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Company fines

Information about what happens if a company employee is fined.

Companies can be issued with both court fines and infringement notices. As companies cannot accumulate demerit points, they are at an advantage over individuals who are caught offending. Consequently, the penalties are sometimes much higher than for individual offenders. This depends on the legislation that creates the offence. The most common types of fines that are imposed on companies in the Magistrates' Court are for non-payment or toll fines and road safety offences.

See Sentencing Advisory Council—The imposition and enforcement of court fines and infringement penalties in Victoria(opens in a new window).

For example, the maximum fine for a company that does not obey the speed limit is 120 penalty units, whereas the maximum penalty is 20 penalty units for an individual driver.

Note: If the speeding matter is dealt with by infringement notice the penalty for a company is 20 penalty units.

See r. 20—Road Safety Road Rules 2017 (Vic)(opens in a new window) and Schedule 7—Road Safety (General) Regulations 2019 (Vic)(opens in a new window).

Fining a company

An infringement notice can be issued to a company. This might happen if a vehicle is caught on a traffic camera, which is registered in the name of a company. It is up to the company to nominate the person who was driving at the time of the offence.

An authorised officer of the company must complete the nomination statement on behalf of the company within the standard timeframe. This could be a director, secretary, official manager, liquidator or trustee.

As with other driver nomination situations the responsibility for the fine then passes from the company to the driver. The driver then must pay the fine and demerit points will be added to their licence.

See Nominating another driver.

Additional offence of repeated failure to nominate a driver

If the company repeatedly fails to nominate a person as responsible, they face significant penalties. This will happen if a compant fails to give an effective statement nominating who was driving for 3 or more fines within 12 months.

Note: The key issue under this section 84BEA of the Act is the 12 Month Period. Even if the company has nominated drivers for other penalties - if they fail to nominate a driver 3 or more times within a 12 month period they can still be penalised.

To be liable for this penalty the company must have been the registered owner of the vehicle at the time of the offence. This penalty only applies to operator onus infringements that attract demerit points.

If the company is unable to nominate the driver it may help if they get a copy of the photo to help identify the person. They can view the image online for free.

See s. 84BEA—Road Safety Act 1986 (Vic)(opens in a new window) and Fines—Pay your fine(opens in a new window).

Penalty

The maximum penalty for failing to give an effective statement nominating a driver is 120 penalty units.

See s. 84BEA—Road Safety Act 1986 (Vic)(opens in a new window).

Failing to keep records is not an excuse

A registered owner cannot avoid liability for an operator onus fine by saying in their nomination statement that they did not know who was driving the vehicle at the time of the offence (unknown user statement), if the reason was that they did not keep proper records of who was driving the vehicle at the time that the offence happened, unless there are exceptional circumstances.

See s. 84BE(5B)—Road Safety Act 1986 (Vic)(opens in a new window).

Defence

It is a defence to a charge of failing to nominate a driver if the company can prove that:

  • it had taken all reasonable steps to make sure it could identify the person who had possession and control of a vehicle
  • its failure to give an effective nomination statement was due to exceptional circumstances, and
  • there are no more than 2 other infringement notices in 12 months where the company failed to nominate a driver.

See s. 84BEA(5)—Road Safety Act 1986 (Vic)(opens in a new window).

Enforcement

If the fine is not paid after the due date on the Penalty reminder notice, the fine is registered with Director of Fines Victoria ('the director'). The fine becomes a debt to the state of Victoria and the director is authorised take court action to recover the debt. The director may also enforce the fine by imposing sanctions as they would if the fine was issued to an individual.

The company can apply to the director to make a payment arrangement to pay off the fine.

If repayments are not made as required, the director can issue a final noticed of demand and begin administrative sanctions such as making an attachment of debts direction or issuing an enforcement warrant. If the director uses these sanctions to try to recover the outstanding money, they cannot simultaneously attempt to recover the fine as a debt.

See ss. 26, 27—Fines Reform Act 2014 (Vic)(opens in a new window).

Problems with this enforcement

According to the Sheriff's office, enforcement of court fines is hindered by director behaviour, such as companies holding few or no assets in order to evade payment or engaging in phoenix activity (closing down one business and substantially resuming the same business) to avoid payment.

For companies that default on infringement penalties sanctions may include:

  • detention, immobilisation and sale of motor vehicles
  • suspension or non-renewal of driver licence or vehicle registration
  • seizure and sale of personal property
  • an attachment of earnings order
  • an attachment of debts order
  • a charge over, or sale of real property.

A corporation does not have demerit points deducted.

Note: A 2013 Ombudsman's report says that these methods of enforcement are rarely used.

See:

Personal liability of directors

Under some circumstances a company director may be held personally liable for in outstanding infringement that is issued against a corporation if:

  • an enforcement warrant has been issued against the company, and
  • personal property of the company is not enough to meet the cost of the fine and associated costs, or
  • the company becomes deregistered after the offence is committed (and the fine issued).

The sheriff cannot execute an enforcement warrant by removing property if the company is in administration.

Before taking this action the Director of Fines Victoria must establish that at the time that the offence was committed, the person was a director of the company. This is done by checking the company returns lodged under the Corporations Act 2001 (Cth).

After verifying this the director will serve the company director a 'Declared director notice.' This notice must be personally served. The notice warns the company director that they are jointly and severally liable for the outstanding amount of the fine. The company director then has 28 days from the date of the notice to apply to court for an order that they are not a declared director.

After 28 days, if this notice has not been successfully challenged, the director can go ahead and enforce the fine in the same way that they can for a private individual.

See ss. 29, 30—Fines Reform Act 2014 (Vic)(opens in a new window).

Exceptions

A director must not be declared liable by the Infringements Registrar if at the time of the offence the director had:

  • reasonable grounds for believing that the company would be able to meet its debts at the time, and
  • taken all reasonable steps to make sure that the company would be able to meet its debts when they fell due.

Penalties for director

If an enforcement warrant is issued to a director the following sanctions can be brought against them unless the infringement penalty is paid:

  • seizure of personal property
  • detention, immobilisation, or sale of motor vehicle
  • suspension of driver licence or vehicle registration
  • an attachment of earnings order
  • an attachment of debts order
  • a charge over, or sale of real property
  • community work
  • imprisonment.

See Sanctions against property.

Note: A 2013 Ombudsman's report says that these powers are rarely used.

See Victorian Ombudsman—Own motion investigation into unenforced warrants(opens in a new window).

More information

Legislation

Road Safety Act 1986 (Vic)

  • s. 84BC(5)—treatment of body corporates who are fined may be fined at a higher rate
  • s. 84BE—use of a statement to avoid liability
  • s. 84BEA—failure of company to give effective statement

See Road Safety Act 1986 (Vic)(opens in a new window).

Fines Victoria Act 2014 (Vic)

  • Part 3 Division 5—Fines for bodies corporate

See Fines Reform Act 2014 (Vic)(opens in a new window).

Road Safety (General) Regulations 2019 (Vic)

  • Schedule 7—matters that can be dealt with by issue of infringement notice

See Road Safety (General) Regulations 2019 (Vic)(opens in a new window).

Road Safety Road Rules 2017 (Vic)

  • r. 20—exceeding the speed limit offences

See Road Safety Road Rules 2017 (Vic)(opens in a new window).

Reference

Fines Victoria site

This site has information about how a corporation can nominate another driver.

See Fines—Nominate(opens in a new window).

To view an image online for free see Fines—Pay your fine(opens in a new window).

Victorian Ombudsman

  • 89. 'If demand is made on a company offender and the company is unwilling to pay or there are no assets to seize, the matter is currently not pursued.'
  • 90. An infringements court register can declare a company director personally liable for outstanding enforcement warrants incurred by the company, however this is never used.

See Victorian Ombudsman—Own motion investigation into unenforced warrants(opens in a new window).

Sentencing Advisory Council

  • 5.6 Enforcing fines against corporations

See Sentencing Advisory Council—The imposition and enforcement of court fines and infringement penalties in Victoria(opens in a new window).

Updated