Civil penalties – Full Federal Court rejects agreed penalty submissions

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59

The above CFMEU decision considered Barbaro v The Queen [2014] HCA 2; (2014) 305 ALR 323, which had previously been considered inapplicable to civil penalty matters and limited to criminal prosecutions. The Full Federal Court held that joint submissions on agreed facts and penalty is neither evidence nor law and hence inadmissible.

It will have significant practical implications as the vast majority of these sorts of matters proceed on agreed basis of either the facts and or penalty.

DOWSETT, GREENWOOD AND WIGNEY JJ

  1. Some of the Commonwealth’s submissions imply that this Court is presently engaged in making a policy decision as to the form which submissions should take where pecuniary penalties are sought. We do not perceive our task to involve policymaking. Rather, we seek to identify the applicability or otherwise of the decision in Barbaro to proceedings for the imposition of a pecuniary penalty pursuant to the BCII Act, and therefore the way in which these proceedings should be conducted. We accept that the Commonwealth’s interest goes beyond issues associated with the BCII Act. However, whilst the material set out in Mr Blunn’s affidavit is interesting, it is not particularly helpful. At least some of the regulators seem simply to insist upon the right to make submissions as to range, as well as submissions as to specific penalties or as to agreed penalties.
  2. We do not accept at face value assertions as to the dire consequences of forbidding submissions which identify a range of penalties, nominate specific penalties or urge the adoption of agreed penalties. We are not aware of any suggestions that the decision in Barbaro has significantly reduced pleas of guilty in criminal cases. Until quite recently in Victoria, the prosecution was not involved in the sentencing process. The only reason for its more recent involvement appears to have been the increased availability of Crown appeals against sentence. Again, we are not aware of any suggestion that under the earlier regime, pleas of guilty were discouraged by the absence of any likelihood that the prosecution would make submissions as to sentence. As counsel for the Contradictor pointed out in submissions, there are many good reasons for resolving litigation. Most litigants, including accused persons in criminal proceedings, make decisions about the conduct of their litigation without the benefit of any degree of certainty as to outcome. With the assistance of their lawyers, they seek to identify the advantages and disadvantages of resolving the matter other than by going to trial. One might wonder why a respondent in proceedings for the imposition of pecuniary penalties should expect any greater degree of certainty as to the ultimate outcome.
  3. Apart from the generalized views of the regulators, we see no reason to conclude that the exclusion of submissions as to range, agreed penalty or a specific outcome would necessarily discourage joint submissions as to the facts of the case, identification of relevant comparable cases and the proper approach to fixing the penalty. The regulator may have to provide carefully prepared evidence, and counsel may have to make considered submissions. The Court expects such assistance.
  4. In the course of submissions it has been suggested that there is a dearth of reported penalty cases. That proposition seems to be inconsistent with the view expressed by the Full Court in Mobil at [66] – [67]. Nonetheless, we are inclined to think that the proposition is correct. If so, the situation reflects the extent to which these matters have been resolved by consent. Where a penalty has been fixed in that way, the decision may not be treated as helpful in future cases, save to the extent that it indicates a position adopted by a regulator to which it should be held in later cases.
  5. We accept that in the short term, there may be inconvenience and perhaps increased expense to regulators and respondents in cases where agreed penalties, or agreed ranges have already been identified. We do not expect that such additional cost will be significant. We have already said much about why we consider that the decision in Barbaro should inform our approach to the agreed statement. Primarily, we consider that the sentencing process, and that in which a pecuniary penalty is imposed are very similar in nature. In particular, both address punishment by the State, and both require an assessment of a wide range of considerations which interact in complex ways. Hence each involves the instinctive synthesis to which we have referred. We consider that the concerns identified in Barbaro are relevant to the pecuniary penalty process. The impermissible expression of an opinion as to the amount of the penalty reflects a wellestablished limitation upon the ambit of a party’s right to make submissions. Further, the difficulty in understanding the method by which any such opinion is formed is as real in pecuniary penalty cases as it is in criminal sentencing, as is the risk that such opinions may compromise the sentencing process and/or create a public perception of such compromise.
  6. Insofar as concerns submissions as to the range within which the penalty should fall, it is equally as inappropriate in pecuniary penalty cases as in criminal sentencing. The High Court has made it clear that statutory discretions are not to be limited other than by reference to the relevant statute. It is difficult to identify any other statutory discretion conferred upon a court which has been limited in the way in which the decisions in NW Frozen Foods and Mobil have limited the discretion to fix a pecuniary penalty. When examined, the historical basis for that limitation is not grounded in principle.
  7. As to an agreed penalty, we have previously indicated that any admission of liability may be a relevant consideration in sentencing or imposing a pecuniary penalty. Willingness to submit to the imposition of a substantial penalty may also be relevant in that way. However, even if the offender nominates a substantial figure as the penalty to which it will submit, the Court must still fix the appropriate penalty, taking into account such contrition as well as all other relevant considerations. As we have said, any such agreement is no more than an expression of a shared opinion, and therefore inadmissible. As we have also said, the amount of the agreed penalty may simply reflect the point at which each party considers that it is in its interest to agree. In either case, the agreed amount offers no assistance in fixing the amount of the appropriate penalty.
  8. Finally, we do not dismiss the concerns of the regulators as to the importance of negotiations and agreements in the enforcement of the various statutes pursuant to which pecuniary penalties may be imposed. However we do not accept that the problem is as great as the regulators suggest. The adversarial system depends upon the capacity of professional advocates to explain the most complicated of legal and factual situations by reference to the evidence and the law. The issues to be ventilated in pecuniary penalty cases may be complex, but they are not amongst the most complex matters which this Court regularly considers. We expect that regulators and offenders will continue to seek to reach agreement as to factual matters and as to the application of the law. As to uncertainty of outcome, we consider it to be the inevitable consequence of entrusting the pecuniary penalty process to the judiciary. NW Frozen Foods and Mobil establish that it is for the Court to fix the penalty. That proposition has been constantly repeated in subsequent cases. In these proceedings, no party has suggested otherwise. Once that proposition is accepted, the only remaining question is as to the relevance, to the Court’s consideration, of submissions as to ultimate penalty or range of penalties, or the fact of any agreement as to penalty. In Barbaro, the High Court held that statements as to ultimate outcome or range were merely expressions of opinion and therefore could not properly be advanced in submissions. There can be no justification for taking a different view in pecuniary penalty proceedings.
  9. We appreciate that the views which we have expressed are inconsistent with the long established, although perhaps imprecise practice described in NW Frozen Foods and Mobil. We depart from that practice only because the decision in Barbaro, in our view, requires that we do so.

 

David Cormack – Brisbane Barrister & Mediator

Related Posts

Recent Comments

    Categories