Draffin v Construction, Forestry, Mining and Energy Union [2009] FCAFC 120 (10 September 2009)

INDUSTRIAL LAW – Penalties – Errors of principle when imposing penalties – Parity of penalties – Whether a single course of conduct which breaches multiple legislative provisions should be subject to multiple penalties –- Relevance of prior contravening conduct when imposing penalties

Building and Construction Industry Improvement Act 2005 (Cth), ss 4, 38, 43, 45, 57, 69
Fair Work Act 2009 (Cth)
Federal Court of Australia Act 1976 (Cth), s 27
Workplace Relations Act 1996 (Cth), ss 4, 84, 298B, 298K, 298L, 298P

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560, applied
Bovis Lend Lease Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 650, cited
Council of the City of Greater Wollongong v Cowan [1955] HCA 16; (1955) 93 CLR 435, followed
Draffin v Construction, Forestry, Mining and Energy Union [2007] FCA 2011, referred to
Draffin v Construction, Forestry, Mining and Energy Union [2009] FCA 243
House v The King [1936] HCA 40; (1936) 55 CLR 499, referred to
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383, referred to
NW Frozen Foods Pty Limited v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285, applied
Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632, followed
Ponzio v B & P Caelli Constructions Pty Ltd and Others [2007] FCAFC 65, cited
R v McInerney (1986) 42 SASR 111, referred to
Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Others [2001] FCA 456; (2001) 109 FCR 378, cited
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426, cited

JOHN WILLIAM DRAFFIN v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, STEVE ALLEN, GERARD BENSTEAD and BILL OLIVER
VID 223 of 2009

GOLDBERG, JACOBSON & TRACEY JJ
10 SEPTEMBER 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 223 of 2009
FAIR WORK DIVISION

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	JOHN WILLIAM DRAFFIN Appellant
AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent STEVE ALLEN Second Respondent GERARD BENSTEAD Third Respondent BILL OLIVER Fourth Respondent

JUDGES:	GOLDBERG, JACOBSON & TRACEY JJ
DATE OF ORDER:	10 SEPTEMBER 2009
WHERE MADE:	MELBOURNE

2. Order 1 of the orders made by the trial judge be varied by deleting "$18,000" and inserting in lieu "$50,000".

3. Order 4 of the orders made by the trial judge be set aside and in lieu thereof it be ordered that:

4. Order 5 of the orders made by the trial judge be set aside and in lieu thereof it be ordered that, subject to paragraph 4C, the penalties imposed in paragraphs 1, 2, 3, 4, 4A and 4B be paid into the Consolidated Revenue Fund within 30 days.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 223 of 2009
FAIR WORK DIVISION

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	JOHN WILLIAM DRAFFIN Appellant
AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent STEVE ALLEN Second Respondent GERARD BENSTEAD Third Respondent BILL OLIVER Fourth Respondent

JUDGES:	GOLDBERG, JACOBSON & TRACEY JJ
DATE:	10 SEPTEMBER 2009
PLACE:	MELBOURNE

1 On 17 March 2009, the primary judge ordered the Construction, Forestry, Mining and Energy Union ("the Union") to pay pecuniary penalties totalling $20,750 for breaches of ss 43(1)(c) and 45(1) of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act") and s 298P(3) of the Workplace Relations Act 1996 (Cth) ("the WR Act"). Unless otherwise specified, references to the WR Act are references to that Act as it was in force at November 2005 (the time of the relevant conduct).

2 His Honour made a declaration of breach of those provisions in respect of the second respondent ("Mr Allen") but imposed no penalty. He imposed penalties of $2,000, fully suspended, upon the third and fourth respondents ("Mr Benstead" and "Mr Oliver" respectively).

3 Mr Allen, Mr Benstead and Mr Oliver are officers of the Union. The contraventions of the legislation which were ultimately admitted by all of the respondents involved the exertion of pressure and coercion on a construction company by the Union, Mr Allen, Mr Benstead and Mr Oliver. The pressure and coercion were applied in a successful attempt to have the company cease to use the services of a sub-contractor which employed workers under Australian Workplace Agreements ("AWAs").

4 The appellant contends that the primary judge’s orders were affected by a number of errors of principle in the exercise of his discretion, as revealed in his ex tempore reasons for judgment: House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505.

5 It is common ground between the parties that if we are of the view that the primary judge’s discretion miscarried, we should determine the penalties afresh.

6 The issues raised on this appeal turn primarily upon the legislation, the Statement of Agreed Facts signed on behalf of the applicant and the respondents and a consideration of his Honour’s reasons for judgment.

7 Counsel for the respondents also sought to rely upon a statement made by the Acting Commissioner of the Australian Building and Construction Commission, recorded in a media release, welcoming the penalties that were imposed by the primary judge.

8 We reserved for consideration in our reasons for judgment whether the media release is admissible in evidence on the appeal.

9 A further issue which arises if we are of the view that the discretion miscarried, is the question of parity with the penalties imposed by Ryan J on the former fifth respondent to these proceedings, Walton Constructions Pty Limited ("Walton"); see Draffin v Construction, Forestry, Mining and Energy Union [2007] FCA 2011.

When read with s 298L, 298K relevantly constrained a person from altering the position of an independent contractor to its prejudice by reason of the fact that it was entitled to the benefit of an industrial instrument such as an AWA.

13 The Statement of Agreed Facts between the applicant and the first, second, third and fourth respondents was dated 5 March 2009. It commenced with admissions by each of the Union, Mr Allen, Mr Benstead and Mr Oliver of contraventions of the provisions of s 43(1)(c) and s 45(1) of the BCII Act and s 298P(3)(a) of the WR Act. It included a description of the parties to which we will refer.

14 Mr Draffin is an Australian Building and Construction Inspector appointed under s 57 of the BCII Act. He is also an inspector appointed under s 84 of the WR Act.

15 The Union is an organisation of employees registered under the WR Act and an "organisation" for the purposes of s 4 of the WR Act and ss 4 and 45(4)(b) of the BCII Act. It is also an "industrial association" for the purposes of s 298B of the WR Act and s 4 of the BCII Act.

16 Mr Allen was a Union shop steward and an "officer" of the Union for the purposes of the relevant provisions of the BCII Act and the WR Act. He was, at the relevant time, employed by Walton at a site known as the Brunswick Police Station site ("the Site"), and the Occupational Health & Safety representative at the Site.

17 Mr Benstead was employed by the Union and was an organiser in the Union’s Construction and General Division. He was an officer of the Union for the purposes of the relevant provisions of the BCII Act and the WR Act.

18 Mr Oliver was the Joint Divisional Vice-President of the Union’s Construction and General Division and Assistant Secretary of the Victorian Building Union’s Divisional Branch of the Union’s Construction and General Division. He was also an "officer" of the Union for the purposes of the relevant legislation. Walton was engaged by or on behalf of the Victoria Police to carry out refurbishment work to the police station at the Site.

19 Prior to 11 November 2005, Walton engaged a company, described in the Agreed Facts as Monjon ("Monjon"), to perform security services at the Site. On 11 November 2005 and 12 November 2005 Walton engaged Monjon to perform traffic management services on the Site, replacing another company that had previously provided those services under contract to Walton. Monjon provided its traffic management services to Walton at the Site without apparent interruption on 11 November and 12 November 2005.

20 Some time before 16 November 2005, Mr Allen became aware that Monjon’s employees were employed by it under AWAs. Also, prior to 16 November 2005, Mr Allen spoke to Monjon employees about the AWAs and told Mr Benstead that the Monjon employees were employed on that basis.

21 On 16 November 2005, two employees of Monjon attended the Site to perform traffic management services on that day. However, at around 8 am on 16 November 2005, Mr Allen told the employees not to set up the Site. Also, at around 8 am on 16 November 2005, there was a telephone conversation between Mr Benstead and Mr Moncrieff, on behalf of Monjon. Mr Benstead told Mr Moncrieff that he (Mr Benstead) had a problem with the Monjon employees providing traffic management services on the Site and that traffic management was work that was covered by the National Building and Construction Industry Award 2000 ("the Award"). Mr Benstead also told Mr Moncrieff that because the Monjon employees were employed on AWAs, they would not be entitled to the benefit of the Award.

22 Shortly after the telephone conversation, Mr Benstead attended the Site and spoke to Walton’s site manager. Mr Benstead told the site manager that:

• he had a problem with the Monjon employees performing traffic management services on the Site because the work was covered by the Award;

• he had a problem with the Monjon employees being engaged on AWAs because they would not be entitled to the benefit of the Award;

• the Monjon employees should not perform traffic management services at the Site.

23 There was a telephone conversation on 16 November 2005 between Mr Oliver and a director of Walton during which Mr Oliver told the director that he had "an issue" with Monjon performing traffic management services at the Site and that those services were covered by the Award.

24 There was another telephone conversation on the morning of 16 November 2005 between Mr Benstead and Walton’s project manager for the Site. The project manager then telephoned Mr Moncrieff and told him that Walton could not afford to have problems on the Site. The project manager also told Mr Moncrieff that Monjon was no longer on the job.

25 Mr Moncrieff then telephoned Walton’s Construction Manager who told Mr Moncrieff that Walton needed the job done and that Walton would engage someone other than Monjon to do the work. The Construction Manager suggested that Mr Moncrieff call Mr Oliver as he (Mr Oliver) was the person who was telling Walton he was unhappy with Walton carrying out traffic management at the Site.

26 At about 10:10 am on 16 November 2005, there was a telephone conversation between Mr Moncrieff and Mr Oliver. During the conversation Mr Oliver said words to the effect that he understood that Monjon had been previously carrying out security services at the Site and that security services were not covered by the Award whereas traffic management was covered by the Award.

27 Shortly after the conversation between Mr Moncrieff and Mr Oliver, Mr Moncrieff attended a meeting at the Site. The meeting was conducted in Mr Allen’s office. The meeting was attended by Mr Allen, Mr Moncrieff, the two Monjon employees and Walton’s site manager.

28 During the meeting in his office on 16 November 2005, Mr Allen told the other attendees that:

• he had taken the Monjon AWAs home and looked at them as part of his role as Union delegate;

• he had been directed by Mr Benstead not to allow Monjon to perform traffic management services at the Site;

• the site manager should work out what to do, and Mr Moncrieff should deal with the Union.

29 At about 12:45 pm on 16 November 2005 the site manager told Mr Moncrieff that Monjon was "off the job".

30 Walton paid Monjon for the day of 16 November 2005, although it is evident that no traffic management services were provided on that day.

31 Monjon ceased to provide traffic management services at the Site from 16 November 2005 although it had been contracted to provide those services on 18 and 19 November 2005 and for a period of about two weeks thereafter.

32 By reason of the operation of s 69(1) of the BCII Act, the conduct of Mr Allen, Mr Benstead and Mr Oliver referred to above, was the conduct of the Union.

33 Paragraph [34] of the Agreed Facts is important and for that reason we set it out in full:

34 Ryan J dealt with the proceeding against Walton on 10 December 2007 (see Draffin [2007] FCA 2011). The matter proceeded on an Agreed Statement of Facts and an agreed penalty.

35 His Honour observed at [2] that Walton had, at an early point in time, conceded that it had contravened s 45 of the BCII Act and s 298K (2)(d) of the WR Act. He also observed that it was agreed that Walton had no prior convictions for any contravention of a relevant kind.

36 The amount of the penalty which was agreed between the parties and accepted by Ryan J was $40,000 for contravention of s 45 of the BCII Act and $10,000 for breach of s 298K(2)(d) of the WR Act.

37 One half of the penalties were suspended for twelve months on condition that Walton did not breach the BCII Act or the WR Act during that period.

38 The primary judge said at [29] of his reasons that although there were three breaches of separate statutory provisions:

39 His Honour went on to say that he did not consider it appropriate to punish the respondents more than once for "one unlawful act".

40 He noted that the totality principle requires a penalty to be imposed for each contravention arising out of "a course of conduct", although the most serious may attract the bulk of the penalty.

41 The primary judge singled out at [30], the contravention of s 43 of the BCII Act as the strongest statutory expression of what occurred on 16 November 2005 because that offence carries with it an element of coercion.

42 His Honour then proceeded to deal with the factors identified by Tracey J in Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426 at [40], as relevant to the determination of the appropriate penalty for contravention of the BCII Act.

43 One of those factors is contrition. His Honour dealt with this factor under the sub-heading "contrition" as follows:

44 Another relevant factor is any corrective action taken by a contravener to ensure future compliance with the legislation. His Honour observed at [38] that the only corrective action was the holding by the Union of the seminar in May 2006.

45 A further relevant factor is relevant previous conduct. His Honour said at [43] that the closest relevant previous conduct was that identified by Tracey J in Stuart-Mahoney. That case involved contraventions by the Union, and one of its organisers, of ss 38 and 43 of the BCII Act.

46 The contraventions in Stuart-Mahoney arose out of a dispute over whether a construction company was required to engage an apprentice throughout the construction period of a police and law courts complex in Morwell, Victoria: (see Stuart-Mahoney at [2]).

47 In the present case, the primary judge made the following observations about the decision in Stuart-Mahoney under the heading "previous conduct":

48 The primary judge then set out his "conclusion" on the penalty to be imposed on the respondents. He considered the appropriate penalty for the Union’s breach of s 43 of the BCII Act to be $18,000.

49 He imposed a penalty of $2,000 for breach of s 45 of the BCII Act and $750 for breach of s 298P of the WR Act.

50 His Honour expressed his conclusion in relation to the penalty of $18,000 as follows:-

51 The primary judge’s reasons for imposing no penalty on Mr Allen, and suspended penalties of $2,000 on each of Mr Benstead and Mr Oliver were set out at [46] as follows:

52 The media release by the office of the Australian Building and Construction Commissioner was dated 18 March 2009, the day following that on which the primary judge imposed the penalties referred to above.

53 The media release in its initial form stated that the Acting Australian Building and Construction Commissioner, Ross Dalgleish, welcomed the "heavy penalties". The media release was replaced approximately 36 minutes later by a release which deleted the word "heavy" so that it merely stated that Mr Dalgleish welcomed the penalties.

54 Counsel for Mr Draffin sought to tender evidence in reply, in the event that we admitted the media release. That evidence established the 36 minute gap between the two versions of the media release but gave no explanation for why the word "heavy" had been deleted.

55 As we have said, the primary judge’s reasons were delivered ex tempore. A reasonable degree of latitude is to be given to the mode of expression adopted by his Honour and it would be wrong to criticise any infelicitous turn of phrase. Nevertheless, we are satisfied that there are four errors of principle within the well-known test stated in House v The King.

56 The first error is to be found in [29] of his Honour’s reasons in the statement that there was "essentially one unlawful act" committed by the Union respondents, namely the request for Walton that Monjon leave the site because its employees were employed on AWAs.

57 The second is to be found in [37] of the primary judge’s reasons which, in our view, discloses that his Honour took into account the seminar conducted by the Union as an aspect of contrition.

58 The third is in [43] which discloses two separate errors. The first was a failure to have regard to the full history of previous contraventions by the Union of similar legislative provisions. The second was to determine the amount of the penalty by comparison with the conduct which occurred in Stuart-Mahoney.

59 The fourth error is to be found in [44] in the statement that "Walton’s conduct was at least as serious as that of the Union, if not more serious."

60 There are also a number of errors of principle in the determination of the penalties against Mr Benstead and Mr Oliver and the failure to order any penalty against Mr Allen. These are to be found in the statements made in [46] that the personal respondents were merely reflecting the position of Union management.

61 Mr Allen, Mr Benstead, Mr Oliver and the Union each admitted contravening ss 43(1)(c) and 45(1) of the BCII Act and s 298P(3)(a) of the WR Act. Neither at trial nor during argument on this appeal was it asserted by any party that these admitted contraventions had been committed by reason of a single act of the individual respondents. Rather, as is plain from the Summary of Agreed Facts set above at [13]-[33], each of these respondents engaged in a course of conduct which was constituted by a series of separate acts which had the objective of preventing employees of Monjon who were employed under AWAs from performing duties at the Site.

62 The distinction between a single act and a course of conduct, and the relevance of a course of conduct to the determination of a penalty, is illustrated in the reasons of Stone and Buchanan JJ in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383 at [49]- [52].

63 It is necessary, for the purpose of assessing the gravity of the admitted offences to have regard to the nature, quality and number of the separate acts, comprising the course of conduct, the period over which they occurred and the circumstances in which they occurred. For example, it is relevant in assessing the culpability of Mr Allen to take into account his unilateral action on 16 November 2005 by which he assumed the right to direct employees of Monjon not to perform their duties.

64 One of the three steps taken by the respondents in the wake of their contravening conduct which the trial judge treated as being indicative of contrition was the conduct of a seminar in May 2006. No reference was made to the seminar in the Agreed Statement of Facts. His Honour appears to have been alerted to the fact that the seminar was held by the reference to it in the reasons of judgment of Tracey J in Stuart-Mahoney at [53].

65 In Stuart-Mahoney it was an agreed fact that, in May 2006, CFMEU legal officers conducted a seminar which was attended by officials of the Union. The purpose of the seminar was to make the officials aware of the potentially serious consequences of action taken by them should they contravene the BCII Act. A significant part of the seminar was dedicated to the definition of "building industrial action" under the BCII Act. In Stuart-Mahoney the respondents sought to rely on the conduct of this seminar as evidence of their contrition. Tracey J, whilst accepting that the conduct of the seminar indicated a desire on the part of the CFMEU to avoid repetition of the admitted contraventions which were considered in that case, was not prepared to treat the conduct of the seminar as being indicative of any contrition on the part of any respondent.

66 Counsel for the respondents in the present case did not seek to submit that the conduct of the seminar evidenced contrition. Rather, it was said that his Honour had taken this matter into account in the same way and for the same purpose as had been done by Tracey J in Stuart-Mahoney. This submission cannot succeed. The trial judge specifically dealt with the conduct of the seminar in dealing with the matter of contrition and did so again, discretely, in holding that the CFMEU had taken some corrective action following the relevant contraventions.

67 In Stuart-Mahoney it was an agreed fact that one of the respondents had, in fact, attended the seminar in May 2006. There was no evidence before the trial judge that any of the individual respondents in the present case had attended the seminar or had been made aware of the matters dealt with in it.

68 At trial, counsel for the appellant provided the Court with a list of eighteen cases which he submitted were relevant in determining the penalties which should be imposed on the Union. In each of the cases the relevant conduct had occurred either wholly or in part before the presently relevant events. The cases involved contraventions of the BCII Act, the freedom of association provisions of the WR Act and coercive conduct contrary to the WR Act. Although the conduct pre-dated the events in the present case a number of the contraventions had not been dealt with by a Court until later times. It was submitted that similar previous conduct on the part of the Union demonstrated that it had a history of engaging in conduct of the kind involved in the present case, that the penalties previously imposed were insufficient to deter it from re-engaging in that conduct and that it failed to take adequate steps to prevent further contraventions.

69 The trial judge dealt with the Union’s previous conduct in one paragraph of his reasons. That paragraph is set out above at [47]. In it he confined himself to a comparative analysis of some aspects of the impugned conduct in the present matter and its consequences and compared it with some of the acts and consequences in Stuart-Mahoney. He concluded that the conduct of the respondents in the present matter and its impact were both less serious than that which had occurred in Stuart-Mahoney.

70 His Honour did not have regard to the litany of contraventions on which the appellant had sought to rely. We are unable to accept the respondents’ submission that his Honour had, in substance, done so because the events which led to the imposition of penalties in Stuart-Mahoney had occurred at about the same time as the present events and it could be assumed that the trial judge in that case would have brought those decisions into account in fixing penalties.

71 A reading of Tracey J’s reasons for judgment in Stuart-Mahoney does not support the suggestion that his Honour had been referred to all, or even most, of the eighteen cases to which counsel referred in the present case. More importantly, however, there is nothing in the trial judge’s reasons which suggest that he had, as it were, incorporated by reference any consideration of prior offences which had been undertaken in Stuart-Mahoney. On the contrary, as we read paragraph [43], his Honour did no more than make a broad and general comparison of the facts of Stuart-Mahoney and the present case and then proceed to fix penalties based on that comparison.

72 Counsel for the Union submitted that contraventions by branches of the Union in states other than Victoria ought not be taken into account. Even if this submission is correct, (which we doubt), it is sufficient to note that there were other relevant contraventions in Victoria by the Union which were not taken into account by the primary judge.

73 There was a further error of principle in the primary judge’s approach, because it is well-established that the facts of the matter before the sentencing judge should not be compared with an earlier authority in order to derive from it the amount of penalty to be fixed: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 at 295 per Burchett and Kiefel JJ; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at [12] per Gray J, at [56] per Graham J, and at [87] per Buchanan J.

74 Yet this is precisely what the primary judge did in comparing the facts of the present case to the circumstances of Stuart-Mahoney.

75 Walton was the principal contractor on the Site. It was an agreed fact that pressure was exerted on Walton by the respondents with a view to having Walton cease to utilise the services of Monjon on the Site. Their conduct had the desired effect. Walton dispensed with the services of Monjon. Walton acknowledged that, in so doing, it had contravened s 45 of the BCII Act and s 298K(2)(d) of the WR Act. The appellant and Walton agreed that an appropriate penalty for the contravention of s 45 of the BCII Act was $40,000 and that an appropriate penalty for breach of s 298K of the WR Act was $10,000. Ryan J imposed these penalties. He suspended one half of each penalty for 12 months on condition that Walton did not breach the BCII Act or the WR Act during that period. In doing so he noted that Walton had not previously been found to have contravened any provision of these two statutes.

76 The trial judge determined to impose a penalty of $18,000 on the Union for its breach of s 43 of the BCII Act. He was influenced by a number of considerations. They were:

• Walton’s conduct "was at least as serious as that of the Union, if not more serious" (emphasis added);

• Walton could have resisted the Union’s coercive behaviour but chose to "take the easy way out";

• The penalty imposed on the CFMEU should not be greater than the penalty imposed on Walton;

• In Stuart-Mahoney, Tracey J had imposed a fine of $25,000 for a more serious breach of s 43 of the BCII Act;

• The Union was not a profit making body - it existed for the benefit of its members and is ultimately funded by those members; and

77 We do not accept that Walton’s conduct was at least as serious as that of the Union. Much less do we consider it to be more serious. Had the Union not determined that it would not countenance persons engaged under AWAs working on the Site and put pressure on Walton to cease to engage Monjon, Walton would not have so acted. The Union was the moving party. The Union’s coercive conduct was such as to negate the choice of Walton: cf Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union and Others [2001] FCA 456; (2001) 109 FCR 378 at 388. Walton contravened the BCII Act because of the Union’s conduct not because it chose to do so on its own initiative. The culpability of the Union and Walton cannot, therefore, be equated. It is even less tenable to suggest that Walton’s conduct might be regarded as being more serious than that of the Union.

78 By treating the Union and Walton as being equally culpable, the trial judge was led into further error of principle. He determined that the penalty imposed on the Union should not be greater than the penalty imposed on Walton. He considered that Walton had effectively been fined $20,000 because half of the penalty, imposed by Ryan J for the contravention of s 45 of the BCII Act, had been suspended for 12 months. His Honour considered that it would not be appropriate to adopt a similar course in respect of the Union. He, therefore, fixed on the penalty of $18,000 which was slightly less than that part of the penalty imposed on Walton which it was required to pay.

79 We pause, at this point, to note that, even had his Honour not been in error in equating the level of culpability of the Union and Walton, it would be difficult to support the fixing of the $18,000 penalty having regard to the many prior contraventions of relevant statutory proscriptions by the Union and Walton’s previously unblemished record.

80 We have already indicated our reasons for considering that the trial judge fell into error by using Stuart-Mahoney as a bench mark in the sentencing process. In the present context this error was compounded by his Honour’s misstatement that the penalty imposed on the Union in Stuart-Mahoney for contravention of s 43 was $25,000 when, in fact, it was $35,000.

81 We should also say something about his Honour’s observation that the Union was not a profit-making body and was ultimately funded by its members. It appears that his Honour was influenced by the fact that any monetary penalty imposed on the Union would have to be paid out of funds subscribed by the members. Any funds applied to meet penalties imposed by the Court would not then be available to be used for purposes which would be of direct benefit to the members. Such will always be the case whenever a Union is penalised for a contravention of some statutory provision. This consideration cannot weigh heavily in mitigation of penalty. Where, as is presently the case, a Union adopts a policy, and seeks to take deliberate action which contravenes a statutory provision and that action is undertaken by officials of the Union in the course of their duties, responsibility lies with the officials who choose to act unlawfully. It is the members who elect the officials and those who constitute the Union’s policy-making bodies. The remedy, insofar as there is one, lies elsewhere. Members who are dissatisfied with such conduct can stand or vote against the miscreant officials when next they offer themselves for re-election: see Bovis Lend Lease Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 650 at [21].

82 That is not to say that the individual or personal circumstances of the contravener cannot be taken into account: Ponzio v B & P Caelli Constructions Pty Ltd and Others [2007] FCAFC 65 at [94] per Lander J. However, that was not what the primary judge did in the present case.

83 The trial judge imposed no penalty on the Union’s shop steward (Mr Allen) for his contravention of s 43. He imposed a wholly suspended penalty of $2,000 on the organiser (Mr Benstead) and the then Assistant Secretary of the Union Branch (Mr Oliver). His Honour considered that all three respondents were merely giving effect to a Union policy by which they were bound. In the case of Mr Allen, he was regarded as being "simply the voice of the Union at the Site, reflecting the position of Union management ...".

84 We consider that his Honour erred in principle in having regard to such considerations.

85 A Union is free to adopt any policy which its elected officials and members consider to be appropriate from time to time. The Union is also free to pursue and implement such policies by lawful means. What is not permissible is the pursuit of policy objectives by means which are unlawful. If officials or members of a Union act unlawfully it cannot be asserted in mitigation that the persons concerned were seeking to achieve ends which the Union wished to pursue. The end does not justify the means.

86 In the case of Mr Allen it is not correct to assert that he was no more than the Union’s mouthpiece on the Site. Mr Allen took an active part in the Union’s successful attempt to have Monjon and its employees removed from the Site. It was an agreed fact that it was Mr Allen who had seen the AWAs under which Monjon employees were engaged. It was Mr Allen who alerted Mr Benstead to the fact that the employees were engaged under AWAs. It was Mr Allen, who on 16 November 2005, arrogated to himself the right to direct Monjon employees not to set up the Site. Later that day Mr Allen acted as the principal spokesman for the Union at a meeting in his office at the Site which was attended by representatives of Walton and Monjon and the two employees. He told the meeting that he had been directed by Mr Benstead not to allow the Monjon employees to perform their duties. It is clear that both he and his audience accepted that he had the capacity to carry out the direction. The problem was not, he said, his - it was for Walton to work out what to do. He told Monjon’s representative to deal with the Union. Mr Allen was clearly an active participant in the course of conduct which gave rise to the contraventions.

87 When considering the appropriate penalties to be imposed on the individual respondents his Honour fell into further error by assuming that each of them had subsequently had the benefit of the May 2006 seminar. There was no evidence before him or any agreed fact that would have allowed him to find that any of the three individual respondents had attended the May 2006 seminar or otherwise had the benefit of the instruction given at it.

88 In the circumstances, the determinations by the trial judge concerning the imposition of penalties (or in the case of Mr Allen, the failure to do so) should be set aside. It falls to this Court to determine appropriate penalties.

89 As the trial judge recognised, both specific and general deterrence are significant considerations when fixing penalties for contraventions of legislative provisions such as those under consideration. Penalties will serve as a deterrent only if they are fixed at a meaningful level.

90 Relevantly, the purpose of s 43 of the BCII and s 298P of the WR Act was to prevent coercive conduct intended to prejudice employees and employers who elected to have their relationship regulated by industrial instruments of their choosing. The Union sought to prevent employees engaged under AWAs from working on a site on which some of its members were employed. It was not prepared to countenance such a possibility and was prepared to, and did, resort to unlawful coercive conduct to prevent it. This was but another example of what Lander J described in Ponzio at [110] as "a calculated indifference" on the part of the Union and its officials to statutory provisions which were introduced to curb such conduct.

91 As already noted, the appellant, at trial, relied on eighteen prior instances of relevant conduct by the Union which had led to the imposition of civil penalties. The common feature of these earlier cases was that they involved unlawful industrial action with a view to pressuring employers and workers to take action or make concessions demanded by the Union.

92 Although, in each of the cases, the impugned conduct had occurred wholly, or in substantial part, prior to the presently relevant events, the penalty hearings in most of them post-dated November 2005. We cannot therefore, and do not, proceed on the basis that, when the Union committed the present contraventions, it did so in the knowledge that Courts had considered all similar earlier conduct by it to have contravened industrial legislation. That prior similar conduct, however, does have relevance to our present task as indicating a propensity, on the part of the Union, to engage in proscribed conduct. The weight to be attached to this consideration will not be as great where the prior similar conduct had not led to the imposition of a penalty before November 2005: cf R v McInerney (1986) 42 SASR 111 at 113 and 124.

93 The principle of parity of sentencing requires us to have regard to the penalties imposed on Walton by Ryan J. His Honour imposed a penalty of $40,000 for Walton’s contravention of s 45 of the BCII Act and $10,000 for its contravention of s 298K of the WR Act. The penalties were agreed on between the parties. Nonetheless, Ryan J was not bound by the agreement and would have been free to impose a different penalty had he regarded the agreed sum as being unduly lenient or severe: see NW Frozen Foods at 295. For the reasons which we have already given, we consider that the conduct of the Union was more reprehensible than that of Walton.

95 Some credit must be allowed for the fact that the Union, albeit at a late stage of the pre-trial process, was prepared to admit that it had contravened particular statutory provisions and subscribed to an Agreed Statement of Facts.

96 In the circumstances we consider that the appropriate penalty to impose for the Union’s contravention of s 43 of the BCII is $50,000. Having regard to the totality principle we are not disposed to disturb the penalties imposed by the trial judge in respect of the contraventions of s 45 of the BCII Act and s 298P of the WR Act.

97 No prior misconduct is alleged against any of the individual respondents. Like the Union they are entitled to the benefit of their admissions and willingness to be parties to the Agreed Statement of Facts. Their admitted contraventions constituted serious breaches of the legislation. They acted deliberately. They succeeded in forcing Walton and Monjon to act in a way they would not have otherwise done to the detriment of Monjon and its employees. They have expressed no remorse for what they did. Although the offending conduct of the individual respondents differed, we do not consider it appropriate to discriminate between them in fixing penalties. Mr Allen was the person who was most actively involved at the worksite. He was, however, relatively junior in the Union hierarchy. Mr Benstead and Mr Oliver knew what Mr Allen was doing but made no attempt to direct him, as they should have done, to desist. On the contrary, they encouraged him to act in contravention of the law.

98 We consider that the appropriate penalties for their contraventions of s 43 of the BCII Act should be:

101 We consider it appropriate to suspend half of each of the penalties imposed on the individual respondents for a period of 12 months on conditions similar to those imposed by the trial judge.

102 The penalties (save for the suspended portions) should be paid into Consolidated Revenue within 30 days of the date of the orders being made.

103 The respondents sought to tender the media release of the Acting Australian Building and Construction Commissioner for the purpose of demonstrating that the penalties imposed by the trial judge were not, as claimed by the appellant, manifestly inadequate. We have not found it necessary to deal with the appellant’s submission that the penalties imposed at trial were manifestly inadequate. It is not, therefore, strictly necessary for us to rule on the admissibility of the affidavit on which the respondents sought to rely (to which the press release was exhibited) or the answering affidavit filed on behalf of the appellant. We do, however, consider that the material was inadmissible.

104 The media release post-dated the primary judge’s reasons but the Court has a discretion to receive it as further evidence under s 27 of the Federal Court of Australia Act 1976 (Cth) ("the FCA Act"). Nevertheless, the ordinary requirements for the exercise of the discretion to receive fresh evidence include a requirement of cogency of the evidence to be adduced: Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632 at 642 per Dixon J (as he then was); Council of the City of Greater Wollongong v Cowan [1955] HCA 16; (1955) 93 CLR 435 at 444 per Dixon CJ. The views of a regulator on the question of penalty may be of assistance to a judge, but they are not determinative of the question which must always be one for the Court having regard to the circumstances of the particular case: NW Frozen Foods at 290 per Burchett and Kiefel JJ. It follows in our view that the statement in the media release does not meet the test for admissibility under s 27 of the FCA Act.

I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Goldberg, Jacobson & Tracey .

Counsel for the Appellant:	Mr P O'Grady

Solicitor for the Appellant:	Deacons

Counsel for the Respondents:	Mr C Dowling

Solicitor for the Respondents:	Construction, Forestry, Mining & Energy Union

Date of Hearing:	3 August 2009

Date of Judgment:	10 September 2009

Federal Court of Australia - Full Court

Draffin v Construction, Forestry, Mining and Energy Union [2009] FCAFC 120 (10 September 2009)