Alogaidi v Agad Property Consulting Pty Ltd

[2014] FCCA 1883

FEDERAL CIRCUIT COURT OF AUSTRALIA

ALOGAIDI v AGAD PROPERTY CONSULTING PTY LTD [2014] FCCA 1883

Catchwords:
INDUSTRIAL LAW – Default judgment – contravention of s.405 of the Fair Work Act 2009 (Cth) – pecuniary penalty pursuant to s.546 of the Fair Work Act 2009 (Cth) – consideration of matters relevant to penalty.

Legislation:

Fair Work Act 2009 (Cth), ss.405, 546, .570, 570(2)(b)

Applicant: BASEL ALOGAIDI

Respondent: AGAD PROPERTY CONSULTING PTY LTD (ACN 155 463 531)

File Number: MLG 877 of 2014

Judgment of: Judge Hartnett

Submissions of the Applicant: 30 June 2014

Delivered at: Melbourne

Delivered on: 22 August 2014

REPRESENTATION

Solicitors for the Applicant: Ashurst Australia

ORDERS

1. The Respondent comply forthwith with the Order of Commissioner Ryan of the Fair Work Commission made on 3 March 2014 by paying to the Applicant the sum of $48,651, less the appropriate amount of tax ($15,325.07) to be withheld.

2. The Respondent pay to the Applicant interest on the sum of $33,325.93 from 3 April 2014 at the rate prescribed under r.39.06 of the Federal Court Rules 2011 (Cth).

3. Pursuant to s.546 of the Fair Work Act 2009 (Cth), the Respondent pay to the Applicant a pecuniary penalty in the sum of $40,800. Such payment to be made within 30 days of the date of this Order.

4. The Respondent pay the Applicant’s costs to be taxed in default of agreement. 

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 877 of 2014

BASEL ALOGAIDI

Applicant

And

AGAD PROPERTY CONSULTING PTY LTD

Respondent

REASONS FOR JUDGMENT

1. The Applicant filed an Application on 9 May 2014 seeking that the Court make orders in terms which the Court does this day. Essentially, the making of such Orders is the entering of a default judgment for the Applicant against the Respondent pursuant to r.13.03B(2)(d) of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’). The evidence supporting that application is as set out in the Affidavit of Dominic Fleeton sworn 9 May 2014. Submissions of the Applicant were also filed on 30 June 2014, in accordance with Orders made by this Court on 6 June 2014.

2. These proceedings were served on the Respondent Company by posting the Application filed 9 May 2014 and the Affidavit of Dominic Fleeton sworn 9 May 2014 by registered pre-paid post to the registered office of the Respondent on 12 May 2014.  In addition, at 5.14pm on 9 May 2014 Dominic Leeton sent a copy of the documents to the Respondent by email. That email was sent to an email address from which Mr Fleeton previously received correspondence from the Respondent in respect of the unfair dismissal proceedings brought by the Applicant in the Fair Work Commission. An Affidavit of Service attesting to this was filed on 3 June 2014.

Background

1. The Applicant was an employee of the Respondent from on or about 13 June 2012 until 18 July 2013 when his employment was terminated by the Respondent.

2. On 23 July 2013, the Applicant filed an Application in the Fair Work Commission for an unfair dismissal remedy against the Respondent.

3. The Respondent did not file submissions or evidence, nor did it appear before the Fair Work Commission at the hearing on 3 March 2014.

4. On 3 March 2014, Commissioner Ryan determined that the Applicant’s dismissal “was harsh, unjust and unreasonable”[1] and it was ordered that:-

   [1] Basel Alogaidi v Agad Property Consulting Pty Ltd [2014] FWC 1503

   “1. Pursuant to s.392(1) of the Fair Work Act 2009, Agad Property Consulting Pty Ltd is to pay to Mr Alogaidi the amount the (sic) $48,651.00, to be taxed at appropriate rate, as compensation in lieu of reinstatement.

   2. The amount is to be paid within thirty-one days of this order.”

   6. There be liberty to apply.”

5. No payment of compensation, with an amount withheld for taxation, was made by 3 April 2014 or indeed has been made at all. Following the filing of the application in this proceeding, the matter was listed for a directions hearing before Registrar Luxton on 6 June 2014. The Respondent failed to attend the directions hearing and, on that date, it was ordered that:-

   “1. If the respondent fails to file and serve a notice of address for service by 30 June 2014, the application be heard on the papers as soon as is practicable thereafter.

   2. If the respondent files and serves a notice of address for service by 30 June 2014, the application be set down for hearing on a date to be fixed as soon as is practicable thereafter, on an estimate of half an hour.

   3. The applicant file and serve short written submissions, not exceeding two pages in length (including any annexure), by 30 June 2014.

   4. The applicant serve a copy of these orders on the Respondent as soon as is practicable.

   5. Costs be reserved.”

   The Respondent failed to comply with order number 1 of Registrar Luxton’s Orders. Thus, the proceeding has been determined on the papers.

Default judgment

1. Rule 13.03B(2) of the FCC Rules provides that:-

   “(2) If a respondent is in default, the Court may:

   (a) order that a step in the proceeding be taken within the time limited in the order; or

   (b) if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:

   (i) the debt or liquidated damages; and

   (ii) if appropriate—costs; or

   (c) if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:

   (i) the applicant appears entitled to on the statement of claim; and

   (ii) the Court is satisfied it has power to grant; or

   (d) give judgment or make any other order against the respondent; or

   (e) make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.”

2. Rule 13.03A(2) of the Rules relevantly provides that a respondent will be in default for the purposes of r.13.03B of the Rules if the respondent:-

   “…

   (b) fails to:

   (i) give an address for service before the time for the respondent to give an address has expired; or

   (ii) file a response before the time for the respondent to file a response has expired; or

   (iii) comply with an order of the Court in the proceeding; or

   (iv) file and serve a document required under these Rules; or

   (v) produce a document as required by Part 14; or

   (vi) do any act required to be done by these Rules; or

   (vii) defend the proceeding with due diligence.”

3. Further, r.13.03B(d) of the Rules provides that the Court may give judgment and make orders against a respondent in default.

4. The Respondent is clearly in default. It has not:-

   a)filed an address for service;

   b)filed a response;

   c)complied with the Orders of this Court made 6 June 2014;

   d)done the acts required by the Rules; or

   e)defended the proceeding with due diligence, or at all.

Pecuniary penalty

1. The Respondent’s failure to comply with the Order of Commissioner Ryan is a contravention of s.405 of the Fair Work Act 2009 (Cth) (‘the FW Act’). This section is a civil remedy provision. The Applicant seeks a pecuniary penalty payment pursuant to s.546 of the FW Act and that such payment be made to the Applicant pursuant to s.546(3) of the FW Act.

2. The Applicant has made multiple attempts to contact the Respondent regarding compliance with the Order made 3 March 2014.

3. The Respondent has not satisfied the Applicant’s claim and, in particular, has not paid the Applicant the amount required to be paid by the Orders made by Commissioner Ryan on 3 March 2014. The Respondent’s senior management were made aware of the Order of Commissioner Ryan and took no action to ensure compliance with it as set out in the Affidavit of Mr Fleeton at paragraphs 10 and 11 thereof. The ongoing breach of the Order is wilful and deliberate.

4. The Applicant submits that the appropriate amount of tax to be withheld by the Respondent is 31.5 per cent of the ordered sum which equates to $15,325.07,[2] the payment being an eligible termination payment.

   [2] s.546(2)(b) of the Fair Work Act 2009 (Cth)

5. The maximum pecuniary penalty that the Respondent can be ordered to pay for a contravention of s.405 of the FW Act is 300 penalty units being currently $51,000.

Factors considered

1. The breach of s.405 of the FW Act by the Respondent occurred at a time when the Applicant was still unemployed and making extensive efforts to find other employment. He was reliant on social security payments to support himself, his wife and two young children. The Respondent’s failure to comply with the Order increased the stress and financial hardship suffered by the Applicant. He was vulnerable. By contrast, no evidence is before the Court from the Respondent as to its financial position in particular as to whether this small business would suffer a crushing blow by the imposition of a significant financial penalty that it had not the capacity to meet. There is simply no evidence as to whether any order, in any sum, would affect the viability of the Respondent’s business.

2. There is no evidence of any efforts made by the Respondent to mitigate the seriousness of its conduct, nor of any contrition on the part of the Respondent.

3. The Applicant submits that the imposition of a penalty at the higher end of the available range is necessary to deter the Respondent, which has wilfully disregarded the authority of the Fair Work Commission, from behaving in a similar manner in future. It would also serve to deter other employers from flagrantly disobeying orders made by the Fair Work Commission. I accept those submissions.

4. The size of the business enterprise, as found by Commissioner Ryan,[3] and the lack of prior offending does weigh marginally against the above, consideration all of which favour the imposition of significant penalty. The Court will impose a pecuniary penalty of $40,800 being a reduction of 20 per cent on the maximum penalty.

   [3] Affidavit of Dominic Fleeton sworn 9 May 2014 Annexure DF-2 at [21]

5. The Applicant makes an application for costs which requires a consideration of s.570 of the FW Act. In this case I am satisfied that s.570(2)(b) of the FW Act does apply. The Applicant has incurred the burden of legal costs in bringing the matter before this Court only because of the Respondent’s failure to comply with the Order of Commissioner Ryan. It is appropriate the Court exercise its discretion and make a costs order against the Respondent company.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Associate: 

Date:  22 August 2014