A civil penalty is not a criminal sentence by any other name

Regulators' speaking roles in civil penalty determinations restored by the High Court

Last week, the High Court delivered an important judgment for regulators in civil penalty proceedings.  In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; CFMEU and Director, Fair Work Building Industry Inspectorate, the High Court unanimously held that Courts are not precluded from considering and, if appropriate, imposing civil penalties that are agreed between the parties. 

What's new about that?  Isn't that the way it always works?

Not exactly.  In May this year, the Full Court of the Federal Court significantly constrained the ability of Courts (and potentially Tribunals) to consider and give effect to agreements between regulators and other parties about the suitable penalty for a regulatory breach.  

As many of our State clients would know (and as the High Court has now said is sound practice) in a multitude of regulatory proceedings - from breaches of employment awards to director’s duties – regulators as diverse as the Fair Work Ombudsman to ASIC had often reached agreement with an accused on a form of civil penalty.  That agreement was then proposed to the courts who, if it was considered appropriate, imposed the agreed penalty.  Trial times were shortened and, among other things, the regulators’ resources could be put to other uses, such as monitoring compliance. 

With the Full Court’s decision, however, this longstanding practice was held to be unlawful.  For the Full Court, the task of ordering a civil penalty was very much like imposing a criminal sentence.  As a result, it applied the principle in Barbaro, which prohibits a criminal prosecutor from making submissions as to the appropriate sentencing range or ultimate sentencing outcome, to the civil penalty context.  At the heart of the Court's concern was the idea that by agreeing on a penalty, parties may 'bind the Court' to make their preferred order and undermine its role in determining an appropriate penalty. 

Since May, then, real questions have existed in many jurisdictions about the lawfulness of regulators’ speaking roles in any civil penalty determination.  Were regulators to be like prosecutors – silent and dispassionate? Or, alternatively -  invested, knowledgeable, agencies with a range of unlawful conduct expertly in their sights?  

High Court Decision

On appeal, the High Court determined unanimously that, in civil penalty proceedings, courts are not precluded from considering and, if appropriate, imposing penalties that are agreed between the parties.   While the High Court noted that there was some similarity between the task of imposing civil and criminal penalties – the tasks are, it said, fundamentally of a different character.  The Court rejected any attempt to apply Barbaro to civil penalty proceedings.  Moreover, the Court held that a court is not bound by the penalty suggested by the parties, reiterating that it must ask 'whether their proposal can be accepted as fixing an appropriate amount'.  The judgments also spend considerable time endorsing the traditional model of regulator agreement and regulators' speaking role when proposing the terms and quantum of a penalty, stating:

• there is important public policy involved in promoting predictability of outcome in civil proceedings;
• the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcomes for regulators and wrongdoers; and
• it must be accepted that judges will do their duty, as they have been sworn to do, and reject any agreed penalty submission if not satisfied that what is proposed is appropriate.

For advice on regulatory proceedings and civil penalties, now the silence has been lifted, contact:

Greg Elms

Managing Principal Solicitor

8684 0414

greg.elms@vgso.vic.gov.au 

Janine Hebiton

Managing Principal Solicitor

8684 0450

janine.hebiton@vgso.vic.gov.au

Plan Melbourne 2016

What are the issues of relevance to me?

The Victorian Government has released a discussion paper on the refresh of Plan Melbourne.

Plan Melbourne 2016 will be published in the first half of next year, and will build on Plan Melbourne 2014.  On 18 June 2014, we reported on the adoption of Plan Melbourne which was subsequently incorporated into the Victoria Planning Provisions.  The Ministerial Advisory Committee that advised on Plan Melbourne has been reappointed to advise on the refresh.

The discussion paper reflects the Government's commitments and priorities and canvasses options for changes in planning policy and strategy.  It covers a range of key issues including housing and investment.  Of particular relevance to our clients is the discussion of improved environmental sustainability and planning for transport.

Environmental sustainability and climate change

The discussion paper emphasises sustainability as a key concept in the Plan Melbourne refresh.  Driving this part of the commentary are the CSIRO and Bureau of Meteorology[1] projections of increases in temperature and changing patterns of rainfall and more extreme weather events such as drought and bushfires, heatwaves, flooding and increased coastal inundation. 

The discussion paper suggests that a 'more sustainable polycentric city model' is preferable to contain urban growth within a permanent urban growth boundary.  It is also suggested that Plan Melbourne 2016 might support the 'greening' of the city, by structuring planning, local policies and overlays to promote more vegetation cover and cool hard surfaces.  Clarification of the limits to the 20-minute neighbourhood is also expected in Plan Melbourne 2016.

Once finalised, Plan Melbourne 2016 will sit alongside other key components of current and existing legislation, policy and plans in Victoria on the topic of climate change and environmental sustainability, many of which are under review:

·         Climate Change Act 2010, under review by an Independent Panel;

·         Climate Change Adaptation Plan, for which consultation is planned in early 2016;

·         Victorian Energy Efficiency Target Act 2007, recently amended;

·         Renewable Energy Action Plan, currently being developed;

·         Energy Efficiency and Productivity Strategy, to be released later this year;

·         revised Draft Victorian Floodplain Management Strategy, released in June 2015 and expected to be finalised by the end of 2015;

·         State Water Plan, to be released in 2016.

Transport Planning

Plan Melbourne 2016 will reflect the Government's transport priorities and commitments, including:

·         the Melbourne Metro Rail Project;

·         the removal of 50 metropolitan level crossings;

·         the Mernda Rail Extension; and

·         commitments to expand the bus network.

The discussion paper recognises that potential road initiatives such as connecting the Eastern Freeway and the Metropolitan Ring Road require further assessment.

Although Plan Melbourne 2014 committed to a second container port at Hastings, Plan Melbourne 2016 will leave open different options for the most appropriate site for a second container port, including locations at Bay West and Hastings.  Infrastructure Victoria will independently advise the government on this.

What are the next steps?

We will continue to update clients on this process.  Comments and submissions on the refresh of Plan Melbourne are invited until Friday 18 December 2015.  Please contact us if you would like assistance with preparing your submission.

Natasha Maugueret

Managing Principal Solicitor

8684 0402

natasha.maugueret@vgso.vic.gov.au

Eliza Bergin

Principal Solicitor

8684 0267

eliza.bergin@vgso.vic.gov.au

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[1] Bureau of Meteorology (2014) 'State of the Climate 2014'.