FEDERAL CIRCUIT COURT OF AUSTRALIA
Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756
File number(s): BRG 623 of 2020 Judgment of: JUDGE JARRETT Date of judgment: 15 April 2021 Catchwords: INDUSTRIAL LAW – Commonwealth – compliance and enforcement – civil remedies – pecuniary penalty orders – amount of penalty – failure to comply with order of Fair Work Commission. Legislation: Fair Work Act 2009 (Cth), ss 3(e), 14, 382, 387, 392, 394, 405, 539, 545(1), 545(2), 546(1), 547(2), 550(1), 550(2), 559(2)
Federal Circuit Court Act 1999 (Cth), ss 16, 76
Federal Circuit Court Rules 2001 (Cth), rr 4.03, 4.04, 6.01, 13.03A(2), 13.03A(2)(b)(iii), 13.03B(2)(c)
Cases cited: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Fair Work Ombudsman v Soma Kitchen Pty Ltd (No 2) [2020] FCCA 2583
Fair Work Ombudsman v Wedderburn Petroleum Pty Ltd (No. 2) [2015] FCCA 2750
Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290
Number of paragraphs: 44 Date of last submission/s: 9 April, 2021 Date of hearing: 9 April, 2021 Place: Brisbane Counsel for the Applicant: Mr McKechnie Solicitor for the Applicant: Office of the Fair Work Ombudsman The First Respondent: No appearance The Second Respondent: No appearance ORDERS
BRG 623 of 2020 BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: ADADN PTY LTD ACN 619 272 374
First Respondent
STEVE DURMAZ
Second Respondent
ORDER MADE BY:
JUDGE JARRETT
DATE OF ORDER:
15 APRIL 2021
THE COURT DECLARES THAT:
1.Based on the admissions which the first respondent is deemed to have made by reason of its default, pursuant to rule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), the first respondent contravened s.405 of the Fair Work Act 2009 (Cth) by contravening a term of an order made by the Fair Work Commission on 7 May, 2020 pursuant to s.392 of the Fair Work Act 2009 (Cth); and
2.Based on the admissions which the second respondent is deemed to have made by reason of his default, pursuant to rule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), the second respondent was, for the purposes of s.550(1) of the Fair Work Act 2009 (Cth) involved in the contravention by the first respondent of s.405 of the Fair Work Act 2009 (Cth) referred to in declaration 1 hereof.
THE COURT ORDERS THAT:
3.Judgment be, and hereby is, entered for the applicant against the first respondent and the second respondent pursuant to rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) by reason of the first and second respondents default.
4.Pursuant to s.545(2) of the Fair Work Act 2009 (Cth), within 28 days of the date of these orders…
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- Fair Work Ombudsman v Adadn Pty Ltd [2021] FCCA 756
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- [2021] FCCA 756
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CaseChat Overview and Summary
The Fair Work Ombudsman commenced proceedings against Adadn Pty Ltd (the first respondent) and its sole director and secretary, Mr. Kosta (the second respondent), seeking default judgment. The dispute arose from Adadn Pty Ltd's failure to comply with an order of the Fair Work Commission, which had previously found Mr. Hilario's dismissal to be harsh, unjust, or unreasonable and ordered compensation and superannuation contributions. Despite repeated demands and court orders, neither respondent had filed a defence or engaged with the proceedings.
The court was required to determine whether to grant default judgment against both respondents. Specifically, the court needed to consider if the applicant had established a prima facie case based on the statement of claim, and if the circumstances warranted the exercise of its discretion to enter judgment in default of a defence, pursuant to Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth). The applicant also sought to establish the second respondent's personal liability for the contravention.
Jarrett J applied Rule 13.03B(2)(c), which allows for default judgment where the applicant appears entitled to the relief sought on the statement of claim and the court has the power to grant it. The judge found that the respondents were in default, having failed to file a notice of address for service, a response, or a defence, and had not complied with previous court orders. The statement of claim alleged that the first respondent contravened section 405 of the Fair Work Act by failing to comply with the Fair Work Commission's order. Furthermore, the statement of claim alleged that the second respondent, as the sole director and secretary, was responsible for the company's operations and compliance, had actual knowledge of the order and its contravention, and was an intentional participant in the failure to comply.
The court found that the respondents were in default and that the discretion to grant default judgment was enlivened. The facts alleged in the statement of claim established that the first respondent contravened section 405 of the Fair Work Act. The court was satisfied that it had the power to grant the relief sought and that the applicant was entitled to judgment on the face of the statement of claim.
The court was required to determine whether to grant default judgment against both respondents. Specifically, the court needed to consider if the applicant had established a prima facie case based on the statement of claim, and if the circumstances warranted the exercise of its discretion to enter judgment in default of a defence, pursuant to Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth). The applicant also sought to establish the second respondent's personal liability for the contravention.
Jarrett J applied Rule 13.03B(2)(c), which allows for default judgment where the applicant appears entitled to the relief sought on the statement of claim and the court has the power to grant it. The judge found that the respondents were in default, having failed to file a notice of address for service, a response, or a defence, and had not complied with previous court orders. The statement of claim alleged that the first respondent contravened section 405 of the Fair Work Act by failing to comply with the Fair Work Commission's order. Furthermore, the statement of claim alleged that the second respondent, as the sole director and secretary, was responsible for the company's operations and compliance, had actual knowledge of the order and its contravention, and was an intentional participant in the failure to comply.
The court found that the respondents were in default and that the discretion to grant default judgment was enlivened. The facts alleged in the statement of claim established that the first respondent contravened section 405 of the Fair Work Act. The court was satisfied that it had the power to grant the relief sought and that the applicant was entitled to judgment on the face of the statement of claim.
Orders
Orders of the court
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Background
Background to the litigation
This proceeding was commenced on 1 December, 2020 by an application and statement of claim. The first respondent was served with the initiating documents on 7 December, 2020. They were mailed to the registered address of the first respondent. The second respondent was personally served with the initiating documents on 10 December, 2020.BACKGROUND The first respondent employed Mr Hilario on a full-time basis as a carpenter between 20 June, 2017 and 27 September, 2019. His employment was terminated by the first respondent and on 2 October, 2019 Mr Hilario lodged an application for an unfair dismissal remedy in the Fair Work Commission pursuant to s.394 of the Fair Work Act in respect of the termination. On 7 May, 2020 the Fair Work Commission found that:(a)Mr Hilario was protected from unfair dismissal within the meaning of s.382 of the Fair Work Act;(b)the termination was harsh, unjust or unreasonable within the meaning of s.387 of the Fair Work Act;(c)reinstatement of Mr Hilario was inappropriate; and(d)an order for payment of compensation was appropriate in the circumstances. Consequently, the Fair Work Commission ordered that the first respondent pay Mr Hilario compensation of $34,590.00 and superannuation contributions of $2,052.00 by 28 May, 2020. The order was provided to the first respondent by the Fair Work Commission on 7 May, 2020 by email. The first respondent’s appeal rights have been exhausted. The first respondent did not make the required payments to Mr Hilario by 28 May, 2020 or at all and it did not otherwise comply with the order. The Commission’s order was subsequently amended on 16 June, 2020 and a copy given to the first respondent. From May to July, 2020 the applicant conducted an investigation into the first respondent after receiving a request for assistance from Mr Hilario. On 10 July, 2020 a Fair Work Inspector had a conversation with the second respondent. The second respondent said that the first respondent could not make the payments required by the Commission’s order. Soon thereafter on 16 July, 2020 the Fair Work Inspector sent a letter to the respondents in relation to the first respondent’s failure to comply with the order. The letter recorded the inspector’s finding that the first respondent had contravened the Fair Work Act. The letter required the first respondent to make the payments ordered by the Fair Work Commission by 30 July, 2020. The respondents took no action on the demand and so, on 21 August, 2020 the Fair Work Inspector sent a final reminder letter to the respondents. The letter required a response by 31 August, 2020. None was forthcoming. This proceeding was commenced and served upon the respondents as I have set out above. On 12 February, 2021 I made orders for the respondents to file a notice of address for service and a response and defence in the proceedings. Neither respondent complied with those orders. There has been no engagement by the respondent with the proceeding.DEFAULT JUDGMENT
Evidence
Evidence Before The Court
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Decision
Reasons for decision
This proceeding was commenced and served upon the respondents as I have set out above. On 12 February, 2021 I made orders for the respondents to file a notice of address for service and a response and defence in the proceedings. Neither respondent complied with those orders. There has been no engagement by the respondent with the proceeding.DEFAULT JUDGMENT The applicant applies for default judgment. Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) permits the Court to give judgment against a respondent who is in default in a proceeding which was commenced by an application supported by a statement of claim for the relief that:(a)the applicant appears entitled to on the statement of claim; and(b)the Court is satisfied it has the power to grant. An order for default judgment under FCCR 13.03B(2)(c) can be made where there is a basis for the relief sought by the applicant on the face of the statement of claim. There is no requirement for proof by way of evidence of the applicant’s claim. However, where discretionary relief is claimed, the Court may receive evidence relevant to the exercise of its discretion. On the evidence before me, I find that neither respondent has:(a)satisfied the applicant’s claim;(b)filed a notice of address for service in accordance with FCCR 6.01;(c)filed a response and any defence in accordance with FCCR 4.03 and 4.04 ;(d)complied with an order of the Court in the proceeding in accordance with FCCR 13.03A(2)(b)(iii), being the February orders to file a notice of address for service and a response and defence in the proceedings; and(e)defended the proceedings with due diligence. I find that the respondents are in default for the purposes of FCCR 13.03A(2) and that the discretion to give judgment for the applicant in the proceedings has been enlivened. The statement of claim alleges the facts I have set out above concerning Mr Hilario’s employment with the first respondent, the termination of his employment and the facts leading to the Fair Work Commission order. It alleges non-compliance with that order. It also alleges that:(a)the first respondent is and was a national system employer within the meaning of s.14 of the Fair Work Act; and(b)the second respondent:(i)was the sole director and secretary of the first respondent;(ii)was responsible for the overall operation, management and control of the first respondent;(iii)was the person responsible for ensuring that the first respondent complied with its legal obligations under the Fair Work Act;(iv)had actual knowledge of the Fair Work Commission order and that the Fair Work Commission order applied to the first respondent;(v)had actual knowledge that the first respondent contravened a term of the Fair Work Commission order; and(vi)was an intentional participant in the first respondent’s failure to comply with the Fair Work Commission order. The facts alleged by the applicant in the statement of claim establish that the first respondent failed to comply with an order of the Fair Work Commission. That is a contravention of s.405 of the Fair Work Act.
Ratio Decidendi
Legal Principle Established
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