Australian Building and Construction Commissioner v Adadn Pty Ltd
[2021] FCCA 1820
•6 August 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Australian Building and Construction Commissioner v ADADN Pty Ltd [2021] FCCA 1820
File number(s): BRG 99 of 2021 Judgment of: JUDGE EGAN Date of judgment: 6 August 2021 Catchwords: INDUSTRIAL LAW – failure by respondent to comply with notices to produce records – failure by respondent to co-operate with respondent in any respect – level of penalty to act as a general deterrence in respect of non-compliance with statutory notices – orders accordingly Legislation: Building and Construction Industry (Improving Productivity) Act 2016 (Cth), ss 77(3), 81(1)(a), 81(5).
Workers Compensation and Rehabilitation Act 2003 (Qld), ss 48, 50(b)(i).
Labour Hire Licensing Act 2017 (Qld), s 40(1).
Fair Work Act 2009 (Cth), ss 387, 392, 405.
Federal Circuit Court Rules 2001 (Cth), r 21.11.
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No.2) [2018] FCA 1968.
Auimatagi v Australian Building and Construction Commissioner (2018) 363 ALR 246.
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the New Cold Picket Case) [2019] FCA 2038.Number of paragraphs: 19 Date of last submission/s: 3 August 2021 Date of hearings: 7 June 2021, 3 August 2021 Place: Brisbane Counsel for the Applicant: Ms K. Slack Solicitor for the Applicant: Mr Shuttleworth of the Australian Building and Construction Commission Respondent: There being no appearance by or on behalf of the Respondent ORDERS
BRG 99 of 2021 BETWEEN: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER
Applicant
AND: ADADN PTY LTD ACN 619272374
Respondent
ORDER MADE BY:
JUDGE EGAN
DATE OF ORDER:
6 AUGUST 2021
IT IS ORDERED THAT:
1.Pursuant to s. 81(1)(a) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (‘the Act’), the Respondent pay a pecuniary penalty in the sum of $16, 650.00 in respect of the declared contravention of s. 77(3) of the Act, contained in declaration 2(a) made by this Court on 7 June 2021.
2.Pursuant to s. 81(1)(a) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (‘the Act’), the Respondent pay a pecuniary penalty in the sum of $16, 650.00 in respect of the declared contravention of s. 77(3) of the Act, contained in declaration 2(b) made by this Court on 7 June 2021.
3.Pursuant to s. 81(5) of the Act, the penalties imposed on the Respondent be paid to the Commonwealth within twenty-eight (28) days.
4.The Applicant have liberty to apply on the giving of seven (7) days’ notice in the event that any of the preceding orders are not complied with.
5.The Respondent pay the Applicant’s costs of the proceeding to be taxed pursuant to the provisions of r. 21.11 of the Federal Circuit Court Rules 2001 (Cth).
REASONS FOR JUDGMENT
JUDGE EGAN:
Introduction
The applicant filed an Originating Application on 16 March 2021. That application sought the relief claimed in a Statement of Claim, also filed on 16 March 2021. Such relief was as follows:
“12. The Applicant seeks the following relief against the Respondent:
(a) a declaration that the Respondent contravened s 77(3) of the BCIIP Act by failing to comply with the First Notice;
(b) a declaration that the Respondent contravened s 77(3) of the BCIIP Act by failing to comply with the Second Notice;
(c) orders pursuant to s 81(1)(a) of the BCIIP Act imposing civil penalties on the Respondent for contraventions of s 77(3) of the BCIIP Act;
(d) an order that any penalties imposed by the Court be paid within twenty-eight days;
(e) an order pursuant to s 81(5) of the BCIIP Act that all penalties imposed by the Court be paid to the Commonwealth;
(f) orders pursuant to s 81(1)(c) of the BCIIP Act requiring the Respondent to produce to the Applicant the records and documents as sought in the First Notice and the Second Notice within 28 days; and
(g) costs pursuant to s 79(2) of the Federal Circuit Court of Australia Act 1999 (Cth)”
On 7 June 2021, the Court made the following declarations:
“1. The Respondent is deemed to have admitted the facts as pleaded in the Statement of Claim filed on 17 March 2021 consequent upon the default of the Respondent in its failure to:
a. file a notice of address for service as required by Rule 6.01(1) of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’);
b. file a response or a defence within 28 days of service as required by Rules 4.03 and 4.05(3) of the Rules; and
c. defend the proceeding with due diligence as required by Rule 13.03A(2)(b)(vii) of the Rules.
2. Pursuant to r. 13.03A(2) and r. 13.03B(2)(c) of the Rules:
a. The Respondent contravened s. 77(3) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (‘BCIIP Act’) by failing to comply with a written notice issued by an authorised officer to the Respondent pursuant to s. 77(1) of the BCIIP Act on 9 June 2020 (‘the first notice’);
b. the Respondent contravened s 77(3) of the BCIIP Act by failing to comply with a written notice issued by an authorised officer to the Respondent pursuant to s 77(1) of the BCIIP Act on 3 August 2020 (‘the Second Notice’).”
On 7 June 2021, the Court made the following orders:
“1. Default judgment be entered against the Respondent pursuant to Rule 13.03B(2)(c) of the Rules by reason of the Respondent’s default pursuant to Rule 13.03A(2) of the Rules by its failure to:
a. file a notice of address for service as required by Rule 6.01(1) of the Rules;
b. file a response or a defence within 28 days of service as required by Rules 4.03 and 4.05(3) of the Rules; and
c. defend the proceeding with due diligence as required by Rule 13.03A(2)(b)(vii) of the Rules.
2. Pursuant to s. 81(1)(c) of the BCIIP Act, the Respondent is directed to provide to the Applicant the records and documents referred to in the First Notice (as referred to in paragraph 4 of the statement of claim) and the Second Notice (as referred to in paragraph 8 of the statement of claim) within 28 days of the date of this order. “
3. The Applicant forthwith serve copies of these orders on the Respondent as soon as they are made available by the Court by posting it to the Respondent by registered post at the following address: Suite 8, 25 Discovery Drive North Lakes QLD 4509 and, by emailing it to the respondent at the following email addresses: [email protected] and [email protected].
4. The matter is adjourned to 9.45am AEST on 3 August 2021 for a further hearing in respect of the Applicant’s claim for a penalty to be imposed on the Respondent for the contraventions declared at paragraph 2 of the Declarations.
5. Evidence in chief on the question of penalty be by way of affidavit.
6. The Applicant shall file and serve any affidavits upon which it intends to rely, and an outline of submissions relating to penalty, by no later than 4:00pm on 13 July 2021.
7. The Respondent shall file and serve any affidavits upon which it intends to rely, and an outline of submissions relating to penalty, by no later than 4:00pm on 20 July 2021.
8. The Applicant shall file and serve any affidavits and submissions in reply by no later than 4:00pm on 27 July 2021, prior to the hearing fixed pursuant to order 4 hereof.
9. Each party have liberty to apply on the giving of two (2) days’ notice, each to the other.
10. The costs of and incidental to today’s hearing be reserved.”
At the hearing before the Court on 3 August 2021, the Court was satisfied that the orders of the Court relating to service of the order of 7 June 2021 had been complied with, and that the respondent had duly been given notice of the hearing before the Court on 3 August 2021.
Background
The respondent carried on a labour hire business which supplied building industry employees to work sites on the Gold Coast and in the Australian Capital Territory (‘the Projects’).
On 9 June 2020, a Notice to Produce Records or Documents was issued by the applicant requiring the respondent to produce copies of nominated documents to a specified address in Adelaide by 4:00pm on 10 July 2020 (‘First Notice’). [1] The documents sought related to employees of the respondent who worked at the Projects during the relevant period, as well as to any independent contractors engaged by the respondent to perform work at the Projects during such period.
[1] Annexure TO-2 to the Affidavit of Tara O’Connor filed on 13 July 2021.
On 3 August 2020, a Notice to Produce Records or Documents was issued requiring the respondent to produce copies of nominated documents to a specified address in Canberra by 5:00pm on 24 August 2020 (‘Second Notice’). [2] The copies of documents required to be produced were as follows:
· “Any site diary entries or notes taken by ADADN employees regarding work stoppages at the Project on 26 November 2019, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020;
· Any internal ADADN records or documents, such as memoranda, file notes and email correspondence, regarding work stoppages at the Project on 26 November 2018, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020;
· Any records/documents that list, or otherwise identify, workers who stopped work on the Project on 26 November 2019, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020;
· Any records/documents that identify the contact details (phone numbers, email addresses, mailing addresses) of the workers who stopped work on the Project on 26 November 2019, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020;
· Any labour hire agreements/contracts relevant to the Project;
· Timesheet records/documents relating to workers who attended the Project on 26 November 2019, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020; and
· Any correspondence sent from ADADN to individual workers on the Project, or to relevant labour hire companies, concerning work stoppages on 26 November 2019, 27 November 2019, 22 January 2020, 27 February 2020 and 28 February 2020.”
[2] Annexure TF-4 to the Affidavit of Ty Freedman filed on 13 July 2021.
The Court accepts the unchallenged evidence contained in affidavits filed on behalf of the applicant that the respondent failed to comply in any respect with either the First Notice or the Second Notice. By reason of such failure, the applicant has been unable, pursuant to its statutory function, to ascertain all relevant facts the subject of the giving of the notices. That necessarily frustrated the intention of Parliament in respect of the performance by the applicant of its functions under the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (‘the Act’).
Approach to Imposition of Penalty and Proportionality
In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No.2) [2018] FCA 1968, O’Callaghan J at [46] – [47] said:
“[46] In my view, the question of the assessment of penalties is to be approached consistently with the joint judgment of the Full Court (comprised of the Chief Justice, White J and myself) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 (The Non-Indemnification Personal Payment Case) in particular at [22], viz:
The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen [No 2] [1988] HCA 14; (1988) 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.
[47] To the extent that the submissions of the applicant suggested that the judgments of the majority in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126 may be read to suggest otherwise, I respectfully disagree.”
The Full Court of the Federal Court in Auimatagi v Australian Building and Construction Commissioner (2018) 363 ALR 246 at [176] said as follows:
“[176]It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases. See the points of principle set out in the reasons of Bromwich J (dissenting in the result, but not in point of principle) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126 at [93] and [102] to [110], and see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 at [22].”
The Court adopts the approaches as set out in each of the above cases.
Relevant Considerations
The respondent has failed to co-operate in any respect with the applicant. It has ignored its legal obligation to comply with duly issued notices. It has not been contrite or remorseful in respect of its dilatory non-compliance with the statutory notices.
The statutory scheme under the Act requires observance of statutory provisions by employers across the board. The failure to comply with notices duly issued to employers in circumstances such as the present constitutes a serious breach of legislative provisions.
In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the New Cold Picket Case) [2019] FCA 2038 at [69], O’Callaghan J said:
“[69] In my view, the absence of any proffered excuse, or any expression of contrition, reasonably leads to the conclusion that the refusal to comply was a deliberate and wanton “thumbing of the nose” at the regulator. As the Full Court explained in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 at 58, [131]:
If a contravention does not involve any state of mind then it is for the party asserting any particular state of mind (be it a deliberate flouting of the law, recklessness, wilful blindness, “courting the risk”, negligence, or innocence or any other characterisation of state of mind) to prove its assertion. If, in the event, neither party discharges its onus to establish any particular state of mind in relation to the contraventions, the Court determines penalty on no more than the fact of the proscribed nature of the conduct (see, by analogy see R v Olbrich ...(1999) 199 CLR 270 at [22] – [28]). However, if any degree of awareness of the actual or potential unlawfulness of the conduct is proved then, all other things being equal, the contravention is necessarily more serious. Such awareness may be able to be inferred from the very nature of the conduct or representations constituting the conduct. However absence of such proof does not establish a mitigatory state of mind (see, by analogy, R v Storey [1998] 1 VR 359 at 369, quoted with approval by the majority in Olbrich at [27]; see also [25]). It means only that the neutral state of mind required for liability has not been disturbed for the purposes of penalty. If a contravening party wishes to go beyond the neutral statutory state of mind for liability and positively assert a lack of consciousness of the character of the conduct for the purposes of penalty that is a circumstance of mitigation which the contravening party must prove.”
(Emphasis added).
Penalty
The respondent has been involved in previous contraventions of industrial legislation. The uncontested evidence before the Court demonstrated that:
(a)The respondent contravened ss 48 and 50(b)(i) of the Workers Compensation and Rehabilitation Act 2003 (Qld) by failing to remain insured for each worker against injury sustained by a worker when, on 6 October 2020, ADADN’s WorkCover policy lapsed due to non-payment and, as at 3 March 2020, ADADN remained uninsured with an overdue premium amount of $199,839.33.
(b)The respondent contravened s 40(1) of the Labour Hire Licensing Act 2017 (Qld) (‘the LHL Act’) by failing to notify the Chief Executive of the outcome of various Fair Work proceedings against ADADN within the time required.
(c)The respondent contravened s 43 of the LHL Act by failing to respond to a statutory notice requiring ADADN to give information.
(d)The respondent contravened s 405 of the Fair WorkAct 2009 (Cth) (‘the FW Act’) by contravening a term of an order made by the Fair Work Commission on 7 May 2020 pursuant to s 392 of the FW Act.
(e)On 7 May 2020, Deputy President Asbury of the Fair Work Commission found that ADADN unfairly dismissed Jose Hilario under s 387 of the FW Act.
(f)On 18 November 2020, Commissioner Johns of the Fair Work Commission found that ADADN unfairly dismissed Anthony Evans-Marshall, Ahmet Aduhanandi and Mark McDonald under s 387 of the FW Act.
(g)On 15 January 2021, Deputy President Dean of the Fair Work Commission found that ADADN unfairly dismissed Matthew Thurgood and Vahraz Etemandi under s 387 of the FW Act.
There is no evidence as to the current size of the respondent’s business, nor its capacity to pay any pecuniary penalty imposed by order of this Court. The lack of such evidence does not preclude the Court from making a pecuniary penalty order which will act as a general deterrent to other companies which may seek to flout the intention of Parliament in the regulation of the building industry.
The Court considers that it is appropriate that pecuniary penalties in the current matter are fixed in amounts at the higher end of the range open to be ordered by the Court by reason of the respondent’s lack of co-operation, and its wanton disregard of compliance with statutory notices duly issued to it.
The failure to comply with each notice gave rise to separate and distinct contraventions of s. 77(3) of the Act. The Court orders that in respect of each contravention, the respondent be ordered to pay pecuniary penalties which represent 75% of the maximum penalty able to be imposed – namely the sum of $16, 650.00 in respect of each contravention.
It is further appropriate that the respondent be ordered to pay the applicant’s costs of and incidental to the proceeding to be taxed pursuant to the provisions of r. 21.11 of the Federal Circuit Court Rules 2001 (Cth).
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan. Associate:
Dated: 6 August 2021
0
9
0