INDUSTRIAL LAW – appeal from orders – whether primary judge erred in treating declarations as a consequence of default by respondent as not being binding on non-defaulting respondent – whether primary judge erred in treating multiple classes of contraventions grouped by s 557 of Fair Work Act 2009 (Cth) as single contravention with single maximum penalty – held: appeal allowed
2.Orders 1, 5(a) and 6 of the Federal Circuit Court of Australia made on 28 February 2017 be set aside.
3.The proceeding be remitted to the primary judge for rehearing in accordance with the reasons of this Court.
4.There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMWICH J:
This is an appeal from orders made on 28 February 2017 by a judge sitting in the Fair Work Division…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Fair Work Ombudsman v Lohr [2018] FCA 5
Case
[2018] FCA 5
Decision Date
CaseChat Overview and Summary
In the case of Fair Work Ombudsman v Lohr, the Fair Work Ombudsman (FWO) sought to appeal certain orders made by the Federal Circuit Court. The primary judge's decision involved a dispute over whether declarations made due to the default of one respondent could bind the other respondent who had not defaulted. Additionally, the FWO challenged the primary judge's treatment of multiple contraventions grouped by section 557 of the Fair Work Act 2009 as a single contravention with a single maximum penalty.
The court was required to decide whether the primary judge erred in concluding that the declarations due to the default of one party were not binding on the other party who had not defaulted. It also needed to determine whether the primary judge correctly treated the multiple classes of contraventions as a single contravention with a single maximum penalty. The court found that the primary judge erred in both respects. The court clarified that the rule allowing for a judgment against a defaulting respondent does not permit the court to bind a non-defaulting respondent, and it was incorrect to treat multiple contraventions as a single contravention with a single maximum penalty.
The appeal was allowed on grounds 1, 2, 3, and 5. Orders 1, 5(a), and 6 made by the primary judge were set aside, and the matter was remitted to the primary judge for rehearing in accordance with the court's reasons. There was no order as to costs. The primary judge's conclusion that the declarations were not binding on Mr. Lohr was based on the interpretation of the relevant rule, which only allows for judgment against the defaulting respondent and does not extend to binding the non-defaulting respondent. The court emphasized the plain meaning of the rule and the implications of the non-defaulting respondent's defence.
Orders
Orders of the court
1. The appeal be allowed.
2. Orders 1, 5(a) and 6 of the Federal Circuit Court of Australia made on 28 February 2017 be set aside.
3. The proceeding be remitted to the primary judge for rehearing in accordance with the reasons of this Court.
4. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
As noted above, if one or more of grounds 1 to 4 succeeded, the factual substratum of order 6, on which ground 5 is based, would be swept aside. In light of grounds 1 to 3 having succeeded, the issue of order 6 should be re-determined at the rehearing that must now take place. This ground of appeal must therefore succeed and order 6 must be set aside.Conclusion The FWO’s appeal succeeds on grounds 1, 2, 3 and 5. Orders 1, 5(a) and 6 made by the primary judge on 28 February 2017 must be set aside and the matter must be remitted to his Honour for hearing and determination in accordance with these reasons. There should be no order as to costs.
Ratio Decidendi
Legal Principle Established
It is convenient to reproduce in full the primary judge’s reasons grounding the conclusion that the declarations were not binding on Mr Lohr as follows:Are the Declarations binding on Mr Lohr?70.Counsel for the FWO submitted Mr Lohr is bound by the Declarations. Counsel relied on the following matters:a)Mr Lohr was given notice of the application for default judgment, but he elected not to appear and oppose that application; b)the Declarations are final, binding and conclusive as to SSG’s contraventions of the FW Act; c)Mr Lohr was properly joined as a party and is bound by the Declarations.71.Counsel also relied on what undoubtedly are correct propositions of law. At least where default judgment has been entered for a defendant’s failure to plead to a statement of claim, the defendant in default, by failing to plead, is deemed to have admitted each allegation made in the statement of claim; a positive declaration gives rise to a res judicata and to issue estoppel; and a default judgment gives rise to an issue estoppel to the same extent as a judgment entered after a contested hearing. These principles, however, say nothing about whether a default judgment entered against one of two respondents in circumstances where the other respondent has filed a defence is binding on the party who filed a defence.72.The starting point in determining whether the Declarations are binding on Mr Lohr is the text of r.13.03B(2)(c) of the FCC Rules, being the rule pursuant to which I made the Declarations. The text is as follows (emphasis added):If a respondent is in default, the Court may:. . . .(c)if the proceeding was commenced 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; . . . .73.Rule 13.03A(2) of the FCC Rules defines when “a respondent is in default”; and that consists of seven things “the respondent” may fail to do (at least where the respondent has not satisfied the applicant’s claim).74.It will be seen that the power to give judgment that is conferred by r.13.03B(2)(c) of the FCC Rules is engaged when “a respondent” is in default; and the power, when engaged, is to give judgment against “the respondent”, that is, the respondent who is in default. The rule does not authorise the Court to give judgment against a respondent who is not in default. In those circumstances, the deemed admissions by the defaulting respondent that arises on the giving of default judgment against that respondent cannot operate as a deemed admission by the respondent who has not defaulted.75.There are at least two considerations that support the plain meaning of the text of r.13.03B(2)(c) of the FCC Rules. First, where the non-defaulting respondent has filed a defence that has put in issue one or more of the allegations made in the statement of claim, there would be no room for any deemed admission to operate in relation to the allegations made in the statement of claim the non-defaulting respondent has not admitted or denied. That is because the non-defaulting respondent will have expressly identified the allegations the respondent does not admit. Second, if, as the FWO submits, the non-defaulting respondent who has been notified of an application for default judgment against the defaulting respondent should oppose the giving of a default judgment if he or she wishes to avoid being deemed to admit allegations made against the defaulting respondent, it must follow that where such respondent has an arguable defence the Court will be bound not to grant default judgment against the defaulting respondent until after the claims against the non-defaulting respondent has been heard and decided. That is not a result that could reasonably be imputed to the framers of the FCC Rules.76.Thus, to the extent the FWO did not adduce evidence of SSG’s contraventions of s.45 of the FW Act, it will be necessary for her to apply for leave to reopen her case.