Fair Work Ombudsman v Auscare Constructions Pty Ltd
[2023] FedCFamC2G 289
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Auscare Constructions Pty Ltd [2023] FedCFamC2G 289
File number: SYG 424 of 2022 Judgment of: JUDGE CAMERON Date of judgment: 21 April 2023 Catchwords: INDUSTRIAL LAW – Failure to comply with notice of direction issued under s.35 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) – Grade B civil penalty contravention – declaration made – penalty sought – relevant considerations.
STATUTORY INTERPRETATION – Application for orders compelling compliance with repealed statutory provisions – effect of proceedings commenced before repeal – application refused – no statutory basis for the relief sought.
Legislation: Building and Construction Industry (Improving Productivity) Act 2016 (Cth) ss 35, 81
Code for the Tendering and Performance of Building Work 2016 (Cth) ss 6, 11D, 11E, 110
Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth)
Acts Interpretation Act1901 (Cth) s 7
Crimes Act 1914 (Cth) s 4AA
Federal Safety Commissioner Act 2022 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) items 1, 5, pt 1, sch 2
Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Regulation (NSW)
Cases cited: Australian Building and Construction Commissioner v Pattinson (2022) 96 ALJR 426
Kelly v Fitzpatrick (2007) 166 IR 14
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61
Division: Fair Work Division Number of paragraphs: 32 Date of last submissions: 17 June 2022 Date of hearing: On the papers Place: Sydney Counsel for the Applicant: Ms N. Campbell Solicitor for the Applicant: Australian Building and Construction Commissioner Solicitor for the Respondent: Mr G. M. McDonald (O’Neill McDonald Lawyers) ORDERS
SYG 424 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: AUSCARE CONSTRUCTIONS PTY LTD ACN 003 295 565
Respondent
order made by:
JUDGE CAMERON
DATE OF ORDER:
21 April 2023
THE COURT DECLARES THAT:
1.By failing to comply by 8 November 2021 with a notice issued under s.35 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (“Act”) in relation to its compliance with the Code for the Tendering and Performance of Building Work 2016 (Cth), the respondent contravened a Grade B civil penalty provision of the Act.
THE COURT ORDERS THAT:
1.The respondent pay a penalty of $5,000.
2.The penalty be paid to the Commonwealth.
3.The respondent pay the applicant’s costs fixed in the amount of $10,223.
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
JUDGE CAMERON
INTRODUCTION
This proceeding was brought by the then-Australian Building and Construction Commissioner (“ABCC”). He filed an application and then an amended statement of claim alleging that the respondent, Auscare Constructions Pty Ltd (“Auscare”), had contravened s.35(3) of the then-Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (“BCCI Act”) by failing to comply with the requirements of a Notice of Direction (“Notice”) issued under s.35 of that Act in respect of certain obligations it owed under the then-Code for the Tendering and Performance of Building Work 2016 (Cth) (“Code”). Auscare admitted the contravention.
These reasons concern the penalty to be imposed on Auscare for the contravention.
After the commencement of this proceeding, the Code and the relevant provisions of the BCCI Act were repealed by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) but those repeals do not affect the maintenance of the proceeding: s.7 Acts Interpretation Act 1901 (Cth). The position of ABCC was also abolished by that Act and its remaining functions transferred to the Fair Work Ombudsman, who was substituted as applicant in this matter after judgment was reserved.
APPLICANT’S PLEADINGS
It was alleged and admitted that:
(a)Auscare had entered into a contract for flooring works at the Goodhew Gardens project (“Project”) with SAS Flooring Pty Ltd (“SAS Flooring”);
(b)the ABCC audited Auscare after receiving a complaint from SAS Flooring about delays in Auscare’s payment for work SAS Flooring had completed on the Project;
(c)on 15 October 2021 the ABCC issued the Notice to Auscare and sent it to its director, Mr Rowlands;
(d)the Notice required Auscare to provide to the ABCC by 8 November 2021, a written report about the extent to which it had complied on the Project with ss.11D(1)(a)-(c) and 11E(1)(a) of the Code; and
(e)Auscare failed to comply with the Notice by 8 November 2021 and thereby contravened s.35(3) of the BCCI Act.
The ABCC sought the following relief:
(a)a declaration that, by failing to comply with a notice issued under s.35 of the BCCI Act in relation to its compliance with the Code by 8 November 2021, Auscare had contravened a Grade B civil penalty provision of the BCCI Act (“Contravention”);
(b)an order that Auscare pay to the Commonwealth a pecuniary penalty in respect of the Contravention;
(c)costs; and
(d)in para.13(e) of the amended statement of claim, an order that Auscare produce to the ABCC the following information, within 20 days of the Court’s declaration:
(i)information about the reasons why payment to SAS Flooring of its payment claim dated 28 July 2020 was made outside contractual payment timeframes and outside the 20 business day payment timeframe set out in the Building and Construction Industry Security of Payment Act 1999 (NSW) (“SOP Act”);
(ii)information about the reasons why payment to SAS Flooring of its payment claim dated 28 July 2020, were made in instalments;
(iii)information about what steps, if any, Auscare has taken to address the reasons identified in (i) above, to ensure Auscare complies with the contractual payment timeframes and the payment timeframes set out in the SOP Act.
(iv)for the period of 1 July 2020 to 15 October 2021, information about whether:
(A)Auscare had a dispute settlement process that detailed how disputes about payments to subcontractors on the Project would be resolved;
(B)Auscare communicated that dispute settlement process to SAS Flooring; and
(C)Auscare followed that dispute settlement process during the period of 1 July 2020 to 15 October 2021; and
(v)information about what steps, if any, Auscare has taken to address any non-compliance with section 11D(1)(c) and 11E(1)(a) of the Code, identified in response to (i) – (iii) above.
RESPONDENT’S PLEADINGS
Auscare admitted that it had failed to comply with the Notice by 8 November 2021 and that a declaration should be made that it had contravened a Grade B civil penalty of the BCCI Act but denied that it should have to pay a penalty or costs.
Auscare acknowledged that the instalment payments by which it had satisfied SAS Flooring’s invoices were made outside the contractual arrangement it had with SAS Flooring but alleged that the COVID-19 pandemic impacted its business and led to a period of negative cashflow and unavailability of staff because of lockdowns, quarantining and travel restrictions. It also alleged that it released the 10% final payment on 4 December 2020, instead of holding it for 12 months, to compensate SAS Flooring for the delay in payment.
Auscare alleged that it had taken steps to remedy any non-compliance with the SOP Act and the Code and had implemented processes to ensure it operated in a manner consistent with the SOP Act.
LEGISLATION
At all material times the BCCI Act relevantly provided:
35Building industry participants to report on compliance with Building Code
(1)The ABC Commissioner may give a written notice to a person who is required to comply with the Building Code in respect of particular building work.
(2)The notice may direct the person to give a written report to the ABC Commissioner containing specified information about the extent to which the person complied with the Building Code in respect of that building work.
(3)The person must comply with the notice within the period specified by the notice. The period must be at least 14 days.
(4)A notice under subsection (1) is not a legislative instrument.
…
Division 1 – Obtaining an order for contravention of civil remedy provision
81Penalty etc. for contravention of civil remedy provision
(1)A relevant court, on application by an authorised applicant, may make one or more of the following orders relating to a person (the defendant) who has contravened a civil remedy provision:
(a)an order imposing a pecuniary penalty on the defendant;
(b)an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;
(c)any other order that the court considers appropriate.
Maximum penalty for civil remedy provisions
(2) The maximum pecuniary penalty is:
…
(b)for a Grade B civil remedy provision—100 penalty units if the defendant is a body corporate and otherwise 20 penalty units.
…
(6)In determining a pecuniary penalty under paragraph (1)(a), the court must take into account all relevant matters, including:
(a)the nature and extent of the contravention; and
(b)the nature and extent of any loss or damage suffered because of the contravention; and
(c)the circumstances in which the contravention took place; and
(d)whether the person has previously been found by a court (including a court in a foreign country) to have engaged in any similar conduct.
…
At the material time a penalty unit was worth $222: s.4AA of the Crimes Act 1914 (Cth).
At all material times the Code relevantly provided:
6Application of the code of practice
(1)A building contractor or building industry participant that could be required to comply with this code of practice by section 34 of the Act becomes subject to this code of practice (a code covered entity) from the first time they submit an expression of interest or tender (howsoever described) for Commonwealth funded building work on or after the date this code of practice commences.
...
…
11D Security of payment
(1) A code covered entity must:
(a) comply with all applicable laws and other requirements relating to the security of payments that are due to persons; and
(b) ensure that payments which are due and payable by the code covered entity are made in a timely manner and are not unreasonably withheld; and
(c) have a documented dispute settlement process that details how disputes about payments to subcontractors will be resolved, and must comply with that process; and
…
11E Disputed payments
(1) A code covered entity must:
(a) ensure that its documented dispute settlement process detailing how disputes about payments to subcontractors will be resolved includes a referral process to an independent adjudicator for determination if the dispute cannot be resolved between the parties, and must comply with that process and any determination; …
EVIDENCE
Applicant
In her affidavit of 16 June 2022 Michaela Kriewaldt, a solicitor at the office of the ABCC, deposed to the following as background facts.
On 2 December 2020 the ABCC made a demand of Auscare that it provide him with information concerning its compliance with the Code in the period when SAS Flooring was engaged on the Project. On 22 January 2020 the ABCC issued to Auscare a notice to produce records in connection with its compliance with the Code, including in relation to SAS Flooring. On 3 June 2021 Auscare admitted to the ABCC that it had breached the Code by failing to issue a valid payment schedule in relation to a valid claim and by not making full payment within the statutory timeframe. It also advised of steps taken to ensure future compliance with the Code. The letter was signed:
Nishant Arora
Auscare Constructions Pty Ltd.
The ABCC told Auscare on 10 June 2021 that its proposals had not addressed all of his concerns and he identified deficiencies he perceived. The ABCC made related suggestions and required Auscare to provide him with its responses to his comments by 22 June 2021. Auscare did not respond within the 12 days allowed it and so on 2 August 2021 the ABCC issued Auscare with a notice under s.35 of the BCCI Act. That elicited no response and another such notice was issued on 6 September 2021. It also elicited no response other than a telephone message on 22 October 2021 from Auscare’s construction manager advising that he had just returned to work following a lockdown and was seeking an extension of the time within which to reply to the notice. During this period Auscare had stood its staff down because of the COVID-19 pandemic, the implication being that until then there had been no one in the office to respond to correspondence.
Ms Kriewaldt’s affidavit did not refer to the Notice, which was issued later, or to its terms.
Respondent
Auscare relied on the affidavit of Nishant Arora sworn 10 June 2022. Mr Arora’s role and the basis of his purported knowledge was not adequately explained, he simply stating in his affidavit:
1.I am assisting the shareholder and business of Auscare Construction Pty Ltd (Auscare) with their dealings with the Applicant.
2.I have been authorised to make this affidavit on behalf of Auscare.
3. I make this Affidavit from my own knowledge acquired during the performance of my role(s) described at paragraph 1 above and from information I have obtained from reviewing the books and records of Auscare and other documents where specified in this Affidavit.
Annexed to Ms Kriewaldt’s affidavit was a file note of a conversation she had on 30 August 2021. Relevantly, it said
At 10.15 am on 30 August 2021, I (Michaela Kriewaldt) attempted to contact Nishant Arora from Auscare Constructions on the number he previously provided me via email … . A man named David answered the phone and said he was from Next Security. I explained I was looking to speak to Nishant. David said Nishant no longer worked there. I then advised I was really just needing to speak with someone from Auscare Constructions. David said he didnt [sic] know about that . He indicated that he could forward my details onto Nishant and see if he could assist me. I told David I would be grateful if he could. I provided David with my direct number.
In the absence of any objection to his affidavit, it appears that the parties accept that Mr Arora has a proper basis to depose to the matters to which he refers. Noting that, and that Auscare’s 3 June 2021 letter was over Mr Arora’s name, the Court will proceed on the assumption that Mr Arora does have a proper basis to depose to the matters to which he refers.
Mr Arora deposed that:
(a)between March 2020 and December 2021, Auscare’s normal trade was impacted by lock downs, quarantining, illness and travel restrictions as a result of the COVID-19 pandemic;
(b)on 9 July 2020 Auscare entered into a subcontractor agreement with SAS Flooring (“Agreement”) to assist in completing the Project;
(c)the Agreement contained the following terms:
1. All invoices to be submitted 25th of every month and payment will be made 30 days from the end of the month.
2. Only one invoice per month per job.
3. Every invoice must include completed subcontractor statement attached with current insurances.
Retention 10.0% until 5.0% of the total contract amount is reached. The final retention can be released after 12 months of AusCare Constructions (being Auscare) achieving project completion and upon final release request from subcontractor.
(d)on 28 July 2020 SAS Flooring sent Auscare invoice INV0665 for $58,375.63 (“INV0665”). It was dated 28 July 2020 and expressed a due date of 27 August 2020;
(e)on 10 August 2020 SAS Flooring sent Auscare invoice INV0677 for $72,046.59 (“INV0677”). It was dated 10 August 2020 and expressed a due date of 9 September 2020;
(f)the total amount payable for the two invoices was $130,422.22 and between 14 August 2020 and 13 November 2020 Auscare made the following payments to SAS Flooring:
(i)$26,674.87 on 14 August 2020 in respect of INV0665:
(ii)$6,674.87 on 18 September 2020 in respect of INV0665;
(iii)$5,000 on 25 September 2020 in respect of INV0665;
(iv)$6,500 on 2 October 2020 in respect of INV0665;
(v)$8,500 on 9 October 2020 in respect of INV0665;
(vi)$7,000 on 16 October 2020 in respect of INV0677
(vii)$6,000 on 23 October 2020 in respect of INV0677
(viii)$5,000 on 30 October 2020 in respect of INV0677
(ix)$5,000 on 6 November 2020 in respect of INV0677; and
(x)$60,000 on 13 November 2020 in respect of both invoices,
totalling $136,349.74, greater than the total of the invoices;
(g)on 4 December 2020 Auscare paid to SAS Flooring the sum of $5,479.48 which represented the 10% retention;
(h)he spoke to Ms Irwin-Robinson of SAS Flooring a couple times whilst Auscare was making the instalment payments and at some point they had the following conversation:
Ms Arora:Hi Angela, I’m calling about Auscare’s payment to SAS Flooring for the work they did at the Anglicare Project.
Ms Irwin-Robinson: Thanks for your call. What would you like to discuss?
Ms Arora:Auscare is experiencing some financial difficulties at the moment and cannot pay the invoices in a single payment. Auscare has to pay the invoice by instalments. I’m very sorry on behalf of Auscare that we have to do this but unfortunately, we have no other option.
Ms Irwin-Robinson: Thank you for informing me.
(i)on 2 December 2020 the ABCC requested that Auscare provide information relating to its compliance with s.11D(1) of the Code concerning the Project and the instalment payments made to SAS Flooring;
(j)the same day, Peter Baxter, the managing director of Auscare, emailed the ABCC saying that the accounts with SAS Flooring had been agreed and paid in full;
(k)on 4 December 2020 the ABCC replied saying that he was conducting an audit of Auscare’s compliance;
(l)on 22 January 2021 he sent an email to the ABCC attaching:
(a)A sub-contractor registration form for SAS;
(b)Signed letter of intent from Anglicare to the Respondent dated 13 December 2019;
(c) INV0665;
(d) INV0677;
(e) Remittance slips issued by the National Australia Bank for each of the Instalment Payments and the 10% Retention payment;
(f) SAS certificate of insurance dated 16 March 2020;
(g) The quote received from SAS dated 9 July 2020;
(h) The Agreement; and
(i) An iCare certificate of currency issued in favour of SAS dated 8 November 2019;
(m)on 18 March 2021 the ABCC wrote to Auscare advising that his audit had identified conduct that he considered had not been in compliance with the Code. He detailed the alleged breaches in a tabulated summary of the audit findings and asked Auscare to, within 21 days:
… review these issues and provide details of rectification measures that it will take as a result. In doing so, your response should clearly outline the specific details of the programs, policies or actions that you will undertake, as well as the proposed timelines;
(n)Auscare did not reply to that email and on 14 April 2021 the ABCC wrote again to follow up its letter of 18 March 2021. Auscare did not respond to that email either;
(o)Mr Baxter had been responsible for replying to those emails. His employment was terminated in March 2021;
(p)on 26 May 2021 the ABCC asked Auscare to answer its previous emails, to which he, Mr Arora, responded on 3 June 2021 saying that Auscare:
(i)accepted that it did not issue a valid payment schedule in line with s.110(1)(a)-(b) of the Code;
(ii)had made sure that to issue valid payment schedules to all of its sub-contractors where applicable;
(iii)had terminated its prior managing director due to the compliance issued raised by the ABCC;
(iv)had undertaken in-house training of its employees and implemented corrective measures effective immediately, to be in accordance with the SOP Act;
(v)was seeking external training with the Australian Building & Construction Dispute Resolution Service in respect of the Building and Construction Industry Security of Payment Regulation (NSW);
(vi)was working with a compliance manager to put together a flowchart of all their accounts to follow and adhere to when evaluating progress claims and to make sure they issued a valid payment schedule in accordance with the SOP Act;
(vii)had put together a spreadsheet to identify any delays which had become part of the monthly management meetings;
(viii)included in its integrated management systems reporting policy that any disputed or delayed progress payments were reported to the ABCC as soon as practicable; and
(ix)apologised to the ABCC for its non-compliance, saying that it was not happy with the impact this incident had had on their otherwise good reputation. He said:
We apologise for the inconvenience this has caused to the ABCC. We can also ensure you as a business we were not happy with this and the impact on our reputation. We trust we can work through this matter collaboratively and take a proactive approach moving forward to not find ourselves in this position again.
(q)on 9 September 2021 Auscare received a letter dated 6 September 2021 from the ABCC enclosing a notice pursuant to s.35 of the BCCI Act;
(r)on 15 October 2021 the Notice was delivered to Mr Rowland. It relevantly said:
NOTICE OF DIRECTION TO REPORT ON COMPLIANCE WITH BUILDING CODE
…
The ABCC seeks information in relation to Auscare's compliance with section 11D(1)(a), 11D(1)(b), 11D(1)(c) and 11E(1)(a) of the Code, with respect to payments made by Auscare to SAS and Auscare's obligation to have a documented dispute resolution process.
I direct you, Auscare, to produce to me a written report containing the following information to demonstrate the extent to which Auscare has complied with section 11D(1)(a), 11D(1)(b), 11D(1)(c) and 11E(1)(a) of the Code on the Project.
Compliance with sections 11D(1)(a) and 11D(1)(b)
For the period of 28 July 2020 to the date of this Notice (the Specified Period):
1. Information which demonstrates the reasons payment to SAS of its payment claim dated 28 July 2020, were made outside the contractual payment timeframes and outside the 20 business day payment timeframe set out in the Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW SOP Act).
2. Information which demonstrates the reasons payment to SAS of its payment claim dated 28 July 2020, were made in instalments.
3. Information which demonstrates what steps, if any, Auscare has taken during the Specified Period, to address the reasons identified in item 1, to ensure Auscare complies with the contractual payment timeframes and the payment timeframes set out in the NSW SOP Act.
For the period of 1 July 2020 to the date of this Notice (the Second Period):
4. Information which demonstrates that:
a. Auscare had a dispute settlement process that details how disputes about payments to subcontractors on the Project would be resolved;
b. Auscare communicated that dispute settlement process to SAS;
c. Auscare followed that dispute settlement process during the Second Period.
5. Any other information which demonstrates what steps, if any, Auscare has taken during the Second Period, to address any non-compliance with section 11D(1)(c) and 11E(1)(a) of the Code, identified in response to item 4 above.
The information provided by Auscare should demonstrate the extent to which Auscare has complied with section 11D(1)(a), 11D(1)(b), 11D(1)(c) and 11E(1)(a) of the Code and any steps taken to rectify any delayed payments or establish a documented dispute resolution process.
(s)sometime between September 2021 and October 2021 he telephoned Ms Kriewaldt of the ABCC’s office and had the following conversation:
Mr Arora:Hi Michaela, I’m calling you about the notices Auscare have received;
Ms Kriewaldt: What would you like to discuss?
Mr Arora:Well, currently Auscare have stood down all of their staff until further notice and we will likely not be in a position to answer the notice served on Auscare.
Ms Kriewaldt: Okay, the ABCC will consider their next steps. [35]
(t)on 20 April 2022 Auscare’s solicitors informed Ms Kriewaldt that Auscare would admit the contravention and would answer the Notice with a view to “finalising the matter”;
(u)Auscare had struggled operationally and financially because of the COVID-19 pandemic and, at the time of his affidavit, had no work or employees; and
(v)Auscare had implemented a dispute resolution policy, a copy of the 7 January 2022 version of which was annexed to Mr Arora’s affidavit. Mr Arora also annexed a copy of a, presumably updated, form of subcontractor agreement which referred to the dispute resolution policy.
Mr Arora also deposed:
I understand that the October Notice required Auscare's response by no later than 8 November 2021. From my understanding of Auscare's operations, I know Auscare to be disappointed that it did not comply with the October Notice.
On 20 April 2022, I instructed Auscare's solicitors to inform Ms Kriewaldt that Auscare would be entering into a guilty plea with reference to any breaches of section 35 of the Act. …
CONSIDERATION
Declaration
Auscare’s admissions satisfy me that it is appropriate to make the declaration sought.
Penalty
The purpose of a civil penalty under a given Act’s civil penalty regime is primarily, if not solely, the promotion of the public interest in compliance with the provisions of that Act by the deterrence of contravention of it. The theory is that the financial disincentive involved in the imposition of a pecuniary penalty will encourage compliance with the law by ensuring that contraventions are viewed by the contravener and others as an economically irrational choice: Australian Building and Construction Commissioner v Pattinson (2022) 96 ALJR 426 at 431 [9], 442 [66]. When determining the penalty appropriate to impose for a contravention of the BCCI Act, regard should be had to all of the circumstances of the case, guided by the various discretionary considerations discussed in authorities such as Kelly v Fitzpatrick (2007) 166 IR 14 and Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61, in order to arrive at a single result that is an instinctive synthesis of those various factors.
In this case, the evidence indicates that the COVID-19 pandemic and related business disruption led Auscare to encounter cash-flow difficulties which led to it not paying what it owed SAS Flooring in accordance with the time of payment requirements of the SOP Act. Its final payment was made about 2½ months after it should have been. An audit by the ABCC found what he considered to be conduct not in compliance with the Code and in respect of which he sought remedial action. When the action reported and proposed by Auscare was considered insufficient, the ABCC issued the Notice. The Notice required Auscare to provide a written report about the extent to which it had complied with the Code’s requirements regarding payments to SAS Flooring (s.11D(1)(a)-(b) of the Code) and about the extent to which it had complied with the Code’s requirement to have a documented dispute resolution process (ss.11D(1)(c) and 11E(1)(a) of the Code). The Notice went substantively unanswered and, strictly, remains so.
The ABCC submitted that, absent a substantive response to the Notice, he had been unable to conclude his audit or determine the extent of Auscare’s non-compliance and what regulatory outcome was appropriate. Even so, no evidence was adduced which contradicted or challenged Mr Arora’s evidence as to why the amounts owing to SAS Flooring had been paid late and that those amounts had in fact been paid before the ABCC made his first contact with Auscare. In such circumstances I am prepared to accept that Mr Arora’s evidence on that subject was correct. Consequently, the extent of Auscare’s non-compliance with s.11D(1)(a)-(b) of the Code is already known, as is the fact that it released the retention before it was required to.
The remaining issue concerns the requirements of ss.11D(1)(c) and 11E(1)(a) of the Code to have a documented dispute settlement process detailing how disputes about payments to subcontractors were to be resolved and providing for reference to an independent adjudicator if the parties could not resolve a dispute. A copy of such a policy was annexed to Mr Arora’s affidavit although the evidence does not support a finding that it had been sent at any earlier time to the ABCC or sent to him in specific response to the Notice. The same observation applies to the form of subcontractor agreement also annexed to the affidavit.
It is important to note that the contravention in issue in this proceeding is not Auscare’s failure to comply with the Code but its failure to comply with the Notice by not responding to it. Even so, the seriousness of the breach can be assessed in part by reference to the conduct or inaction underlying the Notice and with which it was concerned. As has already been noted, the payment failure occurred at a time of particular difficulty for Australian businesses but SAS Flooring’s need to be paid timeously for its work at a time when difficulties of the same sort can be assumed to have affected it too, should not be overlooked. The payments were made within a reasonable time and it has not been suggested that SAS Flooring had been more than usually disadvantaged by receiving payment a couple of months late. Similarly, it has not been submitted that the dispute resolution policy and the form of subcontractor agreement annexed to Mr Arora’s affidavit did not satisfy the Code’s requirements. However, the ABCC should not have needed to bring this proceeding in order to extract those documents, at least the first of which pre-dated the litigation, from Auscare. The failure to provide them directly in response to the Notice has not been explained.
More generally, the failure to respond to the Notice at all deserves notice as it does not appear to have been a difficult thing to do. However, balanced against that is the early admission of contravention and the detail provided in Mr Aurora’s affidavit, together with the expressions of contrition in his affidavit. I am satisfied that the penalty to be imposed should have regard to the early admissions and to the expression of contrition and that it need not include a significant element for specific deterrence. However, even though the relevant statutory scheme supervised by ABCC has come to an end, it is necessary to include a component for general deterrence to discourage contraventions of statutory schemes more generally.
The ABCC submitted, and I accept, that Auscare has not previously been found by a court to have engaged in conduct similar to that considered in this proceeding. Auscare submitted that it had been in business for over 20 years and I accept that submission, in the absence of any argument against it.
Having regard to the matters to which I have referred, I consider an appropriate penalty to be $5,000.
Further Orders
In his written submissions the ABCC said:
Given Auscare’s contravention arose out of its failure to comply with the Notice, it is appropriate that the Court order Auscare to provide this information to the Applicant. This would ensure that the purpose of the Notice has not been defeated, and that proper effect is given to the Applicant’s powers under s 35 of the BCIIP Act. The Applicant seeks an order that Auscare provide the information set out in paragraph 13E of the amended statement of claim.
However, as referred to earlier, the Code and the relevant provisions of the BCCI Act, which is now entitled the Federal Safety Commissioner Act 2022 (Cth), were repealed by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 effective on 7 December 2022 and the existence of this proceeding does not have the effect of extending any obligation to observe the Code and the relevant provisions of the BCCI Act beyond their repeal: cf s.7 of the Acts Interpretation Act1901 (Cth). In those circumstances there is no longer a statutory basis for the making of such an order.
COSTS
The ordinary costs regime applied in this case and costs should follow the event. Having regard to the scale that applied when this case was argued I consider, by reference to items 1 and 5 of pt.1 of sch.2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), that Auscare should pay the ABCC’s costs fixed in the amount of $10,223.
CONCLUSION
There will be orders accordingly.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 21 April 2023
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