Fair Work Ombudsman v Centennial Wealth Pty Ltd
[2023] FedCFamC2G 439
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Centennial Wealth Pty Ltd [2023] FedCFamC2G 439
File number(s): SYG 259 of 2022 Judgment of: JUDGE D HUMPHREYS Date of judgment: 15 May 2023 Catchwords: FAIR WORK – Fair Work Ombudsman – contravention of 716(5) of the Fair Work Act2009 (Cth) “(the Act)”– Contravention of 550 of the Fair Work Act – multiple contraventions of the Act – whether Director accessorily liable – liability determined Legislation: Fair Work Act 2009 (Cth) ss 92, 117, 550, 716,
Corporations Act 2001 (Cth) s 471
Federal Circuit and Family Court of Australia (division 2) General Federal Law Rules 2021 (Cth) r 13.06 (1)(e)
Banking, Finance and Insurance Award 2020 cl 16.1, 17.1,
Cases cited: Australian Securities and Investments Commission v Albarran (2008) 169 FCR 448
Australian Securities & Investments Commission v Maxwell (2006) 59 ACSR 373
Bank of Valletta PLC v National Crime Authority (1999) 164 ALR 45
Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134
Fair Work Ombudsman v A to Z Catering Solution Pty Limited & Anor (No 2) [2018] FCCA 2299
Fair Work Ombudsman v Bikaner India (WA) Pty Ltd [2023] FedCFamC2G 20
Fair Work Ombudsman v Blue Impression Pty Ltd [2017] FCCA 810
Fair Work Ombudsman v C & H Entertainment Pty Limited (2021) FCCA 1216
Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamCG2 934
Fair Work Ombudsman v Grouped Property Services Pty Ltd (2016) 152 ALD 209
Fair Work Ombudsman v Devine Marine Pty Limited (2014) FCA 1365
Taikato v The Queen (1986) 186 CLR 454
Division: Division 2 General Federal Law Number of paragraphs: 34 Date of last submission/s: 15 May 2023 Date of hearing: 15 May 2023 Place: Sydney Counsel for the Applicant: Mr Whitbread instructed by Ms Quigley Counsel for the Respondents: No appearance on behalf of the Respondent ORDERS
SYG 259 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: CENTENNIAL WEALTH PTY LTD (ACN 606 400 873)
First Respondent
NAVENKA LOVRICH
Second Respondent
order made by:
JUDGE D HUMPHREYS
DATE OF ORDER:
15 MAY 2023
THE COURT ORDERS THAT:
1.The matter proceed in the absence of the Respondents pursuant to r 13.06(1) (e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2.A declaration that the First Respondent contravened section 716(5) of the FW Act by failing to comply with the Compliance Notice issued on 26 August 2021;
3.A declaration that the Second Respondent was involved, within the meaning of section 550 of the FW Act, in the contravention by the First Respondent of section 716(5) of the FW Act referred to at paragraph 1 above.
4.The Applicant file and serve evidence and submissions relating to penalty within four weeks of the date of these orders.
5.The Respondents file and serve evidence and submissions relating to penalty within eight weeks of the date of these orders.
6.The Applicant file and serve any reply submissions and/or reply evidence within 10 weeks of the date of these orders.
7.The matter is listed for a Hearing at 9:30am on 21 July 2023, to determine the question of appropriate penalties, or, the question of appropriate penalties be determined on the papers on the basis of the materials filed by the parties.
8.There be liberty to apply on 3 days’ notice.
THE COURT NOTES THAT:
A.Should the Respondent fail to serve any submissions or evidence, the Court is open to considering the matter on the papers.
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
(As Revised from Transcript)JUDGE D HUMPHREYS
INTRODUCTION
The Fair Work Ombudsman has commenced proceedings in this Court seeking declarations and orders against the second respondent, Ms Nevenka Lovrich, alleging her involvement as an accessory under s 550 of the Fair Work Act 2009 (Cth), in contravention of s 715(6) of the Act for the first respondent’s failure to comply with a Compliance Notice issued under s 716(2) of the Act on 26 August 2021.
It is to be noted that the first respondent, Centennial Wealth Pty Ltd, is being wound up due to insolvency and is currently in external administration. That insolvency has not yet crystallised, in that, it is still ongoing.
The Fair Work Ombudsman has not sought leave to proceed against the first respondent under s 471B of the Corporations Act 2001 (Cth).
Ms Lovrich has been self-represented. There is various material before the Court, including three Affidavits filed by Ms Lovrich on 10 June 2022, 15 August 2022, and another one in August 2022. Pursuant to Court orders of 16 December 2022, Ms Lovrich’s Affidavit of 15 August 2022 has been treated by the Court as her defence. No other Affidavit material has been filed by Ms Lovrich other than that set out above.
The matter was called at 10:00 am on 15 May 2023. Ms Lovrich did not appear. A phone call was made on loud speaker, from the Court, by Counsel for the Fair Work Department’s instructing solicitor, Ms Quigley. That phone call was made to Ms Lovrich’s last-known phone number and there was no answer. The Court is satisfied, based on the Affidavit of Ms Quigley, sworn 10 May 2023 and provided to the Court as part of the Court book, that Ms Lovrich was aware of the time, date and place of the hearing, and that she failed to appear.
On the application of the Fair Work Ombudsman, the Court will deal with this matter pursuant to r 13.06 of the Federal Circuit and Family Court of Australia (division 2) General Federal Law Rules 2021 (Cth), and in particular rule 13.06(1)(e), which allows the Court to proceed generally with the hearing, or in relation to any claim for relief in the proceeding where the party is absent.
THE FAIR WORK OMBUDSMAN EVIDENCE
Based on the three Affidavits of Ms Quigley, that have been received into evidence, and an Affidavit of Fair Work Inspector Barker, the Court is satisfied as to the following matters:
•In around March 2021, the Fair Work Ombudsman commenced an investigation into the first respondent after receiving a request for assistance from Ms Anna Krjatian, a former employer of the first respondent.
•By 26 August 2021, following an investigation by Fair Work Inspector Barker, the Fair Work Ombudsman formed a reasonable belief the first respondent had engaged in a number of contraventions of the relevant Award and the Act as follows:
a.Contravention of clauses 16.1 and 17.1 of the Banking, Finance and Insurance Award 2020 (“the Award”), by failing to pay Ms Krjatian the applicable annualised salary in respect of work performed from the period 7 March 2020 to 30 March 2020;
b.Contravention of s 117(2) of the Act by failing to provide the minimum notice period or make payment in lieu of notice to Ms Krjatian, as required by the Act when the first respondent terminated her employment on 30 March 2020.
c.A contravention of s 92 of the Act by failing to pay Ms Krjatian the amount that would have been payable had she taken her accrued annual leave as required by the Act.
The Court notes at this point, that it was Ms Lovrich who signed the letter of termination in relation to Ms Krjatian from the first respondent. On 26 August 2021, a Compliance Notice was issued to the first respondent which required the first respondent to calculate and rectify the above underpayments by 23 September 2021, and to produce to the Fair Work Ombudsman reasonable evidence of compliance with the Notice by 30 September 2021.
The Court is satisfied, based on the material contained within the various Affidavits that the Compliance Notice was validly served on the first respondent. On 15 September 2021, Ms Lovrich responded in an email advising, inter alia, that the first respondent’s offices were closed until Covid restrictions eased; second, she was “unable to assist, as previously mentioned we have no funds to spare until such time as we’re able to acquire funds, and only then can we distribute accordingly”. Third, “please let me know what is owing so we can arrange a payment plan to your client and put this matter” – and the Court assumes it is “to” – in the email it was ti – “a sensible, viable close”.
The Court rejects the claim made by Ms Lovrich in her material that she did not receive any documents in relation to the matter until she was served the documents commencing at the proceeding of the Court.
The Court proposes to receive into evidence the three Affidavits of Ms Lovrich, and they will be exhibits 6, 7 and 8. The above email was responded to by Fair Work Inspector Barker, who noted that the amounts owing, had been included as an appendix to the Compliance Notice.
On 21 September 2021, Ms Lovrich advised Fair Work Inspector Barker that:
a. “As soon as my accounts from the HR Department return to the office, we will reconcile with our books. As you’d be aware of the rules, I cannot ask my staff to work during stand down, and/or go to the office”.
b. “For now, it is difficult to make full payment as the office is closed due to Covid‑19 lockdowns and restrictions”.
c. “As soon as I return to work, we’ll contact your office and try and sort out this matter”.
The Court is satisfied that the first respondent did not take specified action as required in the Compliance Notice by 23 February 2021, or provide reasonable evidence to the Fair Work Ombudsman of compliance, by producing a schedule setting out the calculations and evidence that the required amounts had been paid by 30 September 2021.
The Court notes that in a subsequent email sent on 12 October 2021, Ms Lovrich committed to make a payment by 22 October 2021 at the latest. That payment was not made till the day after. Accordingly, the Court is reasonably satisfied that the first respondent failed to comply with the Compliance Notice issued to it, by failing to rectify the underpayments to Ms Krjatian, and failing to provide evidence of rectification payments to the Fair Work Ombudsman by the required dates.
DOES THE DEFENCE OF REASONABLE EXCUSE APPLY?
Ms Lovrich has indirectly raised the excuse or the defence of reasonable excuse.
Section 716 (6) of the Act, provides the defence of reasonable excuse in relation to failing to comply with a Compliance Notice. In Ms Lovrich’s Affidavit of 15 August 2022, at paragraphs 16 to 22, she proffers the following explanations for failing to comply:
a. the Fair Work Ombudsman had requested documents; she advised she had no access to the documents at the time as they were in the office and she could not leave her home due to a Covid lockdown; some documents were also in storage;
b. in November 2021 Ms Lovrich commenced paying $400.00 per fortnight and made five payments totally $2000.00.
However, these payments ceased as she claimed the business had no funds. Ms Lovrich claimed that she was unsure as to what amount was still outstanding. The Court rejects that, and it was clear from the Compliance Notice, what was required.
c. After Ms Lovrich was able to return to the office to sort out the paperwork, she claimed she did not receive any documents from the Fair Work Ombudsman regarding the Compliance Notice in July 2021 until she was informed of the Court hearing.
There were repeated attempts to contact her and find out what was going on. The Court rejects that claim.
d. Ms Lovrich states that she proffered a payment plan, however, the Fair Work Ombudsman rejected that plan.
The delay in the Fair Work Ombudsman acting on the claim, resulted in prejudice to Ms Lovrich. Had action been taken in a timely manner, the issue could have been resolved during the time that Ms Lovrich’s husband, who was the Principal of the business, was alive. Sadly he passed away.
e. Ms Lovrich claimed that the first respondent does not have the funds to pay the full amount owing. At the time of Ms Krjatian’s employment, the Principal of the business was Ms Lovrich’s husband, as she was not a Director of the company, although she was an employee of it, and, as noted above, she in fact signed the termination notice. Ms Lovrich took over as sole Director of the company following the death of her husband. Ms Lovrich claimed that she was not in charge of payroll or staff, and did not have any access to bank accounts.
The Court finds that difficult to believe, based on the totality of the evidence, in terms of Ms Lovrich’s role within the business.
f. Ms Lovrich claims that the amount calculated by the Fair Work Ombudsman is wrong, and that it should be recalculated to an amount net rather than gross.
The Court rejects that claim. The amount owing to Ms Krjatian, includes any tax payable that, is gross. Further, Ms Lovrich claims that there were no funds available from either the company or herself to rectify the underpayment.
The Fair Work Ombudsman submitted that these matters should be rejected for the following reasons:
a. Despite the Compliance Notice, the subject of these proceedings being served on 26 August 2021, the first and second respondents were aware of the issue, and was the subject of the Compliance Notice as a result of previous Compliance Notices issued on 8 April 2021 and 15 April 2021, noting that these were later withdrawn.
b. It was submitted that neither the first nor the second respondent took steps to access the relevant records in the months following these earlier notices, and prior to the service of the Compliance Notice relied upon in this matter. The Compliance Notice relied upon contained an appendix listing the amounts owed to Ms Krjatian under the Compliance Notice;
c. It is unclear why the second respondent had to inspect records in order to verify the amounts alleged as owing under the Compliance Notice;
d. Even if the records did need to be inspected, the second respondent has not provided any evidence to establish the records were not available electronically or remotely, and were only in hard copy at some location that she was unable to access.
e. In any event, even if there were such hard copy records that the second respondent needed to access, the Public Health Orders in place between 26 August 2021 and 21 September 2021 would have allowed the second respondent to travel to the company’s offices for the purposes of fulfilling legal obligations;
f. Even after the restrictions ceased in October 2021, the second respondent did not take any steps to attempt to comply with the Compliance Notice in full. Partial payments were made from November to December 2021, however amounts still remain outstanding under the Compliance Notice. No evidence has been provided that she calculated the underpayment owing as required by the notice until the proceedings were commenced.
As to the claim that the first respondent had limited funds, or no funds to pay, it was submitted that this is not a matter that establishes a reasonable excuse for noncompliance for the following reasons:
a. Alleged financial incapacity is not of itself generally a reasonable excuse for noncompliance: (see; Fair Work Ombudsman v Devine Marine Pty Limited (2014) FCA 1365 (“Devine”) at [165] and Fair Work Ombudsman v C & H Entertainment Pty Limited (2021) FCCA 1216 at [20] to [21].
b. Paying the employee the moneys owed was not the only step required in the Compliance Notice; the first respondent was also required to take steps to calculate the amounts owed and provide a schedule with that information;
c. Following the period for compliance in late November to December ’21, without advising the Fair Work office at the time, five $400.00 payments totalling $2000.00 were made to Ms Krjatian, which in event did not rectify the amounts owing under the Compliance Notice.
d. Ms Lovrich by that stage was the sole director of the first respondent, and she did not take steps to move the company towards liquidation, and certainly not prior to the time for compliance with the notice. It was the Australian Tax Office which placed the first respondent into external administration more than a year after service of the Compliance Notice on 7 September 2022.
e. On 11 May 2021, Ms Lovrich had a conversation with Fair Work Inspector Barker - see Barker affidavit at paragraph 17 – that she had made a decision that the first respondent was not going into liquidation at that time. At that time she continued to have three ongoing employees. She stated the first respondent had no creditors. However, inconsistent with this last statement, she also stated that the company owed money to the ATO and was seeking to come to an arrangement with the ATO to avoid interest and penalties. She further acknowledged that Ms Krjatian was a creditor, and she had received the April Compliance Notices in respect of the moneys owed to Ms Krjatian.
Given the above, it was submitted the matters proffered by Ms Lovrich did not amount to a reasonable excuse. In the matter of Devine quoted above, White J had the following to say about what constitutes a reasonable defence, at [154] and [155]:
[154] Many of the authorities concerning the concept of “reasonable excuse” as a ground of exculpation were reviewed by Hely J in Bank of the Valletta PLC v National Crime Authority [1999] FCA 791; (1999) 164 ALR 45 at [36]-[47]. Hely J referred to the observation of the plurality in Taikato v The Queen (1986) 186 CLR 454 at 464 that decisions on other statutes provide no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of “reasonable excuse” is an exception. Hely J also referred to the observation of Dawson J in Taikato at 470:
“A reasonable excuse is no more or less than an excuse which would be accepted by a reasonable person. It’s different from a lawful excuse.”
[155] In Australian Securities and Investments Commission v Albarran (2008) 169 FCR 448, Jacobsen J summarised three propositions emerging from the Bank of Valletta:
[81] First the question of what constitutes a reasonable excuse is to be determined from the terms and structure of the particular statute and circumstances of each particular case; Bank of Valletta at [39] and [47];
[82] Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify noncompliance. But it is necessary to bear in mind the importance of the particular statutory description to the overall statutory regime. That is Valletta at [42].
[83] Third, the question of what constitutes a reasonable excuse involves an objective determination in all of the circumstances. These include the adverse consequences to an individual of being compelled to answer, and adverse consequences to an inquiry if the questions are not answered. That is Valletta at [44].
In terms of incapacity to pay, White J in Devine had the following to say at [165]:
[165] The expense and inconvenience (and perhaps oppression) in complying with a notice to produce, will not usually provide a “reasonable excuse” for non-compliance with the notice. It is be expected that compliance will usually occasion a respondent some inconvenience and expense but, unless the circumstances are out of the ordinary, this is to be taken to be a necessary incidence of compliance, and will not relieve the respondent from complying with the notice. As Bowen CJ, as he was then, observed in Riley Mackay Pty Limited v Bannerman (1977) 31 FLR 129 at 136, in an analogous context:
It is not…a good ground of objection to a notice under section 155 that it is burdensome or oppressive. It is clear that when a notice is given the answering of it may involve the recipient in considerable work and expense. This in itself may constitute a kind of penalty, whether or not there is ultimately found to have been a contravention. The legislation assumes the public interest necessitates this.
White J in Devine goes on to say that:
Nevertheless, the wide range of documents required to be produced, together with other factors, may be another bearing upon whether or not a recipient does have a reasonable excuse for not complying with the notice, or at least within the time specified by the notice.
On behalf of the Fair Work Ombudsman it was submitted that if the first respondent had difficulty paying its debts, that action should have been taken promptly to place the company into administration or for the company to be appointed a liquidator and wound up. The Court accepts this submission. As a director of the company, Ms Lovrich had a duty to ensure that the company was able to pay its debts as and when they fell due. As to the other matters put forward by Ms Lovrich, the Court does not accept that these provide a reasonable excuse. A part‑payment of the amounts owing is not a reasonable excuse.
The Compliance Notice also required the calculation of entitlements. This has not been done at any point of time. The fact that the Fair Work Ombudsman rejected a payment schedule does not provide a reasonable excuse. While the Court has some sympathy for Ms Lovrich following the death of her husband and the requirement for her to take over the business, by accepting appointment as the Director she accepted the liabilities that go with that position, including the responsibilities to rectify, as required, any past issues, including the underpayments to Ms Krjatian.
It may well be that the circumstances relating to the death of her husband, and what followed, are a matter of mitigation in relation to penalty, but they are not matters the Court will take into account in relation to the issue of liability.
Accordingly, the Court is satisfied that contraventions in relation to the first respondent are made out, and that no reasonable excuse for failing to comply with the issues or the matters contained within the Compliance Notice has been provided.
ACCESSORIAL LIABILITY OF MS LOVRICH
The Court now turns to consider the accessorial liability of Ms Lovrich. Having determined that the first respondent contravened s 716(5) of the Act, the Court must next determine if it is satisfied Ms Lovrich breached s 716(5) of the Act as an accessory. In Fair Work Ombudsman v Bikaner India (WA) Pty Ltd [2023] FedCFamC2G 20, the Court had the following to say in relation to accessorial liability:
[134] Accessorial liability is covered by s 550 of the Act. That section reads as follows:
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
[135] On behalf of Mr Kumar it was submitted that the requisite knowledge required is actual rather than constructive knowledge. Reliance was placed on Yorke v Lucas (1985) 158 CLR 661 at 669-670. The mere fact that a person was a director of a company found to have engaged in a contravention is not sufficient to establish knowing involvement: (see; Australian Securities & Investments Commission v Maxwell (2006) 59 ACSR 373 at [92]).
[136] There is some difference in the authorities as to what is required to prove knowledge. In Fair Work Ombudsman v Blue Impression Pty Ltd [2017] FCCA 810 at [25] (“Blue Impression”) Judge O’Sullivan held that:
The authorities established that, in order for a person have accessorial liability, he or she must be a knowing participant or, in other words:
a.have knowledge of the essential facts constituting the contravention;
b.must be knowingly concerned in the contravention;
c.must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient under s550(2)(c) of the FW Act in cases of wilful blindness; and
d.need not know the matters in question constituted a contravention.
[137] In relation to the requirement of knowledge, in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342 at [400] per White J, the following was said:
Proof that a person had actual knowledge of each of the essential elements making up the contravention may be derived from direct evidence but more commonly will be a matter of inference from all the circumstances found to be proved. In some cases, actual knowledge can be inferred from the combination of a defendant’s knowledge of suspicious circumstances and the decision by the defendant not to make inquiries to remove those suspicions. The High Court referred to knowledge in these circumstances in Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 220:
[A] combination of suspicious circumstances and failure to make inquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter. In a case where a jury is invited to draw such an inference, a failure to make inquiry may sometimes, as a matter of lawyer’s shorthand, be referred to as “wilful blindness”. Where that expression is used, care should be taken to ensure that a jury is not distracted by it from a consideration of the matter in issue as a matter of fact to be proved beyond reasonable doubt.
[138] In the Court’s view, in an underpayment case, the better view is that it is not necessary that the accessory knew of the existence of the applicable Award or what its terms were or that what was being paid was below Award rates, knowledge of what was in fact being paid is sufficient: (see; Fair Work Ombudsman v Grouped Property Services Pty Ltd (2016) 152 ALD 209 at [1019] (“Grouped”); Australian Building and Construction Commissioner v Parker [2017] FCA 564 at [128] (“Parker”)).
[139] In Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamCG2 934 at [90] (“Chatime”), Judge Mansousaridis had the following to say as to knowledge (citations omitted):
Mr Zhao submits that the view expressed by Katzmann J in Grouped Property Services is obiter, whereas in Potter, Cowdroy J relied on the view that it was necessary to prove knowledge of an award before a person could be held to be involved in a contravention of the award; and, for that reason, this Court is bound to follow Potter.[151] On a strict application of the principles of precedent, Mr Zhao is correct.
[140] The above should be compared with what His Honour said in Fair Work Ombudsman v A to Z Catering Solution Pty Limited & Anor (No 2) [2018] FCCA 2299 at [267]-[282].
[141] The Court’s view, is that it should not follow Chatime, but follow the line of authority that commences with Grouped and Parker as the Full Federal Court endorsed the view of Flick J in Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 at [14]. In Parker, Flick J concluded at [128]:
… Where the contravention in question is a contravention of s 50, that section does not require the person contravening a term of an enterprise agreement to have any knowledge of the existence of an enterprise agreement and does not require knowledge of the term being contravened or the fact that the act of contravention is in fact contravening conduct. If the “elements” of s 50 do not encompass those matters, it is — with respect — difficult to see why an accessory need have any greater knowledge. For a person to contravene s 50, it is sufficient to prove that conduct took place which was in fact a contravention of a term of an enterprise agreement. For the purposes of accessorial liability, all that need be proved is that the accessory had knowledge of the conduct. (emphasis added).
[142] In the Court’s view, the decision of Flick and Parker is the better alternative, it is not necessary that the accessory be shown to have knowledge of the relevant award.
[143] Even if the Court is wrong in this, it is reasonably satisfied, based on the totality of the evidence, that Mr Kumar had actual knowledge of the relevant Award, the business affairs as they pertain to the running of Bricklane at the relevant times and was knowingly involved in the relevant decisions as they relate to the pleaded breaches.
In the present case, in relation to Ms Lovrich, the Court is satisfied that although Ms Lovrich may not have been a Director at the time the breaches were committed, she was the Director of the company, and the Sole Director of the company, when she was served with the initial Compliance Notices in May 2021, and had actual knowledge of the notice relied upon in the current proceedings.
The Court is satisfied that Ms Lovrich had actual knowledge and was in a position where she had authority and responsibility as the Sole Director of the company to ensure that compliance was achieved. This view is fortified by the evidence of Fair Work Inspector Barker as to the conversation that occurred between her and Ms Lovrich in relation to any application for a payment plan on behalf of the first respondent. Based on the entirety of the evidence, the Court is satisfied that Ms Lovrich was involved in – within the meaning of section 550(2) of the Act of the first respondent in contravening s 716(5) of the Act.
CONCLUSION
Accordingly, the Court will make the declaration sought by the Fair Work office, together with appropriate orders in relation to the case management of this matter for the consideration of the imposition of appropriate penalties.
The orders of the Court are as follows;
1. The matter proceed in the absence of the Respondents pursuant to r 13.06(1) (e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2. A declaration that the First Respondent contravened section 716(5) of the FW Act by failing to comply with the Compliance Notice issued on 26 August 2021;
3. A declaration that the Second Respondent was involved, within the meaning of section 550 of the FW Act, in the contravention by the First Respondent of section 716(5) of the FW Act referred to at paragraph 1 above.
4. The Applicant file and serve evidence and submissions relating to penalty within four weeks of the date of these orders.
5. The Respondents file and serve evidence and submissions relating to penalty within eight weeks of the date of these orders.
6. The Applicant file and serve any reply submissions and/or reply evidence within 10 weeks of the date of these orders.
7. The matter is listed for a Hearing at 9:30am on 21 July 2023, to determine the question of appropriate penalties, or, the question of appropriate penalties be determined on the papers on the basis of the materials filed by the parties.
8. There be liberty to apply on 3 days’ notice.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Associate:
Dated: 25 May 2023
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