FEDERAL COURT OF AUSTRALIA Setka v Gregor (No 2) [2011] FCAFC 90 Citation: Setka v Gregor (No 2) [2011] FCAFC 90 Appeal from: Gregor v Setka [2010] FMCA 690 Parties: JOHN SETKA v MURRAY GREGOR File number: VID 10 of 2011 Judges: LANDER, TRACEY & YATES JJ Date of judgment: 28 July 2011 Catchwords: INDUSTRIAL LAW – right of union official to enter work site – arises under occupational health and safety legislation –limited in operation by s 767 Workplace Relations Act – contravention of s 767 - whether respondent acted in an "improper manner" - construction of s 767 - whether "improper" conduct requires intent - whether penalty imposed was manifestly excessive EVIDENCE – s 140 of Evidence Act – whether evidence supported inference that appellant was exercising or seeking to exercise rights under Workplace Relations Act Legislation: Acts Interpretation Act 1901 (Cth) ss 13, 15AB Building and Construction Industry Improvement Act 2005 (Cth) Crimes Act 1914 (Cth) s 4AA Evidence Act 1995 (Cth) s 140 Occupational Health and Safety Act 2004 (Vic) ss 81, 87, 88, 89 Workplace Relations Act 1996 (Cth) ss 756, 760, 767, 769 Cases cited: AB v The Queen (1999) 198 CLR 111 applied Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 referred to Briginshaw v Briginshaw (1938) 60 CLR 336 referred to Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 discussed Darlaston v Parker (2010) 189 FCR 1 discussed Hogan v Riley (2010 182 FCR 583 cited Markarian v The Queen (2005) 228 CLR 357 applied Pine v Doyle (2005) 141 IR 98 cited Date of hearing: 12 May 2011 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 51 Counsel for the Appellant: Mr P G Priest QC & Mr C Dowling Solicitor for the Appellant: Slater and Gordon Counsel for the Respondent: Mr J L Bourke QC and Ms J M Maclean Solicitor for the Respondent: Clayton Utz IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 10 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: JOHN SETKA Appellant AND: MURRAY GREGOR Respondent JUDGES: LANDER, TRACEY & YATES JJ DATE OF ORDER: 28 JULY 2011 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by the Federal Magistrates Court on 20 December 2010 be set aside. 3. In lieu thereof it be ordered that: (i) A penalty of $3,000 be imposed on the respondent for contravention of s 767 of the Workplace Relations Act 1996 (Cth). (ii) The respondent pay the penalty of $3,000 into the Consolidated Revenue Fund within 30 days of the date of this order. 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 GENERAL DIVISION VID 10 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: JOHN SETKA Appellant AND: MURRAY GREGOR Respondent JUDGES: LANDER, TRACEY & YATES JJ DATE: 28 JULY 2011 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The appellant ("Mr Setka") is an official of the Construction, Forestry, Mining and Energy Union ("the CFMEU"). He was found, by the Federal Magistrates Court, to have contravened s 767 of the Workplace Relations Act 1996 (Cth) ("the Act") in the course of a visit to a building site. He was found to have acted improperly by using abusive language towards and threatening managers at the site. The Federal Magistrate imposed a pecuniary penalty of $6,000. 2 Mr Setka alleges that the Federal Magistrate erred in finding that he had contravened s 767 of the Act and that the pecuniary penalty imposed was excessive and manifestly so. THE PROCEEDING IN THE FEDERAL MAGISTRATES COURT 3 The Respondent (the Applicant below) is an inspector appointed for the purposes of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act") ("the inspector"). He made application, pursuant to s 769 of the Act, for an order that a penalty be imposed upon Mr Setka for contravention of s 767. 4 At trial the inspector called evidence from the managers who were present when Mr Setka engaged in what was alleged to be the contravening conduct. Following the closure of the inspector's case counsel for Mr Setka made an unsuccessful "no case" submission. Mr Setka called no evidence. 5 The evidence which was accepted by the Federal Magistrate was that, on 6 March 2008, Mr Setka, accompanied by other union officials, attended at a building site in the Docklands area of Melbourne. Mr Setka was the holder of an entry permit under the Occupational Health and Safety Act 2004 (Vic) ("the OHS Act"). The officials (including Mr Setka) arrived unannounced at about 7:15 am. As he entered the site Mr Setka referred to it as being a "fucking pigsty". 6 Before the union officials separated one of the group, which included Mr Setka, told managers, who challenged their right to enter the site, that they had been invited by the safety committee and that they had significant safety concerns. Specific reference was made to the lighting of access ways and to edge protection around the atrium. 7 The officials ignored the usual induction processes and dispersed around the site. One of them, Mr Shaun Reardon, commenced taking photographs of works on the site which he claimed were a threat to health and safety. At about 8:00 am Mr Setka encountered two managers on the site. One of them was Mr Robert McGregor who was the general foreman employed by one of the contractors. The following exchange then took place: SETKA: "This job's a fucking deathtrap and a disgrace. If you kill anyone on this job I am going to quit my fucking job and get you." McGREGOR: "Are you threatening me?" SETKA: "I'm not fucking threatening, I'm fucking promising, I will get you and you." As he spoke Mr Setka pointed at Mr McGregor and the other manager, Mr Jolyon Keeble. 8 Immediately after this incident Mr Setka left the presence of the two managers. They did not see him again on that day. 9 Later in the day a meeting took place between management representatives, the site-safety committee and all of the union officials (other than Mr Setka) who had come to the site. Those present discussed the alleged dangers to health and safety and methods of remedying those dangers. 10 Senior counsel for Mr Setka cross-examined Mr Keeble about the conduct of Mr Setka as follows: "So he accused you of being criminals, albeit with a colourful adjective attached to it?---Yes. Is that right?---Yes. And this is against a background that there are a number of items on the site that – on that day, which were clearly a risk to health and safety of workers. Is that not right?---Yes. Yes. And such things are prosecuted under the State Occupational Health and Safety Act of 2004 as criminal offences. You're aware of that, aren't you?---Yes. Yes. He also said, expressed the view, that this job's a "fucking disgrace", didn't he?---Yes. And again, that was against the background of there being a number of different items identified as being risks to the health and safety of workers. Is that not right?--- That's right. Yes? And his next remark was if you kill someone, if you do, then he would come back and get you?---Yes. Yes. And it was plain to you, wasn't it, that what he was saying was that, if anyone was killed, he was going to take some action against you, and against Mr McGregor?---Yes. And, again, this is against the background that, in the previous financial year, nine workers had been killed on Bovis Lend Lease sites. Is that not right?---I'm not sure of the number." THE LEGISLATION 11 Section 756(1) of the Act provided that a union official who has a right under an occupational health and safety law to enter premises must not exercise that right unless he or she holds a permit and exercises the right during working hours. 12 Section 767 relevantly provided that: "(1) A permit holder exercising, or seeking to exercise, rights: (a) …under section…760; or (b) under an OHS law in accordance with section 756 …; must not intentionally hinder or obstruct any person, or otherwise act in an improper manner. (2) Subsection (1) is a civil remedy provision. … (7) A person must not otherwise intentionally hinder or obstruct a permit holder exercising rights: (a) under section 747, 748 or 760; or (b) under an OHS law in accordance with section 756 or 757. …" 13 Section 769 provided for the imposition of a pecuniary penalty on a person who contravened a civil remedy provision. Under s 769(2) the maximum pecuniary penalty which could be imposed on an individual for a single contravention was 60 penalty units. This corresponds with the monetary amount of $6,600: see s 4AA of the Crimes Act 1914 (Cth). THE FEDERAL MAGISTRATE'S DECISION 14 The Federal Magistrate found that Mr Setka had contravened s 767 of the Act. He found that Mr Setka had attended the site to deal with safety issues and did so as a holder of a permit under the OHS Act. He had regard to a range of matters including: Mr Setka's complaint, immediately on entering the site, that it was a "fucking pigsty". The avowed purpose of the officials who attended the site in company with Mr Setka which was to deal with health and safety issues. The taking of photographs, by one of them, of works on the site which were said to present a risk to the health and safety of workers. The tenor of Mr Setka's exchange with the managers. The conduct of a meeting (albeit one not attended by Mr Setka) shortly after the incident to deal with health and safety issues. The parts of the cross-examination of Mr Keeble recorded above at [10]. 15 He held that: "[y]elling the sort of abuse and threats that [Mr Setka] did is plainly improper on any view of the meaning of those words." His Honour concluded: "In the light of the evidence as a whole, it is clear that Mr Setka intended to act in the fashion that he did. Any suggestion that he would regard it as appropriate to swear at people in the way that he did and offer what on any view were significant threats to their personal safety cannot, on any view, possibly be thought to be otherwise than intentional." 16 The Federal Magistrate recognised that the maximum penalty available to him was $6,600. He accepted that reasonable grounds existed for Mr Setka's concern that there were problems at the site that posed risks to the health and safety of workers. This concern did not, however, justify Mr Setka's conduct towards the two managers. The Federal Magistrate referred to Mr Setka being "in a violent temper" when he "shouted" at them. He concluded that: "Looking at the matters that are relevant from the applicant's submissions, I would deal with a number of them as follows: a) This was a serious episode involving Mr Setka screaming at Mr Keeble and Mr McGregor, employing foul language and threatening them in the clearest possible way. b) Mr Setka is a senior officer of the CFMEU. As a senior officer, he should be setting a better example. c) This was not conduct in any way contributed to by the CFMEU as an organisation. It was plainly conduct of Mr Setka alone. d) Mr Setka has exhibited no contrition. e) Mr Setka has taken no corrective action. f) Mr Setka has not cooperated in any way with the applicant." THE APPEAL TO THIS COURT 17 Mr Setka challenged the Federal Magistrate's finding that he contravened s 767 of the Act and, in the event that he is unsuccessful on this point, further complained that the penalty which was imposed on him was excessive. 18 The appeal grounds relating to the finding of the contravention raise a number of issues concerning the construction of s 767(1) of the Act. "Exercising, or seeking to exercise, rights" 19 Mr Setka submitted that the Federal Magistrate erred in concluding that, at relevant times, he was exercising or seeking to exercise rights under s 756 of the Act. He contended that the Federal Magistrate could not, consistently with the requirements of s 140(2) of the Evidence Act 1995 (Cth), find that he had attended the site for the purpose of exercising or seeking to exercise the rights referred to in s 756 of the Act. He submitted that the Federal Magistrate could not have been so satisfied on the evidence given that there was no evidence from him about his reason for attending the site or that he had advised anyone at the site that he was attending to deal with health and safety issues. There was no evidence that Mr Setka had previously raised safety matters relating to the site or that he had instigated the safety inspection. He had not attended the safety meeting which took place following the inspection. 20 Mr Setka relied on certain observations of Spender and Dowsett JJ in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88. In that case the Court was concerned with the inter-relationship of ss 760 and 767(1) of the Act. Section 760 provided that a permit holder "may enter premises for the purposes of holding discussions with any eligible employees who wish to participate in those discussions." Spender J said (at 92) that: "In my view, if s 760 is not engaged because the relevant permit holder lacks the prescribed purpose, then s 767(1) has no operation, because it applies, relevantly, only to a permit holder 'exercising, or seeking to exercise a right under s 760' of the … Act. In my view, s 767(1) regulates the way in which a person exercises his or her right of entry pursuant to s 760 … For myself, the relevant question under s 760 was whether the permit holder had the prescribed purpose. If the permit holder had that purpose, then it is a question whether there was an actual intentional hindrance or obstruction of any person … Alternatively, if the permit holder did not have the prescribed purpose, then s 767 is not engaged …" Dowsett J said (at 97-8) that "[i]f s 760 is not engaged (because the permit holder lacks the prescribed purpose) then there are no relevant rights for the purposes of s 767(1)." Mr Setka submitted that, in the absence of evidence that he had attended the site for the purpose of pursuing matters relating to occupational health and safety, s 767(1) could have no operation. 21 It may be noted, immediately, that s 756(1) differed from s 760 in that it contained no prescribed purpose. Moreover, section 756(1) did not create or confer a right but rather, as the Federal Magistrate rightly noted, assumed the existence of a right and regulated its exercise. The relevant right was conferred by the OHS Act. The right considered in John Holland was conferred by s 760. This distinction was reflected in the phrasing of sub-paragraphs (a) and (b) in s 767(1). 22 The question for the Federal Magistrate was whether, on the evidence, Mr Setka was exercising or seeking to exercise rights under the OHS Act. His Honour answered that question by finding that Mr Setka "was a permit-holder and that he entered upon the premises with a view to investigating safety concerns in respect of members of his union." It followed that s 767(1) was engaged. 23 Mr Setka was "an authorised representative" of the CFMEU who held an entry permit for the purposes of the OHS Act: see ss 81 and 87. An authorised representative has the right to enter a workplace during working hours for the purpose of inquiring into any suspected contravention of the OHS Act: see s 87(2). By s 88(1) an authorised representative must, immediately on entering a workplace under s 87, give a notice to the manager of the site and produce his or her entry permit for inspection. Once on the site, an authorised representative has powers of inspection and consultation with employees and managers: see s 89. 24 Section 140 of the Evidence Act provides that the standard of proof in civil proceedings is the balance of probabilities. Section 140(2) codifies some of the cautionary observations made by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2. It provides that: "(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." 25 We are satisfied that there was ample evidence before the Federal Magistrate on which he could, consistently with the provisions of s 140, conclude that Mr Setka was, when he engaged in the exchange with the managers, exercising, or seeking to exercise, rights under the OHS Act. That evidence is summarised above at [14]. On this evidence it may readily be inferred that Mr Setka was, at the least, seeking to exercise rights under the OHS Act. He was involved in consultations with employer representatives about health and safety issues. 26 Whilst the case against the appellant was for a contravention of s 767 of the Act, the issue for determination was whether the appellant had been exercising or seeking to exercise rights under the OHS Act at the time that he said what he was found to have said. That issue, like the respondent's case which had to be proved on the balance of probability (s 140) could hardly be said to be grave. "Otherwise act in an improper manner" 27 The Federal Magistrate rejected a submission that the words "act in an improper manner" in s 767(1) must be read ejusdem generis with the words "hinder or obstruct". In doing so, Mr Setka submitted, his Honour erred. 28 Mr Setka directed attention to the heading adjacent to s 767 of the Act which reads: "Hindering, obstruction etc. in relation to this Part." Whilst acknowledging the constraint, imposed by s 13(3) of the Acts Interpretation Act 1901 (Cth), on reliance on headings for construction purposes, he contended that s 15AB(2)(e) of that Act permitted regard to be had to the heading. It suggested a legislative intention that any conduct comprehended by the words "improper manner" had to be "conduct of a general kind falling within" the concepts of hindering or obstructing. 29 We doubt that the heading to s 767 can be called in aid in construing the section. It is unnecessary to decide this point because we consider that the use of the abbreviation "etc." in the heading is no more than a shorthand way of picking up the parts of the section not specifically mentioned and because the context suggests that the so-called ejusdem generis rule has no application to the construction of s 767(1). 30 The use of the word "otherwise" tells strongly against the contention that the words which follow ("act in an improper manner") do not broaden the reach of the sub-section. The primary meaning attributed to "otherwise" in the Shorter Oxford English Dictionary is "in another way, or in other ways; by other means; differently." The sub-section is thus to be understood as comprehending improper acts other than those involving obstruction or hindering. In this respect sub-section (1) may be contrasted with sub-section (7) which proscribes the intentional hindering or obstruction of a permit holder but does not extend to other improper conduct. If the inclusion of the words "otherwise act in an improper manner" was not intended to broaden the scope of s 767(1), it might have been expected that improper conduct would not have been mentioned in that sub-section. 31 Mr Setka's conduct, as the Federal Magistrate held, was clearly "improper" in the necessary sense. "Intentionally hinder or obstruct" 32 Mr Setka submitted that the Federal Magistrate erred in concluding that his conduct was "intentional". He submitted that, if the Court agreed that the words "act in an improper manner" should be read ejusdem generis with the words "hinder and obstruct", it was necessary for the Federal Magistrate "to find that Mr Setka had an intention to hinder and obstruct". It was not sufficient to find that he had intended to speak to and gesture at the managers in the manner in which he did. 33 Mr Setka directed attention to decisions of the Court in which it had been held that it was necessary to establish that the offender had a subjective intention to hinder or obstruct before a contravention of s 767(1) can be established: see Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at 94 (per Spender J) and 99 (per Dowsett J); Pine v Doyle (2005) 141 IR 98 at [22] (per Merkel J). 34 Mr Setka's submissions encounter a number of difficulties. The first is that, for the reasons which we have already given, s 767(1) is not confined in its reach to conduct which hinders or obstructs. There is, therefore, no requirement that an applicant must establish an intention on the part of the respondent to hinder or obstruct. 35 Nor was it necessary that the inspector establish that Mr Setka intended to act in an improper manner. In Darlaston v Parker (2010) 189 FCR 1 at 17 [54] Flick J was disposed to construe s 767(1) such that there was "no need to confine an act which amounts to 'act[ing] in an improper manner' to an intentional act." In other words, the word "intentionally" only qualifies the words "hinder or obstruct". 36 We are inclined to think that this is the appropriate reading of s 767(1). So much appears to have been implicitly accepted by the Full Court in Hogan v Riley (2010) 182 FCR 583 at 590-1 (Finn, Lander and Jessup JJ) and by Flick J in Darlaston at 13-14. One reason for not requiring that an intention to act in an improper manner be established is that, if subjective intention to so act had to be proved, a person who had no understanding of how to conduct him or herself in society could never be held to contravene s 767(1). 37 It is not, however, necessary for us to come to a concluded view on this point because the Federal Magistrate expressly found that Mr Setka intended to act in the manner which the Federal Magistrate found to be improper. Penalty 38 Mr Setka submitted that the Federal Magistrate had erred in fixing the penalty of $6,000. The error had arisen as a result of a misunderstanding of the facts by the Federal Magistrate. Mr Setka further submitted that the penalty was excessive. 39 The inspector contended that the penalty imposed by the Federal Magistrate did not fall outside the available range and was not excessive: a penalty of $6,000 was warranted, having regard to the matters to which the Federal Magistrate referred in his reasons. The relevant part of the Federal Magistrate's reasons is set out above at [16]. 40 The principles which are applied by Courts of Criminal Appeal when they are considering whether a criminal penalty is excessive are well established. They were summarised by Hayne J in AB v The Queen (1999) 198 CLR 111 at 159-60. His Honour said: "The task of the Courts of Criminal Appeal in this country in hearing appeals against sentences is a limited task and it is governed by well-established principles that have been repeatedly stated. In particular: 'If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.' [House v The King (1936) 55 CLR 499 at 504-5]. Such cases are, however, different from cases in which the complaint is that the sentence is manifestly excessive. There, as was said in House v The King: '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.' The difference between cases of specific error and manifest excess is not merely a matter of convenient classification. It reflects a fundamental difference in what the appellate court does. In the former case, once an appellate court identifies an error, the sentence imposed below must be set aside and the appellate court is then required to exercise the sentencing discretion afresh. The offender must be resentenced unless, of course, in the separate and independent exercise of its discretion the appellate court concludes that no different sentence should be passed. By contrast, in the case of manifest excess, the error in reasoning of the sentencing judge is not discernible; all that can be seen is that the sentence imposed is too heavy and thus lies outside the permissible range of dispositions. Only then may the appellate court intervene and, in the exercise of its discretion, consider what sentence is to be imposed." 41 This Court has drawn on these principles when dealing with claims that pecuniary penalties should be interfered with on the ground that they are too severe: see, for example, Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 567-8, 577 and 583-4. 42 Mr Setka relied, as we understood the argument, on both specific errors and manifest excess. 43 He submitted that the Federal Magistrate had acted on mistaken findings of fact that he (Mr Setka) had been in a violent temper and had shouted and screamed at Messrs Keeble and McGregor. We do not agree. The Federal Magistrate's findings were supported by the unchallenged evidence of Mr Keeble that Mr Setka had gone "over the top" and was "yelling, with plenty of volume". 44 Mr Setka invited the Court to infer that the penalty was manifestly excessive. This inference should, he submitted, be drawn because the amount involved was 91% of the maximum penalty available and, thus, little room was left to cater for the worst possible case of contravention. Furthermore, the circumstances of Mr Setka's offending did not, on any reasonable view, approach the worst possible case characterisation. 45 It has often been said that a finding of manifest excess in a sentence admits of little argument. We consider that the penalty imposed on Mr Setka was, in the circumstances, manifestly excessive. 46 One factor, of great importance, in all sentencing exercises is the maximum available penalty fixed by the legislature. As Gleeson CJ, Gummow, Hayne and Callinan JJ observed in Markarian v The Queen (2005) 228 CLR 357 at 372: "It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick." 47 Mr Setka's conduct undoubtedly constituted a serious contravention of the Act. It was not, however, conduct of a kind which would bring it into the borderline sentencing territory reserved for the most serious case. 48 Neither party suggested that the matter should be remitted to the Federal Magistrate for redetermination of a penalty. This course would have only led to further costs being incurred unnecessarily. It thus falls to us to determine an appropriate penalty. 49 We must do so having regard to the findings of the Federal Magistrate and our assessment of the conduct when compared with the hypothetical worst possible case. 50 Mr Setka's conduct clearly constituted a serious breach of s 767(1). It warranted the strong criticism made of it by the Federal Magistrate. It did not, however, disrupt work at the site. It may be explained (but not justified) on the ground that Mr Setka was concerned about manifest and admitted risks to the health and safety of workers. It is also relevant that no prior contraventions of s 767 or similar provisions were alleged against Mr Setka. This was not, therefore, a case in which the contravening conduct was such as to justify the imposition of a penalty at the upper end of the range. DISPOSITION 51 We conclude, having regard to all of the circumstances, that a penalty of $3,000 should be imposed on Mr Setka. The appeal should to this extent be allowed. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Lander, Tracey & Yates. Associate: Dated: 28 July 2011