Plaintiff v First Defendant

Mr B Terzic, solicitor for the Labour Hire Licensing Authority

1 Between May and July 2023, the first defendant, Cameron Workforce Pty Ltd ('CWF'), provided labour hire services to businesses in the horticultural and wine industry. The first defendant engaged in the business of providing labour hire services notwithstanding it was not a licensed provider under the Labour Hire Licensing Act 2018 (Vic) ('Act'). The provision of labour hire services without a licence is a contravention of s 13 of the Act. The second defendant, Chamroeun (Cameron) Morm, and third defendant, Linna Chiem, aided and abetted the first defendant in its contravention of the Act.

2 The plaintiff, the Labour Hire Licensing Authority ('Authority'), and the defendants have reached an agreement as to the quantum of penalties to be paid by the defendants for their admitted contraventions of the Act. The first defendant has agreed to pay a penalty of $1.37 million. The second and third defendants have each agreed to pay a penalty of $65,000.

3 The principal issue for determination in the present proceeding is whether the agreed penalties are appropriate. Notwithstanding the agreement of the parties, I have determined that the penalties are not appropriate. The agreed penalties are greater than is necessary to achieve the object of specific and general deterrence, and fail to strike a reasonable balance between deterrence and oppressive severity. In lieu of the agreed penalties, the first defendant will be ordered to pay a pecuniary penalty of $200,000. The second defendant will be ordered to pay a pecuniary penalty of $15,000. The third defendant will be ordered to pay a pecuniary penalty of $40,000.

4 The facts relevant to this proceeding are the subject of a statement of agreed facts and admissions dated 14 October 2024 ('SOAF') and supplementary statement of agreed facts dated 14 January 2025 ('Supplementary SOAF'). The following summary of the factual background is taken from those statements.

5 The Authority was established by section 50(1) of the Act and is the regulator of labour hire services in Victoria.[1] CWF was registered on 6 March 2023.[2] Mr Morm and Ms Chiem are domestic partners.[3] Ms Chiem is the sole director of CWF.[4] She is also the registered proprietor of two properties: 148 Cowan Street, Benalla, Victoria ('Cowan Street') and 2 Exton Court, Benalla, Victoria.[5]

6 In the middle of 2022, Mr Morm was introduced to Guru Labour Hire Pty Ltd ('Guru') by members of the local Cambodian and Indian communities in Shepparton, Victoria, who worked in the horticultural and wine industry.[6] Guru was at the time a licensed provider of labour hire services in the horticultural and wine industry.[7]

7 Following the introduction, Mr Morm commenced a business relationship with Guru.[8] Mr Morm provided transportation and accommodation to Guru's workers, for which he charged each worker $100 per week.[9] Later, Mr Morm took on the role of a field supervisor for Guru's workers and engaged on behalf of Guru with horticultural businesses to whom Guru was supplying workers.[10]

8 In April 2023, a representative of Guru told Mr Morm that Mrs Patel, the director of Guru, was going overseas for a holiday. After this conversation, the defendants had no further contact or dealings with Guru.[11] Guru held a labour hire licence from 1 June 2021 until 24 April 2023, when it was cancelled at Guru's request.[12]

9 On 1 May 2023, Ms Chiem applied for a labour hire licence for CWF, identifying herself as its sole 'nominated officer'.[13] The application stated that CWF intended to conduct a labour hire business, but the business was not yet in operation.[14] Ms Chiem's application has not been approved by the Authority.[15] None of the defendants have ever held a labour hire licence granted under the Act.[16]

10 Prior to May 2023, four businesses had used labour hire services provided by Guru: Agri Workforce Pty Ltd ('Agri'), Aquila Audax Enterprises Pty Ltd ('Aquila'), Stanton & Killeen Pty Ltd ('S&K'), and Chambers Rosewood Pty Ltd ('Chambers Rosewood') (collectively, the 'Hosts').[17]

11 Mr Morm and Ms Chiem, on behalf of CWF, contacted Agri on 10 May 2023, Aquila on 4 June 2023, S&K on 8 June 2023, and Chambers Rosewood on 10 June 2023.[18] Mr Morm and Ms Chiem contacted the Hosts via email, sent from the email address 'cameronworkforce168@gmail.com' and which contained an email signature that included 'CAMERON WORKFORCE PTY LTD'.[19] The Hosts were told that payments for the provision of labour hire services were to be made from then on into CWF's bank account.[20]

12 Between May 2023 and July 2023, CWF conducted a business of supplying workers to the Hosts to perform horticultural work in Victoria.[21] The workers performed work as casual labourers in vineyards.[22] CWF employed the workers and was obliged to pay the workers.[23] There were, however, no written contracts between CWF and the workers.[24] Many of the workers employed and supplied by CWF were in Australia as part of the Pacific Australia Labour Mobility ('PALM') scheme. The workers were permitted to work in Australia under subclass 403 visas which were subject to conditions, including that the workers were required to be employed by an approved sponsor and could only work for another employer with the approval of the federal government. During the relevant period, CWF was not the approved sponsor of the workers, nor had the federal government provided approval for CWF to employ the workers.[25]

13 CWF received $35 per hour from the Hosts for the provision of workers, and paid the workers $25 per hour for all hours worked.[26] The workers were paid either by direct transfer from CWF's bank account or in cash withdrawn from that account.[27]

14 Mr Morm arranged for the supply of the workers to the Hosts, kept timesheets for the workers under his name "Cameron", made payments to the workers on behalf of CWF and acted as CWF's agent in dealing with the Hosts.[28]

15 CWF did not keep employee records.[29] Furthermore, the workers did not:

(a) receive superannuation contributions;

(b) have income tax withheld from their wages;

(c) receive pay slips; or

(d) authorise in writing for a $100 accommodation fee to be deducted from their wages.[30]

16 The defendants also provided accommodation for the workers at Cowan Street.[31] The workers were charged $100 per week for the accommodation, which was deducted from their wages.[32] Between May 2023 and July 2023, the Authority received a complaint regarding the accommodation at Cowan Street from one of the Hosts due to concerns about the workers' welfare.[33] Photographs of the accommodation at Cowan Street were taken by that host, and are attached to this judgment as Appendix 1. The Authority formed the view that the accommodation did not meet 'minimum accommodation standards' as defined in the Act and referred the matter to Benalla Rural Council.[34]

17 In May 2023, CWF supplied workers to Agri.[35] On any given day, five to ten workers were supplied over a four-week period.[36] Agri, who held a labour hire licence at the time, on-supplied those workers to work in and as part of the business or undertaking of various agricultural businesses.[37] There was no written contract between CWF and Agri.[38]

18 In June 2023, CWF supplied workers to Aquila.[39] On any given day, four to six workers were supplied over a four-week period.[40] The workers performed horticultural work in and as part of Aquila's business or undertaking.[41] There was no written contract between CWF and Aquila.[42]

19 In June and July 2023, CWF supplied workers to S&K.[43] On any given day, one or two workers were supplied over an eight-week period.[44] The workers performed horticultural work in and as part of S&K's business or undertaking.[45] There was no written contract between CWF and S&K.[46]

20 In June and July 2023, CWF supplied workers to Chambers Rosewood.[47] On any given day, one or two workers were supplied over an eight-week period.[48] The workers performed horticultural work in and as part of Chambers Rosewood's business or undertaking.[49] There was no written contract between CWF and Chambers Rosewood.[50]

21 Section 13 of the Act provides that a person must not provide labour hire services unless the person is the holder of a licence that is in force.[51] The meaning of the phrase 'provides labour hire services' is defined in section 7 of the Act as follows:

(1) A person (a provider) provides labour hire services if -

(a) in the course of conducting a business, the provider supplies one or more individuals to another person (a host) to perform work in and as part of a business or undertaking of the host; and

(b) the individuals are workers for the provider, within the meaning of section 9(1).

(2) For the purposes of subsection (1), a provider may provide labour hire services to a host regardless of the following -

(a) whether a contract has been entered into between the provider and the host;

(b) whether the individuals supplied by the provider are supplied -

(i) directly; or

(ii) indirectly through one or more intermediaries;

(c) whether the work performed is under the control of the provider or the host.[52]

22 Section 13 of the Act is a civil penalty provision.[53] Section 94(2) of the Act provides that the maximum penalty for a contravention of s 13 by a natural person is 800 penalty units.[54] The maximum penalty for a contravention by a body corporate is 3,200 penalty units.[55] Prior to 1 July 2023 the maximum penalty for a body corporate was $591,774. Post 1 July 2023 the maximum penalty was $615,392. Prior to 1 July 2023 the maximum penalty for a natural person was $147,936. Post 1 July 2023 the maximum penalty was $153,848.

23 Section 93(6)(b) of the Act provides that the Authority may apply to the Supreme Court of Victoria for an order in relation to an alleged contravention of a civil penalty provision for which the maximum penalty is more than 500 penalty units.[56] Section 93(5) of the Act provides that for the purposes of determining the amount of a pecuniary penalty the Court must have regard to:

(a) the nature and extent of the contravention; and

(b) the nature and extent of any loss or damage suffered as a result of the contravention; and

(c) the circumstances in which the contravention took place.[57]

24 The proceeding was commenced by writ with a general endorsement of claim filed on 3 August 2023. On 3 August 2023, the Authority filed a summons seeking a freezing order and an injunction to restrain the defendants from providing labour hire services. On 4 August 2023, Gray J made a freezing order against the first and third defendants. His Honour did not grant the ex parte injunction sought by the Authority to restrain the defendants from providing labour hire services.

25 On 7 August 2023, the Authority filed a further summons, which was served on the defendants, seeking an injunction to restrain them from providing labour hire services. On 11 August 2023, Gray J made orders by consent extending the freezing order and adjourning the Authority's summons of 7 August 2023 for hearing on 23 August 2023. On 23 August 2023, the defendants proffered an undertaking to the Court not to provide labour hire services without a licence. The second and third defendants also proffered an undertaking that they would not aid, abet or be knowingly concerned in the provision of labour hire services without a licence contrary to the provisions of the Act. The Court made orders for the filing and service of a statement of claim, defence and reply. On 6 October 2023, Ierodiaconou AsJ extended the dates for the filing of pleadings. On 9 October 2023, the Authority filed a statement of claim.

26 On 20 November 2023, the Court received signed minutes of consent orders. In 'Other Matters' the consent orders recorded the following:

The parties have begun without prejudice negotiations on a way to expeditiously dispose of this matter. These negotiations may dispense with the need for further pleadings, and, they render the directions hearing listed for 9:30am on 24 November 2023 unnecessary.

On 21 November 2023, the Court made orders by consent vacating the orders previously made which had specified the date for the filing of a defence and reply.

27 On 27 February 2024, the proceeding was referred to mediation. The mediation was conducted by Englefield JR without a resolution being achieved. On 10 May 2024, the Authority forwarded an email to my chambers. The email included the following:

This matter was the subject of a judicial mediation on 20 March 2024. While an agreed position was not reached on that day, the parties have continued to negotiate, and we remain hopeful of reaching an agreement.

Therefore, the parties seek the indulgence of the Court to keep the file in abeyance while talks continue. We will continue to keep you appraised as developments occur.

28 On 17 June 2024, the Authority, with the consent of the defendants, forwarded a further email to the Court, which included the following:

Regarding the abovementioned matter, on 10 May 2024, I sent you an email to inform the Court that the parties were optimistically moving towards a settlement.

I can report that there is now an agreement in principle which the parties hope will allow the Court to dispose of the matter fully, without contest.

The parties will now set themselves to preparing the documents required to give effect to the settlement, and they will be filed in due course.

29 On 22 October 2024, the Authority forwarded to the Court a minute of proposed consent orders with a timetable for the filing of an agreed statement of facts, outlines of submissions and affidavits on the question of penalty and costs. The proposed orders included an order that the question of penalty and costs be determined on the papers. On 23 October 2024, the Court made an order reflecting the parties' proposed timetable for the filing of an agreed statement of facts, outlines of submissions and affidavits. However, the Court did not make orders providing for the question of penalty and costs to be determined on the papers. Rather, paragraph 5 of the orders provided as follows:

Upon receipt of the Statement of Agreed Facts, outlines of submissions and affidavits the Court will inform the parties whether the question of penalty and costs will be determined on the papers or whether the matter will be listed for further hearing.

30 On 28 October 2024, the parties filed the SOAF. On 4 November 2024, the plaintiff filed submissions. On 19 November 2024, the defendants filed submissions and an affidavit. The Authority's outline of submissions annexed a proposed consent order under which CWF would be ordered to pay a penalty of $1,370,000 and each of the second and third defendants would be ordered to pay a penalty of $65,000.[58] In written submissions filed by the defendants on 19 November 2024 they confirmed that they consented to the proposed penalties.[59]

31 The proceeding was listed for mention on 28 November 2024. During this hearing, the Court informed the parties that it did not consider it appropriate to determine the question of penalty without a full hearing.[60] The Court raised a number of concerns regarding the adequacy of the affidavits and submissions which had been filed. In particular, the Court noted that no evidence had been filed in respect of any pecuniary loss or damage resulting from the defendants' contravening conduct.[61] The Court noted that the nature and extent of any loss or damage suffered as a result of a contravention is a mandatory consideration under s 93(5)(b) of the Act.[62] The parties were requested to confirm whether the Court should make a positive finding that no loss or damage had been suffered as a result of the contravention.[63]

32 The proceeding was listed for hearing on 10 February 2025. Prior to the hearing, the parties filed the Supplementary SOAF as well as further outlines of submissions. The defendants filed a further affidavit. In this affidavit, the second and third defendants deposed to their current personal and financial circumstances.[64] They also deposed to the income received by CWF flowing from the admitted contravening conduct.[65] The Authority and the defendants maintained their previous position that CWF should be ordered to pay a penalty of $1.37 million and each of the second and third defendants a penalty of $65,000.[66]

33 The Court can receive and, if appropriate, accept an agreed pecuniary penalty to be imposed in a civil penalty proceeding.[67] There is an important public policy involved in promoting predictability of outcome in civil penalty proceedings.[68] This policy consideration supports the Court receiving and, if appropriate, accepting an agreed pecuniary penalty to be imposed in a civil penalty proceeding. However, the Court is not bound by the quantum of penalty suggested by the parties. Rather, the Court must satisfy itself that the penalty submitted by the parties is appropriate.[69] In this regard, the Court asks itself whether the proposed penalty is an appropriate remedy rather than the appropriate remedy.[70]

34 Where a poorly resourced defendant is a party to a joint penalty submission, the Court 'should scrutinise the submission and supporting statement of facts with particular care to ensure, so far as possible, that the statement of facts [i]s accurate and the contravener's will ha[s] not been overborne'.[71]

35 In the present proceeding, there is no evidence that the defendants' agreement to the proposed penalties is a consequence of their collective will having been overborne by the Authority. However, it is plain that relative to the Authority, the defendants are poorly resourced. As set out later in this judgment, the evidence before the Court supports a finding that the second and third defendants are of limited financial means. In contrast, the Authority is a well-resourced agency of the State of Victoria. Further, the agreement pursuant to which the defendants agreed to the proposed penalties included a provision that the Authority would not seek any costs ordered against the defendants. I infer that a consideration which motivated the defendants to agree to the proposed penalties was their desire to avoid an adverse costs order. Having regard to the interlocutory applications in the proceeding, any costs order would be significant.

36 The Court carefully scrutinised the SOAF filed by the parties on 28 October 2024. When the matter was listed for mention on 28 November 2024, the Court noted that the SOAF did not address the nature and extent of any loss or damage suffered as a result of the admitted contraventions.[72] Further, the SOAF repeatedly used the phrase 'up to' a certain number of workers having been provided by CWF to the Hosts.[73] The Court directed the parties to provide more precise evidence as to the number of workers who were actually provided to the Hosts.[74] As set out later in this judgment, the Supplementary SOAF filed by the parties prior to the hearing on 10 February 2025 provided revised figures regarding the number of workers provided by CWF to the Hosts. In some instances, the revised figures were significantly less than the figures provided in the SOAF.

37 It is necessary for the Court to address the three mandatory considerations prescribed by s 93(5) of the Act:

(i) the nature and extent of the contravention;

(ii) the nature and extent of any loss or damage suffered as a result of the contravention; and

(iii) the circumstances in which the contravention took place.

38 CWF provided labour hire services to the Hosts between May and July 2023. The SOAF stated that CWF supplied 'up to 20 workers' per day to Agri in May 2023,[75] 'up to 10 workers' per day to Aquila in June 2023,[76] 'up to 10 workers' per day to S&K in June and July 2023,[77] and 'up to 10 workers' per day to Chambers Rosewood in June and July 2023.[78] The Supplementary SOAF revised these figures. The hearing on 10 February 2025 was conducted on the basis that in May 2023 CWF supplied five to 10 workers per day to Agri over a four-week period; in June 2023 CWF supplied four to six workers per day to Aquila over a four-week period; in June and July 2023 CWF supplied Chambers Rosewood with one or two workers per day over an eight-week period; and in June and July 2023 CWF supplied S&K with one or two workers per day over an eight-week period.[79]

39 The contravening conduct did not involve a significant number of workers. Further, between May and July 2023 CWF was not a significant player in the labour hire industry. Only the second and third defendants were involved in the day-to-day operation of the company.

40 On 1 May 2023, the third defendant made an application under the Act for CWF to be licensed to provide labour hire services. It is common ground that when the contravening conduct occurred, the defendants were aware of the operation of the Victorian labour hire licensing scheme, including the requirement for a person providing labour hire services to hold a licence under the Act. It is also common ground that prior to 10 May 2023 the Hosts had used Guru as a provider of labour hire services. The second defendant had worked for Guru as a field supervisor. Between May and July 2023, CWF provided labour hire services to the Hosts. It is common ground that these services were ostensibly provided by Guru, when in fact Guru had cancelled its labour hire licence in April 2023.

41 Counsel for the Authority submitted that the Court should infer that the defendants engaged in a deliberate scheme to mislead the Hosts into believing that labour hire services were being provided by Guru, when in fact they were being provided by CWF.[80] Counsel for the defendants disputed this contention and submitted that the evidence does not provide a basis for the Court to find that the defendants engaged in a scheme to deliberately mislead the Hosts into believing that labour hire services were being provided by Guru rather than CWF.[81]

42 I am not satisfied that there is a proper basis for finding that the defendants deliberately engaged in a scheme designed to mislead the Hosts into believing that labour hire services were being provided by Guru, when in fact the services were being provided by CWF. The Supplementary SOAF annexes emails which were sent to three of the Hosts (Aquila, S&K and Chambers Rosewood) by the second defendant which provided details of CWF's bank account into which payment for labour hire services were to be made by the Hosts.[82] Each of the emails are signed off as follows: 'CAMERON WORKFORCE PTY LTD'.

43 At face value, each of the three emails sent to the Hosts identified CWF as the source of the email and the recipient of payment for the services rendered. If the emails had been signed off under the name of "Guru Labour Hire Pty Ltd" this would support a finding that the defendants had engaged in a scheme to deliberately mislead the Hosts into believing that the labour hire services were being provided by Guru rather than CWF. However, the fact that the emails prominently identified CWF undermines a finding that the defendants deliberately engaged in a scheme to mislead the Hosts into believing that labour hire services were being provided by Guru rather than CWF.

44 The Authority could have led direct evidence from the Hosts that they were misled into believing that the labour hire services were being provided by Guru. In the absence of such evidence, I do not find the defendants engaged in a scheme designed to create a false impression that Guru was the provider of the labour hire services rather than CWF. Notwithstanding this finding, the contravention of the Act by the defendants was intentional. The defendants knew that in order to lawfully provide labour hire services it was necessary for CWF to be licensed under the Act. CWF provided labour hire services in circumstances where it and the second and third defendants knew that the provision of labour hire services without a licence was a contravention of the Act.

The nature and extent of the loss or damage suffered as a result of the contravention

45 It is common ground that the workers who were provided by CWF to the Hosts were entitled to be paid in accordance with the minimum entitlements prescribed in the Wine Industry Award 2020 ('Award').[83] The workers were paid $25 per hour. Prior to 1 July 2023, the workers were entitled to be paid $27.10 per hour, resulting in an underpayment of $2.10 per hour. Subsequent to 1 July 2023, the workers were entitled to be paid $28.66 per hour, resulting in an underpayment of $3.66 per hour.[84]

46 CWF received $35.00 per hour for each worker it provided to the Hosts. CWF did not make any superannuation contributions for workers in accordance with clause 21.2 of the Award. It is common ground that prior to 30 June 2023, the applicable rate was 10.5% of the minimum Award rate. After 30 June 2023, the applicable rate was 11%.

47 Neither party attempted to quantify the pecuniary loss flowing from CWF's non-compliance with the minimum rates prescribed by the Award, as well as the failure to make superannuation contributions. The unchallenged evidence of the defendants is that the income received by CWF in respect of the contravening conduct was $126,824.52.[85] This sum divided by an hourly rate of $35 equates to approximately 3,624 hours. Based on the $10 differential between the $25 which CWF paid the workers and the $35 it received from the Hosts, CWF made a net profit of approximately $36,240 as a result of its contravening conduct.

48 CWF received the following income from the Hosts:

(a) Agri made payments totalling $29,327.07 on 15 and 18 May 2023;

(b) Aquila made payments totalling $12,487.20 on 15 and 26 June 2023;

(c) S&K made payments totalling $40,055 on 15, 22, 29 June; 6, 7, 13, 20 and 27 July and 3 August 2023; and

(d) Chambers Rosewood made payments totalling $44,910.25 on 22 and 29 June and 13, 20 and 27 July and 4 August 2023.[86]

49 All of the income received from Agri and Aquila pre-dates 30 June 2023. Part of the income received from S&K and Chambers Rosewood pre-dates 30 June 2023. CWF underpaid its workers $2.10 per hour plus superannuation prior to 30 June 2023 and $3.66 per hour plus superannuation after 30 June 2023. Assuming an average underpayment of $3.00 per hour for 3,624 hours, the amount of the underpayment of wages is approximately $10,872. Assuming non-payment of superannuation contributions at the post-30 June 2023 rate of 11%, and assuming an average hourly rate of $28 x 3,624 hours ($101,472), the underpayment of superannuation contributions is approximately $11,162. It follows that, in total, the amount of underpayment of superannuation and minimum Award salary entitlements as a result of the contravening conduct is approximately $22,000.

50 The phrase 'loss or damage' in s 93(5)(b) of the Act is not limited to pecuniary loss or damage. The words 'loss or damage' have a broad ambit.[87] Loss or damage under s 93(5)(b) also includes non-pecuniary forms of damage.[88] The words 'nature' and 'extent' in s 93(5)(b) indicate that loss and damage is not confined to pecuniary loss or damage.[89]

51 Counsel for the Authority submitted that the workers provided to the Hosts by CWF lived in 'squalid' accommodation which constituted damage for the purposes of s 93(5)(b).[90] It is common ground that CWF deducted $100 per week from the wages paid to workers in return for which the workers were provided with accommodation at Cowan Street. The evidence does not establish how many workers were living at Cowan Street at any one time. There is a photograph of a bedroom at Cowan Street which was taken during the period May to July 2023 which displays three mattresses on the floor.[91] There are also photographs taken at the rear of the premises which show cooking equipment, a refrigerator, a washing up sink and a table covered in grocery shopping bags.[92] Counsel for the Authority submitted that the Court should conclude that the accommodation provided to the workers was squalid, evidencing exploitation of the workers by CWF.[93]

52 The photograph of a bedroom with three mattresses on the floor supports a finding that Cowan Street was overcrowded. It is not clear from the evidence how many workers were residing at the premises and whether other bedrooms were similarly overcrowded. I accept the Authority's submission that if the workers were residing in squalid conditions this would constitute loss or damage within the meaning of s 93(5)(b) of the Act. However, I do not accept that the evidence supports a finding that the accommodation was squalid. There is no evidence from any of the workers who were residing at the Cowan Property between May and July 2023. Save for the photograph of one bedroom, there are no other photographs of the interior of the premises. The evidence supports a finding that an indeterminate number of workers who were provided to the Hosts were living in overcrowded accommodation. However, the evidence does not support a finding that that accommodation was squalid.

53 The Authority also pointed to the following matters in aid of its submission that the workers suffered damage as a consequence of CWF's contravening conduct:

(a) pay slips were not given to the workers as required by s 536 of the Fair Work Act 2009 (Cth) ('FW Act');

(b) $100 for accommodation costs was deducted from the workers' wages without their written authorisation as required under s 324 of the FW Act;

(c) employee records were not kept as required under s 535 of the FW Act; and

(d) CWF failed to withhold income tax from the workers' wages as required by Schedule 1 of the Taxation Administration Act 1953 (Cth).[94]

54 I accept the Authority's submission that CWF's failure to comply with these legislative requirements supports a finding that it exploited the workers. CWF deliberately disregarded its statutory and Award obligations in respect of its employment of the workers. Its non-compliance with these obligations contributed to the profits which it generated from the provision of labour hire services in contravention of the Act.

Circumstances in which the contravention took place

55 It is common ground that the workers who were provided to the Hosts were international workers in Australia under the PALM scheme. The Authority submitted that '[t]hrough their engagement by Cameron Workforce, these workers' presence in Australia became unlawful, exacerbating their vulnerability.'[95] The SOAF includes the following:

Many of the workers provided by Cameron Workforce were in Australia as part of the Pacific Australia Labour Mobility (PALM) scheme (the PALM Workers). The PALM Workers were permitted to work in Australia under subclass 403 visas that were granted by the Australian Government to each of them (the Visas). The Visas were subject to conditions including that the PALM Workers were required to be employed by an approved sponsor, and could only work for another employer with the approval of the Australian Government. Cameron Workforce employed the PALM Workers in circumstances where it was not the approved sponsor and the Australian Government had not provided its approval. Accordingly, Cameron Workforce's employment of the PALM Workers was inconsistent with the conditions on the Visas.[96]

56 I accept the Authority's submission that CWF's employment of the workers was inconsistent with their visa requirement that they be employed by an approved sponsor. However, I do not accept the Authority's submission that the workers' presence in Australia became unlawful by reason of their employment with CWF. Counsel for the Authority submitted that prior to their employment with CWF, the workers had been employed by Guru, which was not itself an approved sponsor under the PALM scheme.[97] There is no evidence as to the identity of the approved sponsor for the workers when they first arrived in Australia. Nor is there any evidence as to what happened to the workers after their employment with CWF was terminated in July 2023. The evidence supports a finding that when the workers were engaged by Guru they were already non-compliant with their visa requirements because Guru was not an approved sponsor, and that this state of affairs continued whilst they were working for CWF.

Is the agreed penalty of $1.37 million an appropriate penalty?

57 In Australian Building and Construction Commissioner v Pattinson ('Pattinson'),[98] a majority of the High Court (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) stated:

Under the civil penalty regime provided by the [FW Act], the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the [FW Act] by the deterrence of further contraventions of the [FW Act].[99]

This statement was made in respect of the civil penalty regime under the FW Act. However, the statement is equally applicable to the civil penalty regime under the Act.

58 In Pattinson, Snaden J at first instance had imposed a penalty of $63,000 upon the respondent union. His Honour had been minded to fix the penalty at the statutory maximum of $63,000 for each of the two contraventions of the FW Act. However, because both contraventions had occurred in the course of a single episode, the penalty for each contravention was reduced by half, resulting in a single penalty reflecting the statutory maximum of $63,000. On appeal, the Full Court of the Federal Court set aside that penalty and in lieu thereof imposed a penalty of $40,000. The majority of the High Court upheld an appeal from the Full Court's judgment and orders.[100] In doing so, the majority rejected the notion that the imposition of a maximum penalty is to be reserved for only the most serious examples of offending:

Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed". That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.[101]

59 The majority concluded that the critical error underpinning the Full Court's judgment 'was that it was distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention.'[102] The majority considered that the Full Court's approach was 'apt to undermine the primacy of deterrence as the objective of the civil penalty regime in the [FW Act]'.[103] Nevertheless, the majority accepted that the penalty regime under the FW Act requires the Court 'to ensure that the penalty it imposes is "proportionate", where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity'.[104] An appropriate penalty is 'one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case'.[105]

60 The majority held that the Full Court erred in 'treating the statutory maximum as implicitly requiring that contraventions be graded on a scale of increasing seriousness, with the maximum to be reserved exclusively for the worst category of contravening conduct'.[106] The majority rejected the notion that the statutory maximum penalty has 'a role in a civil penalty context as some kind of graduated scale by which contraventions are to be categorised in order of seriousness and corresponding penalty'.[107]

61 The majority endorsed the following passage from the judgment of the Full Court of the Federal Court in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd ('Reckitt')[108] in respect of the relevance, in a civil penalty context, of a prescribed maximum penalty as a yardstick:

As Markarian makes clear, the maximum penalty, while important, is but one yardstick that ordinarily must be applied.

Care must be taken to ensure that the maximum penalty is not applied mechanically, instead of it being treated as one of a number of relevant factors, albeit an important one. Put another way, a contravention that is objectively in the mid-range of objective seriousness may not, for that reason alone, transpose into a penalty range somewhere in the middle between zero and the maximum penalty. Similarly, just because a contravention is towards either end of the spectrum of contraventions of its kind does not mean that the penalty must be towards the bottom or top of the range respectively. However, ordinarily there must be some reasonable relationship between the theoretical maximum and the final penalty imposed.[109]

62 The majority considered that the relationship of reasonableness between the theoretical maximum and the final penalty imposed 'may be established by reference to the circumstances of the contravenor as well as by the circumstances of the conduct involved in the contravention. That is so because either set of circumstances may have a bearing upon the extent of the need for deterrence in the penalty to be imposed.'[110]

63 CWF has no assets other than paid up shares of $1,000.[111] The third defendant is the sole director and shareholder of CWF.[112] CWF has $9,411.60 in a bank account which is the subject of a freezing order made in August 2023.[113]

64 The Authority accepts that in respect of CWF, 'specific deterrence is of little importance in this matter given the likelihood on the facts that a significant penalty on [CWF] would render it insolvent'.[114] Counsel accepted that for the purposes of specific deterrence, a penalty of $1.37 million is far in excess of what would be required to deter it from engaging in further contravening conduct because a penalty in excess of $100,000 would almost certainly result in the liquidation of the company.[115]

65 The Authority submits that the agreed penalty of $1.37 million is appropriate to promote compliance with the provisions of the Act by the deterrence of further contraventions of the Act by other participants in the labour hire industry. The Authority submits that contraventions of the Act in the horticultural industry warrant a strong response from the Court.[116] The Authority submits that the provision of labour hire services by unlicensed providers undermines a critical objective of the Act of ensuring that people who provide such services have been assessed for fitness and propriety by the Authority.[117] The Authority submits that these matters underscore the significance of general deterrence when determining the amount of a penalty to be imposed for a contravention of s 13 of the Act. The Authority submits that there is a need for participants in the labour hire industry to be aware that contravening the Act will not be worth it commercially.[118]

66 I accept these submissions. However, I do not accept that the agreed penalty of $1.37 million is 'no more than might be considered to be reasonably necessary to deter further contraventions of a like kind.'[119]

67 In Pattinson,[120] the High Court majority endorsed a passage from the judgment of the Full Court of the Federal Court in Reckitt which included the following statement:

If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation.[121]

68 The Authority's submission that industry participants should be made aware that it is not commercially worth it to contravene the Act is consistent with the reasoning in Reckitt. However, the agreed penalty of $1.37 million is disproportionate to what is necessary to achieve the object of general deterrence.

69 I have set out earlier in this judgment the evidence of the income which CWF derived from providing labour hire services in contravention of the Act between May and July 2023. The total amount of income was $126,824.52. The net profit from this income was approximately $36,240. An appropriate penalty should exceed the profit made by CWF as a consequence of its contravening conduct. The penalty should exceed the profit in an amount which has both specific and general deterrence value.[122]

70 In Tax Practitioners Board v Van Dyke,[123] the Federal Court considered the imposition of pecuniary penalties for numerous admitted contraventions of s 50-5(1) of the Tax Agent Services Act 2009 (Cth). Between 29 September 2019 and 11 July 2023, Mr Van Dyke contravened the Tax Agent Services Act 2009 (Cth) on 3,359 occasions by preparing and lodging 3,359 tax returns for taxpayers whilst not a registered tax agent. He received income of $1,658,000 from preparing the tax returns.[124] The total maximum penalty for the admitted contraventions was $186,823,000.[125] Abraham J assessed the appropriate penalty to be $1,800,000.[126] This penalty exceeded by $142,000 the $1,658,000 Mr Van Dyke received from preparing tax returns whilst not registered as a tax agent.

71 Significant profits can be made by unlicensed providers of labour hire services. An appropriate penalty is one which sends a clear signal to industry participants that there is no commercial benefit to be derived from being an unlicensed provider of labour hire services. In the circumstances of the present case, a penalty of $200,000 will deter prospective and current industry participants from providing labour hire services without a licence. This penalty exceeds the income received by CWF from the provision of labour hire services whilst unlicensed. The consequence of the penalty is that CWF will derive no commercial benefit from its contravening conduct. A penalty of $200,000 strikes a balance between deterrence and oppressive severity. The contraventions by CWF which are the subject of the present proceeding are the first occasion it has breached the Act. CWF cooperated with the Authority by making admissions. The penalty will almost certainly result in the company going into liquidation.

72 There is a significant difference between the agreed penalty of $1.37 million and $200,000, which I consider to be an appropriate penalty. I shall therefore address in some detail the reasons for my conclusion that the agreed penalty of $1.37 million is not an appropriate penalty.

73 The agreed penalty of $1.37 million is based upon four separate penalties of $342,500 for four separate contraventions of s 13 arising from the provision of labour hire services to each of Agri, Aquila, S&K and Chambers Rosewood.[127] The parties have treated the contraventions arising from the provision of labour hire services to each of the four hosts as warranting identical penalties. However, it is clear that there were differences in the nature and extent of the contraventions. In particular, there were differences in the number of workers provided to the Hosts by CWF. This in turn resulted in differences in the nature and extent of loss and damage suffered as a consequence of the contraventions. I do not accept that the four separate contraventions of the Act warrant identical penalties.

74 The provision of labour hire services to each of the four hosts constituted separate breaches of the Act. Nevertheless, the contraventions were the product of an unlicensed business operation designed to make a profit.[128] Whether the contraventions should be treated as a single course of conduct is 'fact specific having regard to all of the circumstances of the case.'[129] The course of conduct principle applies where the offences are part of a series and 'it is necessary to ensure that the punishment is for "the entirety of the criminal conduct of the same or similar character, rather than the several acts or omissions constituting the separate offences".'[130]

75 A key element of CWF's contravening conduct was its status as an unlicensed provider of labour hire services. There is a significant factual overlap in the four contraventions. Further, the four contraventions occurred within a three month period between May and July 2023. It is appropriate to treat the contraventions as a single course of conduct.

76 The penalty of $1.37 million represents 57.9% of the maximum penalty which could be imposed for four separate contraventions of s 13.[131] Counsel for the Authority submitted that 'a penalty just over the midpoint of the applicable maximum is not, in my submission, reasonably to be viewed as excessive. It is an appropriate penalty for what I would characterise as very grave and serious conduct; and conduct which should be the subject of a penalty as proposed.'[132]

77 Counsel for the Authority submitted that the agreed penalty of $1.37 million, being 57.9% of the statutory maximum, could not reasonably be viewed as excessive. I do not accept this submission. The maximum penalty is 'but one yardstick that ordinarily must be applied' and must be treated as 'one of a number of relevant factors.'[133] The maximum penalty does not constrain the exercise of the Court's discretion beyond requiring some 'reasonable relationship between the theoretical maximum and the final penalty imposed.'[134] The relationship of reasonableness 'may be established by reference to the circumstances of the contravenor as well as by the circumstances of the conduct involved in the contravention.'[135]

78 I accept that the maximum penalty for a contravention of s 13 is one of a number of factors which must be considered when determining whether the agreed penalty of $1.37 million is appropriate. In Pattinson, the majority of the High Court rejected the notion that, in a civil penalty context, a statutory maximum penalty has a role 'as some kind of graduated scale by which contraventions are to be categorised in order of seriousness and corresponding penalty'.[136] The maximum penalty for a contravention of s 13 is one of a number of relevant factors which must be weighed against other relevant factors, including the mandatory considerations prescribed by s 93(5) of the Act. The appropriate penalty depends upon the facts and circumstances of the particular case. Having regard to the facts and circumstances of the present case, a penalty which equates with 57.9% of the maximum penalty is not an appropriate penalty.

79 In support of its contention that the agreed penalty is appropriate, the Authority relied upon two judgments of Ierodiaconou AsJ: Labour Hire Licensing Authority v UNG Services Pty Ltd ('UNG Services')[137] and Labour Hire Licensing Authority v A L Star Express Pty Ltd ('A L Star Express')[138]. In UNG Services, Ierodiaconou AsJ imposed penalties totalling $386,742.72 against the corporate defendant for breaches of ss 43 and 44 of the Act.[139] In A L Star Express, Ierodiaconou AsJ imposed a penalty of $617,916 against the corporate defendant for a contravention of s 13 of the Act.[140]

80 The judgments in both UNG Services and A L Star Express were default judgments in default of appearance. In both proceedings there was no evidence as to the nature and extent of any loss or damage suffered as a result of the contraventions. Further, there does not appear to have been any evidence as to the income and/or profit received by the corporate defendants as a consequence of their contravening conduct. These are significant distinguishing features from the present proceeding, where the Court has received detailed evidence as to the loss and damage resulting from the contravening conduct and the income and profit attributable to the contravening conduct.

81 The penalties imposed by the Court in UNG Services and A L Star Express do not constitute a benchmark for what is an appropriate penalty in the present proceeding. Rather, the appropriate penalty in the present proceeding depends upon the facts and circumstances of the present case.

82 The principle of totality is applied in relation to civil penalties to ensure that the penalty is proportionate to the gravity of the contravention and is just and appropriate.[141] The principle requires the Court to make a 'final check' of the penalty to be imposed.[142] A penalty of $200,000 is proportionate to the gravity of CWF's contravening conduct and is just and appropriate.

83 The Authority and the second and third defendants have agreed that the Court should impose a pecuniary penalty of $65,000 on each of the second and third defendants. The second and third defendants admit they contravened s 13 by virtue of ss 95(1)(a) and 95(1)(c) of the Act, which provide that a person must not:

(a) aid, abet, counsel or procure a contravention of a civil penalty provision; or

(b) be in any way directly or indirectly knowingly concerned in, or party to, a contravention of a civil penalty provision.[143]

84 In Giorgianni v The Queen ('Giorgianni')[144], the High Court held that to have aided, abetted, counselled or procured the offence of culpable driving a person must have intentionally participated in that offence, and to have done so, must have had knowledge of the essential matters which went to make up the offence. After surveying a number of authorities, Gibbs CJ summarised the law as follows:

No one may be convicted of aiding, abetting, counselling or procuring the commission of an offence unless, knowing all the essential facts which made what was done a crime, he intentionally aided, abetted, counselled or procured the acts of the principal offender. Wilful blindness ... is treated as equivalent to knowledge but neither negligence nor recklessness is sufficient.[145]

[T]he absence of intention as an element of the substantive offence has not been regarded as obviating the necessity for knowledge on the part of the secondary party of the essential facts constituting the offence. The "link in purpose" between the secondary party and the principal offender is not established where a person does something to bring about, or render more likely, the commission of an offence by another in circumstances in which, through ignorance of the facts, it appears to him to be an innocent act.[146]

[T]he offences of aiding and abetting and counselling and procuring ... require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law. The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it. ... Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts.[147]

87 In this context, knowledge means actual and not constructive knowledge.[148] However, where there is a combination of suspicious circumstances and a failure to make inquiry, it may be possible to infer knowledge of the relevant essential matters where it is the only rational inference available.[149]

88 In Yorke v Lucas ('Yorke'),[150] the High Court applied the principles in Giorgianni in the context of section 75B of the Trade Practices Act 1974 (Cth) ('TPA'), which provided that a reference to a person involved in a contravention shall be read as a reference to a person who:

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention.

89 In Yorke, Ross Lucas Pty Ltd was alleged to have contravened s 52 of the TPA, which prohibited a corporation from, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Lucas, the managing director of the company, was alleged to have been involved in the contravention. Mason ACJ, Wilson, Deane and Dawson JJ held that s 75B(a) of the TPA imports the requirements of the criminal law, and that:

[A] person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if he intentionally participates in it. To form the requisite intent he must have knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime.[151]

90 Accordingly, it was held that Lucas had not aided, abetted, counselled or procured the contravention by the company as he lacked the knowledge necessary to form the required intent. Whilst Lucas had made false representations about the company's turnover and profit, he had no knowledge that they were false.[152]

91 In Yorke, the High Court said of the 'party to' limb of s 75B(c) of the TPA:

[A] person could only properly be said to be "party to" a "contravention" if his participation was in the context of knowledge of the essential facts constituting the particular contravention in question. ... the proper construction of par. (c) requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention.[153]

That is, a party to a contravention is a person who is aware of the elements constituting the contravention, and who participates in, or assents to, the contravention in question.[154]

92 The High Court said of the 'knowingly concerned' limb '[t]here can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention.'[155] The required knowledge, absent wilful blindness, is actual knowledge.[156]

93 Recently, the High Court in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission[157] affirmed the above principles. In that case, an action was brought against the director of a company on the basis that he was knowingly concerned in or party to the company having engaged in unconscionable conduct in contravention of s 21 of the Australian Consumer Law ('ACL'). The High Court held that for a person to be knowingly concerned in a contravention of s 21 of the ACL, it is necessary only to prove that they knew the essential matters that together made up the contravention. It is not necessary to prove the person knew the conduct could or would be characterised as unconscionable conduct.[158] The distinction is 'between the essential matters constituting the contravention (be they facts, circumstances, or states of mind) and the character, quality, nature, or status of those matters for the purpose of the characterisation of the conduct the statute requires. For accessorial liability, knowledge of the former is required but knowledge of the latter is not.'[159]

94 In addition, there must also be a practical connection between the person said to be knowingly concerned and the contravention. The expression 'concerned in' requires conduct, by act or omission, which implicates or involves the alleged accessory in the offence or shows a practical connection between the accessory and the contravention.[160] The mere circumstance that a person is a director of a company that engages in contravening conduct is insufficient to establish that he or she is a person involved in the contravention.[161] As the Full Court of the Supreme Court of Western Australia stated in Ashbury v Reid:[162]

The question which a Court should ask itself ... is whether on the facts it can reasonably be said that the act ... shown to have been done ... by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connection between him and the offence.[163]

95 The essential matters constituting a contravention depend upon the terms of the provision that has been contravened.[164] Section 13 of the Act prohibits a person from providing labour hire services unless they hold a licence that is in force. In order to establish that the second and third defendants aided, abetted, counselled or procured a contravention of s 13, it must be established that they knew:

(a) the provision of workers by CWF constituted the provision of labour hire services regulated by the Act; and

(b) CWF did not hold the required licence to provide labour hire services.

The evidence clearly establishes both of these matters. Consequently, the second and third defendants have breached s 13 of the Act.

96 The $65,000 agreed penalty is based upon four penalties of $16,250 for four separate contraventions of s 13 constituted by the provision of labour hire services without a licence to Agri, Aquila, S&K and Chambers Rosewood.[165] For the reasons set out above in respect of the four separate penalties of $342,500, the four separate contraventions of s 13 by the second and third defendants do not warrant the imposition of identical penalties of $16,250 for each contravention.

97 In determining whether the agreed penalties are appropriate, it is necessary to address the question of whether the second and third defendants' breaches of s 13 should be treated as a single course of conduct. Whether the four separate contraventions should be treated as a single course of conduct 'is fact specific having regard to all the circumstances of a case.'[166] Each of the four contraventions have the common element of CWF providing labour hire services whilst it was unlicensed. The accessorial liability of the second and third defendants is based upon their knowledge that the labour hire services were being provided by CWF when it was not licensed and that it was unlawful for it to do so. Treating the contraventions as a single course of conduct does not convert the four separate contraventions into one contravention. Rather, the Court imposes one penalty rather than four separate penalties.

98 The personal and financial circumstances of the second and third defendants are not in dispute. The second and third defendants are married.[167] The second defendant has had polio since the age of six.[168] He walks with a heavy limp and cannot walk far.[169] He is currently unemployed and is in receipt of a Centrelink disability payment of $450 per week.[170] His mental and physical health has suffered since CWF ceased conducting a labour hire business.[171] He currently has a serious heart condition which has necessitated four hospital emergency admissions.[172]

99 The third defendant is presently employed at a food outlet in Benalla, earning on average $600 per week.[173] The third defendant wishes to relocate to Newcastle in New South Wales with the second defendant and complete a Certificate in Aged Care.[174]

100 The second defendant has no assets.[175] The third defendant is the registered proprietor of two properties in Benalla which are mortgaged to the Commonwealth Bank of Australia.[176] The properties have been valued by a real estate agent in Benalla at $780,000 and $525,000 respectively.[177] The two mortgages against these properties total approximately $895,000, resulting in a net equity in the properties of approximately $407,000.[178]

101 The principles set out earlier in this judgment in respect of the Court's acceptance of an agreed penalty of $1.37 million for CWF apply equally to the agreed penalty of $65,000 for each of the second and third defendants. The Court is not bound by the figure suggested by the parties. Rather, the Court must address the question of whether the suggested penalty is an appropriate amount.[179]

102 Until 30 June 2023, the maximum penalty for an individual who contravenes s 13 was $147,936. Post 1 July 2023, the maximum penalty was $153,848. The agreed penalty of $65,000 equates to 11% of the pre-30 June 2023 maximum and 10.6% of the post 1 July 2023 maximum.[180] As a percentage of the maximum penalty, the agreed penalty of $65,000 is significantly less than the agreed penalty of $1.37 million in respect of CWF. The maximum penalty is an important relevant consideration. However, it must be balanced against other considerations. These include the matters prescribed by s 93(5) and the need for specific and general deterrence.

103 The findings I have made in respect of the matters prescribed by ss 93(5)(a) to (c) apply with equal force for the purpose of determining the quantum of any penalty to be imposed upon the second and third defendants. In addition to those matters, it is necessary to have regard to the importance of imposing a penalty which will specifically deter the second and third defendants from contravening the Act in the future. Further, considerations of general deterrence are relevant to any penalty imposed upon the second and third defendants. Any penalty should act as a deterrent for any individuals who have the capacity to aid and abet the contravention of the Act by a corporation.

104 The unchallenged evidence of the second and third defendants, which I accept, is that they have no intention of ever working in the labour hire industry again.[181] The agreed penalties of $65,000 exceed that which is necessary to deter the second and third defendants contravening the Act in the future. Further, the second defendant has no assets. His sole source of income is a disability pension. The proposed penalty of $65,000 for the second defendant does not strike a reasonable balance between deterrence and oppressive severity. A penalty of $15,000 will impose a very significant financial burden upon the second defendant and meets the object of specific and general deterrence.

105 The third defendant's financial position is much stronger than that of the second defendant. The third defendant has equity of approximately $407,000 in two properties located in Benalla and has sufficient financial resources to pay a penalty of $65,000. However, the fact that the third defendant has capacity to pay does not, of itself, support a finding that the penalty of $65,000 is appropriate. A penalty of $65,000 exceeds that which is necessary to achieve specific deterrence. I accept the third defendant's evidence that she has no intention of working in the labour hire industry in the future.

106 Any penalty imposed upon the third defendant must deter other individuals who are officers and/or employees of corporations providing labour hire services who have a capacity to aid and abet a contravention of the Act. Earlier in this judgment, I have recorded a finding that CWF made a net profit of approximately $36,240 from its contravening conduct. I infer that, as the sole director and shareholder of CWF, the third defendant benefitted financially from the profit generated by CWF's contravening conduct. A penalty which exceeds the profit from CWF's contravening conduct will deter other officers and employees of corporations from aiding and abetting corporations to provide labour hire services whilst unlicensed. Such a penalty sends a clear message to industry participants that there is no financial benefit to be derived from engaging in conduct which contravenes the Act.

107 The penalty to be imposed upon the third defendant should not exceed that which is necessary to achieve the object of specific and general deterrence. A penalty of $40,000 will achieve this object. Although the third defendant agreed to pay a penalty of $65,000, I do not consider this to be an appropriate penalty.

108 The Court will order CWF to pay a penalty of $200,000. The second defendant will be ordered to pay a penalty of $15,000. The third defendant will be ordered to pay a penalty of $40,000.

109 The parties consent to the Court granting declarations which record its findings that the defendants have contravened s 13 of the Act. I accept that there is utility in the grant of declaratory relief and shall make declarations in the terms proposed by the parties. It is an agreed matter that there be no order as to the costs of the proceeding. It is also an agreed matter that the freezing order made by Gray J on 4 August 2023, as varied and extended on 11 August 2023, is to be vacated 42 days from the date of the orders giving effect to this judgment. However, the difficulty with this agreed position is that it would have the effect of preventing the first and third defendants from accessing funds to comply with the orders requiring them to pay penalties within 28 days of the date of this judgment. Accordingly, the freezing order of Gray J will be set aside forthwith. The parties also agree that the second and third defendants should be released from the undertakings which they proffered to the Court on 23 August 2023. Orders will be made which give effect to this agreement.

[1] Statement of Agreed Facts and Admissions dated 14 October 2024 at [1] ('SOAF').

[2] Supplementary Statement of Agreed Facts dated 14 January 2025 at [6(e)] ('Supplementary SOAF').

[4] SOAF at [7(b)]. See also Further Affidavit of Second and Third Defendant dated 7 February 2025 at [17].

[5] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [12].

[12] SOAF at [16]; Supplementary SOAF at [6(h)].

[13] SOAF at [9]; Supplementary SOAF at [6(i)].

[21] SOAF at [13], [19], [25], [31].

[23] SOAF at [46]; Supplementary SOAF at [11].

[24] Supplementary SOAF at [10(e)-(f)].

[26] Supplementary SOAF at [22], [25].

[32] Supplementary SOAF at [6(k)(vi)].

[38] Supplementary SOAF at [10(a)-(b)].

[42] Supplementary SOAF at [10(a)-(b)].

[46] Supplementary SOAF at [10(a)-(b)].

[50] Supplementary SOAF at [10(a)-(b)].

[51] Labour Hire Licensing Act 2018 (Vic) s 13.

[52] Ibid s 7.

[53] Ibid ss 94(1), 94(2) item 1.

[54] Ibid s 94(2) item 1.

[56] Ibid s 93(6)(b).

[57] Ibid s 93(5).

[58] Plaintiff's Outline of Submissions dated 4 November 2024 at Schedule 1 [13]-[15].

[59] Defendants' Outline of Submissions dated 17 November 2024 at [30].

[60] Transcript of proceeding on 28 November 2024 T 1 L 17 - 18.

[63] Ibid T 2 L 29 - T 3 L 1, T 3 L 28 - T 4 L 1.

[64] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [2]-[7], [10]-[18].

[66] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [61]; Defendants' Outline of Submissions dated 6 February 2025 at [3].

[67] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCA 46; (2015) 258 CLR 482 at 507 [57] ('Fair Work Building Industry Inspectorate').

[71] Ibid at 497-498 [31]; Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] ATPR 41-993 at 48,628-48,629 [63].

[72] Transcript of proceeding on 28 November 2024 T 2 L 26-27, T 3 L 28-30.

[73] See SOAF at [13], [19], [25], [31].

[74] Transcript of proceeding on 28 November 2024 T 2 L 20-25.

[80] Transcript of proceedings on 10 February 2025 T 14 L 14-17.

[82] Supplementary SOAF at Attachments B, C, D. An email was also sent to the host Agri by the third defendant stating 'I would like to inform you that [] I change Bank account to NAB', however it did not contain details of the bank account: see Attachment A.

[85] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [8].

[87] Brabazon v Western Mail Ltd [1985] FCA 76; (1985) 8 FCR 122 at 129; Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494 at 547 [149].

[88] Cf Demagogue v Ramensky [1992] FCA 557; (1992) 39 FCR 31 at 33 (Black CJ), 44 (Gummow J), 47 (Cooper J).

[89] Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; (2017) 258 FCR 312 at 459 [500].

[90] Transcript of proceedings on 10 February 2025 T 18 L 20 - T 19 L 2.

[93] Transcript of proceedings on 10 February 2025 T 22 L 5-8.

[94] Transcript of proceedings on 10 February 2025 T 16 L 5-10, T 17 L 12-14, T 67 L 9-15.

[95] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [94].

[97] Transcript of proceedings on 10 February 2025 T 40 L 12-14, T 41 L 1-2.

[98] [2022] HCA 13; (2022) 274 CLR 450 ('Pattinson').

[100] Edelman J allowed the appeal in part: ibid at 493 [125].

[108] (2016) 340 ALR 25 at 63 [155]-[156] ('Reckitt').

[111] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [17].

[113] Affidavit of Defendants dated 19 November 2024 at [10].

[114] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [77].

[115] Transcript of proceedings on 10 February 2025 T 35 L 9-17.

[116] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [72].

[122] Tax Practitioners Board v Van Stroe (No 2) [2023] FCA 1533 at [41]; Tax Practitioners Board v Van Dyke [2024] FCA 899 at [76].

[123] [2024] FCA 899 ('Van Dyke').

[127] Transcript of proceedings on 10 February 2025 T 38 L 25-28. See also Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [63].

[129] Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302 at 314 [51].

[130] Pattinson at 484 [96] (Edelman J), quoting Ryan v The Queen [1982] HCA 30; (1982) 149 CLR 1 at 22.

[131] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [63].

[132] Transcript of proceedings on 10 February 2025 T 39 L 5-10.

[133] Reckitt at [155]; Pattinson at 472 [54].

[137] [2002] VSC 740 ('UNG Services').

[138] [2023] VSC 711 ('A L Star Express').

[141] Pattinson at 483 [94] (Edelman J).

[142] Australian Competition and Consumer Commission v Qantas Airways Ltd [2024] FCA 1219 at [104] ('Qantas').

[143] Labour Hire Licensing Act 2018 (Vic) ss 95(1)(a), 95(1)(c).

[144] [1985] HCA 29; (1985) 156 CLR 473 ('Giorgianni').

[149] Pereira v Director of Public Prosecutions (1988) 63 ALJR 1, 3.

[150] (1985) 158 CLR 661 ('Yorke').

[154] Yorke v Lucas [1983] FCA 230; (1983) 80 FLR 143 at 153.

[156] Ibid; Australian Competition and Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 at [133]-[135].

[157] [2024] HCA 27; (2024) 419 ALR 30.

[158] Ibid at 54-55 (Gageler CJ and Jagot J), 72 (Gordon J), 97-98 (Edelman J), 123 (Beech-Jones J).

[159] Ibid at 54-55 (Gageler CJ and Jagot J).

[160] Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588 at 596-597 [34].

[161] Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052; (2006) 59 ACSR 373 at 395.

[162] [1961] WAR 49

[164] Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1 at 62 [253].

[165] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [64].

[167] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [1].

[179] Fair Work Building Inspectorate at 504 [48].

[180] Plaintiff's Outline of Submissions in Support of Final Orders dated 4 February 2025 at [64].

[181] Further Affidavit of Second and Third Defendant dated 7 February 2025 at [6].