Baldacchino v Bloombird Education Pty Ltd
[2023] FedCFamC2G 691
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Baldacchino v Bloombird Education Pty Ltd [2023] FedCFamC2G 691
File number(s): SYG 594 of 2023 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 4 August 2023 Catchwords: INDUSTRIAL LAW – Practice and procedure – application for default judgment – declarations and orders made. Legislation: Corporations Act 2001 (Cth) s 50AAA(7)
Fair Work Act 2009 (Cth) ss 22(5)(a), 22(7), 44, 45, 90(2), 311(2), 311(3), 323, 536(3), 545(1), 547(2), 550(1)
Superannuation Guarantee (Administration) Act 1992 (Cth)
Fair Work Regulations 2009 (Cth) reg 3.42(3)(b)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.06, 13.04, 13.05
Long Service Leave Act 1955 (NSW) ss 4(5), 4(11)(c)
Cases cited: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427
Coote v Mainline Access Pty Ltd & Anor (No.3) [2019] FCCA 383
Macquarie Bank Limited v Seagle [2005] FCA 1239
Macquarie Bank Limited v Seagle [2008] FCA 1417
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Division: Fair Work Number of paragraphs: 25 Date of hearing: 2 August 2023 Place: Sydney Counsel for the Applicant: Mr B May Solicitor for the Applicant: Marrickville Legal Centre The First and Second Respondents: Second Respondent in person, and on behalf of the First Respondent, by telephone ORDERS
SYG 594 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CARLA BALDACCHINO
Applicant
AND: BLOOMBIRD EDUCATION PTY LTD ACN 637 957 110
First Respondent
CHRISSANTHY FOUNDIS
Second Respondent
order made by:
JUDGE MANOUSARIDIS
DATE OF ORDER:
4 August 2023
THE COURT DECLARES THAT:
1.The first respondent contravened:
(a)s 44 of the Fair Work Act 2009 (Cth) (FW Act) by failing to pay the applicant, contrary to s 90(2) of the FW Act, the Deducted Annual Leave (as that expression is defined in paragraph 43 of the statement of claim), calculated at the applicant’s base rate of pay as at the day the applicant’s employment with the first respondent ended;
(b)s 45 of the FW Act by failing to pay to the applicant, contrary to cl 24.3 of the Children’s Services Award 2010 (Award), a 17.5% annual leave loading on the Deducted Annual Leave (as that expression is defined in paragraph 43 of the statement of claim) within 7 days of the day on which the applicant’s employment with the first respondent ended;
(c)s 45 of the FW Act by failing to pay to the applicant, contrary to cl 20.2 of the Award, the Superannuation Owing (being the amount of $7,001.73 referred to in paragraph 73 of the statement of claim); and
(d)reg 3.42(3)(b) of the Fair Work Regulations 2009 (Cth) by failing to provide the applicant with a copy of employee records requested on 23 November 2022 and 22 December 2022.
2.The second respondent was a person involved, within the meaning of s 550(2) of the FW Act, in the first respondent’s contraventions referred to in declarations 1(a)-(d).
THE COURT ORDERS THAT:
3.Pursuant to s 545(2)(b) of the FW Act, within 28 days after the day on which these orders are pronounced the first respondent pay compensation to the applicant in the amount of $33,633.85, being the sum of the amounts referred to in declarations 1(a) and (b) the first respondent failed to pay the applicant.
4.Pursuant to s 545(1) of the FW Act the first respondent, within 28 days after the pronouncement of these orders, pay $7,001.73 (being the amount referred to in declaration 1(c)) to a superannuation fund nominated by the applicant, such nomination to be communicated by the applicant to the first respondent within 14 days of the pronouncement of these orders.
5.Pursuant to s 547(2) of the FW Act the first respondent pay the applicant interest of $1,740.39 on the amount referred to in order 3.
6.The proceeding be listed at 9:30 am on 23 August 2023 for directions on the question of penalties.
7.The applicant have liberty to apply at the directions hearing to be fixed pursuant to order 6 for an order varying these orders, provided the applicant gives the respondents notice of the variation the applicant seeks, and the grounds on which the applicant seeks such variation.
THE COURT NOTES THAT:
8.Declarations 1(a)-(d) and 2, and orders 3, 4, and 5, are made pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
The applicant applies for declarations and orders pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules), on the ground that each of the respondents is “in default” within the meaning of r 13.04 of the GFL Rules.
RELEVANT RULES
Paragraph (c) of r 13.05(2) of the GFL Rules applies to a respondent who “is in default”. Under r 13.04(2) of the GFL Rules, a respondent is in default if the respondent has not satisfied an applicant’s claims, and the respondent has failed to do any one or more of the things identified in r 13.04(2)(b) of the GFL Rules. The things identified in r 13.04(2)(b) that are relevant to the application before me is the failure by the respondents to comply with an order of the Court.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r 13.05(2) of the GFL Rules. Relevant to the application before me is r 13.05(2)(c), which provides that the Court may:
if the proceeding was started 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 . . .
There are a number of matters to note about r 13.05(2) of the GFL Rules.
(a)First, r 13.05(2) of the GFL Rules “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[1]
(b)Second, before the Court may make an order under r 13.05(2) of the GFL Rules it must be satisfied that the document which the applicant has filed with the application is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[2]
(c)Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[3]
(d)Fourth, although r 13.05(2) of the GFL Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought.[4]
(e)Fifth, the Court retains a discretion not to make an order under r 13.05(2) of the GFL Rules even if the preconditions for making an order are satisfied.[5]
[1] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626, at [9] (Gordon J) referring to O 35A r 3(2)(c) of the Federal Court Rules 1979 (Cth), being the equivalent to r 13.05(2) of the GFL Rules.
[2] Under r 1.06 of the GFL Rules, the Federal Court Rules 2011 (Cth) (FC Rules) identified in Schedule 1 apply to general federal law proceedings. The FC Rules there identified include the rules of pleading.
[3] Macquarie Bank Limited v Seagle [2005] FCA 1239, at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417, at [20] (Jagot J)
[4] Phonographic Performance Ltd v Maitra (1998) 41 IPR 225, at page 230; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427, at [50] and [51]
[5] Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, at [20]
STATEMENT OF CLAIM
The applicant commenced this proceeding on 13 April 2023 by filing an application and a statement of claim.[6] In the statement of claim the applicant alleges as follows:
[6] The application and statement of claim were in fact lodged for filing on 6 April 2023.
(a)The applicant was an employee of Natsikas Pty Ltd (Natsikas) from 1 July 2012 to 29 December 2019 (first employment period); an employee of Bloombird ECE Pty Ltd (Bloombird ECE) from 30 December 2019 to 13 June 2021 (second employment period); and an employee of the first respondent from 14 June 2021 until 20 October 2022 (third employment period).
(b)Each of Natsikas, Bloombird ECE, and the first respondent conducted one or more childcare businesses:
(i)Natsikas conducted two childcare centres, one of which was at Rosebery (Rosebery Business), which it conducted until December 2019.
(ii)Bloombird ECE took over the ownership or beneficial use of some of the assets Natsikas used to operate the Rosebery Business, which it operated between 30 December 2020 to 24 August 2022.
(iii)The first respondent operated a childcare business at Rose Bay (Rose Bay Business).
(c)As a consequence of:
(i)(b)(i) and (ii), there was “a connection” between Natsikas and Bloombird ECE within the meaning of s 311(3) of the Fair Work Act 2009 (Cth) (FW Act); and
(ii)(b)(iii), the Children’s Services Award 2010 (Award) applied.
(d)The second respondent (Ms Tsigolis, also known as Ms Foundis) is and at all times was the sole director and shareholder of the first respondent and Bloombird ECE, and a joint director and shareholder of Natsikas and, for that reason, the first respondent and Bloombird ECE are “associated entities” within the meaning of s 50AAA(7) of the Corporations Act 2001 (Cth).
(e)The applicant performed her duties as employee at the Rosebery Business from 1 July 2012 to 4 May 2020, and performed the same duties at the Rose Bay Business from 4 May 2020 to 7 October 2022.
(f)On 29 December 2019 Natsikas ceased employing the applicant at the Rosebery Business, and the applicant was instead employed by Bloombird ECE at that business; but neither Natsikas, Bloomfield ECE, nor Ms Tsigolis notified the applicant that she ceased to be employed by Natsikas but came to be employed by Bloombird ECE.
(g)The applicant’s leave balances for long service leave, annual leave, personal/carer’s leave, and rostered days off shown on her payslips with Natsikas transferred across to her payslips with Bloombird ECE; and between 30 December 2019 to 13 June 2021 the applicant was able to access her accrued leave entitlements for long service leave, annual leave, personal/carer’s leave and rostered days off from the first employment period in her employment with Bloombird ECE.
(h)On 13 June 2021 Bloombird ECE ceased employing the applicant, but commencing on 14 June 2021, the first respondent employed the applicant.
(i)The applicant’s leave balances for long service leave, annual leave, personal/carer’s leave, and rostered days off shown on her payslips with Bloombird ECE transferred across to her payslips with the first respondent; and between 14 June 2021 to 7 October 2022 the applicant was able to access her accrued leave entitlements for annual leave, personal/carer’s leave and rostered days off from the first and second employment period with the first respondent.
(j)The first respondent did not make any superannuation contributions for the applicant’s ordinary time earnings. The superannuation contributions the first respondent should have made are $1,637.28 for the period between 28 September 2021 and 16 January 2022, $3,170.32 for the period between 17 January 2022 to 26 June 2022, and $2,194.13 for the period 27 June 2022 to 20 October 2022.
(k)On 29 September 2022 the first respondent deducted from the applicant’s accrued leave balances the following amounts (Leave Deduction):
(i)515.9268 hours of annual leave (Deducted Annual Leave);
(ii)304.4409 hours of long service leave (Deducted Long Service Leave);
(iii)487.2147 hours of personal/carer’s leave; and
(iv)28.25 hours of rostered days off.
(l)The applicant did not take or receive payment for any paid leave in the pay period 19 to 25 September 2022.
(m)As the sole director of the first respondent Ms Tsigolis was ultimately responsible for authorising the Leave Deduction.
(n)The applicant’s employment with the first respondent ended on 7 October 2022. At that time the applicant was being paid at a base hourly rate of $35.17.
(o)The first respondent has not paid the applicant the annual leave or long service leave that had accrued during the first and second employment periods.
(p)Because of the matters referred to in (c)(i), (f), and (g):
(i)there was a transfer of business from Natsikas to Bloombird ECE on or about 30 December 2019;
(ii)because of (i) the applicant was a “transferring employee” pursuant to s 311(2) of the FW Act;
(iii)because of (ii), there was a “transfer of employment” of the applicant between “non-associated entities” pursuant to s 22(7)(b) of the FW Act;
(iv)pursuant to s 22(5)(a) of the FW Act the first employment period counts as service of the applicant with Bloomfield ECE, including for the purpose of annual leave;
(v)pursuant to s 4(11)(c) of the Long Service Leave Act 1955 (NSW) (LSL Act), the first employment period counts as service of the applicant with Bloombird ECE for the purpose of long service leave;
(q)Because of the matters referred to in (h) and (i):
(i)there was, pursuant to s 22(7)(a) of the FW Act “a transfer of employment” of the applicant between “associated entities”, those associated entities being Bloombird ECE and the first respondent;
(ii)because of (i), pursuant to s 22(5)(a) of the FW Act the first and second employment periods count as service of the applicant with the first respondent, including for the purpose of annual leave; and
(iii)pursuant to s 4(11)(c) of the LSL Act, the first and second employment periods count as service of the applicant with the first respondent for the purpose of long service leave.
(r)On 23 November 2022 and 22 December 2022 the applicant, through her lawyers, requested the first respondent provide a copy of records relating to the applicant’s leave entitlements; but the first respondent did not comply with that request.
On the basis of these allegations, the statement of claim alleges the first respondent engaged in three sets of contraventions of the FW Act. The first set relate to the payment of annual leave. The statement of claim alleges:
(a)Pursuant to s 90(2) of the FW Act the first respondent was required to pay the applicant on the termination of her employment the amount that would have been payable to her had she taken that period of accrued untaken paid annual leave.
(b)Under cl 24.3(a) of the Award the first respondent was required to pay the applicant 17.5% of the amount provided for by the National Employment Standards.
(c)Under cl 19.3(a)(ii) of the Award the first respondent was required to pay to the applicant her accrued annual leave entitlements within 7 days of the day of the “Termination Date”.
(d)Because of (a)-(c), the first respondent was required, but failed to pay $21,320.57 to the applicant within 7 days of the “Termination Date”
(e)Because of (a)-(d), the first respondent contravened s 323 of the FW Act; s 90(2) of the FW Act and, consequently, s 44 of the FW Act;[7] and cl 19.3(a)(ii) of the Award and, consequently, s 45 of the FW Act.
[7] The statement of claim alleges a contravention of s 50 of the FW Act, which applies to enterprise agreements; but it is clear enough the statement of claim intends to allege a contravention of s 44 of the FW Act.
The second set of contraventions relates to long service leave. The statement of claim alleges that on the termination of the applicant’s employment, the first respondent was required, pursuant to s 4(5)(a) of the LSL Act, but failed to pay to the applicant accrued but untaken long service leave pay which amounted to $12,313.28. The first respondent, therefore, “contravened” s 4(5)(a) of the LSL Act and s 323 of the FW Act.
The third set of contraventions relate to the first respondent’s failure to make superannuation contributions. The statement of claim alleges that,
(a)under cl 20.2 of the Award, the first respondent was required to make such superannuation contributions to a superannuation fund for the benefit of the applicant as will avoid the first respondent being required to pay the superannuation guarantee charge under Superannuation Guarantee (Administration) Act 1992 (Cth) in relation to the applicant;
(b)the amount the contributions referred to in (a) the first respondent was required, but failed to make, was $7,001.73 (Superannuation Owing);
(c)by failing to pay the Superannuation Owing the first respondent contravened cl 20.2 of the Award, and consequently s 45 of the FW Act.
The fourth set of contraventions relates to the deductions from the payslips identified in paragraph 43 of the statement of claim. The statement of claim alleges that the first respondent’s providing payslips that had deducted hours of accrued leave entitlements contravened s 536(3) of the FW Act.
The fifth set of contraventions relates to the first respondent’s failing to provide the records the applicant, through her lawyer, requested the first respondent provide. The statement of claim alleges that the first respondent’s failure to provide the records constituted a contravention of reg 3.42(3)(b) of the Fair Work Regulations 2009 (Cth) (FW Regulations).
As against Ms Tsigolis the statement of claim alleges that, being the first respondent’s sole director and shareholder, Ms Tsigolis was aware of the applicant’s transfer of employments; and she was aware of, and responsible for overseeing, the first respondent’s payroll processes. For these reasons Ms Tsigolas was, within the meaning of s 550(2) of the FW Act, a person involved in each of the first respondent’s contraventions alleged in the statement of claim.
On the basis of these allegations, the applicant claims the following relief:
1. Declarations that the First Respondent contravened the following civil remedy provisions:
(a) section 44 of the FW Act by failing to pay the Applicant the Deducted Annual Leave, calculated at the Applicant’s base rate of pay as at the Termination Date plus 17.5% annual leave loading pursuant to clause 24.3 of the Modern Award, as prescribed by section 90(2) of the FW Act;
(b) section 45 of the FW Act by failing to pay the Applicant the Deducted Annual Leave, calculated at the Applicant’s base rate of pay as at the Termination Date plus 17.5% annual leave loading pursuant to clause 24.3 of the Modern Award, within 7 days of the Termination Date as prescribed by clause 19.3(a)(ii) of the Modern Award;
(c) section 45 of the FW Act by failing to pay the Applicant the Superannuation Owing pursuant to clause 20.2 of the Modern Award;
(d) section 323 of the FW Act by failing to pay the Applicant the Deducted Annual Leave, calculated at the Applicant’s base rate of pay as at the Termination Date plus 17.5% annual leave loading pursuant to clause 24.3 of the Modern Award, in full by electronic funds transfer at least monthly; and
(e) regulation 3.42(3)(b) of the FW Regulations by failing to pay the [sic] provide the Applicant with a copy of employee records requested on 23 November 2022 and 22 December 2022.
2. A declaration that the Second Respondent was involved in the contraventions referred to in prayer 1.
3. A declaration that the First Respondent contravened section 4(5) of the LSL Act by failing to pay the Applicant the Deducted Long Service Leave, calculated at the Applicant’s base rate of pay as at the Termination Date.
4. Orders pursuant to section 545(2)(b) of the FW Act that the First Respondent is liable to pay compensation to the Applicant in the amount of $33,633.85 with respect of the leave contraventions.
5. Orders pursuant to section 545(2)(b) of the FW Act that the First Respondent is liable to pay compensation to the Applicant’s nominated superannuation fund in the amount of $7,001.73 with respect of the superannuation contraventions.
6. Orders pursuant to section 547(2) of the FW Act that the First Respondent is liable to pay pre-judgment interest on the leave amounts referred to in the preceding order.
7. Orders pursuant to section 546(1) of the FW Act imposing pecuniary penalties on the First Respondent in respect of each of the contraventions outlined in paragraphs 0 [sic] above, to be paid to the Applicant.
8. Orders pursuant to section 550(1) of the FW Act imposing pecuniary penalties on the Second Respondent in respect of each of the contraventions outlined in paragraphs 2 above, to be paid to the Applicant.
9. An order that any penalties imposed by the Court and the payment of any unpaid monies and interest to the Applicant be paid within 28 days of order for payment.
10. An order that the Applicant have liberty to apply on 7 days’ notice if any of the preceding orders are not complied with.
COURSE OF PROCEEDING
As I noted at the beginning of these reasons, the applicant commenced this proceeding on 13 April 2023. On commencing the proceeding, the matter was listed for a first court date before me at 9:30 am on 9 May 2023. The application and statement of claim were served on the respondents by post and by email on 26 April 2023.
On 7 May 2023 Ms Tsigolis sent an email to Ms Phillips, the applicant’s lawyer, in which she acknowledged having received a copy of the application and statement of claim, and she requested an adjournment of the first court date. On 8 May 2023 I made in chambers orders by consent in which I vacated the first court date that had been listed for 9 May 2023; ordered that the respondents file and serve their response and defence on or before 24 May 2023; ordered that the applicant file and serve any reply by 7 June 2023; and ordered that the matter be referred to mediation.
The respondents did not file any response, as required by the orders I made. On 15 June 2023 Ms Phillips sent an email to Ms Tsigolis in which Ms Phillips stated, among other things, that if Ms Phillips did not hear from the respondents the applicant intended to apply to have the matter relisted before me and request default judgment pursuant to r 13.05 of the GFL Rules. After some further communications between Ms Phillips and Ms Tsigolis, on 6 July 2023 Ms Tsigolis sent Ms Phillips the following email:
I write this to you as a response to your email dated 15th June 2023 and respond to you the below:
First and foremost, I want to acknowledge that Bloombird Education Pty Ltd is indeed liable for the unpaid entitlements owed to Ms. Baldachinno. As the owner and director of the company, I take full responsibility for the financial obligations towards Ms. Baldachinno. I deeply regret any inconvenience or hardship this situation may have caused her.
Bloombird Education Pty Ltd is currently in the process of bankruptcy and is no longer trading. Despite my best efforts, the financial challenges faced by the company have rendered it unable to meet its obligations to creditors and employees, including the payment of Ms Baldachinno’s entitlements.
I engaged the services of a company to assist me in the liquidation process of Bloombird ECE Pty Ltd. During this process, they advised me to direct Carla Baldachinno to apply for her unpaid entitlements through the Fair Entitlements Guarantee (FEG) scheme. I had limited knowledge and understanding of the procedures involved, and I simply followed their guidance and I relied on their expertise and trusted that their directions were in line with the appropriate protocols.
Now that I am aware that the unpaid entitlements are owed by Bloombird Education Pty Ltd, I want to emphasize that Carla Baldachinno is indeed eligible to claim her unpaid entitlements through the Fair Entitlements Guarantee (FEG) scheme. According to the Department of Education, Employment, and Workplace Relations (DEEWR) website, Carla can lodge an effective claim within 12 months from either the date of her end of employment or the date of the liquidation or bankruptcy of her former employer. It is important for Carla to be informed about this timeframe and to take appropriate steps to submit her claim within the specified period
Furthermore, I look forward to our mediation session in order to address any remaining disputes or concerns between Carla Baldachinno and Bloombird Education Pty Ltd, and to explore the possibility of reaching a fair resolution.
The applicant filed an application in a proceeding seeking orders under r 13.05(2)(c) of the GFL Rules; and that application was ultimately listed before me for hearing at 10:15 am on 2 August 2023. The orders the applicant seeks in the application in a proceeding are the orders she claims in the statement of claim.
The applicant appeared at the hearing by counsel; and Ms Tsigolis appeared by telephone. I granted Ms Tsigolis leave also to appear on behalf of the first respondent. Counsel for the applicant informed me that he had not expected any appearance by the respondents; but he nevertheless had instructions to proceed with the application.
I invited counsel to set out the basic facts that have led to the listing of the matter before me at 10:15 am on 2 August 2023. Counsel noted that the applicant had commenced this proceeding; the matter was listed for a first court date on 9 May 2023; on 8 May 2023 I made orders by consent extending the time by which the respondents could file any response; but the respondents failed to file any response, and, for that reason, were in default. I reiterated to Ms Tsigolis these matters, and I invited her to make submissions.
Ms Tsigolis said she needed further time to obtain legal advice. She said that she had unsuccessfully sought pro bono assistance; and that some 14 days ago she had approached a law firm who said that they would consider whether they could provide assistance to the respondents, but they were a little busy at the moment. Ms Tsigolis said that she informed the law firm that the matter was before the Court on 2 August 2023. Ms Tsigolis also said that she believed there was a mediation.
I informed Ms Tsigolis that I would not grant her the adjournment she sought. I informed her that, although it was true that I made an order that the matter be referred to mediation, that order was based on an order that the respondents file a response. I told Ms Tsigolis that a mediation presupposes some dispute; and if there is no dispute, there is nothing to mediate. I also informed Ms Tsigolis that the applicant has appeared by counsel and an instructing solicitor; and there would be the question of costs thrown away, if I were to adjourn the hearing. I informed the applicant that if I did not grant her request for an adjournment, but I heard the application and made orders by default, the orders I make may be liable to be set aside if the respondents obtain legal representation, and they receive advice that they have an arguable defence. Finally, I informed Ms Tsigolis that I would proceed to hear the application for default judgment on the basis that she is not in a position to say whether the respondents have any defence.
Counsel for the applicant read the affidavits Ms Phillips made on 26 April 2023 and 7 July 2023, and he relied on his written submissions. Counsel applied for orders in terms of paragraphs 1-6 of the claims for relief made in the statement of claim. At the end of the hearing, I listed the application for default judgment for judgment at 9:30 am on 4 August 2023. I requested that the applicant send to my Associate’s inbox a calculation of the interest the applicant claims, and a draft form or orders. The applicant’s lawyers did so by sending a draft form of orders (Proposed Orders), and a “Pre-judgment interest table” which calculates interest of $1,740.39 on $33,633.85, being the total of the leave entitlements the first respondent failed to pay the applicant.
DETERMINATION
The respondents are in default; they have failed to comply with the order I made on 8 May 2023 that they file a response by 24 May 2023. Further, nothing that Ms Tsigolis said to me at the hearing suggests there is any real prospect that the respondents will file any response to the statement of claim.
The next question is whether I am satisfied that the allegations of fact made in the statement of claim support the orders to the effect stated in paragraphs 1-6 of the statement of claim, as modified by the Proposed Orders. Save for the following exceptions, I am satisfied.
(a)I am not prepared to make declarations to the effect of the declarations in orders 1 and 2 of the Proposed Orders. Clause 24.3 of the Award provides for the payment of a 17.5% loading; but it is s 90(2) of the FW Act that obliges an employer to pay accrued but untaken annual leave. I have formulated declarations which separately recognise a contravention of s 44 of the FW Act in relation to the first respondent’s failure to comply with s 90(2), and a contravention of s 45 of the FW Act in relation to the first respondent’s failure to pay the 17.5% loading provided for by cl 24.3 of the Award.
(b)I am not prepared to make a declaration referred to in order 4 of the Proposed Orders that the respondents contravened s 323 of the FW Act without hearing further submissions.[8]
(c)I am not prepared to make a declaration that the first respondent “contravened” s 4(5) of the LSL Act, as provided for in order 7 of the Proposed Orders. A failure to pay an amount that accrues by the operation of s 4(5) of the LSL Act does not constitute a contravention of that provision.
(d)I propose to modify order 9 of the Proposed Orders that relates to the payment of superannuation.
[8] See Coote v Mainline Access Pty Ltd & Anor (No.3) [2019] FCCA 383, at [38]
I note that the applicant has not claimed an order that Ms Tsigolas pay compensation to the applicant. This may be an error. This error, however, ought not be fatal. Rule 17.01 of the GFL Rules provides that the “Court may, at any stage in a proceeding on the application of a party, give any judgment or make any order even if the claim was not made in an originating process”.
DISPOSITION
I propose to make the declarations and orders substantially in the form for which the applicant applies, subject to the exceptions and modification I have identified. I will also set the matter down for a directions hearing at 9:30 am on 23 August 2023 to make directions in relation to the question of penalties. I will reserve to the applicant liberty to apply, on giving notice to the respondents, at the directions hearing for an order varying the orders I propose to make.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 4 August 2023
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