Construction, Forestry, Mining and Energy Union v Stuart-Mahoney [2011] FCA 56 (8 February 2011)

Last Updated: 8 February 2011

FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Stuart-Mahoney [2011] FCA 56

Citation:		Construction, Forestry, Mining and Energy Union v Stuart-Mahoney [2011] FCA 56
Appeal from:		Stuart-Mahoney v CFMEU & Anor (No 2) [2008] FMCA 1015 and Stuart-Mahoney v CFMEU & Nor (No 3) [2008] FMCA 1435
Parties:		CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION and JASON DEANS v KAREN STUART-MAHONEY
File number(s):		VID 957 of 2008
Judge:		RYAN J
Date of judgment:		8 February 2011
Catchwords:		INDUSTRIAL LAW – appeal from Federal Magistrates Court – civil penalty proceedings – whether there was action or threat of action having prejudicial effect on employment – whether onus of negativing proscribed reason reversed by s 809 of the Workplace Relations Act 1996 (Cth) EVIDENCE – application of s 140 of the Evidence Act 1995 (Cth) – whether pleaded allegation sufficiently established by the evidence – whether inference of contravening conduct more probable than other available inferences PECUNIARY PENALTIES – appeal from Federal Magistrates Court – whether pecuniary penalties imposed for contravention of ss 789 and 790 of the Workplace Relations Act 1996 (Cth) were excessive
Legislation:		Workplace Relations Act 1996 (Cth) ss 789,  790,  797, 809 Evidence Act 1995 (Cth) s 140 Building, Construction and Industry Improvement Act 2005 (Cth)
Cases cited:		Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; 110 ALR 449 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466 Qantas Airways Limited v Gama [2008] FCAFC 69; (2008) 167 FCR 537 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 Tabet v Gett [2010] HCA 12; (2010) 240 CLR 537 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Cabal v United Mexican States [2001] FCA 427; (2001) 108 FCR 311 Hadgkiss v CFMEU [2008] FCAFC 22; (2008) 166 FCR 376 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Construction, Forestry, Mining, Energy Union v Safety Glass Pty Ltd [2010] FCA 989 Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65; (2010) 185 FCR 308 Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 Cozadinos v Construction, Forestry, Mining and Energy Union [2010] FCA 48 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426; [2008] FCA 1426; (2008) 177 IR 61 House v The King [1936] HCA 40; (1936) 55 CLR 499 Construction, Forestry, Mining and Energy Union v Williams  [2009] FCAFC 171; (2010) 262 ALR 417 A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 Hardwick v Australian Manufacturing Workers’ Union [2010] FCA 818; 198 IR 312 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321
Date of hearing:	15 February 2010
Date of last submissions:	16 February 2010
Place:	Melbourne
Division:	FAIR WORK DIVISION
Category:	Catchwords
Number of paragraphs:	99
Counsel for the Appellants:	Mr H Borenstein SC with Mr C Dowling
Solicitor for the Appellants:	Emma Walters, Constructions, Forestry, Mining and Energy Union
Counsel for the Respondent:	Mr R Dalton
Solicitor for the Respondent:	Trindade Farr & Pill

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
FAIR WORK DIVISION	VID 957 of 2008

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Appellant JASON DEANS Second Appellant
AND:	KAREN STUART-MAHONEY Respondent

JUDGE:	RYAN J
DATE OF ORDER:	8 FEBRUARY 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal be allowed in part.
2. Paragraph 2 of the Order of the Federal Magistrates Court of 4 August 2008 and paragraphs 2, 3 and 5 of the Order of 27 October 2008 be set aside.
3. Paragraph 6 of the Order of 27 October 2008 be varied by substituting for the words “of each of the sums referred to in paragraphs 4 and 5” the words “of the sum referred to in paragraph 4” and for the word “penalties” the word “penalty”.
4. Paragraph 7 of the Order of 27 October 2008 be varied by deleting the references to paragraphs 2 and 4.
5. The appeal be otherwise dismissed.
   

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 Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
FAIR WORK DIVISION	VID 957 of 2008

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Appellant JASON DEANS Second Appellant
AND:	KAREN STUART-MAHONEY Respondent

JUDGE:	RYAN J
DATE:	8 FEBRUARY 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This is an appeal from two sets of orders by Burchardt FM: Stuart-Mahoney v CFMEU & Anor (No 2) [2008] FMCA 1015 (“the Liability Judgment”), and Stuart-Mahoney v CFMEU & Anor (No 3) [2008] FMCA 1435 (“the Penalty Judgment”). By their further amended notice of appeal, the appellants, Jason Deans (“Deans”) and the Construction, Forestry, Mining and Energy Union (“the CFMEU”), an organisation of employees registered under the Workplace Relations Act 1996 (Cth) (“the WR Act”), appeal, first, from so much of the Liability Judgment as reflects his Honour’s finding that Deans’ actions in relation to George Galea were in contravention of the WR Act (“the Galea Findings”). Secondly, the appellants appeal against the whole of the Penalty Judgment.
2. The appellants’ case in relation to the Liability Judgment is, in essence, that there was no basis in the evidence on which the learned Federal Magistrate could have been satisfied, to the requisite standard of proof, that Deans, in his capacity as a CFMEU shop steward, had engaged in conduct in contravention of s 797 of the WR Act which was alleged against him in respect of George Galea. The appellants’ case in relation to the Penalty Judgment, is that the penalties imposed were manifestly excessive, and flowed from the learned Federal Magistrate’s having had regard to irrelevant considerations and not having had regard, or sufficient regard, to relevant considerations.
3. Given the short compass of the appeal, it is unnecessary to rehearse in detail the facts which have been extensively set out in the Liability Judgment at [13]-[58]. The following summary is sufficient for an understanding of how the questions now falling for determination have arisen.

Background facts

4. On the morning of 12 September 2006, Mr George Galea (“Galea”) and Mr Scott Gallagher (“Gallagher”), both employees of a labour hire agency called Direct Hire Services, arrived at a work site in Parkville, Melbourne.
5. The second appellant, Deans, in his dual capacity as the occupational health and safety delegate elected by the employees on the site and CFMEU shop steward, conducted on that morning an induction to the site for Galea, Gallagher and at least three other workers.
6. Galea and Gallagher were inducted at the same time as the other workers and were required to fill out induction forms which, amongst other things, required the workers to state any union affiliation and financial status.
7. Both Galea and Gallagher were members of the CFMEU. However, at that time Galea was unfinancial and Gallagher thought that he was an unfinancial member of the CFMEU. Galea and Gallagher did not commence work at the site until they had regularised their financial status with the CFMEU.
8. Deans spoke to Galea and Gallagher separately from the other three workers. Gallagher was asked by Deans why he had not filled out the induction form in full. Gallagher explained that, whilst he had previously been a financial member of the CFMEU, he had not worked on a CFMEU site for a number of months and was unsure whether or not he was financial. Gallagher volunteered to pay his membership fees and become financial instantly. Gallagher then proceeded to commence work on the site.
9. Galea had also failed to complete that part of the induction form which sought an indication of whether or not he was a financial union member. A conversation took place between Deans and Galea, the substance of which remains the central subject of dispute in this matter.
10. Following the conversation with Deans, Galea left the site, travelled to the CFMEU office in Carlton and there reached an agreement to become a financial member of the CFMEU. He then returned to work at the site. The length of time he was at the CFMEU office was one of the facts in issue.
11. Following a request for an interview by the Australian Building and Construction Commission (“ABCC”), on 27 February 2007 Galea made a statutory declaration, stating that he had been delayed by Deans in starting work on 12 September 2006 because he was not a financial member of the CFMEU. He made a further statutory declaration when interviewed on 29 March 2007 by investigation officers of the ABCC.
12. Ms Karen Stuart-Mahoney (the respondent in this appeal), in her capacity as an ABCC inspector appointed under the Building, Construction and Industry Improvement Act 2005 (Cth), alleged that the appellants had, amongst other things, contravened s 797 of the WR Act in respect of Galea and Gallagher by preventing them from commencing work until they had regularised their financial status as members of the CFMEU.
13. The appellants denied that Deans or the CFMEU had taken any action with the effect that Galea and Gallagher had been prevented from commencing work unless they became financial. The appellants maintained that both Galea and Gallagher decided of their own volition to become financial.
14. Although it is not a subject of this appeal, it is important to note that the learned Federal Magistrate had also been required to make findings in relation to a Mr Wayne Gauci (“Gauci”). Gauci had arrived at the site on the same morning as Galea and Gallagher but was not a member of the CFMEU. There was an exchange between Deans and Gauci, the substance of which was in dispute before the learned Federal Magistrate. His Honour found that Deans had contravened s 789 and s 790 of the WR Act by preventing Gauci from working on that day by reason of the fact that he was not a member of the CFMEU. Gauci gave evidence on affidavit that he had met both Galea and Gallagher who “appeared to be furious” that they could not start work because they were not financial members of the CFMEU. The relevance of Gauci’s evidence is discussed at [66]-[68] below. By their further amended notice of appeal filed 15 February 2010 the appellants abandoned their appeal against so much of the Liability Judgment as related to the contraventions of ss 789 and 790 of the WR Act in respect of Gauci.

THE LIABILITY JUDGMENT

15. The prosecution was conducted in the Federal Magistrates Court in Melbourne before Burchardt FM over three days on 12, 13 and 16 June 2008, almost two years after the alleged contraventions of the WR Act, and the Liability Judgment was delivered on 4 August 2008. The trial raised a number of issues which are not the subject of this appeal, including alleged contraventions of the WR Act in relation to Gauci. Of relevance to this appeal is the following conclusion reached by the learned Federal Magistrate at [3] of the Liability Judgment;

Deans did conduct himself in such a fashion as to contravene ss.789 and 790 of the Act in respect of Mr Gauci. I further accept that Mr Deans contravened s.797 of the Act in respect of Mr Galea. I have also concluded that Mr Deans did not contravene s.790 of the Act in respect of both Mr Galea and Mr Gallagher and did not contravene s.797 of the Act in respect of Mr Gallagher.

16. His Honour obviously had serious reservations about Galea’s evidence. He allowed Galea to be cross-examined by Counsel for the applicant because the earlier statutory declarations made by Galea on 27 February 2007 and 29 March 2007 had been inconsistent with his evidence-in-chief at the hearing. Consequently, there were conflicting accounts of how and why Galea had been delayed in commencing work on the morning of 12 September 2006. However, after reviewing the evidence before him, his Honour concluded that, although Deans had not contravened s 797 of the WR Act in relation to Gallagher, he had contravened that section in relation to Galea because Galea had been “made to go and sort out his financial status before he was allowed to start work” (Liability Judgment at [102]). [Emphasis added].
17. In reaching this conclusion on the alleged contravention, the learned Federal Magistrate explained as follows at [82] to [89] of the Liability Judgment, the use which he made of the inconsistent evidence of Galea:

[82] Mr Galea's evidence involved an all-too-obvious endeavour at one and the same time to resile from and distance himself from and even deny the truthfulness of his statutory declarations while on the other hand maintaining that he had not made a false and misleading declaration by signing them. I permitted Counsel for the applicant to cross-examine Mr Galea, notwithstanding that Mr Galea was his witness, because of inconsistencies between the statutory declarations and his evidence-in-chief.

[83] It is noteworthy that, although under that cross-examination Mr Galea proceeded to agree with a number of propositions put to him by Counsel for the Applicant consistent with his earlier statutory declarations, he resiled again from most of it when he was cross-examined by Counsel for the Respondents.

[84] The forensic practice of calling witnesses known to be likely to be uncooperative is obviously a high-risk one. It is a matter for the ABCC as to how it conducts its cases. But where you get a witness like Mr Galea who will say, unfortunately, pretty much whatever the person cross-examining him wants to hear, their evidence is in many ways not likely to be helpful. The aspects of the evidence of Mr Galea that I am prepared to accept, because they were given with a measure of conviction absent from the rest of his evidence and also because they make commonsense, are as follows:

1. Mr Galea knew he was not a financial union member when he went to the site, because his arrears were over $1,000.00 and he must have been well aware that he had not paid any money to the union for a long time;
2. as a long-time union member, he would have been well aware of the periodicity of union dues and the necessity to pay them;

100. Mr Galea was asked to remain and discuss his union dues by Mr Deans — that was the purport of his evidence;

4. Mr Galea had been out of work for some time, and to quote him (P-77) he "needed the work";
5. Mr Galea left the site to go to the union office, and described himself as distraught (P-78);
6. he was at the union office until about 12.00 pm, which was the time he had originally estimated (P-79).

[85] Examples of Mr Galea's desire to ingratiate himself with the Second Respondent and/or to resile from his earlier statement are:

1. At P-65 where he, unresponsively, volunteered that he had been intimidated when making his first statement to the ABCC;
2. At P-65 where he said, in cross-examination by Counsel for the Respondents, that he "felt intimidated by the large gentleman that was there with Ms Stuart and was saying what they wanted to hear virtually" and that he "I’ve got a memory like a sieve";

100. At P-68, he said he felt nervous when interviewed on 29 March 2007, and inferred that this might be interrelated with the presence of the “large gentleman” who had attended in February;

d) At P-71 where he said he was a proud member of the union.

[86] These statements are in part unbelievable. First of all, the second statutory declaration provided by Mr Galea took place when he was interviewed by two women, the large ex-policeman who had interviewed him the first time not being there.

[87] Second, if — and this is the picture for which the Respondents contend — Mr Galea was a proud union member, so desperate to be up to date in his union fees that he happily disappears from the site for a number of hours, was correct, there is no earthly reason why he would be distraught; rather, he would be happily fulfilling a function that he was keen to do.

[88] The truth is, as I find, that Mr Galea was not financial, that Mr Deans made it plain to him that he would have to sort his financiality out before he was allowed to start and that it took him some three-or-so hours to do so, and that this distressed him because he lost money that he badly needed as a result.

18. In light of those observations, the learned Federal Magistrate came to these conclusions at [102];

Mr Galea needed the money. It is entirely unreasonable to suppose he wanted to do anything other than to start work. The fact is he was prevented from doing so because of the actions of Mr Deans, and in the circumstances this conduct, in my view, plainly contravenes s 797 of the Act. He was made to go and sort his financial status out before he was allowed to start work. This is so, irrespective of whose version one accepts of the unfortunately rather numerous versions that are contained both in the statutory declarations of Mr Galea, his oral evidence given in cross-examination by Counsel for the Applicant and in cross-examination for the Respondents and in Mr Deans' own evidence. [Emphasis added].

19. It is this conclusion of his Honour, based on his findings at [88] which the appellants challenge. They contend that his Honour could not have been satisfied to the requisite standard of the factual matters required to sustain a finding of contravention under s 797 of the WR Act in relation to Galea and, accordingly, his conclusion in that respect was erroneous.

Statutory Framework

20. At [3] of the Liability Judgment, the learned Federal Magistrate concluded “that Mr Deans did conduct himself in such a fashion as to contravene ss 789 and 790 of the WR Act in respect of Mr Gauci.” Those sections provide;
    789. Coercion

(1) A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person or a third person:

(a) to become, or not become, an officer or member of an industrial association; or

(b) to remain, or cease to be, an officer or member of an industrial association.

(2) Subsection (1) is a civil remedy provision.

790. False or misleading statements about membership

(1) A person must not make a false or misleading representation about:

(a) another person’s obligation:

(i) to be, or become, an officer or member of an industrial association; or

(ii) not to be, not to become or to cease to be, an officer or member of an industrial association; or

(b) another person’s obligation to disclose whether he or she, or a third person, is, or has been, an officer or member of an industrial association or of a particular industrial association; or

(c) the need for another person to be, or not to be, an officer or member of an industrial association, or of a particular industrial association, in order for the other person to obtain the benefit of an industrial instrument.

(2) Subsection (1) is a civil remedy provision.

21. As well, his Honour found that the CFMEU and Deans had contravened in respect of Galea s 797(3) of the WR Act which provides, so far as is relevant;

797(3) [Prohibited actions — industrial associations and association officers] An industrial association, or an officer or member of an industrial association, must not:

(a) take, or threaten to take, action having the effect, directly or indirectly, of prejudicing a person in the person's employment or prospective employment; or

(b) advise, encourage or incite a person to take action having the effect, directly or indirectly, of prejudicing another person in the other person's employment or prospective employment;

for any of the following reasons, or for reasons that include any of the following reasons:

...

(f) the person has not paid, has not agreed to pay, or does not propose to pay, a fee (however described) to an industrial association;

22. Subsection 797(3)(f) of the WR Act is a civil remedy provision: s 797(4). According to Pt 14, Div 3 of the WR Act, a Court hearing a proceeding under a civil remedy provision must apply the rules of evidence and procedure for civil matters: s 729. This, in turn, enlivens s 140 of the Evidence Act 1995 (Cth) (“Evidence Act”), which prescribes the civil burden of proof, by stipulating;
    140. Civil proceedings: standard of proof

(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

(a) the nature of the cause of action or defence; and

(b) the nature of the subject-matter of the proceeding; and

(c) the gravity of the matters alleged.

23. As has been observed in a number of authorities; (eg, Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170, at 170-171; [1992] HCA 66; 110 ALR 449, at 449-450 (“Neat”); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466, at [29]-[38]; and Qantas Airways Limited v Gama [2008] FCAFC 69; (2008) 167 FCR 537 (“Qantas v Gama”), per Branson J, at 574, and the cases there cited), s 140 of the Evidence Act reflects the common law standard of civil proof.
24. The requirements for proof on the balance of probabilities was considered (before the enactment of the Evidence Act) by the High Court in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1, at 5 (“Bradshaw”):

We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough [if] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture: (see per Lord Robson, Richard Evans & Co Ltd v Astley [1911] AC 674 at 687). But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as mere conjecture or surmise ...

25. In Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, Dixon CJ, at 305, said, referring to the passage from Bradshaw quoted above;

But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.

26. More recently, the High Court in Tabet v Gett [2010] HCA 12; (2010) 240 CLR 537, at 111 again referring to Bradshaw, stated that;

“More probable” means no more than that, upon a balance of probabilities, such an inference might reasonably be considered to have some greater degree of likelihood; it does not require certainty.

27. The authorities noted above seem to require, in the context of this case, a basis in the evidence before the Magistrates Court for the attainment of satisfaction, on the balance of probabilities, that Deans took some form of action towards Galea wholly or partly for the reason that Galea had not paid his CFMEU dues, which action had the effect of prejudicing Galea in his employment.
28. In applying the civil standard of proof set out in s 140(1) of the Evidence Act to the fact finding task, the learned Federal Magistrate was also required to take into account the non-exhaustive list of factors set out in s 140(2). In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466, at [31], the Court noted that Dixon J’s classic statement in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, at 361-2 (“Briginshaw”) “appositely expresses the considerations that s 140(2) of the Evidence Act now requires a court to take into account”. In the off-quoted passage in Briginshaw, Dixon J said;

[W]hen the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed ... it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences.

29. Accordingly, in making a finding, as he did, of a contravention by Deans of s 797(3)(f) of the WR Act, the learned Federal Magistrate was required to satisfy himself, on the balance of probabilities and taking into account the criteria in s 140(2) of the Evidence Act, that the conduct alleged against Deans had, in fact, occurred. It is necessary in this appeal to examine whether the learned Federal Magistrate applied these statutory provisions correctly to the evidence before him. Before considering the appeal from the Liability Judgment, I note that there is some contention as to whether the “reverse onus” imposed by s 809 of the WR Act applies to s 797 of the WR Act. It is apparent from the Liability Judgment at [12] that it was common ground that s 809 applies to s 797 of the WR Act. Section 809 of the WR Act relevantly provides;

(1) If:

(a) in an application under section 807 relating to a person’s conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and

(b) for the person to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;

it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person proves otherwise.

30. In this case the “conduct”, or “action”, of which the respondent complained in the Statement of Claim dated 19 September 2007 and applicant’s Further and Better Particulars of the Statement of Claim dated 7 March 2008, is Deans’ representation to Galea that he could not work on the site unless he was financial. Thus, the “conduct” referred to in s 809 of the WR Act is, in this case, the making of that alleged representation. The alleged “reason”, for the conduct was that Galea was in arrears in payment of his union dues and Deans and the CFMEU wished him to make up the arrears or agree to do so before commencing work on the site. The purpose of s 809 is to reverse the onus of proof if there is a positive finding of the “conduct” or “action”, so that the “intention” or “reason” is presumed and must be rebutted by, in this case, Deans and the CFMEU. However, the question before the learned Federal Magistrate and the question in this appeal, which must first be answered, is whether there is evidence that the proscribed “conduct” or “action” actually occurred. If the Court had been satisfied on the balance of probabilities that Deans had made the alleged representations, then s 809 of the WR Act applied to reverse the onus and Deans and the CFMEU would have been required to establish, also on the balance of probabilities, that he had not made the representation for the alleged reason or with the relevant intent.

The appeal from the Liability Judgment

31. In the appeal from the Liability Judgment,  Mr Borenstein SC, who appeared with Mr Dowling of Counsel for the appellants, submitted that the learned Federal Magistrate had relied upon “inexact proofs, indefinite testimony, or indirect inferences” in arriving at his findings that a contravention of s 797 had occurred. In support of this contention, Counsel for the appellants pointed to the numerous and inconsistent versions of the events and the fluctuating testimony of Galea. In particular, it was argued that the learned Federal Magistrate’s conclusion at [102] that Galea,

[w]as made to go and sort his financial status out before he was allowed to start work ... irrespective of whose version one accepts of the unfortunately rather numerous versions that are contained both in the statutory declarations of Mr Galea, his oral evidence given in cross-examination by Counsel for the Applicant and in cross-examination for the Respondents and in Mr Deans’ own evidence” [emphasis added],

failed sufficiently to take into account, or gave insufficient weight to, what had been said by Galea in evidence-in-chief and in cross-examination by Counsel for the appellants.

32. In support of the argument that indefinite testimony and inexact proofs had been relied upon by the learned Federal Magistrate, Counsel for the appellants pointed to Galea’s examination-in-chief by Mr Dalton of Counsel for the respondent in relation to his status as a financial member of the CFMEU:

... Did you know at that time whether you were a financial member of the CFMEU or any other union? --- No, I didn’t.

You didn’t know whether you were or whether you weren’t? --- Whether I was, no. I didn’t know at the time.

33. Later, the following exchange took place between Mr Dalton and Galea, highlighting the inconsistencies in Galea’s versions of events:

Can I take you to your second declaration. At paragraph 6, which I’ve already taken you, about that argument that you overheard, and that’s where you overheard hearing “If you don’t have a union ticket, you can’t start”? ---Mm’hm.

The shop steward comes back in, paragraph 7 you say that you were concerned when you’d overheard that argument. You were concerned because you were a union member, however you were not financial? --- Yes.

Again that’s the position, isn’t it? --- Yes, it is

34. Further, Galea was similarly inconsistent on whether he had voluntarily regularised his financial status in the CFMEU. During cross-examination, Counsel for Deans and the CFMEU pointed to Galea’s evidence that it was his own decision to sort out his CFMEU dues. That evidence emerged as follows during examination-in-chief about a discussion between Galea and Deans;

What happens then? --- I said to him, “I’m not sure if I’m financial”, and he said, “Well, we’ll check with the office”, and he rang the CFMEU office, and they mentioned that I was $1200 in payments for my membership. I’d let it lapse.

Then what happened? --- I said, “There’s no way I can pay this. I’m a single father with two children, and there’s no way I can pay it”. I mentioned that I knew Ralph Edwards. He rang Ralph Edwards and I asked Ralph Edwards, “What can I do?” and Ralph said there’s nothing he can do. He said, “Just get in touch with the office”, and I did. I got in touch with the office, and it was my decision – I said to the shop steward that I’ll go down to the office and fix all this up. So I went down the office and fixed it up virtually.

When you say “fixed it up”, what did you do? --- Became financial.

How did you achieve that?---I went to the office, I told them there was no way I could pay $1200, they said they would waive the $1200 and I would only have to pay $34 for the rest of the term, which I did. I paid the $34 which made me financial. [Emphasis added].

35. As Mr Borenstein SC pointed out in this Court, at odds with this evidence-in-chief is Galea’s statement to the ABCC of 27 February 2007 and 29 March 2007 where he said, “[t]hey would not let me on site because I was not a financial union member”, suggesting that the decision to become financial was not his alone but had been dictated by Deans’ insistence that he would not be allowed on site while he was unfinancial.
36. Reference was then made to further evidence going to the voluntariness of Galea’s decision to regularise his status. That evidence was elicited by Mr Dowling of Counsel in the following passage of cross-examination of Galea in the Federal Magistrates Court:

I think your evidence is that you couldn’t sort out your unpaid union dues with Mr Edwards? --- No, I couldn’t, but he suggested to go to the office and maybe fix it up.

So the shop steward says, “Why don’t you go to the union office and sort it out”? --- I can’t recall whether it was him that said it or Mr Edwards.

But someone says, “Do you want to go and sort it out”? --- Yes.

You say, “Yes, I’ll go and sort it out”? --- “Yes, no problem”, because I needed to work.

But what I’m putting to you is that was a decision made voluntarily? --- Yes.

You said “I’ll go and sort it out?” --- Yes, that’s right.

Nobody told you you had to do that? --- Nobody forced me, no. I made the decision myself, yes.

37. Later, in re-examination by Mr Dalton, Galea contradicted what he had said under cross-examination by Mr Dowling. In contrast with the inconsistencies in the accounts given by Galea, of which some tended to implicate the appellants in a contravention of the WR Act and others tended to exculpate them, Deans gave sworn evidence denying any threat to prejudice Galea’s prospects of obtaining work at the site. That evidence was entirely exculpatory. As a result, the learned Federal magistrate was presented with three versions of the events of 12 September 2006 which bore on the central question of whether Deans had engaged in conduct contravening s 797(3) of the WR Act:

(1) Galea’s evidence that, he had been compelled, at Deans’ insistence, to become financial before he could commence work on the site;

(2) Galea’s evidence that he had not, by any conduct of Deans, been forced to become financial before commencing work on site but had voluntarily elected to go to the Union office to regularise his status after he had spoken by telephone to Ralph Edwards;

(3) Deans’ evidence that it was entirely Galea’s decision to become financial, which had been taken without any threat or action by Deans to prevent him (Galea) from starting work.

38. In the light of these differing accounts of what had been said and done, the learned Federal Magistrate observed that, “where you get a witness like Mr Galea who will say, unfortunately, pretty much whatever the person cross-examining him wants to hear, their evidence is in many ways unhelpful”. Nevertheless, his Honour was disposed to accept some parts of Galea’s evidence because “they were given with a measure of conviction absent from the rest of his evidence and also because they make commonsense” (Liability Judgment at [84]).

The role of an appellate Court

39. Before considering in more detail the version of Galea’s evidence which the learned Federal Magistrate was prepared to accept, it is appropriate to say something about the role of this Court in appeal proceedings like the present. In Cabal v United Mexican States [2001] FCA 427; (2001) 108 FCR 311, a Full Court of this Court said, at [223]-[224];

... In general on an appeal by way of rehearing from a judge sitting without a jury an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge. However once having reached its own conclusion it will not shrink from giving effect to it.

Notwithstanding the fact that the learned primary judge's review was conducted on the papers, and without any opportunity to consider the demeanour of the witnesses, the weight to be accorded to the evidence of the experts was primarily a matter for his Honour to determine. This Court can consider whether he fell into appealable error in that regard but it will not approach that evidence as though this were a rehearing de novo in which his Honour's views count for nought. If, after giving full weight to his Honour's views, we are persuaded that the conclusions which he reached were erroneous we must set aside his finding of fact. We cannot however simply substitute for his Honour's findings of fact those findings which we would have made had we been the judges on review who determined this matter at first instance.

40. The role of the appellate court was also relevantly considered by North J in Hadgkiss v CFMEU [2008] FCAFC 22; (2008) 166 FCR 376 in this passage, at [26];

Notwithstanding the significant challenges it faces, the role of the appellate court remains that of real review, a function which was explained by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [25] thus:

Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". (Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549 at 564, citing The Glannibanta (1876) 1 PD 283 at 287).

41. The respondent in these proceedings contends that the finding, at [88] of the Liability Judgment, that the appellants had contravened the WR Act was based, to a significant extent, on the learned Federal Magistrate’s impression of the witnesses. Accordingly, so the argument went, it is necessary for the appellants to establish that one or more of the relevant findings of fact, based on the learned Federal Magistrate’s impression of the witnesses, was erroneous because his Honour had “failed to use or ... palpably misused his advantage” or had acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”. This high threshold has been referred to in the current proceeding as the “principle in Fox v Percy”.
42. In response to the respondent’s invocation of the principle in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 the appellants’ submission, which I accept, was that the learned Federal Magistrate’s error was not in preferring one piece of evidence to another, or finding part of a witness’s evidence believable and another part not, but rather, in the analysis of the effect of the evidence as a whole based on the application of s 140 of the Evidence Act to the facts. That raised the subsidiary question of whether, on the preferable analysis, the evidence permits the particular findings made by his Honour. Accordingly, in assessing whether the learned Federal Magistrate erred in his evaluation of Galea’s evidence, it is not the task of this Court to form a view as to whether the learned Federal Magistrate was right or wrong in finding the testimony of certain witnesses credible or not, but rather, to consider how his Honour applied the relevant provisions of the WR Act and the Evidence Act to the evidence before him.
43. In considering the issues on appeal to this Court, I have taken into account the necessity properly to consider and give due weight to the learned Federal Magistrate’s findings and conclusions. It is clear from the relevant authorities that I should only set aside his findings of fact if, having weighed the conflicting evidence and drawn my own inferences and conclusions, I am persuaded that his Honour’s findings and conclusions are erroneous.

Galea’s evidence

44. To commence an assessment of the evidence of a particular witness, as his Honour did with that of Galea at [84] of the Liability Judgment, with the undifferentiated observation that the evidence is “not likely to be helpful” raises a doubt about the probative value of any of that evidence. Thus, as I have suggested at [61] below, it was open to his Honour to have rejected the whole of Galea’s evidence. However, his Honour was prepared to accept some of Galea’s evidence because it was “given with a measure of conviction”. It is not entirely clear whether he considered that Galea’s evidence, summarised at [84(a)-(f)] of the reasons quoted at [8] above had been given with greater conviction when Galea provided his statutory declarations, when giving evidence-in-chief, or during cross-examination. In this Court Mr Dalton contended that the “measure of conviction” was an attribute of the testimony given by Galea in the witness box. Be that as it may, the summary at [84(a)-(b)] of his Honour’s reasons, is more properly to be regarded as a recital of matters which were not in dispute or went to Galea’s state of mind on the morning of 12 September 2006.
45. None of the matters identified at [84](a) to (f) of his Honour’s reasons bore directly on the central question of what had been said or done by Deans on that morning. The knowledge imputed to Galea that he was unfinancial to a very large extent, equally made available the inference that he was disposed voluntarily to come to some accommodation about the arrears to avoid embarrassment or the opprobrium of Deans or the CFMEU or the CFMEU members who were to become his workmates on the site. In the second place, the fact that Galea was asked by Deans to remain and discuss his union dues does not compel the inference that Deans would not have allowed him to start work unless they were paid. Another available inference was that Deans merely wished to emphasise the undesirability of Galea’s remaining unfinancial. That is consistent with the absence of evidence that the extent of Galea’s unfinanciality was ever communicated to Deans before the telephone call to the Union office and with Deans’ evidence that, when he next saw Galea after his visit to the Union office, Galea was on site and had commenced work. It is also noteworthy that Deans’ request “to remain and discuss his union dues” was also made of Gallagher in respect of whom, it was found, there had been no contravention of s 797(3).
46. Similarly, the fact that Galea had been out of work for some time and “needed the work” went solely to his state of mind and the likelihood that he would respond positively to a threat of the kind imputed to Deans. There was no evidence that Deans had any knowledge that Galea had been out of work or for how long. Nor, apart from Galea’s disclosure that he was unfinancial to an unspecified extent, was there anything to suggest that Deans knew, or thought, that Galea desperately needed the money which he would earn from working on the site.
47. That Galea left the site to go to the Union office in a state of mind which he described as “distraught”, does not compel the drawing of an inference that Deans had threatened to prevent him from working on the site if the arrears were not paid. Had such a threat been made, it is at least as likely that Deans would have insisted on Galea paying the arrears then and there at the OH&S office as Gallagher had done. This aspect of the facts found by the learned Federal Magistrate at the least leaves open the inference that Galea had voluntarily gone to the Union office and had been distressed at learning the extent of his arrears and because of the uncertainty about what would be required to regularise his position. That possible construction of the events seems to have been disregarded by his Honour when he reasoned at [87] that:

... if ... Galea was a proud union member so desperate to be up to date in his union fees that he happily disappears from the site for a number of hours, was correct, there is no earthly reason why he would be distraught; rather he would be happily fulfilling a function that he was keen to do.

48. Moreover, the finding that Galea was “distraught” was based on his answer to a question in cross-examination by Mr Dowling about the length of time he had been at the Union office. Galea’s answer was; “Probably about an hour. I was very distraught at the time.” The context of that exchange suggests that Galea proffered his “distraught” state as an explanation of his inability to recall more precisely how long he had spent at the Union office. It was certainly not effective to convey a feeling of distress because his absence from work for some three hours and the consequent loss of wages had been brought about by a threat from Deans. I therefore conclude that his Honour erred in drawing the inference which he did when he concluded, at [88] of his reasons;

Mr Deans made it plain to him that he would have to sort his financiality out before he was allowed to start and that it took him some three-or-so hours to do so, and that this distressed him because he lost money that he badly needed as a result.

49. The time spent by Galea in travelling to the Union office from the site and back again and in coming to an accommodation with Union officials (other than Deans) about his arrears, seems to me to be irrelevant to the drawing of an inference about what Deans conveyed to Galea before the latter left the site. His Honour’s reliance on that lapse of time appears to have been based on some of Galea’s responses to Mr Dowling’s questions in cross-examination which appear to be inconsistent with other evidence given by Galea during the same exchange. If there had been direct evidence that Deans made a threat to do something which might have prejudiced Galea’s prospective employment that was all that was required. How long it took Galea to reach an accommodation with the Union would indicate only the extent of the prejudice in his employment which he actually suffered. That would have been relevant, albeit marginally, only to the issue of penalty.
50. As already noted, the learned Federal Magistrate indicated, at [84] of his reasons, his acceptance of certain aspects of Galea’s evidence because those parts were given “with a measure of conviction absent from the rest of his evidence.” That was unexceptionable as far as the relevant part of Galea’s evidence was common ground or was undisputed by the appellants. However, there was no real attempt, at first instance, to identify which of “the unfortunately rather numerous versions” of Galea’s evidence were accepted and which were rejected.
51. Nor was there any explanation of the reasons for accepting some parts of Galea’s evidence and rejecting other, inconsistent, parts. Doubtless omissions of that kind from the reasoning below led Counsel for the appellants to contend that his Honour had relied on “inexact proofs, indefinite testimony and indirect inferences” to reach his ultimate conclusion. That conclusion was expressed at [102] of his Honour’s reasons where it was observed;

It is entirely unreasonable to suppose he [Galea] wanted to do anything other than to start work. The fact is he was prevented from doing so because of the actions of Mr Deans, and in the circumstances this conduct, in my view, plainly contravenes s.797 of the Act.

52. That conclusion may have been open if his Honour had accepted the allegation in the following paragraphs of Galea’s second statutory declaration of 29 March 2007;
    19. Matt then came to the induction shed. The shop steward told Matt that I was not financial and that I could not start work until I became a financial member.
    20. I am of the belief that Matt had no control in this situation. It was the shop steward that was wanting to ensure that I be a financial member.
    21. I told Matt that I was going to go to the union office to fix this all up. Matt said to me “that’s fine mate, if you can’t get back here today, come back tomorrow”. I told Matt “I will definitely be back here today”.
        
53. However, the account given in those paragraphs was inconsistent with the allegations in paragraphs 13 and 14 of Galea’s earlier statutory declaration of 27 February 2007 which referred to arrangements made, presumably by Gallagher, to pay his Union dues by credit card and continued;
    13. Then he asked me how I wanted to pay for mine I said I do not have a credit card. I said that I knew Ralph Edwards. He called Ralph Edwards and he handed me the phone I spoke to Ralph and he said ‘unfortunately I can not help you the only way to fix this up is to go into the office’.
    14. After that I said to the shop steward ‘look I will have to go to the office to fix this up’. Then the foreman, I think his name is Doug, said to me ‘once you are financial you are welcome to come back and work on this site’.
        
54. Although the learned Federal Magistrate indicated at [84(a)-(f)] of his reasons reproduced at [17] above that he was prepared to accept the parts of Galea’s evidence there summarised because, it was “given with a measure of conviction absent from the rest of his evidence”, there was no detailed analysis of why that evidence was accepted. Nor did his Honour state what other evidence was accepted and why other evidence was rejected. His Honour’s treatment of the evidence of Gauci in relation to Galea and Gallagher illustrates the difficulty. In the relevant paragraph of his affidavit, Gauci, after referring to a conversation between himself and a union representative identified by Gauci as “Spike” but found by the learned Federal Magistrate to have been Deans, deposed:

I then went out into the centre walkway and spoke with two guys who were also standing around. I asked them:

“What’s going on guys?”

They said they couldn’t start work because they were not paid up union members. They appeared to me to be furious about this. I said to them:

“They can’t stop us. We don’t want to be in their union, we are not breaking the law. The union is not a law of its own.”

55. On the assumption that the two men with whom Gauci claimed to have spoken were Galea and Gallagher, it is clear that Gauci did not differentiate between them in their respective reactions to whatever Deans had said to them. Despite Gauci’s failure to distinguish between what had been said to him by Galea on the one hand and Gallagher on the other, his Honour concluded, at [103] of the Liability Judgment;

I should interpolate and say here that I accept, as Mr Gauci says, that Mr Galea expressed strong discontent to him at the time. For the reasons given, I am not able to accept Mr Gauci’s evidence about Mr Gallagher to the same effect.

56. Criticism was also directed by Counsel for the appellants to Burchardt FM’s observation at [85] of the Liability Judgment that Galea had manifested a “desire to ingratiate himself with [the CFMEU] and/or to resile from his earlier statement.” His Honour identified these passages from Galea’s evidence as supporting the imputation to him of that desire;
    1. At P-65 where he, unresponsively, volunteered that he had been intimidated when making his first statement to the ABCC;
    2. At P-65 where he said, in cross examination by counsel for the Respondents, that he "felt intimidated by the large gentleman that was there with Ms Stuart and was saying what they wanted to hear virtually" and that he "I’ve got a memory like a sieve";
    100. At P-68, he said he felt nervous when interviewed on 29 March 2007, and inferred that this might be interrelated with the presence of the “large gentleman” who had attended in February;
         
57. In respect of the statements there imputed to Galea his Honour said, at [86] of the Liability Judgment;

These statements are in part unbelievable. First of all, the second statutory declaration provided by Mr Galea took place when he was interviewed by two women, the large ex-policeman who had interviewed him the first time not being there.

58. An examination of the transcript makes it clear that Galea never claimed that the “large gentleman” had been present when he made his second statutory declaration of 29 March 2007.
59. When Galea was asked during the hearing at first instance about the 29 March 2007 meeting with the ABCC, the following exchange took place;

Again they came to your house, and again you let them in?---I did, yes.

Was it the same two people?---I’m not sure. I’m not sure if the last [sic. scil “large”] gentleman was there. It could have been just Ms Stuart I think, and another lady I think it was. It might have been a lady.

Were you equally nervous this time around?---Yes, pretty much, because, you know, it’s a statement. I thought I had to do a statement by law.

60. That passage makes clear that Galea attributed his nervousness at the second meeting on 29 March 2007 to a concern that he had “to do a statement by law”. I can see nothing in the evidence to support a finding that Galea implied that the intimidating effect of the large gentleman on 27 February had continued to operate when he had adopted the version of events put to him on 29 March. In any event, I regard Galea’s having “resiled” from his earlier statement and his motive for doing so as a false issue. That is because an examination of the two accounts set out at [52] and [53] above makes clear that the earlier statement of 27 February was more favourable to Deans and the CFMEU than the relevant passage from the later statutory declaration of 29 March.
61. Moreover, although it was clearly open to his Honour to disbelieve Galea and reject his evidence as implausible, that rejection could not, without more, support an affirmative finding to the contrary effect. Where a court disbelieves a witness, it is required to disregard his or her evidence and look to the rest of the evidence to see whether it directly, or by an available inference, supports a particular finding. Accepting that parts of Galea’s evidence had no probative value requires an assessment of whether there are other parts of the evidence which establish, on the balance of probabilities, that Deans made the alleged representations to Galea.

Gauci’s and Gallagher’s evidence

62. Although the circumstances in which this appeal has been brought compel one to focus on the findings made in respect of Galea, those findings cannot be viewed in isolation from the evidence directly related to the charges in respect of each of Gauci and Gallagher.
63. On the basis of Gallagher’s evidence, his Honour found, at [78], that Gallagher had;

...proffered the advice that he was not a financial member and volunteered to bring himself up to date and become financial instantly, once the possibility of doing so was brought to his attention.

The fact that Gallagher had said that he was “prepared to pay my membership that day, there and then” (see Liability Judgment at [73]), apparently enabled his Honour to find, at [98], that Deans had not contravened s 797(3)(f) of the WR Act in relation to Gallagher. Unlike Galea’s, Gallagher’s credit had not been called into question because he had not made any prior statements to the ABCC. However, the learned Federal Magistrate drew different inferences about Deans’ conduct towards Gallagher and Galea respectively. After observing, at [99], that:

On the particular facts of this case, I cannot and do not find that the Respondents contravened s 797 of the Act in respect of Mr Gallagher ... ;

his Honour went on to remark, at [100];

With Mr Galea, however, the evidence is all the other way. Mr Galea needed the job and did not work for three or four hours because he was not a financial member of the union.

64. I have not been able to discern in the evidence any basis for drawing a different inference as to how Deans conducted himself towards Gallagher compared with Galea. It was initially pleaded that both Galea and Gallagher had been subjected to the same “action” by Deans, by the making of some representation that, unless they were financial CFMEU members, they could not commence work on the site. If such conduct by Deans had been established, that directed to Galea would have been indistinguishable from that directed to Gallagher. The only difference between the two men suggested by the evidence was that, after an obstacle had been raised to their starting work, it was easier for Gallagher to overcome the obstacle because he apparently had the means to pay his arrears by credit card. It is quite possible that Galea would have volunteered to pay forthwith had he known that the CFMEU would waive the bulk of his arrears as it ultimately did. If Deans had made statements to the effect that Galea and Gallagher needed to be financial in order to start work at the site, that would have amounted to action, or a threat to take action, having the effect of prejudicing both Gallagher and Galea in their employment or prospective employment on the site in the sense that they would each have had to outlay money to begin work. A finding to that effect would have shifted to Deans and the CFMEU the onus of showing that the action or threat had not been made for the reason, or for reasons that included the reason, that Galea and Gallagher had not paid their dues to the CFMEU as they fell due. If that onus had not been discharged, a contravention of s 797(3) would have been constituted by Deans’ preventing, or threatening to prevent, both Galea and Gallagher from starting work.
65. As I have endeavoured to explain earlier in these reasons, the lapse of time during which Galea was delayed in starting work was not the relevant “prejudice” for the purposes of s 797(3). Rather, it was the denial, or threatened denial, of an opportunity to start work immediately. Moreover, although Galea told the Court that he “needed the work”, there was no evidence to show that the same was not also true of Gallagher. Presumably, if Gallagher had not also “needed the work”, he would not have been at the site on that day and would not have volunteered to bring his union dues up to date.
66. As already noted, Gauci gave evidence at first instance that he had spoken with Gallagher and Galea on 12 September 2006 and that both had said that they could not start work because they were not paid up union members and that they appeared to be furious. However, the learned Federal Magistrate observed, at [79], that “Mr Gallagher, like Mr Galea, denied meeting Mr Gauci after the event, after paying his fees. He, likewise, denied Mr Gauci's assertions that he was annoyed at the time”. That denial by Gallagher of meeting Gauci and being annoyed at the time was accepted by his Honour who disbelieved Galea’s evidence to the same effect. The reasons for this different evaluation of the evidence is not clear apart from his Honour’s reference to his earlier finding that the other evidence in relation to Gallagher did not demonstrate that Deans and the CFMEU had contravened s 797 of the WR Act. I do not consider that it was open on the evidence to distinguish in this way between Gauci’s evidence in relation to Gallagher and that in relation to Galea.
67. Counsel for the respondent on the appeal suggested that, as Gallagher had given evidence that he had not spoken with Gauci, and Galea’s evidence had been that he did not recall whether he had spoken with Gauci, it was open to the Magistrates Court to find that Gauci had spoken with Galea, who had been furious, and that Gauci was mistaken when he claimed to have spoken also with Gallagher. However, it is difficult to attribute that reasoning to his Honour in light of his finding, at [79], that;

Mr Gallagher, like Mr Galea, denied meeting Mr Gauci after the event, after paying his fees.  He, likewise, denied Mr Gauci's assertions that he was annoyed at the time. [Emphasis added].

In the circumstances, I consider that the distinction in this respect between what Deans had said to Gallagher and what he had said to Galea should not have been drawn.

68. The learned Federal Magistrate also drew on his finding that Deans and the CFMEU had contravened s 789 and s 790 of the WR Act in relation to Gauci as supporting the conclusion that they had contravened s 797(3)(f) in respect of Galea. His Honour observed, at [92];

Furthermore and in any event, given that I have accepted that Mr Deans had enforced a no ticket no start policy in respect of Mr Gauci, it is more probable than not that he enforced the same outcome in respect of Mr Galea, whose arrears were far greater than those of Mr Gallagher and which were not amenable to the same immediate result.

The learned Federal Magistrate found that Deans and the CFMEU had contravened ss 789 and 790 of the WR Act in respect of Gauci but not in respect of Galea and Gallagher. To reason from his conclusion in relation to Gauci, that it was probable that Deans had contravened s 797(3)(f) of the WR Act was, I consider, impermissible. The evidence indicated that Gauci had not been present during whatever was said between Deans on the one hand and Galea on the other. When it is remembered that his Honour declined to make any finding of a contravention in respect of Gallagher, the only connection between Deans’ conduct directed to Galea and that found in relation to Gauci was that the two sets of conduct were relatively proximate in time. I regard that circumstance as insufficient to permit the inference that the conduct was relevantly similar in each instance.

Did the appellants contravene s 797(3)(f)?

69. The learned Federal Magistrate’s finding, which the appellants contend was central to his conclusions at [102], that Galea was “made to go and sort out his financial status before he was allowed to work” was said by his Honour to have been available “irrespective of whose version one accepts of the unfortunately numerous versions” of Galea’s evidence. That statement at [102] of the Liability Judgment cannot be reconciled with the contention on behalf of the respondent, that the conclusion at [102] was based on an acceptance of some parts of Galea’s evidence, a rejection of other parts of Galea’s evidence and a disbelief of Deans’ evidence, as well as appropriate inferences from the rest of the evidence. Although his Honour seems to have indicated that he would have come to the same conclusion whether he had accepted one of the numerous accounts given by Galea or that given by Deans, that was a logical impossibility. Of the three statements of the effect of the relevant evidence which I have set out at [37] of these reasons, only the first supports a conclusion that there had been a contravention of s 797(3)(f) in respect of Galea.
70. I do not accept the respondent’s argument that it was unnecessary for the learned Federal Magistrate to make an affirmative finding of what it was that Deans had said and done in relation to Galea. The WR Act required the attainment of satisfaction, on the balance of probabilities, taking into account s 140(2) of the Evidence Act, that Deans took, or threatened to take, action having the effect of prejudicing Galea in his employment or prospective employment. Such actual or threatened action could have been established by acceptance of a particular account of what had been said or done by Deans, or could have been inferred from other established facts. In the present case, it appears that his Honour was unable to accept the one version of events given by Galea which would have established a contravening action or threat by Deans. The other available facts do not, in my view, make the inference of contravening conduct by Deans more probable than some other, exculpatory, inference. Those other facts are that Galea acknowledged to Deans that he was an unfinancial member of the CFMEU; that immediately or shortly afterwards he spoke by telephone to Ralph Edwards, a CFMEU organiser; and, at Edwards’ suggestion, attended at the CFMEU office where he reached an agreement to discharge his liability for arrears of union dues. Thereafter, Galea returned to the site and began work. I regard it as an inference equally available from those facts that Galea decided, without any action or threat by Deans, but either at Edwards’ prompting or of his own volition, to regularise his financial status and thereby avoid being further embarrassed by the existence of the arrears.
71. As noted at [39]-[43] above, the role of this Court is one of real review of the trial and, in particular, the learned Federal Magistrate’s finding and conclusions (see Cabal v United Mexican States (supra) at [223] and [224] and the authorities there cited; Fox v Percy (supra) at [25]; and Hadgkiss v CFMEU (supra), at [26]). I have reviewed the evidence adduced in documentary and oral form at trial in the light of the competing submissions about the factual issues to be resolved. In evaluating the evidence, I have been mindful that I have not had the advantage of hearing the witnesses and observing their demeanour. I have also been guided by s 140 of the Evidence Act and the principles enunciated in Bradshaw and Briginshaw. In applying s 140(2) of the Evidence Act I have also considered the approach taken by Branson J in Qantas v Gama at [139] and the observations of Mason CJ, Brennan, Deane and Gaudron JJ in Neat (1992) 67 ALJR, at [171] “that the strength of the evidence necessary to establish a fact in issue on the balance of probabilities may vary according to the nature of what it is sought to prove”.
72. The respondent’s cause of action was founded on s 797(3)(f) of the WR Act, the requirements of which I have indicated at [70] above. In the statement of claim dated 19 September 2007, it was pleaded that;
    20. On 12 September 2006, the second respondent prevented George Galea from starting work on the Site for a period of approximately 4½ hours.

Particulars

Immediately after his site induction, it took George Galea 4½ hours to attend the Swanston Street offices of the first respondent to negotiate waiver of some $1,200 of arrears in membership fees and to pay up current membership fees, then to return to the Site to satisfy the second respondent that he had thereby had a current ticket and had become a financial member of the first respondent. At that time and not before did the second respondent allow George Galea to proceed past induction to work on the Site.

21. The conduct described in paragraph 20 directly or indirectly had the effect of injuring George Galea in his employment or altering his position to his prejudice.

Particulars

The conduct caused Galea to be absent from work for 4 ½ hours. As a result of this, Galea was only paid for the hours he was actually on the site.

73. By way of further and better particulars supplied on 7 March 2008 of paragraph 20 of that statement of claim, the respondent recited:

.... as soon as Mr Gallagher proceeded out of the lunchroom to commence work on site, the Second Respondent then said to Mr Galea “You are not financial”. Mr Galea said he wasn’t financial because he had not been working and had been using funds to support his family. The Second Respondent said “I understand.” Mr Galea asked “How can I work on site?” The Second Respondent relied “You have to be financial. You can pay credit card or cash.” At Mr Galea’s request, the Second Respondent then rang Ralph Edwards at the Union office and then handed the phone to Mr Galea. In the presence of the Second Respondent Mr Galea said “They won’t let me on site unless I pay my union dues, I am way behind and I can’t afford to pay it.” Mr Galea was not able to resolve the matter as Mr Edwards said he couldn’t do anything about that and that Mr Galea would have to go the union office. The foreman, Mr Blackmore, then came into the room. The Second Respondent told Mr Blackmore that Mr Galea was not financial and that he could not start work until he became a financial member. ...

At this point, Mr Galea left the site to attend the Swanston Street offices of the First Respondent in an effort to restore his status as a financial member of the union. The details of what happened at the office are already particularised to paragraph 20 of the Statement of Claim.

Upon returning to the site at approximately 12 noon, Mr Galea returned to the Site and showed the Second Respondent the receipt indicating payment of current membership fees. The Second Respondent then said words to the effect that Mr Galea was financial and could go to work.

74. Insofar as those further particulars indicate that Deans told Mr Blackmore that Galea was not financial and could not start work until he became financial they were not borne out by Mr Blackmore’s evidence. In the first of two written statements furnished to the ABCC, on 21 September 2006 Mr Blackmore said, apparently in relation to Gallagher and Galea, only:
    13. So I went down and asked them what they were doing. They told me that they had a couple of things that they needed to sort out. I went back to working on site.
    14. They sorted out their problems and have been working on site since. At the time, I did not know what the problems were during their induction – I found out later. I would rather not say what the problem was. “Scott” was delayed starting work by an hour, the other guy was delayed by three hours.
        

In a second supplementary statement supplied to the ABCC on 29 March 2007 the only passages relevant to Galea were:

11. ... I told the 3 workers to wait in the area where the site sheds are to be inducted by the shop steward. I told them the shop steward that would be doing the induction was named “Spike”. The inductions commence at 7.30am.

... ...

19. I recall that one of the labour hire workers came to site, ready to commence work. I cannot recall his name, all I can remember is that he was a worker from Direct Skills. At this point there were still 2 other workers that had not come to site. I then walked down to the induction sheds.
20. I recall seeing the 2 other Direct Skill workers sitting in the compound area. I asked them what was going on. I recall that they told me that they were not financial. I understood this to mean that they did not have a union ticket - that is they were not union members. I recall that one of the men had an expired CFMEU union ticket.
21. Both men told me that they were sorting it out. At this point I was standing near the whiteboard that records the manpower numbers for site. I cannot recall Spike being present during this conversation. I can recall that one of the men, the guy that eventually came to site one hour later, told me that he was going to pay and become financial.
22. The second guy from Direct Skills told me that he was going to leave site to sort out his situation about not being financial. He told me that he was going to the union office to pay his union dues.
23. I was pretty frustrated at this point. I knew that because these workers were not union members that this was going to cause delays in getting them started and working on site. I was pissed off knowing that this was going to ruin my work day. I did not care whether these two men were union members or not. I just wanted them to be working on site as I had arranged with Direct Skills.
24. If I had my way, both of the guys from Direct Skills would have been working from 7am - whether or not they were financial union members.
25. It was because of my experience of working in the construction industry I chose not to speak to Spike about the 2 workers from Direct Skills not being financial. So I chose to return to site to salvage what work I could do for the remainder of the day.
26. One of the workers from Direct Skills then came on to site about an hour later. I would have collected him from the entrance of the CSL plant. He came to site - I cannot recall if he told me what he had done to have been allowed on site. He had been inducted and it was obvious to me that he had become a financial union member. He commenced working and continued to work on site for the remainder of the day.
27. About three hours later I would have collected the second guy from Direct Skills from the entrance of the CSL plant. I cannot recall at any stage during that day being shown a receipt proving payment of union dues. I would see no reason for him or any other person to show me this documentation. This male from Direct Skills then commenced working on site and continued to work for the remainder of the day.
    

Those statements were admitted into evidence and Mr Blackmore was orally examined and later, by leave, cross-examined by Counsel for the ABCC and cross-examined by Counsel for the CFMEU and Deans. At no point in the course of his oral evidence did Mr Blackmore relevantly depart from, or add to, the evidence in his written statements which I have just reproduced.

75. Of course, it was open to the respondent to prove that Deans had prevented Galea from working on the site by stating, in effect, that financiality was a prerequisite to commencing work and that Deans had been authorised by the head contractor on the site, Hooker Cochram, to impose and enforce such a condition. However, in the apparent absence of direct evidence that Deans had been authorised to impose, and had actually imposed, such a condition on Galea, the necessary proof was left as a matter of inference. Since it had been alleged in the further particulars of the statement of claim that Deans had told Mr Blackmore that Galea was not financial and could not start work until he became financial, the respondent’s failure to prove that allegation by the direct evidence of Blackmore should have caused the Magistrates Court to be especially careful in satisfying itself that the most readily available inference supplied the deficiency. As Branson J pointed out in Qantas v Gama, at [138];

...in addition to taking into account the three matters specifically identified in s 140(2), it was open to his Honour to have regard to other relevant matters. Other relevant matters could include the inherent unlikelihood, or otherwise, of the occurrence of the matter of fact alleged ... and the long standing common law rule that evidence is to be weighed according to the proof which it was in the power of one party to produce and the other party to contradict: Medtal Pty Ltd v Courtney (2003)130 FCR 182; 198 ALR; [2003] FCAFC 151 at [76] per Branson J.

Conclusion on the Liability Judgment

76. For the reasons which I have endeavoured to explain, I consider that the evidence did not permit a finding on the balance of probabilities applied in accordance with s 140(2) of the Evidence Act that Deans engaged in conduct in relation to Galea which contravened s 797(3) of the WR Act. The appeal from the Liability Judgment, as limited in the Further Amended Notice of Appeal, must therefore be allowed.

THE PENALTY JUDGMENT

77. Having adjourned the proceeding after publishing the Liability Judgment, the learned Federal Magistrate, on 27 October 2008, delivered further reasons for judgment, Stuart-Mahoney v CFMEU & Anor (No 3) [2008] FMCA 1435 (“the Penalty Judgment”), for making the following orders:

(1) That a penalty of $24,775.00 be imposed on the First Respondent for its contraventions of the Workplace Relations Act 1996 (“the WR Act”) in respect of Wayne Gauci.

(2) That a penalty of $24,775.00 be imposed on the First Respondent for its contraventions of the WR Act in respect of George Galea.

(3) The Respondents shall pay George Galea lost wages in the sum of $190.74 within 30 days.

(4) That a penalty of $6,000.00 be imposed on the Second Respondent for his contraventions of the WR Act in respect of Wayne Gauci.

(5) That a penalty of $6,000.00 be imposed on the Second Respondent for his contraventions of the WR Act in respect of George Galea.

(6) That the Second Respondent pay $3,000.00 of each of the sums referred to in paragraphs 4 and 5, but that payment of the remainder be wholly suspended for 12 months from the date of these orders. If the Second Respondent is not found to have breached any provision of the Building and Construction Industry Improvement Act 2005 (Cth) or the WR Act as a result of conduct occurring within 12 months of the date of these orders he shall not be obliged to pay balance of the penalties.

(7) Subject to paragraph 6, the penalties imposed in paragraphs 1, 2, 4 and 5 of these orders be paid into the Consolidated Revenue Fund within 30 days.

78. The appellants appeal against paragraphs 1 and 4 of those orders solely on the grounds that the penalties imposed were excessive, and against the imposition and severity of the penalties referred to in paragraphs 2, 3, 5 and 6.
79. As a consequence of the conclusion reached in relation to the Liability Judgment, paragraphs 2, 3, and 5 of the orders set out at [77] above must be set aside and paragraph 6 must be varied to take account of the setting aside of paragraph 5.

Penalties

80. Recently, in Construction, Forestry, Mining, Energy Union v Safety Glass Pty Ltd [2010] FCA 989, Tracey J, at [15], made these observations about the Court’s role in fixing penalties for contraventions of the WR Act;

In determining an appropriate penalty the Court will have regard to all the circumstances of a particular case.  There is no immutable list of considerations which must be taken into account although the principle of deterrence, both specific and general, will require consideration in each case:  see Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170; (2008) 171 FCR 357 at 374-7 [57]- [62] (per Branson and Lander JJ).

81. The relevant considerations in assessing an appropriate penalty for breaches of industrial relations legislation have also been discussed extensively in other recent authorities; see eg, Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977; Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65; (2010) 185 FCR 308; Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1; Cozadinos v Construction, Forestry, Mining and Energy Union [2010] FCA 48; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426; [2008] FCA 1426; (2008) 177 IR 61, at [40].

The appeal

82. In addressing the circumstances bearing on his discretion in imposing penalties, the learned Federal Magistrate acknowledged in the Penalty Judgment the various considerations which the authorities indicate as potentially relevant or applicable and specifically noted Tracey J’s summary in Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426; [2008] FCA 1426; (2008) 177 IR 61, at [40], of the discretionary factors to be taken into account in relation to conduct like that found to have occurred in the present case. Although he acknowledged that such a list of relevant considerations may be helpful, his Honour correctly observed, at [4] of the Penalty Judgment, that they;

... are not to be followed in any slavish way (Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560, per Buchanan J at [91]). As was pointed out by Giles J in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 (“Silvestri”) at [6]:

“The discretion is at large.  There are no mandatory statutory criteria, and it is wrong to regard factors seen as relevant by one court as statutory criteria.  Indeed, lists of factors can confuse an essentially straightforward task and lead to over-elaborate reasoning.”

83. The learned Federal Magistrate then set out a number of specific matters which he considered significant, some of which were directed to his findings in respect of Galea. In view of my conclusion that the finding of contravening conduct towards Galea cannot be sustained, it is unnecessary to examine those matters as outlined in the Penalty Judgment.
84. In Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1, Middleton and Gordon JJ, at [28]-[30], made these observations which were adopted by Besanko and Gordon JJ in Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65; (2010) 185 FCR 308, at [44]-[47]:

28 Before turning to consider the penalty judgment, it is necessary to say something about the nature of the appeal and the approach to be adopted by an appellate Court.

29 This is a sentencing appeal:  see Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171; (2009) 262 ALR 417 at [8].  The principles to be applied in a sentencing appeal are described in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505.  That this is so was most recently restated by the High Court in Carroll v The Queen [2009] HCA 13; (2009) 254 ALR 379 at [7] – [8] citing Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321. 

30 A number of principles are worth restating:

1. inadequacy of sentence (or in this case, manifest excess of sentence) is not demonstrated by a mere disagreement by the appellate Court with the sentence actually imposed:  Whittaker v The King [1928] HCA 28; (1928) 41 CLR 230 at 248-249; Griffiths  v  The Queen (1977) 137 CLR 293 at 310; Malvaso v The Queen [1989] HCA 58; (1989) 168 CLR 227 at 234; Everett v The Queen [1994] HCA 49; (1994) 181 CLR 295 at 299-300, 306; Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 at [6]; Carroll [2009] HCA 13; 254 ALR 379 at [7].  Error must first be identified by the appellate Court:  Carroll [2009] HCA 13; 254 ALR 379 at [7] citing Dinsdale [2000] HCA 54; 202 CLR 321 at 325-326 [6]- [9], 330 [24], 339-340 [57]-[61].
2. an appeal against sentence is an appeal against an exercise of discretion – the sentencing discretion – and is governed by established principles or categories of cases:  Carroll [2009] HCA 13; 254 ALR 379 at [7] citing House [1936] HCA 40; 55 CLR 499 at 505; see also Dinsdale [2000] HCA 54; 202 CLR 321 at 324-325 [3]- [4];
3. the categories reflect particular kinds of error – that the primary judge (1) had acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him / her, (2) had mistaken the facts or (3) had not taken into account some material consideration.  If a case of specific error of any of those kinds is made, it is necessary to identify the asserted error in the grounds of appeal.  The last category of case (category (4) is where no case of specific error is alleged except that the sentence was manifestly inadequate or manifestly excessive.  That category arises where (House [1936] HCA 40; 55 CLR 499 at 505 cited in Carroll [2009] HCA 13; 254 ALR 379 at [8]):

It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

4. a sentencing appeal is not a rehearing.  Contentions that a trial judge did not give “sufficient weight” to a particular matter in the exercise of the sentencing discretion is not the “kind of error” an appeal Court can be or should be concerned with in a sentencing appeal:  House [1936] HCA 40; 55 CLR 499 at 504-5; see also Markarian v The Queen (2005) 228 CLR 357 at [25] and Lowndes v The Queen [1999] HCA 29; (1999) 195 CLR 665 at [15].
   
85. It has been accepted on both sides that the principles in House v The King [1936] HCA 40; (1936) 55 CLR 499 (“House v The King”), at 504-5, should be applied in the present appeal from the Penalty Judgment (see, also, Construction, Forestry, Mining and Energy Union v Williams  [2009] FCAFC 171; (2010) 262 ALR 417, 420 at [8]).
86. I shall deal separately with each relevant ground of appeal set out in the appellants’ Further Amended Notice of Appeal filed with the leave of the Court on 15 February 2010.

Was there error constituted by having regard to irrelevant considerations?

87. The appellants contend that the learned Federal Magistrate erred by having regard to the following considerations which they claim were irrelevant or erroneous:

(a) that Deans knew full well that his conduct did indeed breach the WR Act (Penalty Judgment at [5]);

(b) that the CFMEU supported the second respondent at all points up to and including the judgment (Penalty Judgment at [29] and [37]);

(c) that Deans has not suffered any kind of obloquy or retribution or harm as a result of evidence he gave to the Court (Penalty Judgment at [36]);

(d) that the lack of contrition or remorse by the CFMEU and Deans was an aggravating matter (Penalty Judgment at [5(c)] and [30]).

88. In relation to (a), I cannot discern any error of the kind described in House v The King. The appellants contend that, as Deans’ knowledge of whether he had contravened the WR Act was never put to him at trial, it is not proper to draw such an inference in the consideration of penalties. In my view, his Honour did no more at [5(a)-(b)] of the Penalty Judgment than emphasise that the contraventions which he found had been deliberate or intentional. The fact that it was not put to Deans at trial whether he knew that he had acted in breach of the WR Act, did not make it erroneous for the learned Federal Magistrate to draw a relevant inference from his findings as to Deans’ state of mind. It was within the broad sentencing discretion to draw such an inference when considering the assessment of penalty. Moreover, attention was drawn by Counsel for the respondent to this exchange during the cross-examination of Deans at trial;

At all relevant times on 12 September 2006 you well knew that it was not a requirement or an obligation on any worker to be a member of any union, including the CFMEU, before they could work on the site, correct? --- Correct

In similar vein, Deans acknowledged under cross-examination about the conversation between himself and Gauci that;

I asked if he was a member of the union and he said to me, “It’s not the law and I don’t have to be in the union” and I said to him, “Well, there are benefits of being in the union” and he said “it’s not the law...”

I therefore accept that it was open on the evidence for his Honour to find that Deans was aware that the contravening conduct was unlawful and that this was a relevant factor to take into account when fixing penalties.

89. The appellants suggested that [29] and [37] of the Penalty Judgment reflect some error on the learned Federal Magistrate’s part in regarding the CFMEU’s support of Deans as relevant to the assessment of penalties. Mr Borenstein SC contended that there is no principle of sentencing which allows a penalty to be increased because the accused or respondent has contested the case and put the prosecutor to proof. In response to this contention I was referred to A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 (“Silvestri”), per Gyles J, on which Counsel for the respondent said that the learned Federal Magistrate had specifically relied. In Silvestri, Gyles J observed, at [12];

...the CFMEU chose to actively defend the conduct of Lane to the end, notwithstanding the overwhelming evidence marshalled against his version of events. Furthermore, it is hardly sensible to view this incident as the wildcat actions of an aberrant official.  Lane acted with other officials in his actions in relation to this building site.  Notwithstanding the complaints to the Union in this case, Lane acted in a generally similar manner in relation to another site a short time later.  There is a long and well-documented history of unlawful activity by union organisers and delegates in the building industry in Australia that Counsel for the CFMEU acknowledged, but submitted that there has been a considerable change in culture over recent years.  This makes it desirable that any return to the bad old days be appropriately penalised.

90. The learned Federal Magistrate considered the evidence against the appellants to be “at least in part overwhelming” (Penalty Judgment at [36]) and, consistently with what Gyles J said in Silvestri, it was open to his Honour to regard as relevant to the imposition of penalties, the fact that the CFMEU had supported Deans in defending the proceeding. It was seen as supporting a rejection of the appellants’ submission “that the court should not impose a penalty, or that if it did so, the penalty should be at the lower end” (Penalty Judgment, at [28]). His Honour did not say (at [29] and [37]) that these matters of themselves required a higher penalty than would have been imposed had they been absent. Rather, they were seen as militating against the imposition of a minimal, or no penalty. These considerations were weighed in conjunction with other factors when applying the principle of deterrence in the assessment of an appropriate penalty. In my view, consideration (b) noted at [87] above was not irrelevant or extraneous in the sense explained in House v The King.
91. The learned Federal Magistrate’s reference to the absence of obloquy or retribution or harm visited on Deans was made in this context at [35]-[37] of the Penalty Judgment;

It is clear that specific deterrence has a significant role to play in respect of contraventions by the CFMEU, as indicated by its prior infractions of the legislation and its absence of contrition, together with the conduct of this case.

While on one view it was open to and proper for the CFMEU to accept Mr Deans' word as to what his evidence was, in truth the case for the Applicant was at least in part overwhelming.  The pattern of the statutory declarations made, and most particularly that of Mr Gauci, was always likely to be somewhat compelling.  Furthermore, there is no evidence that Mr Deans has suffered any kind of obloquy or retribution or harm as a result of the false story that he gave both to this Court and to the union.  Indeed, there is no suggestion that he is no longer the union delegate of the site.  If this was so, I would have been expected to have been told it.

The inference is clearly open to me, and I do indeed draw it, that the CFMEU fully supported and continues to support the position that Mr Deans has adopted.

92. My understanding of these paragraphs is that his Honour considered that the penalty imposed on the CFMEU fixed at 75 per cent of the statutory maximum reflected, in part at least, an application of the principle of deterrence. The point made at [36] of the Penalty Judgment that Deans had not suffered any “obloquy or retribution or harm” recognized that no action had been taken, even after the Liability Judgment, to ensure that Deans and other union representatives refrained in the future from similar contraventions of the WR Act. So understood, the CFMEU’s inaction in respect of Deans was not an irrelevant or extraneous consideration in the sense contended for in (c) of the contentions summarised at [87] above.
93. I do not accept the appellants’ contention that the learned Federal Magistrate regarded the lack of contrition or remorse by Deans and the CFMEU as an aggravating matter when he came to quantify the pecuniary penalties. The presence or absence of contrition or cooperation by a contravening party are matters to which regard may properly be had when considering specific deterrence and assessing an appropriate penalty (see, Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977, at [85]; Cozadinos v Construction, Forestry, Mining and Energy Union [2010] FCA 48, at [38]; Construction, Forestry, Mining, Energy Union v Safety Glass Pty Ltd [2010] FCA 989, at [16]; Hardwick v Australian Manufacturing Workers’ Union [2010] FCA 818, 198 IR 312, at [14] and Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426; [2008] FCA 1426; (2008) 177 IR 61, at [40].

Were the penalties manifestly excessive?

94. Finally, I turn to the appellants’ contention that the penalties imposed by the learned Federal Magistrate were “manifestly excessive”. This ground of appeal was discussed in House v The King, at 505, and further examined by a Full Court of this Court in Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171; (2010) 262 ALR 417, where it was observed, at [8];

A sentencing appeal is to be approached in the manner described in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505. That is, if specific error is found, as for example, if the sentencing judge took into account irrelevant considerations or failed to take into account relevant considerations, the sentencing discretion has miscarried and it is for this Court to re-sentence. The appeal court exercises the sentencing discretion afresh. Any issue of whether the sentence passed by the trial judge was manifestly excessive does not arise. The ground of the sentence being manifestly excessive is a separate and distinct ground of appellate review engaged only where no specific error is demonstrated.

95. As I have found that no specific error has been demonstrated in the reasons explained in the Penalty Judgment, it is appropriate to consider whether, notwithstanding an absence of specific identifiable error, the penalties imposed were manifestly excessive. I am guided by the decision in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560, where Buchanan J, adopting the reasoning of Gleeson CJ and Hayne (at [6]) and Kirby JJ (at [59]) in Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 said, at [104]-[105]:

To suggest, as the second ground of appeal does, that a penalty is excessive, may not sufficiently identify the nature of the case which must be made out if an appeal on quantum alone is to succeed. It is necessary to show that the penalty fixed is outside the legitimate range within which, in the circumstances of the case, a judicial discretion might properly be exercised. For that reason it must, in my view, be open to conclude that a penalty is manifestly excessive or manifestly inadequate. Expressing the matter that way also draws attention to the fact that the error involved is disclosed by the penalty itself, rather than by any explanation of its amount.

To reach a conclusion that a penalty is manifestly excessive (or manifestly inadequate) it is not necessary to identify any particular error in the reasoning process which leads to the final result. It will usually be the case that specific identification of such an error is not possible.

96. The appellants submit that the penalty of 75 per cent of the maximum for the CFMEU and 91 per cent of the maximum for Deans was excessive, offending the principle that the maximum penalty should be reserved for only the worst imaginable case. The argument proceeded that the learned Federal Magistrate had been wrong to impose such a high penalty, so close to the maximum, in a case where Deans’ and the CFMEU’s contravention was not in the “worst category of breaches” for the purpose of ss 789 and 790 of the WR Act. I reject this submission.
97. The penalty imposed on the CFMEU was 75 per cent of the maximum pecuniary penalty prescribed by s 807 of the WR Act for contravention of a civil remedy provision, including s 797(3). It may be said to be in the middle of the higher end of the range. I do not consider that a penalty at 75 per cent of the maximum should necessarily be reserved for the worst category of cases. There is clearly room in the upper 25 per cent for penalising more serious unmitigated infractions. Taking into account the circumstances of the case, as well as the relevant considerations of specific and general deterrence, the learned Federal Magistrate imposed a penalty which, in my view, was not manifestly excessive. The penalty in relation to the CFMEU has not been demonstrated by the appellants to be outside the range available pursuant to a proper exercise of judicial discretion. In light of the number of relevant factors discussed by the learned Federal Magistrate in the Penalty Judgment, I regard the penalty imposed on the CFMEU for the contraventions of the relevant provision of the WR Act in relation to Gauci as reasonable in the circumstances.
98. The penalty imposed on Deans for contraventions of the WR Act in relation to Gauci was also criticised as manifestly excessive. Although 91 per cent of the maximum allowable pecuniary penalty was clearly in the upper range, payment of half of the amount was wholly suspended for 12 months from the date of the Penalty Judgment and was not to be paid at all on the proviso that Deans was not found within that period to have breached any provision of the Building and Construction Industry Improvement Act 2005 (Cth) or any further provision of the WR Act. That condition was an available reflection of the principle of deterrence and if Deans had complied with it, the maximum pecuniary penalty actually imposed would have been only 45.5 per cent of the maximum. In light of the relevant factors discussed by the learned Federal Magistrate, I accept that this penalty was in the appropriate range and cannot be said to be manifestly excessive.

Conclusion on the appeal

99. For the reasons outlined in relation to each of the Liability Judgment and the Penalty Judgment, the appeal will be allowed in part. Paragraph 2 of the Order of the Federal Magistrates Court of 4 August 2008 and paragraphs 2, 3 and 5 of the Order of 27 October 2008 will be set aside. Paragraph 6 of the latter order will be varied by substituting for the words “of each of the sums referred to in paragraphs 4 and 5” the words “of the sum referred to in paragraph 4” and for the word “penalties” the word “penalty”. Paragraph 7 of the Order of 27 October will be varied by deleting the references to paragraphs 2 and 4 and the appeal will be otherwise dismissed.
    

I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated: 8 February 2011