Gapes, Robert Leslie v The Commercial Bank of Australia Ltd [1979] FCA 99

Federal Court of Australia|1979-10-04|Before: Fisher JJ, Sweeney J, Smithers J

Competency of appeal ~- whether breach of award pursuant to secticn 41 of the Conciliation and"Arbitration Act

1904 a criminal offence ~- legislative intention behind s.119 of Conciliation and Arbitration Act 1904 - whether proceedings in which imposition of penalty sought pursuant

Robert Leslie Gapes v. The Commercial Bank of Australia Limited

Coram: Smithers, J.B. Sweeney, Evatt, Deane and Fisher JJ.

Smithers, J.B. Sweeney, Evatt, Deane and Fisher JJ. 4 October 1979

appealed from is not a judgment of acquittal in a criminal

proceeding after the hearing on the merits, the Court finds that

the appeal to the Full Court of the Federal Court is competent.

IN THE FEDERAL COURT OF AUSTRALTA ) VICTORIA DISTRICT REGISTRY V No. 11 of 1979 INDUSTRIAL DIVISIOW

CORAM: Smithers, J.B. Sweeney, Evatt, Deane and Fisher JJ.

SMITHERS J.: The question for decision arises on a preliminary

point going to the competency of the appeal. The question is whether proceedings in which the imposition of a penalty for the breach of a term of an award made pursuant to s.41 of the

Conciliation and Arbitration Act 1904 (the Act) is sought

pursuant to s.119 of the Act are proceedings in respect of a criminal offence. If so then by reason of the decision of the Full Court in Thompson v. Mastertouch T.V. Service Pty. Ltd. (1978) 19 A.L.R. 547 the appeal is incompetent for the reason that it would be an appeal in criminal proceedings after a

I have had the advantage of reading the reasons for judgment of J.B. Sweeney J. in which the conclusion is reached that the question should be answered in the negative. I agree

with those reasons and wish to add the following observations.

contended that upon the proper interpretation of s.119 a

legislative intention is to be seennamely, that a breach of an award,

even if not wilful shall have the quality of a criminal offence.

In support of this contention he relied upon the unanimous

decision of the Australian Industrial Court in Vehicle Builders!

Employees! Federation of Australia v. General Motors ~Holden Pty. Ltd. (1977) 32 F.L.R. 100 which is directly in point and

in his favour. He relied also on a line of dec1sz1ons which he

said established the proposition that where the legislature has

provided a penalty for breach of a statutory duty which may be recov ,

ered otherwise than by a person aggrieved and by a person interested i

| the enforcement of the Act in the public interest the breach

is constituted an offence and the proceedings for the recovery

of the penalty are criminal, In connection with this

proposition he referred to In_re Medley (1902) 28 V.L.R. 475,

Mellor v. Denham (1880) 5 Q.B.D. 467, R. v. Whitchurch

(1881) 7 Q.B.D. 534, Seaman v. Burley (1896) 2 Q.B. 344 (C.a.) and Robinson v. Currey (1881) 7 Q.B.D. 465. Mr. Shaw conceded

that there is a distinction between a penal statute and a

criminal enactment and that in the case of any particular

statute it is a question of construction whether the statute ' authorising imposition of a penalty is the former or the latter, Addressing himself to this question of construction Mr, Shav referred to various aspects of s.119 and its context which support the contention that s.119 is a criminal enactment. ' First he pointed out that there is a very strong public element

in the basic purposes of the legislature in enacting the

Conciliation and Arbitration Act. He submitted that ina

significant way the provisions of s.119 reflect the public

interest in the enforcement of the Act rather than the

interests of persons aggrieved by a contravention thereof.

Thus although the penalty may be "sued for and recovered"

by a member of an organization who is affected by the breach

it may also be sued for by numerous other parties. Amongst

those other parties are the Industrial Registrar and the Industrial Relations Bureau. The interests of these parties are primarily

if not solely to promote the interest of the public in the

observance of awards. Also, amongst those who may sue and

| affected by the preach, any officer of any such organization ' ' authorised to sue on behalf thereof and any party to the

relevant avards. These last mentioned parties are authorised to sue no doubt, because Parliament considered that it is in the > general public interest to authorise action in respect of

breaches of awards by parties likely to be specially interested ~

It is a feature of a penalty when imposed under s.119 that it does not necessarily benefit the person or body who has sued for it. By s.120 the Court may order that the penalty or any part thereof be paid anto the Consolidated Revenue Fund or to such organization or person asis specified by it. It is emphasised also that the penalty recoverable is not fixed. Within the upward limit of $1000 it is to be assessed by the Court. It is said that it is a common feature of penalties for offences that they are assessed by reference to the blame- worthiness of the offender in the particular case. It is pointed out that the penalty imposed under s.119 has no relation to, for instance, the amount of unpaid vages because s.119(3) provides for an order for payment of unpaid wages separately

from and in addition to the penalty which 1s imposed.

It is pointed out that although s.119(2) speaks of a penalty which a party may sue for and recover there is nothing for which a party can sue for as a debt, Also in a particular case the Court may refrain from imposing any penalty at all.

It is said with considerable force that the statutory provisions reflect the conception on the part of the legislature that

the function of proceedings under s.119 is to punish an offender and

that punishment is of the essence of criminal proceedings.

There are various provisions of the Act which support the view that in enacting s.119 Parliament did not intend to enact that the mere breach of an award is a criminal offence. In s.122 Parliament has declared that wilful breach of an award 1s a criminal offence and has provided a maximum penalty of forty dollars therefor, It is not difficult to understand that there might have been reluctance to characterise a mere breach of an avard as a criminal offence, Awards are detailed documents frequently containing complicated provisions, They often raise most difficult questions of construction not only for parties but for Courts. That a party honestly misconstruing a provision should be at risk of a criminal conviction wight well have been regarded unfavourably by legislators. And it would seem peculiar that the legislature which provided the criminal penalty of forty dollars for a wilful breach of an award should provide a penalty of up to one thousand dollars for the much less blameworthy conduct of

It is to be observed that in various provisions in the Act and the regulations a distinction is made in express terms between offencesand breaches or non-observances of terms of awards. Of course the terms of an award are by the Act made binding on designated parties (see s.61). But it does not follow from that provision that breaches of awards are criminal in nature. One object of the avard making provisions of the Act is to facilitate the insertion into the contract of

employment of persons in the relationship of employer and

employee of terms regarded as fair and reasonable. Those

terms must take their place as banding terms in the contract

of employment. But to make them binding as other terms of

the contract are binding it was not necessary to make a breach thereof a criminal offence, It is enough that they are binding and enforceable as between the parties, as terms of the

contract out of which the relationship of employer and employee arises. The remarks of Latham C.J. in Amalgamated Collieries of W.A. Ltd. v. True 59 C.L.R. 417 at pp.423-424

referred to in the reasons of Northrop J. in the judgment

"When any person is employed to do work to which an award applies, the parties are bound by a contract. Their legal relations are in part determined by the contract between them and in part by the avard, The award governs their relations as to all matters with which it deals ...

But an award never deals with all the matters which affect the relations of any particular employer and any particular employee. The creation of the relation of employer and employee depends upon an agreement between them and not upon any award. Thus the existence of the obligations under an avard in relation to a particular employer and employee always depends on the existence of a contract between them. So, also, there are terms of their relationship which do not depend upon any award. For example, the employee must always obey the lawful orders of his employer, but awards to not commonly include a term to that effect. In my opinion, however, it is unnecessary in this case to work out in detail the basis of

it is sufficient to refer to what was said in a unanimous judgment of this court in

Mallinson v. Scottish Australian Investment Co, Ltd. (1920) 28 CLR. 66 at p.73:

TApart from the Act! (The Commonwealth Conciliation and Arbitration Act) 'kthe right to receive wages sprang from the existence of the relationship of master and servant and the performance of services therein,

and notwithstanding the Act it 1s still the existence of this relationship and the performance of services therein which confers on the employee the right to remuneration - - all that the Act has done in this respect is to substitute another method of determining the amount of

There is no necessary incongruity in the legislature providing for the recovery in a non-criminal proceeding of a penalty for a breach of a term of a contract between private persons. Where the term is one introduced by an award of a statutory authority as a matter of public policy the possibility that the legislature would provide for recovery of such a penalty by an appropriate claimant is real. Of course it might have declared that breach of the term would be a criminal offence, But it is not common that the breach of a term of a contract between private parties constitutes a

However, it is a broad and important object of the Act to promote regular ane uninterrupted work on the terms of employment established by an award (see s.2(b) of the Act). This object 1s served by the grant of authority to the Conciliation and Arbitration Commission to include in an award provisions prohibiting organizations and members thereof from being concerned in any ban or limitation on the per-

foimance of ttork in accordance with the avard, See R. v.

Spicer, ex parte Seamen's Union of Australia(1957) 96 C.L.R. 341.

normally couched in prohibitory terms the binding force

of which one would think would follow merely from the

statutory authority to include such a provision in the

award. But the binding force thereof and the designation

of those who are bound are confirmed by s.61 of the Act

"61, An award determining an industrial dispute is binding on: - -

all parties to the industrial dispute who appeared or were represented before the Comnission;

all parties to the industrial dispute who were summoned or notified, either personally or as prescribed, to appear as parties to the dispute, whether they appeared or not;

all parties who, have been notified, either personally or as prescribed, of the industrial dispute and of the fact that they were

alleged to be parties to the dispute, did not, within the time prescribed, satisfy the Commission that they were not parties to the dispute;

or any assignee or transmittee of, the business of a party to the dispute or of a party

bound by the award, including any corporation which has acquired or taken over the business of such a party;

all organizations and persons on whom the award is binding as a common rule;and

It is clear therefore that Parliament has authorised

the Commission to make awards defining the obligations of

employers and employees who enter into the relationship of

employer and employee and prohibiting certain classes of

j conduct by parties outside that relationship and has made

a law that those obligations and prohibitions are binding on the designated parties, The designated parties are those having an interest in the award either as parties who sought the award or who have direct or indirect interest in its provisions and the observance thereof and employees to whom the provisions of the award extend. So far as the prohibitory provisions of bans clauses are concerned it would not surprise 'that breach thereof should be made a criminal offence, Of course a wilful breach thereof is made a criminal offence

by s.122 of the Act and it is not easy to contemplate a

Section 119 in terms relates to breaches wilful or non-wilful. If it is to be construed as enacting that wilful and non-wilful breaches are criminal offences then the legislature has created the same crime twice in the same part of the same Act. If it is said that s.119 should by implication be read as relating only to non-wilful breaches then the situation would be that Parliament had imposed a penalty higher by far in respect of that less blameworthy conduct than in respect of a wilful breach. Also the piquant situation would arise that that liability might be avoided if it appeared that

It is of amportance that the language employed in s.119 may be contrasteé with that in s. 122 and indeed with other provisions in the Act which create offences and provide punishment therefor. Section 119 does not do that. It speaks

of the case in which a person bound by an award has

committed a breach or a non-observance thereof and empowers the Court to impose a penalty in respect of that breach or non-observance. It says nothing expressly to characterise the relevant conduct, as civil or criminal. And a legislative intention to characterise particular conduct as criminal should be found only where such an intention is made clear expressly or by implication. See the cases referred to in Maxwell on The Interpretation of Statutes (12th Ed) pps. 119-120. It is quite significant that in various parts of the Act the distinction between a breach of a term of an order or award and an offence against the Act is expressly made. Thus in s.121 which concerns the enforcement of penalties awarded under the Act, provision is made for the Registrar to issue a certificate specifying the amount payable as a penalty, ' in circumstances, inter alia, "where a Court has imposed a , penalty for an offence against this Act or the regulations Hi or for a breach or non-observance of any term of an order or award", Clearly if a penalty imposed for a mere breach of an order or award was considered to be an offence against the Act it was unnecessary to include the specific reference thereto in this section, The words used constitute a statutory recognition or indeed impliedly assert that there is a quali- tative difference between the nature of a breach of an award or order and an offence against the Act, This recognition appears also in the separate treatment of offences and of breaches of an order in Part VIA of the Act, introduced by Act No. 64 of 1977, and the amendments to s.119 which were made by that same Act. By s.126C the Industrial

Relations Bureau is empowered to institute proceedings before

! ' any Court of competent jurisdiction for an offence

against the Act or the regulations. If s.119(1) creates

a criminal offence enforceable in criminal proceedings that provision would authorise the Bureau to sue for and recover

a penalty in respect of that offence, But this was not the view of the legislature because by the Act which introduced 8.126C express provision was inserted in s.119(2) (aa) authorising the Bureau to sue and recover a penalty under s.119. The same kind of observation may be made with

respect to s.117 of the Act and s.158Q(2)(a) and (b).

Section 191(1) of the Act provides that a person who has committed an offence against the Act or the regulations may be charged accordingly before the Court and the Court may impose the penalty provided by the Act or the regulations in respect of that offence, and s.191() provides that proceedings before the Court under the section may be in- stituted by summons issued upon information without indictment. The inference that while proceedings involving offences are to proceed by information, as is normal, proceedings in respect of other matters including mere breaches of awards and

orders shall proceed otherwise,is reflected in regulation

"76, - (1) Every application for the recovery of a penalty for any breach or non-observance of an award or order shall be by summons in accordance with Form 19.

(2) Proceedings before the Court in respect of an offence against the Act (including these Regulations) or another Act or proceedings for a contempt of the Court shall be instituted

by summons upon information in accordance with Form 20,

(3) A summons issued on an information shall be in accordance with Form 21."

with the offence created by s.122 the form of expression used in other sections which impose penalties for what are clearly offences is to proscribe certain conduct and add at the foot of the section the word "Penalty" followed by the amount of the penalty expressed in money. This form of expression is obviously used to invoke the provisions of s.41 of the Acts Interpretation Act 1901. This method of creating offences is used precisely or substantially in a

number of sections in Part XI of the Act. Section 41 of the

Acts Interpretation Act is in the following terms:-

"44 The penalty, pecuniary or other, set out - - (23 at the foot of any section of any Act; or at the foot of any sub-section of any section of any Act, but not at the foot of the section

shall indicate that any contravention of the section or of the sub-section respectively, whether by act or omission, shall be an offence against the Act, punishable upon conviction by a penalty not exceeding the penalty mentioned:

to apply to a part only of the section or sub-section, it shall apply to that part only."

On the particular question whether s.119 is to be understood as enacting that a breach of a term of an . award or an order is a criminal offence the features of the Act referred to above appear to me to provide strong grounds

That it 1s sound to use these statutory features in this way appears from the reasoning and decision of

the majority of the High Court in R. v. Metal Trades Employers'

Association and others; ex parte Amalgamated Engineering Union Australian Section (1950) 82 C.L.R. 208. In that

case the Court of Conciliation and Arbitration had made an

order pursuant to what was then s.2S9(c) of the Act

a party to any ban limitation or restriction on the working

of overtime pursuant to a particular avard. For the Union

to be a party to any such ban would have been a breach of a

term of the award. Sectzon 29(c) empowered the Court to enjoin

an organization from committing a contravention of the Act

but had nothing to say about breaches or contraventions of terms

of an award. It was held that within the meaning of the Act a mere breach of a term of an award was not a contravention of the Act and' that as the order against the Union was in substance an | order enjoining the Union from committing a breach of the

term of the award it was not authorised by s.29(c). Dixon J.

",.. as I read it, the Conciliation and Arbitration Act maintains a distinction between infringements

of the Act and infringements of avards and when it speaks of contraventions of the Act it is not re- ferring to breaches of or failures to observe

awards, even if such breaches or non- - observances

are contrary to the statute and expose the persons offending against the awards to penal consequences The distinction is made in the terms in which the followin, ei Ce) are expressed, viz: - ss.31(1) (a) and tb), 33(1)(a), 61, 64(1) and (6) and (80)(1) (c). Indeed it is indicated by s.29(b) and (c)

when they are considered together. The form of s.65, which treats proceedings for an offence against the Act as not including the recovery of a penalty under s.59 for breach or non-observance of an award, follows the distinction and appears to me to confirm the inference that an infringement of an award is not to be treated as included under the expression contravention of the Act. When s.40(c) empowers

the Arbitration Court in relation to an industrial dispute to fix maximum penalties for any breach or non-observance of a term of an award it marks the difference in the manner in which the statute

regards non-compliance with the Act and non-compliance with awards under the Act, The provisions relating to State industrial regulation observe the same distinction when they speak of a 'State law dealing with an industrial matter' and 'an order, award, decision or determination of a State Industrial Authority': s.28(1) and s.51. Finally the importance attached by the framers of the Act to the enforcement of orders and awards and its treatment of their enforcement as a separate legislative subject tends to make it unlikely that the power to grant an injunction against contraventions of the Act was intended to comprise injunctions against breaches and non-observance of awards: see s.2(e) and the heading to Part V."

Reference may also be made to the remarks of Kitto J. at p.264.

The reference in the above to the significance of the form

of words used in s.65 confirms the approach adopted earlier

in these reasons concerning the form of words now appearing

in s.121 of the Act. Section 65 (now section 126) referred

"65. The Registrar or an Inspector appointed under the last preceding section shall, whenever so directed by a Jude? or a Conciliation Commissioner, and such an Inspector shall, whenever so directed by the Registrar, institute proceedings for an offence against this Act or for the recovery

And it as to be observed that consequent upon the decision in the case last mentioned the legislature amended s.29 by adding a provision enabling the Court to make an order enjoining the committing or continuing of "a breach or non-observance of an award (See Act No. 18 of 1951), But by Act section No. 53 of 1970 these words were deleted and the earlier situation restored namely that under g.109 (the successor to s.29) although the Court has power to enjoin a contravention of the Act, it is not empowered to enjoin a mere breach of an award, It is clear that an offence against the Act is,within the meaning of the Act,a contravention against the Act. It appears to follow that a mere breach of an award is not an offence. And this conclusion is agreeable with many indications in the

Mr. Shaw contended in substance that the guiding principle in relation to the question before the Court could be satisfactorily expressed in the vords of the Full Court of the Supreme Court of Vittoria In re Medley /1902/7 28 V.L.R. 475 at p.490 as follows:-

",,. that where there 1s a general law for the good of the public, for the common weal or benefit of the public, and where there is a breach of the provisions of that law, for which a penalty may be imposed, or for which there is a punitive remedy, then that matter is criminal and is not civil..."

But he did not contest that in the end, although such state- ments of principle were useful the question had to be decided in any particular case vpon the proper construction of the

relevant statute. He accepted that view as expressed by

Bowen L.J. in R. v. The International. Commercial Company

"Tt was then said that a section in an Act of Parliament which directs an act to be done does not necessarily make the disobedience an

offence if the Act proceeds to impose a penalty as the only result of non-compliance with the directions of the section. Now, it is true that there are statutes which do not create an imper- - ative and positive duty to the public, but which only impose, as the result of non-compliance with the directions of the statute, a pecuniary loss on the individual who does not so comply. In such a case 1t is not the intention of the legislature to make the disobedience of the

law a misdemeanour; it is only the intention to provide that if the person does not coply with the directions of the statute he must submit to the penalty. In each case it is a question of the construction of the Act to see if that 1s what is meant,"

In my view having regard to the foregoing : consideration of the provisions of the Act the discernable intention of the legislature is that the provisions of s.i119(1) do not characterise a breach of an award in respect of which the Court is empowered to impose a penalty as for a criminal offence. This is a conclusion at variance with that of the Australian Industrial Court in Vehicle Builders'Employees! Federation of Australia v. General Motors-Holdens Pty. Ltd. (supra). It does accord hovever with the decisions of Keely J. in

Jarrad v. Melbourne and Metropolitan Tramways Board(1978) 21 A.L.R'

201 and with the views expressed by Cussen J. in Jones v. Lorne

Saw Mills Pty. Ltd. £19237 V.LR. 58 al pps 63-64 and

Jordan C.J. in Ex parte Australian Timber Workers' Union; Veneer Co. Ltd.(1936) 37 S.R. (N.S.W.) 52 at p.62 and with the

Full Court of the Supreme Court of Queensland in Newstead

Wharves & Stevedoring Company (Pty. )Ltd. v. Chamberlain /1954/

Q.S.R. 331 and with earlier decisions of the Commonwealth

Industrial Court see e.g. Parkinson v. Grazcos Co-operative Ltd.

(1958) 1 F.L.R. 90. In Vehicle Builders' Employees 'Federation of Australia v. General Motors - Holdens Pty. Ltd. (supra)

the Court was influenced to a considerable degree by judicial expressions in terms tending to support the decisions ultimately reached by it but made in proceedings in which

the actual matter now before this Court was not in issue.

The source of some of those judicial expressions gives them great weight but it remains true that they were made in contexts in which the narrow question before this Court was not under consideration. It has seemed to me that in the last resort it is to the indications in the Act itself that decisive significance must be given. It is this consideration which has induced me to enter upon the foregoing observations and compelled me to differ from the decision reached by the

Having regard to those observations and to the reasons expressed in the judgment of J.B. Sweeney J. referred to above I am of the opinion that the appeal before the Court is competent and that the Court should embark on the

J.B. SWEENEY J. This is an appeal from a decision and order

of Northrop J. dismissing a summons under the Conciliation

and arbitration Act, 1904 seeking the imposition of a penalty on the respondent for a breach of an award of the Commonwealth Conciliation and Arbitration Commission. On the appeal coming on for hearing, an objection was taken to the competence of the appeal. The claim was that the proceedings were criminal in nature and that consequently s.24 of the Federal Court of

The respondent relied upon the decision of this Court in

Thompson v. Mastertouch T.V. Service Pty. Limited 19 A.L.R. 547

as holding that an appeal in criminal matters which had resulted in an acquittal of the respondent did not lie to the Federal Court. The correctness of that decision was not questioned by counsel for the appellant who argued that the proceedings were

civil in nature and consequently an appeal did lie.

The question whether proceedings under s.119 attract the civil or criminal onus of proof has come before a single Judge of

this court twice and a full bench of the Australian Industrial Gourt on a number of occasions and has led to a marked division of opinion on the question whether such proceedings are criminal in nature. It was for that reason thought desirable that the

present appeal be heard before five Judges of this Court. With the concurrence of the parties, the question of the com~

petence of the appeal has been argued separately as a prelim-

Section 119 of the Commonwealth Conciliation and Arbitration Act was originally enacted as s.44 of the Commonwealth Conciliation and Arbitration Act, 1904. It provided:

"s.44(1) Where any organization or person bound by an order or award has committed any breach or non-observance of any term of the order or award any penalties which the Court has power to impose may be imposed by any Court of summary jurisdiction constituted by a Police Stipendiary or Special Magistrate.

(2) Any such penalty may be sued for and recovered by - {a) the Registrar; or . {(b) any organization which is affected, or

whose members or any of them are affected, by the breach or non-observance:- or

At that time the relevant Court, which was the Commonwealth Court of Conciliation and Arbitration, had power to impose penalties in an award. By Act No. 39 of 1918 sub+section (1) was repealed and the following sub-section was inserted in its place:

"Where any organization or person bound by an order or award has committed any breach or non-observance of any term of the order or award a penalty not exceeding -

(a) the maximum penalty fixed by the court for any breach or non-observance of any term of the order or award; or

(b) if no maximum penalty has been so fixed, the maximum penalty which the Court has power to fix therefor,

may be imposed by any District, County or Local Court

or Court of summary jurisdiction which is constituted

by a Judge or a Police, Stipendiary or Special Magistrate or by any State Court specified in that behalf by Proclamation,"

The section was further amended by adding to the persons entitled to sue under sub-s(2)any party to the award or order or an officer of an organization. This was dcne by Act No. 31 of 1920. In Act No. 18 of 1928, inspectors

appointed under the Act were added to those entitled to sue.

In Act No. 10 of 1947 s,44 became s.59 and in addition a new sub-section (3) was added in the following terms:

"Where, in any proceedings against an employer before a Court specified in sub-section (1) of this section, it appears to the Court that an employee of that employer has not been paid an amount to which he is entitled under an order or award, that Court may order that the employer shall pay to the employee the amount of the underpayment but no order shall be made in respect of so much of the underpayment as relates to any period more than twelve months prior to the commencement of the proceedings."

A minor amendment was made to the description of inspectors by Act No. 34 of 1952 and Act No. 44 of 1956 and by this Act s.59 became s.119. By Act No. 22 of 1965 a further change was made in the description of inspector and a new sub-section (4) added in the following terms:

months after the commission of the breach or non-observance," :

By Act No. 53 of 1970, s.119 was again amended and provision

made having the effect of limiting penalties where two or more

breaches of an award had been committed by the same organization.

By Act No. 37 of 1972 a change was made in the numbering of

By Act No. 138 of 1973 the period of time within which action was able to be taken either to recover a penalty or to have an order made for payment of wages was changed from twelve months to six years and certain consequential amendments were

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (464 paragraphs)