Fair Work Ombudsman v Jorgensen

[2018] FCCA 1201

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v JORGENSEN [2018] FCCA 1201

Catchwords:
INDUSTRIAL LAW – Whether prima facie case exists – prima facie case established.

Legislation:

Fair Work Act 2009 (Cth)

Applicant: FAIR WORK OMBUDSMAN

Respondent: LEIGH ALAN JORGENSEN

File Number: BRG 1032 of 2017

Judgment of: Judge Vasta

Hearing date: 30 April 2018

Date of Last Submission: 30 April 2018

Delivered at: Brisbane

Delivered on: 30 April 2018

REPRESENTATION

Counsel for the Applicant:

Ms E.S. Wilson QC

Ms C. Hartigan

Solicitors for the Applicant: Ashurst Australia

Counsel for the Respondent: Ms K.W. Gover

Solicitors for the Respondent: Lillas & Loel Lawyers

ORDERS

1. That the Court is satisfied that there is a prima facie case established against the Respondent.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 1032 of 2017

FAIR WORK OMBUDSMAN

Applicant

And

LEIGH ALAN JORGENSEN

Respondent

REASONS FOR JUDGMENT

(As corrected)

(Ex tempore)

1. This is an application by the Fair Work Ombudsman, asking this Court to find that the Respondent, Leigh Alan Jorgensen, has committed a contempt of the Court and ought be dealt with for that. 

2. In short compass, the matter stems from a judgment of His Honour Judge Jarrett finding that, on a default hearing, the Respondent had breached sections of the Fair Work Act 2009 (Cth) and that companies associated with the Respondent were liable for pecuniary penalties, and the Respondent himself was liable for a $12,000.00 pecuniary penalty.

3. In July of 2015, the Fair Work Ombudsman filed an interlocutory application in that matter seeking orders that, in effect, froze the assets of the company, Trek North Tours Pty Ltd, and the Respondent. 

4. Those orders were properly made.  The Applicant was served, and there was an order made on 24 July 2015 and an extension order on 30 July 2015.  In effect, those orders meant that the assets of the Respondent and his company were frozen, except for the fact that the company was able to make such payments that were in the ordinary line of business.

5. Now, the Applicant points to a number of transactions that occurred between 4 August 2015 and 14 August 2015; that is, some five days after His Honour made the order.  They were electronic fund transfers from bank accounts in respect of which Trek North Tours had an interest.  The payments were made over that period. On the face of it, those payments were not in accordance with the orders that His Honour made and therefore have breached the order and would show that there is a prima facie case of contempt.

6. The Fair Work Ombudsman has placed all of their evidence before the Court, and it is mainly made up of two affidavits of Mr Prain, in which a large number of bank accounts are annexed and exhibited.

7. The Respondent does not contest that the transactions occurred. The Respondent does not contest that the freezing order existed and does not contest that the terms were clear, unambiguous and capable of compliance and does not contest that he had knowledge of the freezing order prior to conducting the transactions.

8. What the Respondent says is that there is no case to answer, because the Fair Work Ombudsman could not prove beyond reasonable doubt that the funds withdrawn were not used to pay business expenses, as permitted by the order. 

9. What the Respondent has relied on here is that there have been produced to the Court, as Exhibit 1, two invoices sent to Trek North Tours by Queensland Rail, one for an invoice of just over $24,000.00 and the other for a sum approaching $10,000.00.

10. The bank accounts of the family company trust show that those two invoices made out to the company were paid by the family trust.  The payments made by the Respondent from moneys that he controlled that were from the frozen accounts were paid into the family trust with a notation that says “repay loan”. 

11. What the Respondent says is that, on that evidence alone, the Applicant could not negative a reasonable hypothesis, consistent with innocence that these were business transactions, in that the family company had paid the money, and the business was actually repaying the family company back.

12. What can be seen when one looks at the payments is that they are in odd amounts; that they were, when one totals them, about $7000 dollars more than the moneys expended to Queensland Rail. Notwithstanding that there was a withdrawal from the family company back to the business, TNT, it is submitted that these sums have, in effect, no other explanation.

13. When one then looks at the way in which these companies have conducted business over quite some time it is clear that there is money going in and out of a number of accounts, both the TNT account and the family trust company.

14. There is quite a deal of money going into the family trust company and then going out, sometimes even on the same day.  The Respondent has given an explanation to the effect that the family trust has a line of credit, and the business does not.  Therefore, the family trust can pay bills, and the company then repays the bills.

15. There is scant evidence that this is the case, and the Respondent relies upon a line in the enforcement proceeding that preceded this action by the Fair Work Ombudsman where the questioner asked the Respondent the following:

    “Now, have moneys been received by that family trust from the bank accounts of any of the companies that you’re a director or shareholder from?”

    Answer:

    “If it loaned them money, yes.”

    Question:

    “Did it loan them money?  Did the family trust –“

    The Respondent cut the questioner off and said:

    “It paid bills for them.  Sure.”

    The questioner asked:

    “So moneys came out of the family trust, you say, to pay bills of the companies.”

    The Respondent answered:

    “The family trust doesn’t have any…”

    He was cut off by the questioner:

    “I’m asking you, sir.”

    The Respondent said no.  The questioner said:

    “Is that right?”

    The Respondent answered:

    “No.  You’re wrong.’

    The questioner said:

    “So – okay.  So did the family trust pay debts that the companies owed?”

    The Respondent answered:

    “The family trust doesn’t have a pool of cash or anything.  It’s not a bank account.  I mean –“

    The questioner cut him off and said:

    “So is your answer to that question no?”

    The Respondent answered no.

16. Upon that, the Respondent says that there is evidence that this is how the bank accounts operated but, on the evidence before me, that is still speculation. 

17. When one has a look at what has been occurring between these companies over the period, from the very least April 2015 to August 2015, it seems to me that the transactions that exist between the company, Trek North Tours, and the trust company are not transactions that do occur in the normal course of business. 

18. There is nothing that shows what the structure is between the companies.

19. There is nothing that shows that there are any loan agreements. 

20. There is nothing that explains any of that material. 

21. So what I am left with is that there were withdrawals from the frozen bank accounts into a family trust account and nothing that explains why such transactions occurred.

22. It leads to this conclusion by me:  that, on the state of the evidence before me, there is a case to answer that the Respondent has been in contempt of the freezing order of Judge Jarrett issued on 24 July and extended on 30 July 2015.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Vasta

Date:17 May 2018

CORRECTIONS:

1. Representation: Ashurst Australia as Solicitor for the Applicant instead of Fair Work Ombudsman.