Fair Work Ombudsman v Lobos
[2022] FedCFamC2G 596
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Lobos [2022] FedCFamC2G 596
File number(s): SYG 504 of 2022 Judgment of: JUDGE GIVEN Date of judgment: 15 July 2022 Catchwords: FAIR WORK – application in a proceeding for default judgment pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) – respondents in default – applicant entitled to the relief sought Legislation: Fair Work Act2009 (Cth) ss 545, 546
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 141
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 4.03, 6.01, 13.04, 13.05, 13.06
Cases cited: Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433
Australian Building and Construction Commissioner & CFMEU (2018) 262 CLR 157
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665
Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352
Luna Park Sydney Pty Limited v Bose [2006] FCA 94
Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615
Division: Division 2 General Federal Law Number of paragraphs: 38 Date of hearing: 15 July 2022 Solicitor for the Applicant: Ms M Zhang of the Fair Work Ombudsman The Respondents: No appearance ORDERS
SYG 504 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: MARIANO EZEQUIEL LOBOS
First Respondent
JAMIE LOBOS
Second Respondent
ORDER MADE BY:
JUDGE GIVEN
DATE OF ORDER:
15 JULY 2022
THE COURT ORDERS THAT:
1.Pursuant to rule 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules) judgment is entered for the applicant by reason of the failure of:
(a)the Second Respondent to file a Notice of Address for Service as ordered or at all and pursuant to rule 13.04(2)(b)(i);
(b)each of the Respondents to file a Response as ordered or at all;
(c)each of the Respondents to file a Defence as ordered or at all;
(d)each of the Respondents to defend the proceeding with due diligence pursuant to rule 13.04(2)(b)(vii).
2.Upon the admissions which the Respondents are taken to have made, consequent upon default pursuant to Rule 13.04(2) of the Rules, the Court declares that:
(a)the First Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice given to the First Respondent on 14 September 2021 (Compliance Notice) in respect of Kaleb Larkin (Employee); and
(b)the Second Respondent was involved, within the meaning of section 550(2)(c) of the FW Act, in the First Respondent’s contravention of section 716(5) of the FW Act by failing to comply with the Compliance Notice.
3.Pursuant to section 545(1) of the FW Act that the First Respondent, within 28 days of this order, take the steps required by the Compliance Notice by:
(a)calculating and paying to the Employee the amount that should have been paid when his employment ended in respect of accrued but untaken annual leave, including annual leave loading pursuant to clause 24.4 of the Road Transport and Distribution Award 2020 (Annual Leave Entitlements);
(b)prepare and produce to the Applicant a schedule outlining his calculation of the Annual Leave Entitlements and providing proof that the outstanding amounts have been paid as set out in order 3(a) above.
4.Pursuant to sections 545(1) and 547(2) of the FW Act, within 28 days of this order, the First Respondent is to pay interest calculated in accordance with the applicable pre-judgment interest rates prescribed by the Federal Court of Australia to the Employee on the amounts owed to him pursuant to order 3(a) above.
5.The matter is adjourned to 10.15am on 21 October 2022 before Judge Given 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 above.
6.The Applicant file and serve evidence and an outline of submissions relating to the issue of penalties, by no later than six (6) weeks prior to the date of the hearing fixed pursuant to order 5.
7.The Respondents each file and serve evidence and submissions relating to the issue of penalties, by no later than three (3) weeks prior to the date of the hearing fixed pursuant to order 5 above.
8.A copy of these sealed Orders be served on the First Respondent and the Second Respondent by sending to them at the email address provided in the Notice of Address for Service filed for the First Respondent on 6 May 2022 by close of business today.
9.The parties have liberty to apply on 3 days’ notice.
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 GIVEN:
I have before me an application in a proceeding filed on 7 July 2022 in accordance with a grant of leave, which I made on 10 June 2022 consequent upon the non-appearance of the respondents at the second directions hearing in this matter and when requested to do so by the applicant.
These proceedings and the relief sought by the applicant, who is the Fair Work Ombudsman, concern alleged contraventions of the Fair Work Act2009 (Cth) (Act), in relation to the failure to comply with a compliance notice which was issued to the respondents regarding an alleged failure to pay untaken leave entitlements to an employee.
In respect of the default judgment application, the applicant relies on the following documents:
(a)the statement of claim filed on 5 April 2022 (Statement of Claim);
(b)an Affidavit of Minna Zhang made on 7 July 2022 (Zhang Affidavit);
(c)an Affidavit of Gavin Bellamy made on 10 May 2022; and
(d)a bundle of emails which were tendered at hearing and marked Exhibit “1A”, being emails between the solicitor who appears for the applicant, and the respondents.
The applicant makes an application for default judgment based on the respondents’ failure to comply with the Court’s rules and various orders of the Court. In addition, the applicant seeks declarations of contravention and orders on default pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules).
The applicant alleges that the respondents contravened various provisions of the Act, which are set out in paragraphs [13] and [16] of the Statement of Claim.
Relevant principles
The applicant seeks orders pursuant to r 13.05 of the Rules. Relevantly r 3.05(2)(c) provides as follows:
(2) If a respondent is in default, the Court may:
…
(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 …
Default judgment pursuant to r 13.05(2) can be given if there is a sufficient basis for the relief sought by an applicant on the face of their statement of claim, and that is under r 13.05(2)(c), and the Court is satisfied that it has the power to grant that relief. The Court does not require proof by way of evidence: see Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3], cited in Luna Park Sydney Pty Limited v Bose [2006] FCA 94 at [20]; Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615 at [5] and Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 (ACCC v Yellow Page (No 2)) at [14].
Generally, an application under r 13.05(2)(c) is determined on the face of the facts which are pleaded in the statement of claim alone. However, where discretionary relief is sought, the Court may receive evidence relevant to the exercise of its discretion: ACCC v Yellow Page (No 2) at [61] to [63], citing Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 (ACCC v Dataline) at 678.
The Rules provide for the circumstances in which a respondent can be found to be in default at r 13.04(2):
(2) For the purposes of rule 13.05, a respondent is in default 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.
Rule 13.06 of the Rules provides that if a party to a proceeding is absent from a hearing, the Court may also make an order of the kind mentioned in subrule 13.05(2). Notwithstanding the fact that there has been no appearance for the respondents today, the Court is empowered to proceed to make orders for default judgment in circumstances where the respondents are not present. However, I note that the applicant does not proceed simply on the basis that there is no appearance on behalf of the respondents, but, rather, in relation to the substantive default claimed.
Background
On 5 April 2022, the applicant commenced these proceedings against the respondents by an application and the Statement of Claim for alleged contraventions of the Act.
On 29 April 2022, the matter was listed for a first Court date directions hearing before me, which was held using the Microsoft Teams platform due to ongoing COVID-19 precautions. On that occasion, there was no appearance for the first respondent. The second respondent appeared by audio, but not by video.
The Affidavit of Gavin Bellamy made on 10 May 2022 deposes to having effected personal service on the first applicant of both the application and the Statement of Claim. By her attendance at the first Court date, I was equally satisfied that originating documents had come to the attention of the second respondent. Accordingly, I dispensed with the need to effect service on her. At the first Court date, I made orders which included that the respondents file and serve a Notice of Address for Service by 6 May 2022 and a Response and Defence by 27 May 2022, together with consequential orders for a Reply from the applicant. At the first Court date, the proceeding was relisted before me for further directions at 9.30 am on 10 June 2022.
On 6 May 2022, the first respondent filed a Notice of Address for Service, but nothing else.
No Notice of Address for Service was filed for the second respondent at that time or at any other time, including up to today. By that Notice of Address for Service, an email address was provided for the first respondent. That email address appears to belong to, or at least be in the name of, the second respondent and it is from that email address that all correspondence by email in this matter has gone between the respondents and the applicant.
To the extent that the applicant has been corresponding with that email address, I am satisfied that all correspondence and service of any documents, therefore, has been properly effected on the first respondent by virtue of r 6.01(6) of the Rules. I am satisfied, also that, given that the email address appears to belong to the second respondent, and that she is, in fact, the correspondent from that email address, she has had constructive notice of those matters, even though the email address is not formally an address for service provided for her because of her own election to not file a Notice of Address for Service, despite twice being ordered to do so.
Importantly, neither of the respondents filed a Response or a Defence by 27 May 2022, or at all. When the matter next came before me on 10 June 2022, there was no appearance by or for the respondents and I made orders in their absence as follows (emphasis in original):
1. The Second Respondent is to file a Notice of Address for Service on or before 14 June 2022.
2. The Respondents each file and serve a Response and any Defence by 24 June 2022.
3. The Applicant file and serve any Reply by 1 July 2022.
4. In the event that either of orders 1 or 2 are not complied with, the Applicant may file and serve any application for default judgment on or before 8 July 2022.
5. The matter is adjourned for further directions or the hearing of any Application in a Proceeding for default judgment, as appropriate, at 9.30am on 15 July 2022.
6. The parties have liberty to apply.
On 10 June 2022, following the directions hearing my chambers sent a copy of the sealed orders to the respondents by email to the second respondent’s email address, which was provided for the first respondent as his email address for service, and also by express post to the postal address provided by the first respondent.
From Annexure “MZ-9” to the Zhang Affidavit, it appears that on 17 June 2022 email correspondence was sent by the applicant to the respondents, which detailed the events of the directions hearing on 10 June 2022 and served the orders that were made on that date on the respondents also.
On 7 July 2022, the applicant filed the present application in a proceeding seeking default judgment in accordance with my grant of leave. Annexure “MZ-3” to the Zhang Affidavit shows that the respondents were first put on notice of the prospect that the applicant may seek default judgment on 31 May 2022, yet, despite this, they did not attend the next directions hearing.
From the following, I am satisfied that the respondents have been on notice since 10 June 2022 that the matter was listed before me at 9.30 am today, including potentially for the hearing of any application for default judgment which might be made in the interim:
(a)the 10 June 2022 orders, which were sent to the respondents by both the Court and the solicitors for the applicant; and
(b)the application in a proceeding itself, which I am satisfied was served on the applicants on 8 July 2022 under cover of an email from Ms Zhang to the email address provided for service, and the front page of that application in a proceeding specifically lists the return date and time for hearing of it as 9.30 am on 15 July 2022. Further, the covering email reminded the respondents of the time, date, place and purpose of the listing.
From emails tendered which form Exhibit “1A”, I can see that in reply to the 8 July 2022 email the second respondent wrote to the applicant on 10 July 2022 as follows (errors in original):
Hi Minna,
We are in no position to seek legal advise.
We are currently being affected by the floods. As is most of Maitland and Cessnock and surrounding areas.
The payment i had initially made to Kaleb of $1000 was returned to my account. Kaleb has recived the $500 as I do not have the returned.
I am happy to make a payment to him, but I am unable to pull money from the air.
Thanks Jamie
From Exhibit “1A” it appears that Ms Zhang wrote to the respondents on 13 July 2022 at the email address for service provided for the first respondent, asking for further information arising from the statements in the earlier email as to whether or not the respondents had attempted to seek free legal assistance from a community legal centre, as per previous recommendations which the applicant apparently had made, whether or not the respondents intended to attend this morning’s hearing in person, but would otherwise request that they be allowed to do so by some form of electronic means, and also other matters. I am told that there was no response to that correspondence.
No proper application has been made to the Court by the respondents to appear other than in person. The respondents have provided no evidence to the Court regarding their alleged inability to attend by virtue of recent rain and flooding events in New South Wales. I have otherwise no other indication either from the applicant or from the respondents themselves as to why they are not here. At 9.30 am today when the hearing commenced at its scheduled time, the respondents were not present in court. I had the matter called three times outside the courtroom and there was no response. The time is now 10.53 am and there is still no appearance by or for the respondents.
Accordingly, I am satisfied that the respondents are aware of today’s hearing from a number of sources and a number of methods and have, for whatever reason, chosen not to attend, which is in keeping with their conduct of the proceedings to date. In terms of their engagement with the applicant, other than in relation to the procedural matters in these proceedings, the Zhang Affidavit reveals that there has been some minimal engagement between the second respondent and the applicant. However, Ms Zhang deposes (see paragraph [23(c)] of the Zhang Affidavit) to having had no contact with the first respondent at all.
Defaults
Ms Zhang, who appeared before me this morning, characterised the engagement by the respondents as being “limited to the making of assertions either as to their ability to pay the employee in question”, and also assertions about their inability to engage with these proceedings by reason of not having a lawyer. The solicitor for the applicant notes that, despite these assertions, the respondents have not complied with the compliance notice or otherwise provided any proper material to justify the matters that they raise. I have no material before me to suggest that the respondents have made any genuine attempts to seek either additional time to take steps or, specifically, to engage with free legal service providers, or otherwise have defended the proceedings with due diligence.
The following are objective defaults by the respondents:
(a)the failure to file a Response within the time ordered or at all, which is a non-compliance with r 4.03 of the Rules which requires that any Response filed by a respondent to be filed and served within 28 days of the application to which it relates. This is also a failure to file and serve a document required under the Rules pursuant to r 13.04(2)(b)(iv), to comply with an order of the Court pursuant to r 13.04(2)(b)(iii), and to defend the proceeding with due diligence pursuant to r 13.04(2)(b)(vii);
(b)the failure to file a Defence within the time ordered or at all, which is, again, a failure to file and serve a document required under the Rules pursuant to r 13.04(2)(b)(iv), to comply with an order of the Court pursuant to r 13.04(2)(b)(iii) and to defend the proceeding with due diligence pursuant to r 13.04(2)(b)(vii); and
(c)in relation to the second respondent only, a failure to file a Notice of Address for Service, which is a separate default, being a failure to give an address for service before the time to give an address for service has expired pursuant to r 13.04(2)(b)(i). This also constitutes a failure to file and serve a document required under the Rules pursuant to r 13.04(2)(b)(iv), a failure to comply with an order of this Court pursuant to r 13.04(2)(b)(iii), and to defend the proceeding with due diligence pursuant to r 13.04(2)(b)(vii).
On the basis of the matters set out above, the applicant says the respondents are in default, and I agree.
Entitlement to relief
By the Statement of Claim, the applicant sets out the following relevant matters (emphasis in original):
9. Pursuant to section 716(2) of the FW Act, the Compliance Notice required the First Respondent to:
(a) take the following actions by 10 November 2021 to remedy the direct effects of the Contraventions in respect of the Employee (Specified Action):
(i) calculate the number of hours of annual leave that were accrued to the Employee when his employment ended;
(ii) calculate the amount that should have been paid to the Employee for the accrued, but unused, annual leave when his employment ended;
(iii) calculate the amount that should have been paid to the Employee for annual leave loading under clause 24.4 of the Road Transport Award;
(iv) make a payment to the Employee for the amounts referred to in (ii) and (iii) immediately above;
(v) make a record of the information and amounts referred to in (i) to (iii) and the amount of the payment referred to in (iv) immediately above: and
(b) produce reasonable evidence to the Applicant of the First Respondent’s compliance with the Compliance Notice by 17 November 2021, by producing a record of calculations and payment, and proof that the amount owed has been paid to the Employee.
10. The Compliance Notice met the requirements of section 716(3) of the FW Act.
11. The First Respondent failed to:
(a) take the Specified Action as set out in the Compliance Notice by 10 November 2021, or at all, or
(b) produce to the Applicant reasonable evidence of compliance with the Compliance Notice by 17 November 2021, or at all.
12. By reason of the matters pleaded in paragraph 11, the First Respondent failed to comply with the Compliance Notice.
13. By reason of the matters pleaded in paragraphs 9 to 12, the First Respondent contravened section 716(5) of the FW Act.
C. ACCESSORIAL LIABILITY OF THE SECOND RESPONDENT
14. By reason of the matters pleaded in paragraph A.3, the Second Respondent was responsible for ensuring that the First Respondent complied with the Compliance Notice.
15. By reason of the matters pleaded in paragraphs A.3, B.8, B.11 and 14, the Second Respondent:
(a) had actual knowledge of the Compliance Notice that was given to the First Respondent;
(b) had actual knowledge that the First Respondent failed to comply with the Compliance Notice; and
(c) was an intentional participant in the First Respondent’s failure to comply with the Compliance Notice.
16. By reason of the matters pleaded in paragraphs 14 to 15, the Second Respondent:
(a) was involved, within the meaning of section 550(2) of the FW Act, in the contravention by the First Respondent of section 716(5) of the FW Act as set out in paragraph B.13; and
(b) pursuant to section 550(1) of the FW Act, is taken to have contravened section 716(5) of the FW Act.
The facts summarised in those parts of the Statement of Claim give rise to the contravention of the Act by the respondents in the manner pleaded.
The Court has power to make orders it considers appropriate if it is satisfied that there is a contravention under the Act, including declarations pursuant to s 141 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), remedial and compensatory orders under s 545 of the Act (see also Australian Building and Construction Commissioner & CFMEU (2018) 262 CLR 157) and also pecuniary penalties pursuant to s 546 of the Act.
The Court’s power to make declarations involves a wide discretion (see ACCC v Yellow Page (No 2) at [65]-[66]) and the Court is also empowered to make declarations based on admissions to be made consequent upon a default: see ACCC v Dataline at [54] to [59] and ACCC v Yellow Page (No 2) at [66] to [69]. This is particularly so if the case involves issues of public interest such as enforcing compliance with terms and conditions of employment.
I am satisfied that the applicant has standing to bring this proceeding.
On the basis of the matters set out in the Statement of Claim, the applicant says it has an entitlement to the relief sought, having made out a case for the relief, and I agree.
I am of the view that there is a utility in making the declarations sought by the applicant, which specify clearly the contravening conduct and that there would be a public interest in doing so, including that in making the declarations sought it has the effect of reflecting the Court’s disapproval of the contravening conduct: see ACCC v Yellow Page (No 2) at [69].
By order 5 sought by the application in a proceeding, the applicant seeks that the matter be adjourned to a date to be fixed for a separate hearing in respect of penalty, together with consequential orders for the service of submissions and evidence for all parties.
I am of the view that there is utility in this course as it will not only enable the applicant to seek a specific penalty relevant to the matter, but it will also enable the respondents a further opportunity to make submissions regarding what they say might be an appropriate penalty in all the circumstances of this case.
For the foregoing reasons, I am satisfied that the orders sought by the application in a proceeding filed on 7 July 2022 ought be made and, accordingly, I make the attached orders.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 29 July 2022
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