Fair Work Ombudsman v Benny842 Pty Ltd
[2022] FedCFamC2G 693
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Benny842 Pty Ltd [2022] FedCFamC2G 693
File number(s): MLG 219 of 2022 Judgment of: JUDGE BLAKE Date of judgment: 25 August 2022 Catchwords: INDUSTRIAL LAW – failure to comply with compliance notice – application for default judgment against First Respondent company – where company remains registered – where Second Respondent sole director is an undischarged bankrupt and cannot serve as director – where there is no controlling mind of the company - whether proceedings against First Respondent company may be continued in such circumstances – Held: there is no impediment to the proceeding against the company continuing and the application for default judgment against the company may be heard – default judgment entered
INDUSTRIAL LAW – Second Respondent an undischarged bankrupt – Second Respondent alleged to be involved as an accessory to the First Respondent’s conduct – where Second Respondent has entered into Statement of Agreed Facts admitting the contravention – whether there is any impediment to the Second Respondent entering into the Agreed Statement of Facts – whether there is any impediment to proceedings continuing against the Second respondent – Held: no impediment to the Second respondent entering into the Statement of Agreed Facts or the proceedings against him continuing – declarations of contravention made against Second respondent
Legislation: Bankruptcy Act 1966 (Cth) ss 58(3), 60(1), 82, 82(1), 82(3), 269, 304A.
Corporations Act 2001 (Cth) ss 206B, 471B, 500(2).
Fair Work Act 2009 (Cth) ss 545, 545(1), 547(2), 550, 550(2), 700, 716, 716(2), 716(3), 716(5), 717.Federal Circuit and Family Court of Australia Act 2021 (Cth) s 141.
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 6.01, 4.03, 4.04(3)13.04(2), 13.05(2)(d).
Cases cited: Arthur v Vaupotic Investments [2005] FCA 433
Cotis v MacPherson (2007) 169 IR 30
Fair Work Ombudsman v Garfield Berry Farm Ltd and Anor [2011] FMCA 885
Fair Work Ombudsman v Baal Gammon Copper Pty Ltd [2021] FCCA 348
Mathers v Commonwealth of Australia (2004) 134 FCR 135
Division: Division 2 General Federal Law Number of paragraphs: 45 Date of hearing: 10 August 2022 Place: Melbourne Advocate for the Applicant: Mr Adams Solicitor for the Applicant: HWL Ebsworth Lawyers Advocate for the First Respondent: No Appearance Solicitor for the First Respondent: None Advocate for the Second Respondent: In Person Solicitor for the Second Respondent: None ORDERS
MLG 219 of 2022 BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: BENNY842 PTY LTD
First Respondent
SHANE DHARMATILAKE
Second Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
25 AUGUST 2022
THE COURT ORDERS THAT:
1.Default judgment be entered for the Applicant against the First Respondent pursuant to Rule 13.05(2)(d) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (‘Rules’) by reason of the First Respondent's default within the meaning of Rule 13.04(2) of the Rules by failing to:
(a)file a Notice of Address for Service as required by Rule 6.01 of the Rules;
(b)file a Response as required by Rule 4.03 of the Rules;
(c)file a Defence as required by Rule 4.04(3) of the Rules;
(d)file a Notice of Address for Service on 28 February 2022 in accordance with Order 2 of the Orders of the Court dated 28 February 2022;
(e)file a Response or Defence by 4pm on 31 May 2022 in accordance with Order 3 of the Orders of the Court dated 28 February 2022; and
(f)otherwise defend the proceedings with due diligence.
THE COURT DECLARES THAT:
2.Upon the admissions that the First Respondent is taken to have made, consequent upon its default pursuant to rule 13.04(2) of the Rules, the First Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (‘Act’) by failing to comply with a compliance notice dated 10 December 2021 (‘Compliance Notice’).
3.Upon the admissions that the Second Respondent is taken have made pursuant to the Statement of Agreement Facts filed in this proceeding on 19 July 2022, the Second Respondent was involved, within the meaning of section 550(2) of the Act, in the contravention, by the First Respondent, of section 716(5) of the Act.
THE COURT FURTHER ORDERS THAT:
4.Pursuant to section 545(1) of the Act, the First Respondent take the steps that were required by the Compliance Notice, within 28 days of the Court's Order, by:
(a)calculating and paying to Mr Samson Ballard (‘Mr Ballard’) the outstanding amounts it was required to pay to Mr Ballard pursuant to the Compliance Notice;
(b)calculating and paying to Mr Ballard's nominated superannuation fund any additional superannuation contributions required by clause 22.2 of the Restaurant Industry Award 2020 (‘Restaurant Award’) in respect of the outstanding entitlements referred to in Order 4(a) above;
(c)preparing and producing to the Applicant, a schedule outlining its calculations of the outstanding entitlements and additional superannuation contributions required to be paid to Mr Ballard, as set out in Orders 4(a) and 4(b) above;
(d)providing evidence that the outstanding entitlements and additional superannuation contributions were paid as set out in Orders 4(a) and 4(b) above;
5.Pursuant to section 547(2) of the Act, the First Respondent pay to Mr Ballard, within 28 days, interest, calculated at the Federal Court of Australia’s pre-judgment interest rate applying at the date of the Court's Order, on the amount owed to Mr Ballard pursuant to Order 4(a) above.
6.The Applicant serve a copy of the Court's Orders on the First Respondent within 14 days of the Court's Orders.
7.The proceeding be adjourned to 7 November 2022 at 10.30 am for a further hearing in respect of the Applicant’s claim for penalties to be imposed on:
(a)the First Respondent for the contraventions declared at Order (2) above; and
(b)the Second Respondent for the contraventions declared at Order (3) above.
8.The Applicant file and serve affidavit evidence and submissions relating to penalty by no later than 20 days prior to the date of the hearing fixed pursuant to Order (7) above.
9.The First Respondent and Second Respondent each file and serve any affidavit evidence and submissions relating to penalty by no later than 10 days prior to the date of the hearing fixed pursuant to Order (7) above.
10.The Applicant file and serve any reply evidence or submissions by no later than 5 days prior to the date of hearing fixed pursuant to Order (7) above.
11.The parties have liberty to apply.
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 BLAKE:
This is an Application by the Fair Work Ombudsman (‘Ombudsman’). The Ombudsman initially commenced proceedings seeking among other things, Declarations and the imposition of pecuniary penalties against the Respondents for failing to comply with a Compliance Notice issued under the Fair Work Act 2009 (Cth) (‘Act’).
For the reasons that follow, I have determined that:
(a)Default judgment be entered against the First Respondent with a Declaration that the First Respondent contravened section 716(5) of the Act;
(b)A Declaration issue against the Second Respondent (on the basis of a Statement of Agreed Facts) that he was involved in the contravention by the First Respondent of section 716(5) of the Act.
BACKGROUND
On 24 January 2022, the Ombudsman commenced proceedings in this Court by filing an Application and a Statement of Claim.
On 25 February 2022, the Ombudsman filed affidavits in the proceeding from David Holland. Mr Holland deposed that he had served a copy of the Application and the Statement of Claim as well as a covering letter from solicitors for the Ombudsman on the Respondents by hand on 15 February 2022.
On 28 February 2022, the matter came before me. I made Orders that the Respondents file a Notice of Address for Service and also that a Response and Defence be filed by 31 May 2022. The Second Respondent filed a Notice of Address for Service following that hearing.
On 19 July 2022, a Statement of Agreed Facts was filed. This document was signed by the Ombudsman and the Second Respondent only. The First Respondent had not signed the document.
On 20 July 2022, the Ombudsman filed an Application in a Proceeding. In that Application, the Ombudsman sought, among other things, the following:
(a)that default judgement be entered against the First Respondent and that the Court declare that the First Respondent contravened section 716(5) of the Act by failing to comply with a Compliance Notice;
(b)that the First Respondent take the steps that were required by the Compliance Notice within 28 days of any Order by the Court, including paying to Mr Samson Ballard any outstanding amounts it may be required to pay him, as well as interest on those amounts;
(c)that the proceeding be adjourned to a further hearing in respect of the Ombudsman’s claim for penalties to be imposed on the First Respondent and the Second Respondent;
(d)procedural Orders programming the matter for a hearing on penalty.
The Application was supported by an affidavit of Barney Adams, Solicitor for the Ombudsman, dated 20 July 2022.
On 22 July 2022, an affidavit was filed by Amani Fatileh, attesting to service of the Application in a Proceeding on the Respondents.
On 25 July 2022, the matter returned before me. The Ombudsman appeared as did the Second Respondent. At the hearing, I was informed that the First Respondent remained registered. I was also informed that the Second Respondent was an un-discharged bankrupt. I queried among other things, whether the proceeding could continue in circumstances where the Second Respondent was an un-discharged bankrupt, and where he had purported to sign a Statement of Agreed Facts which would ultimately subject him to a pecuniary penalty. As a result of the query, the matter was adjourned so that the Ombudsman could consider matters further.
On 4 August 2022, the Ombudsman filed an Outline of Submissions that sought to address the matters I had raised on 25 July 2022. The Ombudsman also filed a Minute of Proposed Orders sought. That document makes clear that, among other things, in addition to the relief set out in the Application in a Proceeding, the Ombudsman also seeks a Declaration against the Second Respondent based upon admissions contained within the Statement of Agreed Facts.
ISSUES
The following issues are required to be determined:
(a)Whether the substantive Application and Statement of Claim, as well as the Application in a Proceeding and supporting documentation, have been properly served;
(b)Whether the Court can proceed to make the Declarations sought in this case given the Second Respondent is an undischarged bankrupt;
(c)Whether default judgment may be entered against the First Respondent and consequent upon that, whether a Declaration of contravention should be issued against the First Respondent;
(d)Whether a Declaration of contravention should be made in respect of the Second Respondent.
SERVICE
I am satisfied on the basis of the affidavits of Mr Holland that the Initiating Application and the Statement of Claim were served on the Respondents.
I am satisfied on the basis of the affidavit of Ms Fatileh that the Application in a Proceeding and the supporting affidavit of Mr Adams has been served on each of the Respondents. Clearly the Second Respondent is aware of the proceeding and what is being sought against him, having attended Court on the last two occasions.
IS THE COURT ABLE TO MAKE THE DECLARATIONS SOUGHT?
The sole appointed director of the First Respondent is the Second Respondent. The shareholders of the First Respondent are the Second Respondent and Ms Mendis, who the Court understands to be the partner of the Second Respondent.
The Second Respondent is a bankrupt. He has been a bankrupt since 8 December 2021. The trustee of his bankrupt estate is Mr Joshua Taylor. The Ombudsman communicated with Mr Taylor by email on 15 February 2022. In that communication, Mr Taylor indicated among other things that:
(a)his understanding is that the First Respondent was no longer trading;
(b)his understanding that lack of assets or funds is the reason why a liquidator has not been appointed to the First Respondent;
(c)he is not aware of any future director being appointed to the First Respondent;
(d)that he did not have a formal interest in the proceedings, however requested to be updated in respect of any final Orders made.
The Second Respondent’s bankruptcy means that he is not able to continue to be a director of the First Respondent: see section 206B of the Corporations Act 2001 (Cth) which provides as follows:
206B Automatic disqualification—convictions, bankruptcy and foreign court orders etc.
(3)A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.
No other director has been appointed to the First Respondent. The evidence before the Court is that the First Respondent remains registered.
The question that arises from these facts is whether the present proceedings may be continued against each of the Respondents.
Sections 471B and 500(2) of the Corporations Act 2001 (Cth) relevantly provide as follows:
471B Stay of proceedings and suspension of enforcement process
While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:
(a)a proceeding in a court against the company or in relation to property of the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
500 Execution and civil proceedings
(2)After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
These sections do not have application in the proceeding before me. The First Respondent remains in operation. It is not subject to winding up.
It is then necessary to consider the Bankruptcy Act 1966 (Cth). The following sections of the Bankruptcy Act 1966 (Cth) warrant consideration.
Section 58(3) of the Bankruptcy Act 1966 (Cth) provides as follows:
58 Vesting of property upon bankruptcy—general rule
(3)Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a)to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
Section 60(1) of the Bankruptcy Act 1966 (Cth) provides as follows:
60 Stay of legal proceedings
(1)The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
(a)discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b)stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non‑payment of a provable debt or of a pecuniary penalty payable in consequence of the non‑payment of a provable debt; or
(ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non‑payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.
‘Provable debt’ is defined in section 82 of the Bankruptcy Act 1966 (Cth). Relevantly, subsections (1) and (3) provide as follows:
82 Debts provable in bankruptcy
(1)Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.
(3)Penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy.
The Application presently before the Court is an Application for a default judgment against the First Respondent, and for Declarations as against the First and Second Respondent. The provisions above do not prevent the present Applications from being pursued against either Respondent. As matters presently stand, these are not proceedings in respect of a provable debt. The Ombudsman is not a creditor.
In reaching this conclusion, I am conscious that it is unusual that the First Respondent could be the subject of continued proceedings against it when it is not possessed of a controlling mind, but that is the outcome that legislation appears to permit.
While the Applications presently before the Court would not impose any financial penalty on the Respondents, what is ultimately anticipated, should the Ombudsman succeed in the present Application, is that the Court would conduct a hearing in relation to the imposition of pecuniary penalties against the First Respondent and Second Respondent. The question that then arises is whether a pecuniary penalty would be regarded as a ‘provable debt’. The answer to that question is clearly ‘no’, given the terms of section 82 of the Bankruptcy Act 1966 (Cth) set out above. See also, the comments of Heery J in Mathers v Commonwealth of Australia (2004) 134 FCR 135 where Heery J confirmed that subsection 82(3) was not confined to criminal fines or penalties
The position then is that there is not any impediment to the Applications presently before the Court being determined.
There is then the separate question of whether the Second Respondent is able to enter into the Statement of Agreed Facts. I have considered section 269 of the Bankruptcy Act 1966 (Cth) which is in the following terms:
269 Bankrupt or debtor who is a party to a debt agreement obtaining credit etc. without disclosing bankruptcy or debt agreement
(1)An undischarged bankrupt or a debtor who is a party to a debt agreement shall not:
(a)either alone or jointly with another person, obtain credit to the extent of $3,000 or more from a person without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires);
(aa)either alone or jointly with another person, obtain goods or services from a person:
(i) by giving a bill of exchange or cheque drawn, or a promissory note made, by him or her either alone or jointly with another person, being a bill, cheque or note under which the sum payable is $3,000 or more; or
(ii)by giving 2 or more such instruments under which the sums payable amount in the aggregate to $3,000 or more;
without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires);
(ab)either alone or jointly with another person, enter into a hire‑purchase agreement with a person, or enter into a contract or agreement for the leasing or hiring of any goods from a person, being a hire‑purchase agreement, contract or agreement under which the amounts payable to that person amount in the aggregate to $3,000 or more, without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires);
(ac)either alone or jointly with another person, obtain goods or services from a person by promising to pay that person or another person an amount of, or amounts aggregating, $3,000 or more without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires);
(ad)either alone or jointly with another person, obtain an amount of, or amounts aggregating, $3,000 or more from a person by promising to supply goods to, or render services for, that person or another person without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); or
(b)carry on business under an assumed name, in the name of another person or, either alone or in partnership, under a firm name without disclosing to every person with whom he or she or, if he or she is carrying on business in partnership under a firm name, the partnership deals, his or her true name and the fact that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires).
(2)This section has effect subject to section 304A.
Penalty:Imprisonment for 3 years.
It can be immediately seen from the above that this section in its terms does not limit the ability of the Second Respondent to enter into the Statement of Agreed Facts. Its operation is limited to the circumstances set out within the section.
I observe that the conclusions I have reached above in respect of whether the proceedings are capable of being continued are consistent with prior decisions of this Court: See Cotis v MacPherson (2007) 169 IR 30; Fair Work Ombudsman v Garfield Berry Farm Pty Ltd and Anor [2011] FMCA 885; Fair Work Ombudsman v Baal Gammon Copper Pty Ltd [2021] FCCA 348.
In these circumstances, I find that there is not any impediment to the Court proceeding to deal with the present Applications in respect of the First Respondent or the Second Respondent. There is also nothing which restricts the Second Respondent from entering into the Statement of Agreed Facts.
WHETHER DEFAULT JUDGMENT OUGHT TO BE ENTERED AGAINST THE FIRST RESPONDENT
Default judgment is sought to be entered against the First Respondent under rule 13.05(2)(d) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules (‘Rules’). The Ombudsman alleges the following defaults by the First Respondent:
(a)failure to file a Notice of Address for Service as required by Rule 6.01 of the Rules;
(b)failure to file a Response as required by Rule 4.03 of the Rules;
(c)failure to file a Defence as required by Rule 4.04 (3) of the Rules;
(d)failure to comply with Order 2 and 3 of my Orders of 28 February 2022; and
(e)otherwise failing to defend the proceedings with due diligence.
I am satisfied on the basis of the material before me that the failures identified above have occurred. The First Respondent has been properly served. It has not satisfied the Ombudsman’s claim. It has failed to defend the proceedings with due diligence.
The claim against the First Respondent is set out in the Statement of Claim. The claims relate to a failure to comply with a Compliance Notice issued under section 716 of the Act. In the Statement of Claim, it is alleged, among other things, that:
(a)the Ombudsman is a statutory appointee capable of commencing these proceedings, and that Inspector Biedka was at all relevant times a Fair Work Inspector appointed under section 700 of the Act;
(b)the First Respondent was a company incorporated under the Corporations Act 2001 (Cth), a national system employer under the Act, the trustee for the Benny842 Family Trust and operator of a burger restaurant trading as ‘Burger Boss’ in Cranbourne, Victoria;
(c)the Second Respondent was the director and company secretary of the First Respondent, responsible for its overall management and control, and responsible for ensuring compliance with its legal obligations under the Act;
(d)Inspector Biedka commenced an investigation into the First Respondent’s compliance with Commonwealth workplace laws in or around October 2020 in respect of the employment of Mr Samson Ballard (‘Mr Ballard’);
(e)Inspector Biedka formed a reasonable belief that at all relevant times between 7 June 2022 and 16 October 2020:
(i)Mr Ballard was an employee of the First Respondent;
(ii)that the Restaurant Industry Award 2020 (‘Award’) covered and applied to Mr Ballard;
(iii)that Mr Ballard was employed as a full-time Food and Beverage Attendant Grade 2, under Schedule B to the Award;
(iv)that the remuneration paid to Mr Ballard was insufficient to satisfy a range of entitlements under the Award, including minimum wages, overtime rates of pay and penalty rates;
(v)that on termination of Mr Ballard’s employment, he was not paid for accrued but untaken annual leave;
(vi)as a result of the above, the First Respondent contravened clauses 18.1, 23.4 and 24.2 of the Award as well as the National Employment Standards.
(f)Consequent upon the above, Inspector Biedka issued a Compliance Notice to the First Respondent under section 716(2) of the Act. The Compliance Notice required the First Respondent to take a range of actions to remedy the direct effects of its contraventions of the Award;
(g)The Compliance Notice satisfied the requirements of section 716(3) of the Act;
(h)The First Respondent failed to comply with the Compliance Notice thereby contravening section 716(5) of the Act.
In the Statement of Claim, it is pleaded that the Second Respondent was liable as an accessory under section 550 of the Act, to the First Respondent’s contravention of section 716(5) of the Act because he had actual knowledge of the Compliance Notice, and was an intentional participant in the failure to comply.
Section 717 of the Act sets out a mechanism by which respondents to a Compliance Notice can seek to have the Notice reviewed. There is no evidence before me of either Respondent taking any step in the proceeding to review the notice.
I have reviewed the Orders sought against the First Respondent. Those Orders if made require, among other things, the First Respondent to take the steps set out in the Compliance Notice which includes calculating the amounts of the underpayments to Mr Ballard, and making those payments to him, and providing evidence of such payments to the Ombudsman. The Ombudsman also seeks procedural Orders that the matter be adjourned to a date to be fixed for penalty hearing, as well as making provision for the filing of submissions and material.
In an application for default judgement, the Court needs to be satisfied on the face of the Statement of Claim that there is a claim for relief and that the Court has jurisdiction to grant the relief: Arthur v Vaupotic Investments [2005] FCA 433.
On the question of jurisdiction, the Court has the power under section 545 of the Act to make any Order it considers appropriate in relation to a contravention of a civil remedy provision in the Act. The Court also has the power to make Declarations pursuant to section 141 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), to award interest and to impose pecuniary penalties.
I have reviewed the Compliance Notice. I am satisfied that it meets the requirements set out in section 716(3) of the Act. Further, there is no evidence before me that indicates that the claim brought by the Ombudsman has been satisfied in this matter.
Having regard to the matters above, I am satisfied that it is appropriate for me to enter default judgment against the First Respondent on the basis of the defaults I have outlined above. I am satisfied that there is a claim for relief that remains unsatisfied, and that the Court has jurisdiction to grant the relief. Accordingly, I propose to make Orders that default judgement be entered against the First Respondent, that the First Respondent is declared to have contravened section 716(5) of the Act, that the First Respondent take the steps that were required by the Compliance Notice within 28 days of the date of this Order, and that interest be paid by the First Respondent on the amounts outstanding.
SHOULD A DECLARATION BE MADE AGAINST THE SECOND RESPONDENT?
The Second Respondent has entered into the Statement of Agreed Facts with the Ombudsman. The Statement of Agreed Facts sets out the factual basis upon which the First Respondent failed to comply with the Compliance Notice. At paragraph [6] of the Statement of Agreed Facts, the Second Respondent admits, among other things, that he was the sole director and company secretary of the First Respondent, was responsible for its overall operation, management and control, and was responsible for ensuring it met its legal obligations. At paragraphs [17]-[19], the Second Respondent admits, among other things, that he had actual knowledge of the Compliance Notice, the First Respondent’s failure to comply with the Compliance Notice and that he was an intentional participant in these failures. By reason of those matters, the Second Respondent admits that he was involved in the First Respondent’s failure to comply with the Compliance Notice, and is thereby taken to have committed a contravention of section 716(5) of the Act.
In the circumstances above, I am satisfied that the Second Respondent was an accessory to the First Respondent’s contravention of section 716(5) of the Act. As a result, the Second Respondent is taken to have committed a contravention of section 716(5) of the Act. The Court will issue a Declaration that the Second Respondent was involved, within the meaning of section 550(2) of the Act in the contravention by the First Respondent of section 716(5) of the Act.
CONCLUSION
The Court will issue the Orders and Declarations in the form indicated. The Court will also make Orders programming the matter for a hearing on penalties in the future.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 25 August 2022
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