Fair Work Ombudsman v Centennial Wealth Pty Ltd

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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…

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Details
Case
[2023] FedCFamC2G 439
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman initiated proceedings against Centennial Wealth Pty Ltd and its director, Ms Lovrich, concerning alleged contraventions of the Fair Work Act 2009 (Cth) and the Banking, Finance and Insurance Award 2020. The central dispute revolves around the first respondent's failure to comply with a Compliance Notice issued by the Fair Work Ombudsman, which mandated the rectification of underpayments to a former employee, Ms Krjatian. The court was tasked with determining whether the first respondent had contravened the Act and the Award and if the second respondent, Ms Lovrich, was involved in the contraventions.

The primary legal issues before the court were whether the first respondent had failed to comply with the Compliance Notice and whether Ms Lovrich, as the Sole Director, was involved in the contraventions. The court considered the evidence presented by the Fair Work Ombudsman, including affidavits from Ms Quigley and Fair Work Inspector Barker, which outlined the investigation into the first respondent and the issuance of the Compliance Notice. The court also examined Ms Lovrich's response to the Compliance Notice, which indicated the first respondent's inability to comply due to financial constraints.

The court found that the Compliance Notice was validly served and that the first respondent had failed to comply with it. The evidence demonstrated that Ms Lovrich, as the Sole Director, had actual knowledge of the Compliance Notice and was in a position of authority and responsibility to ensure compliance. The court concluded that Ms Lovrich was involved in the contraventions by the first respondent, as per section 550 of the Act. Consequently, the court declared that the first respondent had contravened the Compliance Notice and that Ms Lovrich was involved in the contraventions.

The court ordered that the matter proceed in the absence of the respondents and directed the filing and serving of evidence and submissions regarding penalties. The hearing to determine appropriate penalties is scheduled for 21 July 2023.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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