Fair Work Ombudsman v HML Holdings Pty Ltd
[2023] FedCFamC2G 119
Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v HML Holdings Pty Ltd [2023] FedCFamC2G 119
File number(s): SYG 1716 of 2022 Judgment of: JUDGE LAING Date of judgment: 20 February 2023 Catchwords: FAIR WORK – application for default judgment against the respondent – allegation that the respondent breached s 716(5) of the Fair Work Act 2009 (Cth) by failing to comply with a Compliance Notice – no appearance on behalf of the respondent – default judgment application granted. Legislation: Corporations Act 2001 (Cth) s 109X
Fair Work Act 2009 (Cth) ss 545, 547, 716
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 141
Federal Circuit and Family Court of Australia Rules (Division 2)(General Federal Law) Rules 2021 (Cth) rules 13.04, 13.05, 13.06
Cases cited: ACCC v Dataline [2006] FCA 1427
ACCC v Yellow Page Marketing BV (No 2) [2011] FCA 352
Fair Work Ombudsman v DB Richardson Trading [2022] FedCFamC2G 1049
United Workers’ Union v Victorian Protection Security Services [2022] FedCFamC2G 584
Division: Division 2 General Federal Law Number of paragraphs: 26 Date of hearing: 20 February 2023 Place: Sydney Solicitor for the Applicant: Ms F Parekh (Fair Work Ombudsman) appeared in person. Solicitor for the Respondent: No appearance by the Respondent. ORDERS
SYG 1716 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: HML HOLDINGS PTY LTD (ACN 655454925)
Respondent
order made by:
JUDGE LAING
DATE OF ORDER:
20 Febryary 2023
THE COURT ORDERS THAT:
1.Default judgment be entered for the applicant against the respondent pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia Rules (Division 2)(General Federal Law) Rules 2021 (FCFCOA Rules), by reason of the failure of the respondent to comply with orders 1 and 2 of Judge Laing dated 16 December 2022.
2.Upon admissions which the respondent is taken to have made, consequent upon default pursuant to r 13.04(2) of the FCFCOA Rules, the Court declares that the respondent contravened:
(a)s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the Compliance Notice issued by Fair Work Inspector Charles Ford on 13 May 2022 (Compliance Notice) in respect of Mr Anil Shakya (Employee).
3.Pursuant to s 545(1) of the FW Act, within 28 days of this Order the respondent take steps to comply with the Compliance Notice by:
(a)paying the underpayment amount of $6,076.53 to the Employee; and
(b)preparing and producing to the applicant a schedule outlining the outstanding amounts and providing proof that these amounts have been paid.
4.Pursuant to s 547(2) of the FW Act, the respondent pay interest at the applicable pre-judgment rate to the Employee on the amounts owed to the Employee in order 3(a).
5.The matter be adjourned to 29 May 2023 at 10:00am for further hearing in respect of the applicant’s claim pursuant to s 546(1) of the FW Act for civil pecuniary penalties for the contravention declared at Order 2.
6.The applicant file and serve evidence and an Outline of Submissions relating to the issue of penalties, by no later than 8 weeks prior to the date of the hearing fixed pursuant to Order 5.
7.The respondent file and serve evidence and an Outline of Submissions relating to the issue of penalties, by no later than 3 weeks prior to the date of the hearing fixed pursuant to Order 5.
8.The applicant file and serve any evidence and submissions in reply no later than 1 week prior to the date of the hearing fixed pursuant to order 5.
9.The applicant serve a copy of these orders on the respondent within 7 days by sending it by way of Express Post to the respondent’s Registered Office.
10.The parties have liberty to apply on the giving of three days’ notice to the Court.
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).
EX TEMPORE REASONS FOR JUDGMENT
(revised from transcript)JUDGE LAING
INTRODUCTION
By an application in a proceeding filed on 24 January 2023, the applicant, the Fair Work Ombudsman (FWO), seeks default judgment under r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules) against the respondent, HML Holdings Pty Ltd (HML Holdings).
The FWO contends that HML Holdings contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with a compliance notice (Compliance Notice) issued under s 716(2) of the FW Act in respect of underpayments to Mr Anil Shakya (Employee). The FWO seeks a declaration in respect of the alleged contravention, payment to the Employee with interest, as well as payment of a pecuniary penalty to the Commonwealth.
PROCEDURAL HISTORY
The originating Application and Statement of Claim were filed in this Court on 23 November 2022. According to an affidavit affirmed by Farishte Tehmasp Parekh on 14 December 2022 (First Affidavit), these document were served upon HML Holdings by express post to its Registered Office (Registered Office) as well as to the address of its Director and Secretary, Mr John Essay (Director), listed on a Company Search that is before the Court (Director’s Address). Those documents were accompanied by a letter dated 24 November 2022 setting out, inter alia, details of the first court date in this matter (Service Letter). They were additionally sent, together with the Service Letter, to the last known email addresses possessed by the FWO for HML Holdings (Email Addresses).
The affidavit further details attempts to contact the Director at a last known telephone number (Mobile Number), to no avail. It includes a report from Sharmans Investigations & Process Serving (Sharmans) indicating that difficulties were encountered in attempting to serve the Director personally at the Director’s Address. That document indicates that a text was received from the Mobile Number in response to a voice message and text, stating “Is this in regards to the annual leave payment”, with the sender adding that he “has only had the café for 2 months and the previous owners owe for the annual leave” and that he “wants [to] resolve the matter quickly as he has no time to attend court”.
The affidavit indicates that a text message was sent to the Mobile Number in advance of the first court date in this matter, reminding the recipient of the details of that listing.
There was no appearance for HML Holdings when the matter came before the Court on the first court date on 16 December 2022. On that occasion, the following orders were made:
1.The respondent appoint a legal representative and file and serve a Notice of Address for Service in accordance with r 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) by 13 January 2023.
2.The respondent is to file and serve a Defence by 13 January 2023.
3.If the respondent complies with orders 1 and 2, the applicant file and serve any reply by 27 January 2023
4.In the event that orders 1 or 2 are not complied with, the applicant may apply for default judgment. Any such application is to be filed and served by 27 January 2023.
5.The matter is listed for directions, and/or the hearing of any application for default judgment, on 20 February 2023 at 10am.
6.The applicant serve a copy of these orders on the respondent by 23 December 2022.
No Notice of Address for Service or Defence were filed in accordance with Orders 1 and 2. Nor have any such documents been filed at the date of today’s listing.
On 24 January 2023, the FWO filed an application in a proceeding seeking the following orders:
1.Default judgment be entered for the Applicant against the Respondent pursuant to Rule 13.05(2)(c) of the Federal Circuit and Family Court of Australia Rules (Division 2)(General Federal Law) Rules 2021 (FCFCOA Rules), by reason of the failure of the Respondent to comply with orders 1 and 2 of Judge Laing dated 16 December 2022.
2.Upon admissions which the Respondent is taken to have made, consequent upon default pursuant to Rule 13.04(2) of the FCFCOA Rules, the Court declares that the Respondent contravened:
(a)section 716(5) of the FW Act by failing to comply with the Compliance Notice issued by Fair Work Inspector Charles Ford on 13 May 2022 (Compliance Notice) in respect of Mr Anil Shakya (Employee).
3.Pursuant to section 545(1) of the FW Act, within 28 days of this Order the Respondent take steps to comply with the Compliance Notice by:
(a)pay the underpayment amount of $6,076.53 to the Employee and
(b) prepare and produce to the Applicant a schedule outlining the outstanding amounts and providing proof that these amounts have been paid.
4.Pursuant to section 547(2) of the FW Act, the Respondent pay interest to the Applicant at the applicable pre-judgment rate to the Employee on the amounts owed to the Employee in paragraph 3(a).
…
The FWO also sought the following orders in respect of the question of penalties:
5.The matter be adjourned to a date to be fixed for further hearing in respect of the Applicant’s claim pursuant to section 546(1) of the FW Act for civil pecuniary penalties for the contraventions declared at Order 2.
6.The Applicant file and serve evidence and an outline of submissions relating to the issue of penalties, by no later than 8 weeks prior to the date of the hearing fixed pursuant to order 5.
7.The Respondent file and serve evidence and an outline of submissions relating to the issue of penalties, by no later than 3 weeks prior to the date of the hearing fixed pursuant to order 5.
8.The Applicant file and serve any evidence and submissions in reply no later than 1 week prior to the date of the hearing fixed pursuant to order 5.
9.The Applicant serve a copy of these orders on the Respondent within 7 days by sending it by way of Express Post to the Respondent’s [Registered Office].
…
In support of the application, the FWO relied upon two further affidavits of Ms Parekh, affirmed on 24 January 2023 (Second Affidavit) and 14 February 2023 (Third Affidavit) respectively.
The Second Affidavit evidences that the Orders made on 16 December 2022 were served upon HML Holdings by express post to its Registered Office, confirmed by a Company Search conducted on 12 December 2022. They were also posted to the Director’s Address by express post and sent to the Email Addresses previously utilised. Attempts were made by Sharmans to personally serve the Director, with the last attempt being made on 9 January 2023. On 20 December 2022, Sharmans received a text from the Mobile Number stating “I’m in hospital”. Further details do not appear to have been provided.
Attempts were also made to communicate the intention to seek default judgment if the Court’s Orders were not complied with by text, phone calls and messages to the Mobile Number, and by email. A missed call was received by Ms Parekh from the Mobile Number on 11 January 2023. Attempts to reconnect were unsuccessful.
The Third Affidavit evidences that the Application in a Proceeding seeking default judgment, and supporting affidavit, were served together with a cover letter by express post to the Registered Office and the Director’s Address. Those documents were also sent to the Email Addresses and details of the listing were sent by message to the Mobile Number.
RELEVANT PRINCIPLES
Rule 13.05(2) of the FCFCOA Rules provides:
13.05 Orders on default
…
(2) If a respondent is in default, the Court may:
(a)order that a step in the proceeding be taken within the time limited in the order; or
(b)if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:
(i) the debt or liquidated damages; and
(ii) if appropriate—costs; or
(c)if the proceeding was started by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and (ii) the Court is satisfied it has power to grant; or
(d) give judgment or make any other order against the respondent; or
(e)make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.
The applicable principles were considered in United Workers' Union v Victorian Protection Security Services Pty Ltd [2022] FedCFamC2G 584 at [8] (footnotes omitted):
8.Rules 13.04 and 13.05 of the GFL Rules were adapted from, and are substantially similar to, the rules contained in O 35A of the now repealed Federal Court Rules 1979 (Cth);[2] and r 13.05(2)(c) of the GFL Rules is almost identical to O 35A r 3(2)(c). There are a number of principles that have been formulated in relation to O 35A r 3(2)(c) which apply to r 13.05 of the GFL Rules. These include the following:
(a) First r 13.05(2)(c) of the GFL Rules “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[3]
(b) Second, before the Court may make an order under r 13.05(2)(c) of the GFL Rules it must be satisfied that the document, which the applicant has filed with the application, is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[4]
(c) Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[5]
(d) Fourth, although r 13.05(2)(c) of the GFL Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought.[6]
(e) Finally, the Court retains a discretion not to make an order under r 13.05(2)(c) of the GFL Rules, even if the preconditions for making an order are satisfied.[7]
NOTIFICATION OF THE COURT’S ORDERS AND HEARINGS
I have set out earlier in some detail the steps taken by the FWO to notify HML Holdings of the originating Application, Statement of Claim and Orders made on 16 December 2022, as well as the Application for default judgment and supporting evidence.
I am satisfied that appropriate steps have been taken by the FWO in this regard. HML Holdings has been served with notice of the proceedings in accordance with r 6.08(2) of the FCFCOA Rules and s 109X(1)(a) of the Corporations Act 2001 (Cth). Significant other effects have been made by the FWO to draw the proceedings, the Orders and the Application for default judgment to the attention of HML Holdings and its Director.
THE RELEVANT DEFAULTS
HML Holdings has not, on the evidence, satisfied the FWO’s claims. HML Holdings has failed to comply with Orders 1 and 2 made on 16 December 2022, which required that it file and serve a Notice of Address for Service in accordance with the FCFCOA Rules, and file and serve a Defence, by 13 January 2023. I am therefore satisfied that HML Holdings is in default within the meaning of r 13.04(2) of the FCFCOA Rules.
I also note that HML Holdings has failed to appear at the first listing date in this matter, and at the listing scheduled for today: see r 13.06(2) of the FCFCOA Rules.
CAUSE OF ACTION PLEADED IN THE STATEMENT OF CLAIM
The Statement of Claim sets out, with reasonable clarity, the factual basis for the relief sought including the following:
B. CONTRAVENTION OF SECTION 716(5) OF THE FW ACT
Investigation
3.FWI Charles Ford (FWI Ford) is and was at all relevant times a FWI appointed by the Applicant under section 700 of the FW Act.
4.In May 2022, the Applicant commenced an investigation into the Respondent after receiving a Request for Assistance from Mr Anil Shakya (Employee).
5.As a result of this investigation, FWI Ford formed a belief, within the meaning of section 716(1) of the FW Act that:
(a) the Respondent employed the Employee as a chef from 21 June 2020 to 22 February 2022 (Employment Period);
(b) the Restaurant Industry Award 2020 (Award), a modern award under the FW Act, covered and applied to the Respondent with respect to its employment of the Employee;
(c)the Employee was:
(i)employed on a full-time basis; and
(ii)classified as a Level 4 Cook grade 3 (tradesperson) under the Award;
(d)the Employee accrued annual leave entitlements over the course of his employment;
(e)the Employee resigned and his employment ended on 22 February 2022;
(f)at the end of his Employment Period, the Employee had a total of 226.5514 hours of untaken accrued annual leave; and
(g) the Respondent did not pay the Employee for his accrued but untaken annual leave at the end of his Employment Period.
6.By reason of the matters pleaded in paragraph 5 above, FWI Ford formed a reasonable belief, within the meaning of section 716(1) of the FW Act, that the Respondent contravened section 90(2) of the FW Act, a provision of the National Employment Standards, in respect of the Employee (Contravention).
The Compliance Notice
7.On 13 May 2022, FWI Ford gave the Respondent a compliance notice in respect of the Contravention pursuant to section 716(2) of the FW Act (Compliance Notice).
Particulars
On 13 May 2022, FWI Ford sent a copy of the Compliance Notice via express post to [the Registered Office].
8.Pursuant to section 716(2) of the FW Act, the Compliance Notice required the Respondent to:
(a)take the following actions to remedy the direct effect of the Contravention (Specified Actions) by 1 July 2022:
(i)identifying the number of hours of accrued but untaken annual leave the Employee had at the end of the Employment Period;
(ii)calculating the full amount the Employee should have been paid for the hours of accrued annual leave at the end of the Employment Period;
(iii)making a payment to the Employee of the amounts referred to in paragraph 8(a)(ii);
(iv)make a record of the information and amounts referred to in paragraph 8(a)(i) and 8(a)(ii) and the amount of payment referred to in paragraph 8(a)(iii) above; and
(b)produce to the Applicant reasonable evidence of compliance with the Compliance Notice by producing the information referred to in paragraph 8(a)(iv) and proof of payment to the Employee by 8 July 2022.
9.The Compliance Notice included all information required by section 716(3) of the FW Act.
Failure to comply with the Compliance Notice
10.The Respondent failed to:
(a)take the Specified Action set out in the Compliance Notice by 1 July 2022, or at all; and
(b) produce to the Applicant reasonable evidence of compliance with the Compliance Notice by 8 July 2022, or at all.
11.The Respondent failed to comply with the Compliance Notice and contravened section 716(5) of the FW Act.
C.AMOUNT OUTSTANDING UNDER THE COMPLIANCE NOTICE
12.At the end of the Employment Period, the Employee:
(a)had 226.5514 hours of accrued untaken annual leave;
(b)was entitled to an hourly rate of pay of $ 26.82 (rounded to the nearest cent); and
(c)was not paid his accrued untaken annual leave when his employment ended.
13.By reason of section 90(2) of the FW Act and the matters pleaded in paragraph 12 above, had the Respondent complied with the Compliance Notice they would have paid to the Employee $6,076.53 (Underpayment Amount).
I am satisfied that the Statement of Claim complies with the rules of pleading and adequately sets out the factual basis of the relief sought. Specifically, the facts alleged support a finding that HML Holdings contravened s 716(5) of the FW Act and that, had it complied with the Compliance Notice, it would have paid to the Employee the Underpayment Amount to which he was entitled.
Upon being satisfied of the contraventions alleged under the FW Act, this Court has the power to made declarations under s 141 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), compensatory orders under s 545 of the FW Act and to order pecuniary penalties under s 546 of the FW Act.
I am satisfied that it is appropriate to make orders that are substantially in the form sought by the FWO in their Application for default judgment.
The Court has a wide discretion regarding the making of declarations, including in circumstances where they are made on the basis of admissions deemed to have been made upon default. It has been recognised that there may be a public interest in the making of such declarations, including by expressing the Court’s disapproval of the contravening conduct: Australian Competition and Consumer Commission v Yellow Page Marketing BV and Anor (No 2) [2011] FCA 352; (2011) 195 FCR 1 at [69]. I accept that the framing of the declaration ultimately sought is appropriate and reflects the caution required in cases such as the present where they are made on the basis of deemed admissions rather than adjudication of the merits: see Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427; (2006) 236 ALR 665 at [59] and Fair Work Ombudsman v DB Richardson Trading Pty Ltd [2022] FedCFamC2G 1049 at [42]. Whilst revised proposed orders were sent to my Associate prior to the hearing today, they did not reflect the qualification proposed in such cases. Regardless, an acceptable form of orders was ultimately proposed at the hearing today that reflected the substance of the original wording in the Application for default judgment.
On the basis of the admissions deemed to have been made, HML Holdings’ compliance with the Compliance Notice remains outstanding and the Employee has not been paid the Underpayment Amount to which he is entitled. I am satisfied that it is appropriate to make orders requiring HML Holdings to pay this amount to the Employee, together with interest, pursuant to ss 545(1) and 547(2) of the FW Act.
CONCLUSION
For the foregoing reasons, orders will be made in accordance with the form ultimately sought by the FWO. In accordance with those orders, the question of penalty will be determined following a further hearing and opportunity being given to HML Holdings to address the Court.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Laing. Associate:
Dated: 20 February 2023
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