Fair Work Ombudsman v Darna Pty Ltd
[2014] FCCA 1105
•27 May 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v DARNA PTY LTD & ANOR | [2014] FCCA 1105 |
| Catchwords: INDUSTRIAL LAW – Undefended – default judgment – Second Respondent director’s refusal to engage legal representation on behalf of the First Respondent company – proceedings adjourned in respect of the Second Respondent’s liability. |
| Legislation: Fair Work Act 2009 (Cth), ss.545(1), 545(2), 716, 716(5) Federal Circuit Court Act 1999 (Cth), s.76 Federal Circuit Court Rules 2001 (Cth), rr.9.04, 13.03A(2), 13.03B, 13.03B(2)(c), 13.03C(2) |
| Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 KerryJ Investment Pty Ltd v Xiamen Fengwei Energy Technology Co Ltd [2013] FCA 361 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | DARNA PTY LTD (ACN 135 545 069) |
| Second Respondent: | YOAV OREN |
| File Number: | MLG 932 of 2013 |
| Judgment of: | Judge Hartnett |
| Hearing date: | 27 May 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 27 May 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Tracey |
| Solicitors for the Applicant: | The Office of the Fair Work Ombudsman |
| The First Respondent: | No appearance | |
| The Second Respondent: | In person | |
THE COURT DECLARES THAT:
Upon the admissions which the First Respondent is taken to have made, consequent upon default by the First Respondent pursuant to r.13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), the First Respondent contravened s.716(5) of the Fair Work Act 2009 (Cth) (‘the FW Act’) by failing to comply with a Compliance Notice dated 28 May 2013 requiring the First Respondent to pay Mr Moshe Ittah the amount of $4,222.05 (gross) by 11 June 2013.
THE COURT ORDERS THAT:
Pursuant to s.545(2) of the FW Act, the First Respondent pay Mr Ittah the amount of $4,222.05 (gross) within 14 days of the date of this Order.
Pursuant to s.547 of the FW Act, the First Respondent pay interest of $257.43 on the sum referred to in order 1 herein.
Pursuant to s.559(1) of the FW Act, in the event the First Respondent is unable to locate Mr Ittah within the time prescribed in order 1 herein, the First Respondent pay the amount due to Mr Ittah to the Commonwealth within a further seven days.
The matter is adjourned to a directions hearing on 13 August 2014 at 10am in respect of the Second Respondent’s liability.
The parties have liability to apply.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 932 of 2013
| FAIR WORK OMBUDSMAN |
Applicant
And
| DARNA PTY LTD (ACN 135 545 069) |
First Respondent
| YOAV OREN |
Second Respondent
REASONS FOR JUDGMENT
(Edited ex tempore reasons)
These proceedings commenced on 27 June 2013 when the Applicant filed an Application seeking orders as set out in the Statement of Claim filed with the Application. The grounds of the application were likewise set out in the Statement of Claim filed contemporaneously.
The respondents filed a Response on 7 January 2014 and Defence on 7 January 2014. In the currency of these proceedings, the Second Respondent sought the Court’s leave to represent the First Respondent in the proceedings, such that the First Respondent would not be represented by a lawyer. The Court heard the application of the Second Respondent and declined to exercise its discretion in favour of the Second Respondent. The application was dismissed and, thus, the First Respondent is required to be represented in these proceedings by a legal practitioner. In the intervening eight weeks and to the present time, the First Respondent has not been so represented. An Application in a Case was filed by the Applicant on 20 May 2014 seeking orders which the Court makes this day. The application was supported by an Affidavit sworn by Ms Caitlin Bailey on 20 May 2014. The Applicant provided Written Submissions supporting the application for the entering of a default judgment for the Applicant against the First Respondent.
In respect of the Second Respondent, the Court determines this day to adjourn the proceedings (as to the Second Respondent’s liability as an accessory to the First Respondent’s contravention of the Fair Work Act 2009 (Cth) (‘the FW Act’)) to a further directions hearing for a timetabling of the filing of evidence and submissions in respect of that alleged liability. That hearing will proceed prior to the listing of any subsequent penalty hearing that may be required.
These proceedings concern an alleged contravention of s.716(5) of the FW Act. The Applicant alleges that the First Respondent failed to comply with a Compliance Notice dated 28 May 2013 given to it in accordance with s.716 of the FW Act. Such notice required the First Respondent to pay Mr Moshe Ittah the amount of $4,222.05 (gross) by 11 June 2013.
Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’) enables the Court to give judgment against the respondent in a proceeding which was commenced by an application supported by a statement of claim for the relief that:-
a)the applicant appears entitled to on the statement of claim; and
b)the Court is satisfied it has the power to grant.
There is no requirement for proof by way of evidence of the Applicant’s claim.[1]
[1] Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3]; Australian Competition and Consumer Commission v Yellow Page Marketing BV(No 2) [2011] FCA 352 at [14].
The Court’s power to enter a default judgment is discretionary and the Court exercises such discretion with caution.
Rule 13.03A(2) of the Rules provides that a respondent will be in default for the purposes of r.13.03B of the Rules if the respondent:-
“…
(a) has not satisfied the applicant's claim; and
(b) fails to:
(i) give an address for service before the time for the respondent to give an address has expired; or
(ii) file a response before the time for the respondent to file a response has expired; or
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.”
Further, r.13.03C(2) of the Rules provides that if a party to a proceeding is absent from a hearing the Court may make an order of the kind mentioned in r.13.03B(2).
For the purposes of its application for default judgment, the Applicant relied upon:-
a)the Court’s earlier decision wherein it refused the application of the Second Respondent to represent the First Respondent such that the First Respondent is to be represented in the proceedings by a lawyer;
b)Rule 9.04 of the Rules which provides that except with leave of the Court, a corporation may not start or carry on a proceeding otherwise than by a lawyer.
A failure by a company that is a party to civil litigation to appoint legal representation has been considered both a failure to do an act required by the rules and a failure to prosecute the proceedings with due diligence.[2]
[2] KerryJ Investment Pty Ltd v Xiamen Fengwei Energy Technology Co Ltd [2013] FCA 361 at [24].
These proceedings commenced on 27 June 2013 and were served on the respondents on 3 July 2013. That is now a considerable period of time ago. The Affidavit of Ms Caitlin Baillie affirmed 20 May 2014 provides evidence that the Applicant’s solicitors informed the Second Respondent, on no less than eight occasions prior to January 2014, of the requirement that a company must be legally represented in order to participate in the proceedings.
Following the decision of the Court handed down on 28 March 2014 refusing the application of the Second Respondent to represent the First Respondent, the Applicant’s solicitors made numerous attempts to engage with legal representatives of the company should same be appointed by the Second Respondent. It became clear that the Second Respondent had, and has, no intention of obtaining legal representation for the First Respondent. This failure by the First Respondent to appoint a lawyer in the eight weeks following the decision of the Court on 28 March 2014 does constitute a failure to do an act required to be done by r.9.04 of the Rules.
In addition, the Court accepts submission 18 of the Applicant’s Submissions on Default Judgment filed 27 May 2014, that the First Respondent’s failure to obtain legal representation constitutes a failure to prosecute the application with due diligence. In that, the First Respondent:-
a)has no capacity to take any steps in proceedings following this Court’s earlier decision of 28 March 2014;
b)has frustrated the Applicant’s attempts to set a timetable to progress the proceedings resulting in no steps being taken since the decision of 28 March 2014; and
c)has indicated through the Second Respondent that it does not intend to take the steps that would enable it to participate in the proceedings which include an appearance by the First Respondent at the hearing this day. Rather, the Second Respondent sought to re-agitate the issue of legal representation for the First Respondent despite that being earlier determined by the Court.
The First Respondent, as at today’s date, has not satisfied the Applicant’s claim and, in particular, has not paid Mr Ittah the amount required to be paid by the Compliance Notice. It has failed to comply with r.9.04 of the Rules. It has failed to defend the proceedings with due diligence. It has demonstrated an unwillingness and inability to cooperate with the Court and the Applicant to bring the matter to trial.
The factual background to the alleged contraventions of the FW Act are set out by the Applicant in the Statement of Claim filed 27 June 2013. The Applicant, who has standing to bring these contraventions of civil remedy provisions proceedings, has made out its case for the relief claimed on the face of the Statement of Claim as required. There is a contravention by the First Respondent of s.716(5) of the Act as a result of it failure to comply with the Compliance Notice issued to it.
The default judgment application sets out the form of orders and declarations sought, and includes wording acknowledging that the declarations are made based on deemed admissions, to reflect the suggested form of words of Kiefel J in Australian Competition and Consumer Commission (ACCC) v Dataline.net.au Pty Ltd (2006) 236 ALR 665 at [59] and adopted by this Court and in Fair Work Ombudsman v Garfield Berry Farm Pty Ltd and Anor [2011] FMCA 885. The Court has a wide discretionary power to make declarations including those based on admissions to be made consequent on default.[3]
[3] Australian Competition and Consumer Commission (ACCC) v Dataline.net.au Pty Ltd (2006) 236 ALR 665 at [54] to [59]; Australian Competition and Consumer Commission v Yellow Page Marketing BV(No 2) [2011] FCA 352 at [66] to [69].
The Applicant submits there will be utility in making the declarations sought by it because they clearly identify the contravening conduct. The Applicant argues there is a public interest to be served in making the declarations sought in that they will help to educate employers about their obligations to employees and warn them of the consequences of failing to comply with statutory notices, assisting in achieving general deterrence. Making the declarations sought would also mark the Court’s disapproval of the contravening conduct. The Court accepts these submissions and accepts that there is such utility in making the declarations sought.
The Court has power to make the orders that are sought pursuant to s.545(1) of the FW Act. The Court may make any order it considers appropriate if it is satisfied that a person has contravened a civil remedy provision. The Orders which the Court makes this day are founded in such section.
Pursuant to s.76 of the Federal Circuit Court Act 1999 (Cth), the Court may order interest at such rate and for such period as the Court sees fit. The Applicant submits that it would be appropriate for interest to be applied for the period between 27 June 2013 to this day, being the date default judgment is entered. The Court accepts such submission and shall order accordingly.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Hartnett
Associate:
Date: 2 June 2014