Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith

• Jurisdiction: Australia Federal only
• Judgment Date: 20 February 2008
• Neutral Citation: [2008] FCAFC 8
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

INDUSTRIAL LAW – award – breach – penalty – breaches of three awards – breaches of several terms of each award – breaches in relation to several employees – after application of course of conduct provision, 22 contraventions, falling into 11 categories – whether aggregate of penalties imposed by magistrate excessive – application of totality principle

Conciliation and Arbitration Act 1904 (Cth) s 119(1D)(a)(i) (repealed)

Crimes Act 1914 (Cth) s 4AA(1)

Industrial Relations Act 1988 (Cth) s 178(4)(a)(ii) (repealed)

Industrial Relations Reform Act 1993 (Cth) (repealed)

Trade Practices Act 1974 (Cth)

Workplace Relations Act 1996 (Cth) ss 4(1), 178(1) (repealed), 178(2) (repealed), 178(4) (repealed), 178(6) (repealed), 179A(1) (repealed), 719(4)(b)

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 approved

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Limited (No. 4) [2006] FCA 21 [2006] ATPR 42-101

Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714 (1999) 94 IR 231 cited

Construction, Forestry, Mining and Energy Union v Hamberger [2003] FCAFC 38 (2003) 127 FCR 309 cited

CPSU, The Community and Public Sector Union v Telstra Corporation Ltd [2001] FCA 1364 (2001) 108 IR 228 considered

Dinsdale v R [2000] HCA 54 (2000) 202 CLR 321 cited

Flattery v The Italian Eatery T/as Zeffirelli’s Pizza Restaurant [2007] FMCA 9 cited

Hadgkiss v Sunland Construction (Qld) Pty Ltd [2006] FCA 1566 cited

House v R (1936) 55 CLR 499 followed

Johnson v R [2004] HCA 15 (2004) 205 ALR 346 cited

Kelly v Fitzpatrick [2007] FCA 1080 (2007) 166 IR 14 cited

Markarian v R [2005] HCA 25 (2005) 228 CLR 357 discussed

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 cited

Mill v R (1988) 166 CLR 59 cited

McDonald v R (1994) 48 FCR 555 cited

NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 followed

Pearce v R [1998] HCA 57 (1998) 194 CLR 610 cited

Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 (2007) 158 FCR 543 cited

Textile Clothing & Footwear Union of Australia v Lotus Cove Pty Ltd [2004] FCA 43 cited

Trade Practices Commission v CSR Limited [1991] ATPR 41-076 cited

Veen v R (No. 2) (1988) 164 CLR 465 cited

Wong v R [2001] HCA 64 (2001) 207 CLR 584 cited

AUSTRALIAN OPHTHALMIC SUPPLIES PTY LTD (ACN 005 419 107) v LYNDA MCALARY-SMITH (AN INSPECTOR PURSUANT TO SECTION 84(2) OF THE WORKPLACE RELATIONS ACT 1996)

VID 481 OF 2007

GRAY, GRAHAM AND BUCHANAN JJ

20 FEBRUARY 2008

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 481 OF 2007

ON APPEAL FROM THE INDUSTRIAL DIVISION OF THE MAGISTRATES’ COURT OF VICTORIA

BETWEEN:	AUSTRALIAN OPHTHALMIC SUPPLIES PTY LTD (ACN 005 419 107) Appellant
AND:	LYNDA MCALARY-SMITH (AN INSPECTOR PURSUANT TO SECTION 84(2) OF THE WORKPLACE RELATIONS ACT 1996) Respondent

JUDGES:	GRAY, GRAHAM AND BUCHANAN JJ
DATE OF ORDER:	20 FEBRUARY 2008
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The orders made on 20 February 2008 be set aside, pursuant to O 35 r 7(1) of the Federal Court Rules.

2. There be substituted for the orders made on 20 February 2008 orders in the following terms:

1. The appeal be allowed.

2. The orders made by the Magistrates’ Court of Victoria at Melbourne, Industrial Division, on 19 April 2007 be set aside.

3. There be substituted for the orders made by the Magistrates’ Court of Victoria at Melbourne, Industrial Division, on 19 April 2007 orders in the following terms:

1. Pursuant to s 178 of the Workplace Relations Act 1996 (Cth), penalties totalling $66,000 be imposed upon the appellant for a total of 22 breaches of the Shop, Distributive and Allied Employees’ Association – Victorian Shops Interim (Roping-In No. 1) Award 2003; the Shop, Distributive and Allied Employees’ Association – Victorian Shops Interim Award 2000; and the National Training Wage Award 2000.

2. Payment of the penalties be made within 14 days to Consolidated Revenue.

_________________________

JUSTICE GRAY

_________________________

JUSTICE GRAHAM

__________________________

JUSTICE BUCHANAN

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 481 OF 2007

ON APPEAL FROM THE INDUSTRIAL DIVISION OF THE MAGISTRATES' COURT OF VICTORIA

BETWEEN:	AUSTRALIAN OPHTHALMIC SUPPLIES PTY LTD (ACN 005 419 107) Appellant
AND:	LYNDA MCALARY-SMITH (AN INSPECTOR PURSUANT TO SECTION 84(2) OF THE WORKPLACE RELATIONS ACT 1996) Respondent

JUDGES:	GRAY, GRAHAM AND BUCHANAN JJ
DATE:	20 FEBRUARY 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

GRAY J: The nature and history of the proceeding

1 This appeal is concerned with the application of the principle of totality, or proportionality, to civil penalties imposed on the appellant pursuant to s 178 (now repealed and replaced by s 719) of the Workplace Relations Act 1996 (Cth) (“the WR Act”) in respect of contraventions of Awards. The appeal is from a judgment of the Magistrates’ Court of Victoria at Melbourne, Industrial Division, given on 19 April 2007. The learned magistrate ordered the appellant to pay a total of $88,000 into Consolidated Revenue. The contraventions were found to have occurred during the period from 27 February 2003 to 6 May 2004, in respect of a number of employees of the appellant.

2 The appellant is a corporation, trading under the name “Merringtons”, as a retailer of optometric and ophthalmic services at over 50 outlets throughout Australia. Its business has been in operation for more than a century.

3 In September 2003, the then Department of Employment and Workplace Relations gave notice to the appellant concerning its award obligations. On 12 December 2005, the respondent, an inspector appointed pursuant to s 84(2) of the WR Act, filed in the Industrial Division of the Magistrates’ Court of Victoria at Melbourne a complaint against the appellant. The complaint alleged a number of contraventions of the Shop, Distributive and Allied Employees’ Association – Victorian Shops Interim (Roping-In No. 1) Award 2003, the Shop, Distributive and Allied Employees’ Association – Victorian Shops Interim Award 2000 and the National Training Wage Award 2000, all Awards made under the WR Act, in respect of several employees of the appellant. The appellant filed a written response on 9 February 2006, and further and better particulars of that response on 26 April 2006. Among other things, the appellant denied that the Awards the subject of the complaint applied to the employees concerned, and contended that the correct applicable industrial instrument was the Manufacturing Industry Sector Minimum Wage Order – Victoria 1997, and that pursuant to that industrial instrument there had been no underpayment. Directions were made that the parties file affidavit material prior to the hearing of the case. The appellant did not file any affidavit material.

4 On the day of the hearing of the complaint, counsel for the appellant informed the court that the appellant would not contest the allegations made against it, but would not consent to the orders sought by the respondent. The effect of this was to put the respondent to proof of every element of the complaint. The matter proceeded before the magistrate in this manner.

5 On 16 October 2006, the magistrate found that all of the elements of the complaint had been proved. Her Honour made orders pursuant to s 178(6) of the WR Act (now repealed and replaced by the similar provision in s 719(6) of the WR Act) for the payment of amounts underpaid to six employees of the appellant. The amounts totalled $22,918.51, including $5,353.65 interest pursuant to s 179A(1) of the WR Act (now repealed and replaced by s 722(1) of the WR Act). The magistrate adjourned to a date to be fixed questions of penalty.

6 On 7 February 2007, the magistrate heard submissions on behalf of the parties as to the appropriate penalties. On 19 April 2007, her Honour made orders, imposing penalties totalling $88,000 on the appellant for a total of 22 breaches of the three Awards. Payment to Consolidated Revenue was required to be made within 60 days.

7 The notice of appeal was filed in this Court on 29 June 2007, pursuant to an order of North J on 26 June 2007, enlarging the time for appeal to that day. This was the second application for an enlargement of time to appeal, North J having dismissed the first such application so far as it related to the notice of appeal then proposed, but having granted leave to file a further proposed ground of appeal.

The grounds of appeal

8 The grounds of appeal are expressed in the notice of appeal in the following terms:

The Magistrates’ Court erred in law in the exercise of its discretion in that:-

(a) it failed to take into account a relevant matter, namely that the
penalties imposed should not be so great as to be oppressive; and

(b) the penalties imposed were, in all the circumstances of the case,
excessive.

9 There was no substance in the first of these grounds. There was no material, either before the magistrate or before this Court, which might have suggested that penalties totalling $88,000 would be oppressive to a corporation conducting a business of the size of that conducted by the appellant. There was no material as to the financial circumstances, or other circumstances relevant to oppression, of the appellant. It is difficult to imagine that a penalty of the magnitude imposed could have been crushing for the appellant. At the hearing of the appeal, the focus was on the proposition that the penalties imposed were excessive. It was not disputed that this ground of appeal was capable of raising the issue of the application of...