accepted, for the same reasons as given in Cameron, that a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.
77 A respondent who admits liability will spare itself the unnecessary cost of a contested hearing. Its motivation, therefore, should not be regarded as unduly altruistic... It is impossible to resist a conclusion that the appellant was finally moved by its assessment of the strength of the case against it rather than any desire to facilitate the course of justice.
(Citations omitted.)
76 Their Honours considered that a contravener's admissions should not automatically be regarded as reflecting a desire to facilitate the course of justice that results in a discounted penalty, and considered that the contravener's motivation is relevant. However, other Full Courts have taken a different approach, discounting penalties on the basis of the public policy rationale of encouraging the saving of resources that would otherwise be expended by regulators and courts in the conduct of a contested trial.
77 In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, the Full Court observed at 293:
It is well settled that, in the assessment of a penalty, a respondent withdrawing defences and acknowledging liability is entitled to special consideration of reduction of the amount that would otherwise be assessed.
78 It may be noted that the Full Court at 297-298 rejected the proposition that, "a factor…diminishing the credit to which the appellant's cooperation entitled it", was that, "its cooperation had also saved it a very significant amount of legal costs".
79 In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 (the Queensland Infrastructure Case), the Full Court found:
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…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.
80 In Pattinson (FFC) the plurality at [207] accepted that the Queensland Infrastructure Case had, "described the correct way to approach the utilitarian (as opposed to contritional) feature of early cooperation". Their Honours stated at [209]:
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.
81 The Full Court at [219] gave, "due allowance for the important public policy of cooperation, albeit without any contrition".
82 Nevertheless, the respondent submits that in Pattinson (HC), the High Court determined that the only purpose of a pecuniary penalty is deterrence (specific and general) of like offending, and that purpose is inconsistent with allowing a reduction of the penalty for the utilitarian value of admissions. As has been indicated, the appellants did not seek to argue that a reduction of the penalty for the utilitarian value of admissions is consistent with Pattinson (HC).
83 I accept that there may be some difficulty in reconciling the plurality's description of the purpose of a civil penalty in Pattinson (HC) as "deterrence of future contraventions of a like kind" with judgments of Full Federal Court approving the practice of discounting penalties in order to encourage cooperation and free-up public resources. In Pattinson (HC), the plurality explained at [15] that the purpose is, "to put a price on contravention that is sufficiently high to deter repetition by the contravener and others who might be tempted to contravene the Act". A contravener may admit contraventions for purely selfish reasons, such as saving itself the cost of a trial, rather than any motivation of cooperating in the interests of justice and saving public resources. In such a case, it is difficult to see that discounting the penalty would be consistent with deterring the contravener or others from future contraventions and, in fact, may encourage contraventions since a prospective contravener knows that any penalty will be discounted upon the making of early admissions. In addition, it does not seem consistent with Pattinson (HC) to first determine a civil penalty that places a price on a contravention that is sufficiently high to deter repetition by the contravener and others, but then discount the penalty to below that level to take into account the public interest in freeing-up public resources
84 There may be at least two ways of seeking to reconcile the emphasis in Pattinson (HC) on deterrence (both specific and general) with the discounting of a penalty to encourage cooperation in order to save public resources.
85 First, it is not entirely clear that the High Court definitively held that deterrence was the only purpose of a pecuniary penalty, or that the High Court considered that factors unrelated to deterrence were incapable of operating in mitigation of a penalty.
86 In Pattinson (HC), the plurality cited, with apparent approval, a passage from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2018) 264 FCR 155 at [19], where the Full Federal Court stated that the "principal and indeed only object" of the imposition of a civil penalty is deterrence. The plurality at [10] also described "the purpose of s 546" as deterrence. However, the plurality was less definitive elsewhere: for example, holding at [15] that, "civil penalties are imposed primarily, if not solely, for the purpose of deterrence", and referring at [42] to, "the primary significance of deterrence", and at [43] to, "the primacy of deterrence".
87 The High Court did not definitively state that factors unrelated to deterrence could never be applied to reduce a civil penalty. It is not unrealistic to consider a circumstance where an employee establishes a breach of the Act by their employer, but the imposition of a penalty at a level appropriate for general deterrence would mean that the employer's business, and with it the employee's employment, would collapse. On the respondent's argument, a penalty appropriate for both general and specific deterrence must be imposed without consideration of any potentially adverse consequences for the employee, such as the deprivation of an award of compensation or loss of employment, flowing from the penalty. An inflexible approach of that kind might deter the making of some complaints of contravention. Allowing a court some greater flexibility in determining an "appropriate" penalty would seem more consistent with the protective purposes of the Act.
88 It is possible that the High Court refrained from definitively stating that the only purpose of a penalty is deterrence in order to leave open the possibility that a penalty may be reduced by some public interest or other factors that are inconsistent with deterrence. The utilitarian value of admissions might be in that category.
89 Another possible way of reconciling the views in Pattinson (HC) with the discounting of a penalty to encourage cooperation in order to save public resources is to regard the latter as promoting, rather than detracting from, the deterrent purpose of a penalty. In Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2022] FCA 1317, Bromwich J observed at [52] that cooperation frees up the resources of a regulator to take deterrence action elsewhere, and considered that discounting a penalty to encourage such cooperation falls squarely within Pattinson (HC).
90 In Fair Work Ombudsman (formerly Australian Building and Construction Commissioner) v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) (No 2) [2023] FCA 13, Katzmann J held that the maximum penalty was not called for in view of the Union's cooperation with the regulator and its admissions of wrongdoing. Her Honour considered that, "[t]he relatively early admissions spared the regulator the costs of a trial, freeing up its resources to increase the chances that other contraveners will be detected and brought before the courts, which has the effect of increasing deterrence", citing Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; (2004) ATPR 41-993 at [53] and Hardwick v Australian Manufacturing Workers' Union [2010] FCA 818; (2010) 198 IR 312 at [19].
91 Against this, it may be argued that while reducing a penalty to encourage cooperation in order to save public resources is directly inconsistent with deterring the contravenor and others from committing future contraventions of a like kind, any countervailing deterrent effect is quite indirect, so that, on balance, applying such discounting would detract from the deterrent purpose of imposing a penalty.
92 In any event, reconciling the discounting of penalties for the utilitarian value of admissions with Pattinson (HC) does not ultimately matter for present purposes. The Full Court in Pattinson (FFC) allowed the appeal on two grounds, the second of which was that the primary judge erred in determining that the contraveners, "should not receive any material discount on penalty by reason of their admissions and co-operation rendering a trial unnecessary". In Pattinson (HC), Edelman J observed at [119]-[120] that special leave to appeal on the second ground had been refused. His Honour indicated that the consequence was that there was no dispute before the High Court that the primary judge had erred by imposing penalties without applying the material discount for cooperation to which the respondents were entitled.
93 Accordingly, Pattinson (FFC) requires that the utilitarian value of admissions, even unaccompanied by contrition, must be taken into account and may operate to reduce the penalty that would otherwise have been imposed.