Elvin v Fair Work Ombudsman (No 1)

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FEDERAL COURT OF AUSTRALIA

Elvin v Fair Work Ombudsman (No 1) [2024] FCA 1071  

Appeal from: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483
File number(s): ACD 38 of 2024
Judgment of: COLLIER J
Date of judgment: 16 September 2024
Catchwords: PRACTICE AND PROCEDURE – whether order to stay proceedings under judgment subject to appeal – s 29 Federal Court of Australia Act 1976 (Cth) and r 36.08 Federal Court Rules 2011 (Cth) – balance of convenience – whether serious questions for determination in appeal – interests of justice – partial stay of proceedings ordered
Legislation:

Federal Court of Australia Act 1976 (Cth) s 29

Fair Work Act 2009 (Cth)

Federal Court Rules 2011 (Cth) r 36.08
Cases cited:

Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403

Minister for Immigration and Border Protection v CZBP [2014] FCAFC 105

Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175

De Pyle v Commonwealth of Australia (No 2) [2023] FCA 751

National Retail Association v Fair Work Commission (No 2) [2014] FCA 664
Division: Fair Work Division
Registry: Australian Capital Territory
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 19
Date of last submission/s: 12 July 2024
Date of hearing: Determined on the papers
Counsel for the Appellant: The Appellant was self-represented
Solicitor for the First Respondent: Office of the Fair Work Ombudsman

ORDERS

ACD 38 of 2024
BETWEEN:

COLIN KENNETH ELVIN

Appellant
AND:

FAIR WORK OMBUDSMAN

First Respondent

FOOT AND THAI MASSAGE PTY LTD (IN LIQUIDATION)

Second Respondent

JUN MILLARD PUERTO

Third Respondent

ORDER MADE BY:

COLLIER J

DATE OF ORDER:

16 SEPTEMBER 2024

THE COURT ORDERS THAT, UNTIL DETERMINATION OF THE AMENDED NOTICE OF APPEAL FILED ON 6 JULY 2024 AND THE AMENDED NOTICE OF CROSS-APPEAL FILED ON 19 JULY 2024, OR FURTHER ORDER OF THE COURT:

1.Orders 1, 2, 4(b) and 5 of the Orders of Justice Katzmann made on 10 May 2024 be stayed to the extent that they affect Mr Colin Kenneth Elvin.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

COLLIER J:

  1. On 10 May 2024 Katzmann J gave final judgment in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483. The respondents were found to have contravened the Fair Work Act 2009 (Cth) in multiple respects referable to, inter alia, minimum rates of pay for employees and record keeping. Mr Elvin was the second respondent in that case, being the director of the first respondent Foot & Thai Massage Pty Ltd ACN 147 134 272, a company now in liquidation (the company). Her Honour appointed a referee to calculate the extent of underpayment of employees’ entitlements, and adopted the referee’s report (to which Mr Elvin unsuccessfully objected).  Her Honour made orders including the payment of compensation, interest and pecuniary penalties by the company and Mr Elvin.

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Details
Case
[2024] FCA 1071
Decision Date

CaseChat Overview and Summary

The matter before the court involves an appeal by Mr Elvin against a judgment given by Katzmann J in the Federal Circuit and Family Court of Australia on 14 October 2021 (Liability Decision) and a final judgment on 10 May 2024 (Penalty Decision). The Fair Work Ombudsman has also cross-appealed part of these decisions. Mr Elvin has filed an interlocutory application seeking a stay of execution of the judgments pending the outcome of his appeal. The legal issues before the court are whether the court should grant an order staying the execution of the judgments, and the relevant principles and considerations that should guide the court’s discretion in this regard.

The court considered the relevant statutory and rule provisions, as well as established legal principles regarding the exercise of the court’s discretion to stay proceedings under a judgment subject to appeal. Key considerations included the onus on the party seeking the stay, the need to exercise the discretion judicially and not lightly, the balance of convenience, the merits of the appeal, and the interests of justice. The court found that while Mr Elvin’s grounds of appeal lacked substantial merit, there were arguable points which could not be easily dismissed. However, the balance of convenience weighed heavily in favour of enforcing the judgments to ensure that vulnerable employees received their entitlements as soon as possible. The court also found that granting a stay could prejudice the Fair Work Ombudsman and the relevant employees, and nullify the deterrent effect of the penalties imposed. The court concluded that the interests of justice did not favour granting a stay.

Accordingly, the court refused the interlocutory application and ordered a partial stay of proceedings, staying enforcement of the judgments against Mr Elvin pending the outcome of his appeal, but not staying enforcement against other parties to the proceedings. This outcome allows Mr Elvin to pursue his appeal while ensuring that other relevant parties can enforce the judgments in the meantime.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

By Amended Notice of Appeal filed on 6 July 2024, Mr Elvin appealed the judgment of Katzmann J given on 14 October 2021 (Liability Decision) and the final judgment given on 10 May 2024 (Penalty Decision). Further, by Amended Notice of Cross-Appeal filed on 19 July 2024, the Fair Work Ombudsman appealed part of the Liability Decision and Penalty Decision, materially referable to the finding of Katzmann J that the Hair and Beauty Award did not cover and apply to relevant employees of the company. On 12 July 2024 Mr Elvin filed an interlocutory application in which he sought the following order:1.An order staying execution of the judgment of Justice Katzmann dated 14 October 2021 (Liability judgment) and 10 May 2024 (Penalty judgment). Both Mr Elvin and the Fair Work Ombudsman have filed written submissions. Both parties also rely on affidavit material filed in the proceeding. In summary, Mr Elvin submitted:·Justice Katzmann erred in her Honour’s reasons in relying on the Health Professionals and Support Services Award 2010 (HP Award);·He would be disadvantaged if a stay were not granted because the Fair Work Ombudsman indicated steps may be taken to enforce the Penalty Decision, and he would be compelled to answer enforcement proceedings while also pursuing his appeal; ·He has very limited resources compared with those available to the Fair Work Ombudsman, and could not answer both proceedings simultaneously;·He was the active respondent in the proceedings at first instance;·Any prejudice to Mr Elvin should the orders of her Honour not be stayed would outweigh any prejudice to the Fair Work Ombudsman if the stay were granted; and·Mr Elvin initiated proceedings in the Supreme Court against the external administrators of the company seeking orders that those administrators for orders that they be held liable for the orders made in Katzmann J’s judgments, and is currently awaiting judgment by the Supreme Court. This is a compelling reason why a stay should be granted. Mr Elvin’s affidavit filed 12 July 2024 gave evidence essentially reiterating his submissions. The Fair Work Ombudsman submitted, in summary:·Mr Elvin’s grounds of appeal lack substantial merit, in that they primarily concern procedural fairness points which misunderstand the role of the court when dealing with unrepresented litigants, and a claim of apprehended bias in respect of actions which were open to Katzmann J;·The balance of convenience does not favour the grant of a stay, because it weighs heavily in favour of ensuring that relevant employees of the company, who were found to be vulnerable employees, receive their entitlements as soon as possible;·The Fair Work Ombudsman has cross-appealed the judgment of Katzmann J, only in the event that Mr Elvin’s appeal is successful;·Mr Elvin’s affidavit filed on 12 July 2024 in support of the interlocutory application did not provide adequate evidence regarding his financial circumstances nor address evidence that between 2020 and 2022, Mr Elvin sold three properties for a total of $2,165,000, and that it therefore appears that he has sufficient funds to pay the outstanding amounts due under the orders of Katzmann J;·There is a risk that Mr Elvin may dispose of or dissipate any assets he holds during the course of the appeal proceedings;·The penalties imposed against Mr Elvin served to act as an appropriate deterrent to both Mr Elvin and more generally to wrongdoers in similar circumstances. Stay of the orders of Katzmann J would nullify or impair the deterrent effect of the penalties imposed;·If granted, the orders sought in the interlocutory application would also prevent the Fair Work Ombudsman from enforcing the orders of Katzmann J against the other parties to the proceedings, including the payment plan which has already been agreed with one of the respondents to the primary proceedings, which would further amplify the prejudice occasioned to the Fair Work Ombudsman and the relevant employees;·Refusal of a stay to Mr Elvin would not render his appeal rights nugatory, as any amounts recovered could be returned to Mr Elvin in the event his appeal was successful; and·Mr Elvin’s submission that an external administrator of the company could be ordered by the Supreme Court to pay compensation and penalties is misconceived because those orders were directed at Mr Elvin personally.CONSIDERATION

Ratio Decidendi

Legal Principle Established

The Fair Work Ombudsman submitted, in summary:·Mr Elvin’s grounds of appeal lack substantial merit, in that they primarily concern procedural fairness points which misunderstand the role of the court when dealing with unrepresented litigants, and a claim of apprehended bias in respect of actions which were open to Katzmann J;·The balance of convenience does not favour the grant of a stay, because it weighs heavily in favour of ensuring that relevant employees of the company, who were found to be vulnerable employees, receive their entitlements as soon as possible;·The Fair Work Ombudsman has cross-appealed the judgment of Katzmann J, only in the event that Mr Elvin’s appeal is successful;·Mr Elvin’s affidavit filed on 12 July 2024 in support of the interlocutory application did not provide adequate evidence regarding his financial circumstances nor address evidence that between 2020 and 2022, Mr Elvin sold three properties for a total of $2,165,000, and that it therefore appears that he has sufficient funds to pay the outstanding amounts due under the orders of Katzmann J;·There is a risk that Mr Elvin may dispose of or dissipate any assets he holds during the course of the appeal proceedings;·The penalties imposed against Mr Elvin served to act as an appropriate deterrent to both Mr Elvin and more generally to wrongdoers in similar circumstances. Stay of the orders of Katzmann J would nullify or impair the deterrent effect of the penalties imposed;·If granted, the orders sought in the interlocutory application would also prevent the Fair Work Ombudsman from enforcing the orders of Katzmann J against the other parties to the proceedings, including the payment plan which has already been agreed with one of the respondents to the primary proceedings, which would further amplify the prejudice occasioned to the Fair Work Ombudsman and the relevant employees;·Refusal of a stay to Mr Elvin would not render his appeal rights nugatory, as any amounts recovered could be returned to Mr Elvin in the event his appeal was successful; and·Mr Elvin’s submission that an external administrator of the company could be ordered by the Supreme Court to pay compensation and penalties is misconceived because those orders were directed at Mr Elvin personally.CONSIDERATION The Court has power under s 29 of the Federal Court of Australia Act 1976 (Cth) and r 36.08 of the Federal Court Rules 2011 (Cth) to order a stay of proceedings under a judgment the subject of appeal. Relevant principles to guide the Court in the exercise of its discretion are settled, and include:·The onus rests on the party seeking the stay.·An order granting a stay is an interlocutory order at the discretion of the Court, and such discretion must be exercised judicially.·The power of the Court to order a stay ought not be exercised lightly. A decision at first instance should not be treated as merely provisional – rather a successful party at trial is generally entitled to the fruits of its judgment, and courts should not be disposed to delay the enforcement of orders. On the other hand, a significant factor in any discretionary consideration is whether there is a real risk or probability that the appeal would be rendered nugatory if a stay is not granted·The balance of convenience plays an important role in determining whether an order ought be made.·The Court may be minded to refuse a stay where it is satisfied that there are no serious questions for determination in the appeal or review. Conversely, the Court may be minded to grant a stay where, on a preliminary assessment of the case, the Court is satisfied that grounds of appeal or review have merit. A key question is whether there is an arguable point on the proposed appeal, or some rational prospect of success in relation to any of the grounds of appeal.·The Court will consider whether a stay is warranted in the interests of justice.(see for example National Retail Association v Fair Work Commission (No 2) [2014] FCA 664, Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175, De Pyle v Commonwealth of Australia (No 2) [2023] FCA 751)