On 9 December 2015, the High Court handed down its decision in
Commonwealth v Director, Fair Work Building Industry
Inspectorate1, 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 CFMEU2.
In CFMEU, the Full Federal Court applied last
year's High Court decision in Barbaro3,
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
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 Foods5
and Mobil Oil6, correctly recognised that
"such predictability of outcome
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". 7
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.
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.
1  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
4Fair Work Building Industry
Inspectorate  HCA 46, .
5NW Frozen Foods Pty Ltd v Australian
Competition and Consumer Commission (1996) 71 FCR 285
(NW Frozen Foods).
6Minister for Industry, Tourism &
Resources v Mobil Oil Australia Pty Ltd (2004) ATPR
¶41-993 (Mobil Oil).
7Fair Work Building Industry
Inspectorate  HCA 46, .
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