Whether regulatory authorities should make submissions as to the appropriate penalty in civil penalty proceedings

Emma Turner, Special Counsel

Anita Courtney, Associate

AIAL National Conference, Perth

24 July 2014

• Explore implications for High Court decision in Barbaro

• Canvass consideration by federal courts and VCAT to date

• Highlight issues and implications for civil penalty proceedings

• Posit a way forward

Outline

French C, Hanye, Kiefel and Bell

• King J did not fail to take into account a relevant consideration when she indicated she would not ask for, nor accept submissions on sentencing.

• Where submissions are made they are submissions of opinion, not law.

• As a result the court overturned the precedent established in R v MacNeil-Brown.

• It is the role of the Court alone to fix a term of sentence, weighing all the relevant factors of the case before them.

Barbaro v R; Zirilli v R [2014] HCA 2

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Gageler J reached the same conclusion for different reasons

• Followed the precedent established in R v MacNeil-Brown, where it was confirmed that, at the request of the Court, a Prosecutor must provide submissions on sentencing. Furthermore, if the Prosecutor believes the court will be lead into error, they are obligated to provide Submissions.

• A submission on sentencing is a submission on law and receives the same weight as any other submission of law.

• The court however, is obliged to reach their own conclusion on sentencing.

Barbaro cont..

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• Pre-Barbaro practise in disciplinary proceedings

• Submissions from parties

• Joint submissions on findings and penalties – Secretary to the Department of Planning and Community Development v Muto [2011] VCAT 328

• “In proceedings in respect of civil penalties there is now a well established line of authority in support of the proposition that where a regulatory body and a respondent have reached a negotiated settlement and the penalty proposed is, broadly speaking, within the ‘permissible range’ (having regard to all the circumstances) the court (or in this case the Tribunal) should not depart from the agreed sanction. I propose to adopt the same approach to the matter before me. The question then becomes whether the sanction proposed is within the permissible range.”

Pre-Barbaro Victoria

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• Legal Services Commissioner v Horak [2014] VCAT 539 and Legal Services Commissioner v Nomikos [2014] VCAT 251

• “Whether or not Barbaro is binding on disciplinary tribunals, there is no doubt that determining the penalty to be imposed in disciplinary proceedings is entirely a matter for the Tribunal, assisted…by the parties’ submissions on relevant principles, the facts to be found, comparable cases and the relative importance of matters such as specific and general deterrence. (Member E Wentworth)

• Consumer Affairs Victoria v Cohen [2014] VCAT 220

• To the extent that the court’s reasoning applies to disciplinary cases, I note that there are no cases from which to draw an available range here as the facts of this case are quite novel and there is no similar precedent for it. The applicant made submissions expressing an opinion about the precise penalties I should impose. In any event, for the reasons given, the disposition reached does not mirror that contended for by the applicant.”

Barbaro in Victoria

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• Legal Services Commissioner v Needham (Corrected) [2014] VCAT 305

• “I do not regard Barbaro as preventing the parties in a case such as this from putting to the Tribunal an agreed position as to determination” (Member J Smithers)

• Medical Board of Australia v McGrath [2014] VCAT

• Accepted the application of Muto’s case.

• Dental Board of Australia v Hussain [2014] VCAT 643

• Referred to Muto and stated “we need not consider any implications for proceedings of this type of the decision...in Barbaro”

Barbaro in Victoria cont..

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• NW Frozen Foods v ACCC (1996)

• Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC

• CF. ASIC v Ingleby [2013] VSCA Weinberg JA with whom Hargrave AJA and Harper JA agreed - critiqued the reasoning in NW Frozen Foods and Mobil Oil and expressed the view that they were “wrongly decided”.

• Middleton J reviewed that critique in Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030 but concluded that he should, in the circumstances of that case, be guided by the approach set out in the decisions of the Full Court of this court.

Federal courts - pre-Barbaro

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ACCC v Flight Centre Ltd (No3) [FCA]

• [56] “...there is a relevant analogy to be drawn from the practice in the criminal jurisdiction in a civil proceeding for the recovery of a pecuniary penalty. The imposition and assessment of a penalty involves the exercise of a discretion by a judge, not the parties.”

Approaches taken in the federal jurisdiction following Barbaro

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• Australian Competition and Consumer Commission v Energy Australia Pty Ltd Middleton J decided Barbaro did not goes as far as to implicitly overrule Full Court authority on the imposition of civil penalties.

• Cited binding Full Court authority where parties to a matter agree on the penalty to be imposed and that “there was a strong public interest in imposing the penalty, even if the court may otherwise have selected a different figure for itself” [132]

• The specialist role of the regulatory authority was a further indication that it is appropriate to take into account their submissions when deciding on a civil penalty. [143]

Support for active regulator involvement

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• ACMA v TP Internet Pty Ltd [2014] FCA –

• Inclined to adopt the view taken by Middleton J in Energy Australia.

• ACCC v Mandurvit Pty Ltd [2014] FCA

• In following NW Froze Foods McKerracher J noted that just as a prosecutor has well-established duties a regulator is also expected to function as a model litigant and that this particular role of the regulator was expressly relevant in that decision.

• ASIC v GE Capital Finance Aus, in the matter of GE Capital Finance [2014] FCA

• Jacobson J concluded that the decision in Barbaro did not exclude submissions from being accepted in civil matters.

Support for Middleton J

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• Fair Work Ombudsman v Ross Geri Pty Ltd [2014] FCCA

• In this matter it was considered appropriate to hear submissions on civil penalties from parties. Parties filed an agreed statement of facts as to admitted contraventions. However, had divergent submissions on the appropriate penalty range.

• Fair Work Ombudsman v Australia China Trading Investment Consultancy Group Pty Ltd & Anor [2014] FCCA

• The court was not precluded by the recent decision of Barbaro from taking into account submissions made by parties.

District court following suit?

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• To what extent are the practices of a regulator making submissions on an appropriate penalty, range of penalties, or the adoption of the parties’ agreement on an appropriate penalty, incompatible with the institutional integrity of the court or accepted notions of judicial power?

• Undisputed that the power to adjudge guilt and issue punishment is exclusively judicial in character.

• Civil penalties – not exclusively a judicial power and whether it is will depend on the context.

• Often a blurring or confusion between civil penalty proceedings and criminal sentencing.

An opportunity to reassert judicial power in civil penalty proceedings?

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• The regulatory context

• Theories of responsive regulation that underpin many federal regulatory schemes

• Obligations of public agencies:

• model litigants guidelines;

• legislative framework; and

• the perspective of the regulators.

The role of civil regulators

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• Await Full Court determination

• Encourage the continuation of the practice of submissions on appropriate penalties and agreements on penalties

• What about penalty ranges?

• Ensure rigour around these approaches and appropriate concessions/ deference the role of the court in civil penalty proceedings

Where to from here???

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All the authorities emphasise that the court is not to act as a mere rubber stamp of the parties’ agreement.

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QUESTIONS

The information contained in this presentation is intended as general commentary and should not be regarded as legal advice. Should you require specific advice on the topics or areas discussed please contact the presenter directly.

Disclaimer

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Emma TurnerSpecial Counsel

Telephone: 03 8602 7223Email: eturner@rk.com.au

Anita CourtneyAssociate

Telephone: 03 8602 7211Email: acourtney@rk.com.au