On 9 December 2015, the High Court handed down its decision in Commonwealth v Director, Fair Work Building Industry Inspectorate 1, and restored the status quo concerning agreed civil penalties.
In our July article we wrote about how the long-standing approach of courts and regulators to make submissions about agreed or appropriate civil penalties was turned on its head by the Full Federal Court's decision in CFMEU 2.
In CFMEU, the Full Federal Court applied last year's High Court decision in Barbaro 3, which established that the Victorian practice of prosecutors making submissions about the available range of sentences for a criminal offence was wrong in principle and should cease. The Full Court ruled that the Barbaro principle similarly applied to submissions about agreed civil penalties, thus making it impermissible for the courts to hear such submissions.
In its December 2015 decision, the High Court ruled that the Barbaro principle does not apply in civil penalty proceedings.
In their joint judgment, Chief Justice French and Justices Kiefel, Bell, Nettle and Gordon stated that what was held by the Court in Barbaro "only applies to criminal proceedings, and, consequently, that nothing said in Barbaro is antithetical to continuing the practice of agreed penalty submissions in civil penalty proceedings". Justices Gageler and Keane wrote separate judgments in support of the joint judgment.
The joint judgment emphasised the importance of the public interest in predictability of outcomes. Their Honours indicated that the earlier authorities, NW Frozen Foods 5 and Mobil Oil 6, correctly recognised that
The court's task, according to the majority, is to ask whether the agreed penalty submitted by parties "'can be accepted as fixing an appropriate amount' and for that purpose the court must satisfy itself that the submitted penalty is appropriate" 8. Judges must always do their sworn duty and "therefore reject any agreed penalty submission if not satisfied that what is proposed is appropriate" 9, and the public may have confidence that judges will do so.
What now?
In our July article we noted that in our view, both the Court and Commonwealth regulators have a role to play in protecting the public interest by the imposition of civil penalties for breaches of Australian law. The High Court's decision clearly supports that view and restores certainty as to the likely outcome of proceedings involving the imposition of a civil penalty. Moreover, parties to such proceedings may take some comfort in knowing that the continued practice of submitting agreed penalties may reduce the need for protracted and costly trials.
Footnotes
1 [2015] HCA 46 (Fair Work Building Industry Inspectorate).
2Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 (CFMEU).
3Barbaro v The Queen (2014) 253 CLR 58 (Barbaro).
4 Fair Work Building Industry Inspectorate [2015] HCA 46, [50].
5 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (NW Frozen Foods).
6 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd (2004) ATPR ¶41-993 (Mobil Oil).
7Fair Work Building Industry Inspectorate [2015] HCA 46, [46].
8 Ibid [48], quoting NW Frozen Foods (1996) 71 FCR 285, 291.
9 Ibid [49].
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