Predictable penalties: High Court rules that Barbaro does not apply to civil penalty cases


Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate 

[2015] HCA 46

Civil penalty proceedings—Building and Construction Industry Improvement Act 2005 (Cth) — submissions as to “appropriate” penalty — whether relevant — whether Barbaro v R (2014) 253 CLR 58 applies

Late last year, the High Court handed down its decision in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46.

Since the decision of the Full Court of the Federal Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commissioner (1996) 71 FCR 285, it has been more or less settled that a court presented with an agreed civil penalty will not depart from it “merely because it might otherwise have been disposed to select some other figure”.  This was said, in NW Frozen Foods, to be because the “beneficial consequences” of a negotiated resolution “would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks”.

In Barbaro v The Queen (2014) 253 CLR 58, the High Court held that a prosecutor’s view of the available sentencing range is an irrelevant statement of opinion that should not be received as part of the sentencing process.  The question soon arose whether Barbaro applies to civil penalty proceedings.  This question first came before the Full Federal Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331.

Decision below 

The Director of the Fair Work Building Industry Inspectorate brought civil penalty proceedings against two unions alleging contraventions of s 38 of the Building and Construction Industry Improvement Act 2005 (Cth).  The parties filed an agreed statement of facts and submissions, including as to penalty.  The primary judge, concerned by the possible application of Barbaro, referred the matter to a Full Court.  The Commonwealth was granted leave to intervene and both parties adopted its position that Barbaro did not apply.  Separate counsel were instructed to appear, amici curiae, as a contradictor.  The Full Court acknowledged the “various differences” between prosecutor and regulator, but held that “none offered a principled basis for declining to apply the reasoning in Barbaro”.  Applying Barbaro, the Full Court held that it was impermissible for parties to make joint submissions to a court seeking the imposition of an agreed penalty.  The Commonwealth appealed.

High Court decision

The Commonwealth’s appeal was upheld 7:0.  The lead judgment was that of French CJ, Kiefel, Bell, Nettle and Gordon JJ, with which Keane J agreed.  Their Honours saw Barbaro as “principally informed by three considerations”:

  • First, “that it is impossible to define the precise limits of the “available range” of terms of imprisonment that may be imposed on a criminal offender”.
  • Second, “that, because it is impossible to define the precise limits of the available range, the essentially negative proposition deriving from House v The King — that a sentence is so far outside the range that it must be the result of a misapplication of principle — cannot safely be transformed into a positive statement of the upper and lower limits within which a sentence may properly be imposed”.
  • Third, “that to permit the Crown to state the bounds of the available range could lead to erroneous views about the importance of such a statement in the sentencing process, with consequent blurring of what should be, and be perceived to be, the sharp distinction between the role of the judge and the role of the prosecutor in the criminal trial process”.

In rejecting the Full Federal Court’s reasoning, their Honour’s emphasised the “important public policy involved in promoting predictability of outcome in civil penalty proceedings”.  Such predictability, their Honours held, “encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention”.

Their Honours distinguished the “available range” for a criminal sentence (beyond which a sentence is manifestly excessive or inadequate) from the “permissible range” within which one civil penalty “cannot necessarily be said to be more appropriate than another”.  Only within this latter range do courts applying NW Frozen Foods accept a submitted figure even though they “might otherwise have been disposed to select some other figure”.

Their Honours also emphasised “basic differences” between criminal and civil proceedings.  In particular, the “very considerable scope” in civil proceedings for parties to agree upon facts, consequences and remedies, including by settling proceedings.  These included — in the present case — the role of the Director under the BCII Act.  In this regard, their Honours approved observations in NW Frozen Foods that regulators “will be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance”.

Gageler J reached the same conclusion from a different perspective.  His Honour saw Barbaro (in which he alone had dissented) as “best understood as having gone no further than to recognise a qualification to the common law duty of a prosecutor to assist a criminal court to avoid appealable error”.  This was “that the prosecutor cannot state that a custodial sentence of a specified numerical length or of a length within a particular numerical range is appropriate”.  The underlying “policy reason” for this was the need to avoid the “unacceptable risk of breaking down the sharp distinction which must exist within the criminal justice system between the roles of the prosecution and the court” were the prosecutor “to speak of numbers”.  So understood, his Honour saw Barbaro as having “nothing to say about the conduct of any party to a civil penalty proceeding.

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