Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: French CJ,Kiefel,Bell,Nettle,Gordon JJ.,Gageler J.,Keane J.
• Judgment Date: 09 December 2015
• Neutral Citation: [2015] HCA 46
• Docket Number: Matter No B36/2015
• Date: 09 December 2015

[2015] HCA 46

HIGH COURT OF AUSTRALIA

French CJ, Kiefel, Bell, Gageler, Keane, Nettle and Gordon JJ

Matter No B36/2015

Matter No B45/2015

Commonwealth of Australia

Appellant

and

Director, Fair Work Building Industry Inspectorate & Ors

Respondents

Construction, Forestry, Mining And Energy Union & Anor

Appellants

and

Director, Fair Work Building Industry Inspectorate & Anor

Respondents

Representation

J T Gleeson SC, Solicitor-General of the Commonwealth with T M Begbie and R C A Higgins for the appellant in B36/2015 and the second respondent in B45/2015 (instructed by Australian Government Solicitor)

J K Kirk SC with E P White for the appellants in B45/2015 and the second and third respondents in B36/2015 (instructed by Hall Payne Lawyers)

C J Murdoch for the first respondent in both matters (instructed by Norton Rose Fulbright)

C A Moore SC with D M Tucker appearing as amici curiae in B36/2015 (instructed by Australian Government Solicitor)

Building and Construction Industry Improvement Act 2005 (Cth), ss 38, 49.

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate

Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate

Practice and procedure — Civil penalties — Whether submissions as to agreed penalty permissible — Whether Barbaro v The Queen (2014) 253 CLR 58 applies to civil penalty proceedings.

Words and phrases — ‘agreed penalty’, ‘appropriate penalty’, ‘civil penalty’.

ORDER

1. In each matter, appeal allowed.

2. Set aside paragraph 1 of the order of the Full Court of the Federal Court of Australia made on 1 May 2015.

3. Remit the proceedings to the Federal Court for determination according to law.

1 French CJ, Kiefel, Bell, Nettle AND Gordon JJ. These are appeals from an order of the Full Court of the Federal Court of Australia (Dowsett, Greenwood and Wigney JJ) 1 adjourning civil penalty proceedings before it under the Building and Construction Industry Improvement Act 2005 (Cth) (‘the BCII Act’) in which the parties had made submissions to the Court seeking the imposition of agreed penalties. The issue is whether the Full Court erred in adjourning the proceedings on the basis that the decision of this Court in Barbaro v The Queen2 applies to a civil penalty proceeding brought under Pt 1 of Ch 7 of the BCII Act 3 and in particular whether Barbaro precludes a court from receiving an agreed or other submission as to the amount of a pecuniary penalty to be imposed under s 49 of the BCII Act. For the reasons which follow, the decision in Barbaro does not apply to civil penalty proceedings and a court is not precluded from receiving and, if appropriate, accepting an agreed or other civil penalty submission.

Legislative provisions

2 Section 9 of the BCII Act established the Australian Building and Construction Commissioner (‘the Commissioner’) and s 10 provided that the functions of the Commissioner included monitoring and promoting compliance with the BCII Act, the investigation of suspected contraventions of the BCII Act, and instituting or intervening in proceedings and making submissions in accordance with the BCII Act.

3 Section 38 of the BCII Act provided that ‘[a] person must not engage in unlawful industrial action’. The section was stipulated to be a ‘Grade A civil penalty provision’ 4. ‘[U]nlawful industrial action’ was defined in s 37 of the Act as building industrial action which was industrially-motivated, constitutionally-connected

and not excluded action 5. ‘[E]xcluded action’ was defined as ‘protected industrial action’, which had the same meaning as in the Fair Work Act 2009 (Cth) 6. Section 40 provided that building industrial action in relation to a proposed building enterprise agreement was not protected industrial action if the action was engaged in in concert with one or more persons who were not ‘protected persons’ for the action. The same section provided that the only ‘protected persons’ were an employee organisation that was a bargaining representative for the proposed enterprise agreement, a member of such an organisation, an officer or employee of such an organisation acting in that capacity and an employee who was a bargaining representative for the proposed enterprise agreement.

4 The practical effect of those provisions was that only industrial action engaged in by employees and unions who were involved in bargaining, or would be covered by a proposed building enterprise agreement, would be ‘protected industrial action’. Therefore, industrially-motivated action taken in concert with persons not involved in bargaining or who would not be covered by the proposed building enterprise agreement was ‘unlawful industrial action’ within the meaning of ss 37 and 38 of the BCII Act 7.

5 Section 48 provided inter alia that, for the purposes of Pt 1 of Ch 7 of the BCII Act, a ‘person’ in relation to the contravention of a civil penalty provision included an industrial association and that a person who was involved in a contravention of a civil penalty provision was to be treated as having contravened that provision.

6 Section 49(1) provided that, on application by an eligible person, an appropriate court could make one or more of the following orders in relation to a person (the defendant) who had contravened a civil penalty provision:

In the case of a Grade A civil penalty provision, the maximum pecuniary penalty was 1,000 penalty units for a body corporate and 200 penalty units for a person other than a body corporate.

• ‘(a) an order imposing a pecuniary penalty on the defendant;

• (b) an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;

• (c) any other order that the court considers appropriate.’

7 Section 49(3) provided that the orders that could be made under s 49(1)(c) included injunctions and any other orders that the court considered necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets. Section 49(5) provided that a pecuniary penalty was payable to the Commonwealth or to some other person if the court so directed, and could be recovered as a debt.

8 Section 49(6)(a) deemed the Commissioner to be an eligible person. Section 75(7) had the effect that the Federal Court was the only eligible court in relation to an act or omission for which an organisation, or a member of an organisation, was liable to be proceeded against for a pecuniary penalty.

Amendments and transitional provisions applicable to these appeals

9 By item 1 of Sched 1 to the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 (Cth) (‘the Transition Act’), the name of the BCII Act was changed to the Fair Work (Building Industry) Act 2012 (Cth) (‘the FWBI Act’). Under s 9 of the FWBI Act, there was established the Director of the Fair Work Building Industry Inspectorate (‘the Director’) and, under s 10, functions broadly similar to those previously performed by the Commissioner were vested in the Director 8.

10 At the same time, by item 52 of Sched 1 to the Transition Act, Pt 1 of Ch 7 of the BCII Act was repealed and replaced by Pt 1 of Ch 7 of the FWBI Act with the effect that, thenceforth, all civil penalty provisions were removed from the legislation. Item 1 of Sched 2 to the Transition Act provided, however, for regulations dealing with matters of a transitional, saving or application nature relating to amendments made by that Act; and, by s 2.3 of the Building and Construction Industry Improvement Amendment (Transition to Fair Work)

Regulation 2012 (‘the Transition Regulation’), it was provided that, if a proceeding could have been started under the BCII Act in relation to conduct that happened before the commencement of the regulation, the BCII Act (other than Divs 1 and 2 of Pt 2 of Ch 7) would continue in force to the extent necessary to allow the proceeding to be started and dealt with. For the purposes of such proceedings, a reference to the Commissioner in the BCII Act is taken to be a reference to the Director under the FWBI Act 9.

11 As will be explained, this proceeding concerns conduct that occurred before the Transition Regulation commenced. The effect of the Transition Act and the Transition Regulation, therefore, is that Pt 1 of Ch 7 of the BCII Act applies to this proceeding unaffected by the subsequent amendments.

Procedural history

12 By originating application dated 23 May 2013, the Director brought civil penalty proceedings in the Federal Court against the Construction, Forestry, Mining and Energy Union (‘the CFMEU’) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CEPU’) (together, ‘the Unions’) for contraventions of s 38 of the BCII Act alleged to have been committed in May 2011. The Director sought pecuniary penalties and declarations under s 49 of that Act. Subsequently, the parties filed an agreed statement of facts and submissions (‘the Agreed Facts’) as to the amounts of civil penalty which they agreed should be imposed. It was agreed that the Unions each contravened s 38 of the BCII Act by virtue of their involvement in contraventions by certain of their officers. The Agreed Facts recorded that the Director and the Unions ‘consent to and agree to seek from the Court’ declarations as to the contraventions and pecuniary penalties of $105,000 against the CFMEU and $45,000 against the CEPU. The Agreed Facts also stated that, ‘subject to the discretion of the Court to fix an appropriate penalty’, those penalty amounts are ‘satisfactory, appropriate and within the permissible range in all the circumstances’.

13 At a pre-trial directions hearing, the primary judge expressed concern as...