Judge Warwick imposed a $9,000 fine on AMK Images and handed a further $3,500 fine to sole director Anthony Gavran.

In his written reasons, published earlier this month, Judge Warwick said $17,000 of the missing $45,000 was repaid, and it had been agreed the balance of the funds would be repaid to the painter.

He added that AMK Images was “contrite” about its errors, there was no history of contraventions, and admissions were “reasonably made”.

This was despite AMK Images denying liability and claiming the painter received sufficient remuneration to compensate him.

In its submissions, CFMEU said a total penalty of $10,000 should apply for the five contraventions – in addition to further penalties of $2,500 for other contraventions – but this was knocked back because AMK was a “first-time offender”.

Appearing before the Federal Court, the CFMEU sought leave to appeal on the grounds the penalties were “inadequate”.

Justice Scott Goodman granted leave, having been satisfied the appeal “gives rise to a serious question to be tried as to the adequacy or otherwise of penalties imposed by the primary judge”.

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He added there was a public interest that “extends beyond the current proceedings”, in that there is a correction of “any error” of the imposition of such penalties in Fair Work matters.

By the time the leave to appeal application was made, AMK had entered liquidation, and Justice Goodman said there would be no potential prejudice to the creditors.

If a greater penalty is imposed, Justice Goodman said this would have “no effect” on the creditors because “such penalties would not be admissible to proof against AMK Images”.