Fair Work Ombudsman v NoBrace Centre Pty Ltd
[2018] FCCA 378
•22 February 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIRWORK OMBUDSMAN v NOBRACE CENTRE PTY LTD & ORS | [2018] FCCA 378 |
| Catchwords: INDUSTRIAL LAW – Applicant arrived in Australia on working holiday visa – visa due to expire – applicant seeks and obtains employer’s sponsorship on application for Temporary Work (Skilled) Visa (subclass 457) – criterion of visa application requires applicant to receive remuneration not less than $50,000 per annum – sham employment contract executed – employee pay and PAYG income tax recorded and calculated according to sham – net pay calculated and paid at lower hourly rate – employee not passive participant in sham – employee requests and obtains employer’s support for permanent visa – sale of business – employment terminated – sponsorship visa withdrawn – Ombudsman’s investigation – employee’s rate of pay below that prescribed by Award – other entitlements not paid. INDUSTRIAL LAW – Contravention of Fair Work Act 2009 (Cth) – contravention of Fair Work Regulations 2009 (Cth) – failure to pay minimum entitlements prescribed by Health Professionals and Support Services Award 2010 – failure to pay minimum wage prescribed by award and other entitlements – unauthorised deductions from employee’s pay – failure to keep records – false and misleading records – failure to provide pay slips within one day of payment – failure to comply with notice to produce – whether reasonable excuse for non-compliance. ACCESSORIAL LIABILITY – Involvement in contravention – necessary that secondary participant had sufficiently direct and practical connection to the wrongdoing – sufficient to establish that participants were aware of material facts and circumstances constituting the contraventions – not necessary for participant to have turned their mind to legal characterisation or to the legality of the principal’s conduct – not necessary for participant to have intended result of principal’s conduct or that it might cause injury or damage – whether honest ignorance that award did not apply – intentional participant – actual knowledge – knowledge of essential elements of facts comprising primary contravention – knowledge that an award conferred certain entitlements – knowledge of the name of the particular award not necessary – knowledge of precise amount prescribed by award not necessary – knowledge of the rates being paid – wilful blindness – deliberate abstention from inquiry – negligence or recklessness not sufficient – combination of suspicious circumstances and failure to make inquiry may suffice – whether knowledge that system of payment of employee entitlements was non-compliant with Act, Regulations or Award grounds involvement in a contravention – relief – declarations granted – existence of threat of continuation of conduct not proved – no utility in injunctions. |
| ACCESSORIAL LIABILITY – Involvement in contravention – necessary that secondary participant had sufficiently direct and practical connection to the wrongdoing – sufficient to establish that participants were aware of material facts and circumstances constituting the contraventions – not necessary for participant to have turned their mind to legal characterisation or to the legality of the principal’s conduct – not necessary for participant to have intended result of principal’s conduct or that it might cause injury or damage – whether honest ignorance that award did not apply – intentional participant – actual knowledge – knowledge of essential elements of facts comprising primary contravention – knowledge that an award conferred certain entitlements – knowledge of the name of the particular award not necessary – knowledge of precise amount prescribed by award not necessary – knowledge of the rates being paid – wilful blindness – deliberate abstention from inquiry – negligence or recklessness not sufficient – combination of suspicious circumstances and failure to make inquiry may suffice – whether knowledge that system of payment of employee entitlements was non-compliant with Act, Regulations or Award grounds involvement in a contravention – relief – declarations granted – existence of threat of continuation of conduct not proved – no utility in injunctions. |
| Legislation: Evidence Act 1995 (Cth), ss.144,191 Fair Work Act 2009 (Cth), ss.3, 12, 14, 44, 45, 61, 87, 90, 116, 323, 324, 535, 536, 550, 687, 700, 701, 703, 706, 707, 712, 793 Fair Work Regulations 2009 (Cth), rr.3.33, 3.34, 3.36, 3.44 Health Professionals and Support Services Award 2010 cl.14.3, 26.1, 28.1, 31.2, 32.2, A.2.5, A.7.3 |
| Cases cited: Adler v Australian Securities and Investment Commission [2003] NSWCA 131 Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 Australian Securities and Investment Commission v ActiveSuper Pty Ltd (In Liq) [2015] FCA 342 Baden Société Générale pour Favouriser le Développement du Commerce et l’Industrie en France SA [1993] 1 WLR 509 Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union v Australian Competition and Consumer Commission (2007) 162 FCR 466 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 Fair Work Ombudsman v Liquid Fuel Pty Ltd [2015] FCCA 2694 Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 Texts & Articles cited: Davies, Accessory Liability, [2015] (Hart Publishing) |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | NOBRACE CENTRE PTY LTD (ACN 12 155 6447) |
| Second Respondent: | CHRISTINE LINDA MASTERS |
| Third Respondent: | ARI MASTERS |
| File Number: | MLG 1981 of 2015 |
| Judgment of: | Judge A Kelly |
| Hearing date: | 27 & 28 February and 1 March 2017 |
| Date of Last Submission: | 1 March 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 22 February 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr McKenna |
| Solicitors for the Applicant: | The Office of the Fair Work Ombudsman |
| Counsel for the Respondent: | Mr Hassett |
| Solicitors for the Respondent: | Hassett Lee & Co Lawyers |
THE COURT DECLARES THAT:
NoBrace Centre Pty Ltd [ACN 121 556 447] (NoBrace) contravened:
(a)section 45 of the Fair Work Act 2009 (Cth) (FW Act), by failing to pay Ms Arang Lee (Ms Lee) her minimum weekly wages as required by cl 14.3 of the Health Professionals and Support Services Award 2010 (Health Award) and cl A.2.5 of Schedule A thereto;
(b)section 45 of the FW Act, by failing to pay Ms Lee overtime penalties as required by cl 28.1 of the Health Award;
(c)section 45 of the FW Act, by failing to pay Ms Lee weekend loading as required by cl 26.1 of the Health Award and cl A.7.3 of Schedule A thereto;
(d)section 45 of the FW Act, by failing to pay Ms Lee public holiday penalty rates as required by cl 32.2 of the Health Award and cl A.7.3 of Schedule A thereto;
(e)section 44 of the FW Act, by failing to pay Ms Lee on a public holiday not worked as required by s 116 of the FW Act;
(f)section 44 of the FW Act, by failing to pay Ms Lee during a period of annual leave as required by s 90(1) of the FW Act;
(g)section 45 of the FW Act, by failing to pay Ms Lee annual leave loading as required by cl 31.2 of the Health Award and cl A.7.3 of Schedule A thereto;
(h)section 44 of the FW Act, by failing to pay Ms Lee accrued annual leave on termination as required by s 90(2) of the FW Act;
(i)section 323(1) of the FW Act, in failing to pay Ms Lee in full the amounts due to her in respect of her work and did so by making unauthorised deductions of amounts from her pay;
(j)section 535(1) of the FW Act, by failing to keep employee records concerning Ms Lee as prescribed by the Fair Work Regulations 2009 (Cth) (FW Regulations);
(k)regulation 3.44(1) of the FW Regulations by keeping records in relation to Ms Lee’s employment in the period 2 April 2011 to 31 October 2012 which NoBrace was required to keep and which to its knowledge were false and misleading;
(l)section 536(1) of the FW Act, by failing to provide Ms Lee her pay slips within one day of payment being made in relation to the performance of her work; and
(m)section 712(3) of the FW Act, by failing to comply with a notice to produce records and documents.
The Second Respondent was, within the meaning of sub-s 550(1) of the FW Act, involved in the contraventions by NoBrace of:
(a)section 45 of the FW Act that occurred in the period 2 April 2011 to 31 October 2012, in respect of the failure to pay Ms Lee her minimum weekly wages as declared by paragraph 1(a);
(b)section 45 of the FW Act that occurred in the period 2 April 2011 to 31 October 2012, by failing to pay Ms Lee overtime penalties as declared by paragraph 1(b);
(c)section 45 of the FW Act that occurred in the period 2 April 2011 to 31 October 2012, by failing to pay Ms Lee weekend loading as declared by paragraph 1(c);
(d)section 45 of the FW Act, by failing to pay Ms Lee public holiday penalty rates as declared by paragraph 1(d);
(e)section 44 of the FW Act, by failing to pay Ms Lee on a public holiday not worked as declared by paragraph 1(e);
(f)section 44 of the FW Act, by failing to pay Ms Lee during a period of annual leave as declared by paragraph 1(f);
(g)section 323(1) of the FW Act that occurred in the period 2 April 2011 to 31 October 2012, by failing to pay Ms Lee in full the amounts due to her in respect of her work and did so by making unauthorised deductions of amounts from her pay as declared by paragraph 1(i);
(h)section 535(1) of the FW Act that occurred in the period 2 April 2011 to 31 October 2012, by failing to keep employee records as declared by paragraph 1(j);
(i)regulation 3.44(1) of the FW Regulations by keeping records in relation to Ms Lee’s employment that NoBrace was required to keep and which to its knowledge were false and misleading as declared by paragraph 1(k); and
(j)section 536(1) of the FW Act, that occurred in the period 2 April 2011 to 31 October 2012, by failing to provide Ms Lee her pay slips within one day of payment being made in relation to the performance of her work as declared by paragraph 1(l).
The Third Respondent was, within the meaning of sub-s 550(1) of the FW Act, involved of the contraventions by NoBrace of:
(a)section 45 of the FW Act that occurred in the period 2 April 2011 to 2 February 2014, in respect of the failure to pay Ms Lee her minimum weekly wages as declared by paragraph 1(a);
(b)section 45 of the FW Act that occurred in the period 2 April 2011 to 2 February 2014, by failing to pay Ms Lee overtime penalties as declared by paragraph 1(b);
(c)section 45 of the FW Act that occurred in the period 2 April 2011 to 2 February 2014, by failing to pay Ms Lee weekend loading as declared by paragraph 1(c);
(d)section 45 of the FW Act, by failing to pay Ms Lee public holiday penalty rates as declared by paragraph 1(d);
(e)section 44 of the FW Act, by failing to pay Ms Lee on a public holiday not worked as declared by paragraph 1(e);
(f)section 44 of the FW Act, by failing to pay Ms Lee during a period of annual leave as declared by paragraph 1(f);
(g)section 45 of the FW Act, by failing to pay Ms Lee annual leave loading as declared by paragraph 1(g);
(h)section 44 of the FW Act, by failing to pay Ms Lee accrued annual leave on termination as declared by paragraph 1(h);
(i)section 323(1) of the FW Act, in failing to pay Ms Lee in full the amounts due to her in respect of her work in the period 2 April 2011 to 2 February 2014 and did so by making unauthorised deductions of amounts from her pay as declared by paragraph 1(i);
(j)section 535(1) of the FW Act that occurred in the period 2 April 2011 to 2 February 2014, by failing to keep employee records as declared by paragraph 1(j);
(k)regulation 3.44(1) of the FW Regulations by keeping records in relation to Ms Lee’s employment which NoBrace was required to keep and which to its knowledge were false and misleading as declared by paragraph 1(k);
(l)section 536(1) of the FW Act that occurred in the period 2 April 2011 to 2 February 2014, by failing to provide Ms Lee her pay slips within one day of payment being made in relation to the performance of her work as declared by paragraph 1(l); and
(m)section 712(3) of the FW Act, by failing to comply with a notice to produce records and documents as declared by paragraph 1(m).
THE COURT ORDERS AND DIRECTS THAT:
The proceeding is listed for directions at 10.00am on 22 March 2018.
By 4.00pm on 8 March 2018, the applicant file and serve submissions, not exceeding 5 pages in length, addressing a proposed timetable for the filing of evidence and submissions in relation to the hearing and determination of the application for compensation and penalties.
By 4.00pm on 15 March 2018, the respondents file and serve submissions in response, not exceeding 5 pages in length.
The proceeding is fixed for further hearing at 10.00am on 1 August 2018, with an estimate of 1 day, for the determination of the applications for compensation, interest and penalties.
The costs of and incidental to the hearing on liability be reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
MLG 1981 of 2015
| FAIR WORK OMBUDSMAN |
Applicant
And
| NOBRACE CENTRE PTY LTD (ACN 12 155 6447) |
First Respondent
| CHRISTINE LINDA MASTERS |
Second Respondent
| ARI MASTERS |
Third Respondent
REASONS FOR JUDGMENT
TABLE OF CONTENTS
Introduction................................................................................................................... 14
Procedural history.......................................................................................................... 19
Pleaded issues............................................................................................................... 20
Parties........................................................................................................................ 20
Ms Lee’s employment................................................................................................. 22
Legislation.................................................................................................................. 24
1st Contraventions – failure to pay minimum wages..................................................... 25
2nd Contraventions – failure to pay overtime penalties................................................. 26
3rd Contraventions – failure to pay weekend loading.................................................... 26
4th Contraventions – failure to pay public holiday penalty rates.................................... 27
5th Contraventions – failure to pay public holidays not worked..................................... 27
6th Contravention – failure to pay annual leave............................................................ 28
7th Contravention – failure to pay 17.5% loading on annual leave................................. 28
8th Contravention – failure to pay accrued annual leave............................................... 28
9th Contraventions – unauthorised deductions (PAYG)................................................. 29
10th Contraventions – failure to keep records............................................................... 31
11th Contraventions – false & misleading records......................................................... 32
12th Contraventions – failure to provide pay slips......................................................... 33
13th Contravention – failure to comply with notice to produce...................................... 33
Accessorial liability...................................................................................................... 34
Relief.......................................................................................................................... 39
Overview.................................................................................................................... 39
Evidence........................................................................................................................ 40
Dental Practice........................................................................................................... 42
The NoBrace technology............................................................................................. 42
A bookkeeper is retained............................................................................................. 43
Ms Lee is employed..................................................................................................... 47
Request to sponsor 457 visa application...................................................................... 48
The Agreement........................................................................................................... 50
Employee entitlements................................................................................................ 52
Ms Lee’s entitlements................................................................................................. 55
Sale of NoBrace.......................................................................................................... 64
ENS visa..................................................................................................................... 64
The Ombudsman’s investigation................................................................................. 65
Consideration – contraventions...................................................................................... 69
Award underpayments: contraventions (1)-(4) & (7)................................................... 69
NES underpayments: contraventions (5), (6), (8)......................................................... 69
Unauthorised deductions & pay slips: contraventions (9) & (12)................................... 70
Documentary contraventions: contraventions (10), (11) & (13).................................... 70
Contested contraventions.............................................................................................. 70
10th Contravention: Failure to keep employee records.................................................. 70
11th Contraventions: False and misleading records....................................................... 73
13th Contravention: Failure to comply with notice to produce....................................... 75
Accessorial liability – principles...................................................................................... 81
Background and purpose............................................................................................ 81
Aid, abet, counsel or procure a contravention.............................................................. 85
Knowingly concerned in or party to a contravention.................................................... 89
Wilful blindness.......................................................................................................... 94
Accessorial liability in the context of s 550.................................................................. 100
Accessorial liability – breach of an award................................................................... 101
Submissions – particular issues..................................................................................... 111
Accessorial liability.................................................................................................... 111
Knowledge of award................................................................................................. 112
Wilful blindness – inference of knowledge.................................................................. 115
Sham........................................................................................................................ 116
Defence – A foundational belief in compliance........................................................... 120
Knowledge of a non-compliant system...................................................................... 122
Consideration of accessorial liability............................................................................. 132
1st Contraventions – failure to pay minimum wages................................................... 133
Mrs Masters.......................................................................................................... 134
Dr Masters............................................................................................................ 138
2nd Contraventions – failure to pay overtime penalties................................................ 143
Mrs Masters.......................................................................................................... 145
Dr Masters............................................................................................................ 146
3rd Contraventions – failure to pay weekend loading.................................................. 147
Mrs Masters.......................................................................................................... 148
Dr Masters............................................................................................................ 148
4th Contraventions – failure to pay public holiday penalty rates.................................. 149
Mrs Masters.......................................................................................................... 149
Dr Masters............................................................................................................ 150
5th Contraventions – failure to pay public holidays not worked................................... 150
Mrs Masters.......................................................................................................... 152
Dr Masters............................................................................................................ 152
6th Contravention – failure to pay annual leave.......................................................... 152
Mrs Masters.......................................................................................................... 153
Dr Masters............................................................................................................ 154
7th Contravention – failure to pay 17.5% loading on annual leave............................... 154
Dr Masters............................................................................................................ 155
8th Contravention – failure to pay accrued annual leave............................................. 156
Mrs Masters.......................................................................................................... 157
Dr Masters............................................................................................................ 157
9th Contraventions – unauthorised deductions (PAYG)................................................ 157
Mrs Masters.......................................................................................................... 159
Dr Masters............................................................................................................ 159
10th Contraventions – failure to keep records.............................................................. 160
Mrs Masters.......................................................................................................... 161
Dr Masters............................................................................................................ 161
11th Contraventions – false & misleading records........................................................ 161
Mrs Masters.......................................................................................................... 162
Dr Masters............................................................................................................ 163
12th Contraventions – failure to provide pay slips........................................................ 164
Mrs Masters.......................................................................................................... 165
Dr Masters............................................................................................................ 165
13th Contravention – failure to comply with notice to produce..................................... 166
Dr Masters............................................................................................................ 166
Relief........................................................................................................................... 167
Conclusion................................................................................................................... 168
Introduction
These reasons for judgment concern issues of liability in a proceeding brought by the Fair Work Ombudsman (Ombudsman) against NoBrace Centre Pty Ltd (NoBrace) and others.
NoBrace operated a dental practice in Melbourne’s central business district. The founder and operator of NoBrace respectively are the second and third respondents, Mrs Masters and Dr Masters. The proceeding arose out of NoBrace’s employment of a dental technician, Ms Arang Lee (Ms Lee), who was entitled to be paid pursuant to the Health Professionals and Support Services Award 2010 (Health Award). Ms Lee’s role as a dental technician fell within the classification of Support Services Employee – Level 4 of the Health Award. When Ms Lee commenced employment she was a student technician. While she worked as a student technician she was paid at a rate of $12.00 per hour. Ms Lee obtained her Diploma in Dental Technology in December 2010, following which she worked as a qualified technician and later, was paid at the rate of $15.00 per hour.
Although Ms Lee had been employed for a longer time in the dental practice (albeit by a different corporate entity), the relevant period of Ms Lee’s employment by NoBrace, the subject of this proceeding is from 2 April 2011 to 2 February 2014.
NoBrace was described during the hearing as being a family practice. For the period of her employment, Ms Lee had been regarded as a part of that family. Ms Lee was a citizen of South Korea. When she first came to Australia, Ms Lee held what she described as a Working Holiday visa. When she commenced her employment, Ms Lee held a student visa. In early 2011, Ms Lee sought the Masters’ assistance in her application for a Temporary Work (Skilled) (subclass 457) visa. They agreed to so assist her and did so. The Masters engaged a lawyer who practiced as a migration agent to provide them advice and prepare an agreement that supposedly recorded the terms of Ms Lee’s employ by NoBrace. The lawyer provided certain advice and prepared an agreement which recorded that Ms Lee would be paid an annual salary of $50,000 in respect of the work she was to perform for NoBrace (Agreement). The Agreement recorded that sum because it was the figure that was apparently stipulated by the migration agent as the minimum sum that was required to satisfy one of the criteria for Ms Lee’s 457 visa application.
In March 2011, the parties executed the Agreement. In the period of her employment until March 2011, Ms Lee’s net pay had been paid by direct credit to her nominated bank account. Following entry into the Agreement, Ms Lee’s net pay was paid in cash.
Despite the terms of the Agreement, a discussion was held between Dr Masters and Mrs Masters as to what was considered to be an appropriate rate of pay for a person having Ms Lee’s experience as a dental technician. Dr Masters suggested and Mrs Masters acquiesced in the suggestion that a pay rate of $15.00 per hour was above the applicable award rate and should be adopted in paying Ms Lee for the performance of her services. They acted upon this view of the matter.
At no stage was Ms Lee paid $50,000 per annum and at no stage did she complain of not being paid that amount. Ms Lee was paid at a gross rate of $15.00 per hour. As with other employees of NoBrace, Ms Lee manually recorded the number of hours that she worked each day. Apart from her hourly pay, Ms Lee was paid no penalty rates for weekend or other work, no public holidays, no annual leave and no other allowances. Tax was deducted from her gross fortnightly pay.
At the material times, NoBrace engaged a bookkeeper, Ms Wong. Ms Wong, who had been engaged by NoBrace since 2008, explained the manner in which she kept the company accounts using a software program known as QuickBooks. Ms Wong recorded both Ms Lee’s pay and the amount withheld in respect of PAYG income tax. She made those records on the basis that the Agreement was operative. However, Ms Wong also calculated Ms Lee’s pay using the $15.00 hourly pay rate that had been stipulated by Dr Masters, multiplied by the number of hours of work that had been performed by Ms Lee.
As noted, Ms Lee was never paid in accordance with the Agreement. It was the applicant’s case that after the Agreement had been executed, Mrs Masters communicated with Ms Wong by an email in which Ms Wong was told of the Agreement and that to maintain the supposed efficacy of the Agreement it would be necessary to remit PAYG installments of income tax to the Australian Taxation Office on the basis that Ms Lee was being paid a gross salary of $50,000 per annum. Ms Wong was also instructed to prepare Ms Lee’s net pay on the basis that she was to be paid at the rate of $15.00 per hour. Once the net pay payable to Ms Lee had been had calculated, Ms Wong would inform Mrs Masters of her calculation. Mrs Masters would then write a cheque payable to cash for an amount equal to a fortnightly instalment of the nominal $50,000 annual salary. Ms Lee was not given the cash cheque. Once the cheque was cashed, Ms Lee was given an amount representing her fortnightly pay as calculated by Ms Wong at the rate of $15.00 per hour. NoBrace retained the balance of the funds. Until 31 October 2012, Mrs Masters gave Ms Lee that cash. From November 2012, Ms Lee was given her cash pay by Ms Wong.
In the period 2 April 2011 to 31 October 2012, Mrs Masters had day-to-day responsibility for NoBrace’s administration including employees’ entitlements. Within that period, the Masters’ marriage was beset by difficulty. When, on 31 October 2012, Mrs Masters resigned as sole director and secretary of NoBrace, Dr Masters stepped into each of those roles. With effect from that date, he passed to Ms Wong the responsibility of paying Ms Lee for her fortnight’s work. Mrs Masters did return to NoBrace sporadically after 2012, however, she had three young children and her involvement at NoBrace was minimal. From this time it appears that her relations with Ms Wong were not warm.
The Ombudsman alleges that Ms Lee was not paid in accordance with the Health Award and that NoBrace contravened provisions of the Fair Work Act 2009 (Cth) (FWAct) in failing to pay Ms Lee: (a) the minimum amounts prescribed by the Health Award, and; (b) the amounts due to Ms Lee by way of: (i) overtime; (ii) weekend loading; (iii) public holidays; (iv) annual leave. It also alleges that NoBrace contravened the FW Act by making unauthorised deductions from Ms Lee’s wages, being certain amounts of PAYG income tax as calculated by reference to the remuneration that would have been payable under the Agreement. A series of further allegations are made in relation to failures by NoBrace to keep records in accordance with the FW Act and regulations thereunder including the timely provision of pay slips. Finally, it is alleged that NoBrace contravened the FW Act in failing to comply with a notice to produce served on it. Declarations are sought in respect of those respective contraventions. Hereafter, where a provision of legislation is referred to in these reasons it is a reference to the FW Act unless indicated otherwise.
As against Mrs Masters and Dr Masters, claims are made that they had actual knowledge of the matters comprising the primary contraventions by NoBrace and that each of them was an intentional participant in such contraventions such that each is liable as an accessory pursuant to s 550. Dr Masters is alleged to be liable as an accessory in respect of all contraventions by NoBrace. A slightly narrower band of accessorial liability is alleged against Mrs Masters.
The Ombudsman alleges that the total of all sums not paid to Ms Lee is $66,945.24. An order is sought for the payment to Ms Lee by NoBrace of that sum, with interest. The respondents’ counsel accepted the accuracy of the Ombudsman’s analysis and calculations concerning the manner of payment (and underpayment) to Ms Lee of her fortnightly pay, penalties, accrued leave and PAYG income tax installments. These concessions significantly narrowed the scope of the proceeding.
With minor exceptions, NoBrace made significant admissions in relation to the alleged contraventions of the FW Act. Before trial, NoBrace had admitted that an aggregate sum of $54,755.34 together with interest was payable in consequence of all alleged contraventions, save for one alleged contravention (being an alleged underpayment to Ms Lee of $12,189 respecting unauthorised deductions of PAYG tax installments). In opening, NoBrace expanded that admission to accept that the full sum claimed was owed to Ms Lee.
The Ombudsman also seeks orders for compensation together with the imposition of penalties and injunctions to restrain the Masters from engaging in further conduct in contravention of the Health Award. At trial, counsel for the Ombudsman submitted that as concerned accessorial liability, the claim for compensation was somewhat novel. The parties agreed that in addition to the question of penalties, the issues relating to the claim for compensation would likewise be deferred until determination of the liability issues in the proceeding.
The Agreement was a sham. The parties to that Agreement did not intend that it was to operate according to its terms. To the extent that the respondents effected payment of PAYG installments of income tax in respect of the income derived by Ms Lee from her services as a dental technician with NoBrace, those parties clearly recognised that such payment was essential to maintaining the outward appearance that the Agreement was on foot. To have done otherwise would have presented an immediate risk of exposing to the ATO – and in turn the Department of Immigration – that Ms Lee was not in receipt of an annual salary of $50,000 and so was not eligible for a 457 visa. As the parties well knew, Ms Lee was paid at a rate of $15.00 per hour.
The conclusion that the Agreement was a sham does not dispose of this claim. The Ombudsman raised thirteen contraventions of the FW Act and the Fair Work Regulations 2009 (Cth) (FW Regulations). While many of them were admitted by NoBrace, the parties were agreed that the substantive issue in the case was whether Mrs Masters and Dr Masters were liable as accessories under s 550.
In substance, so far as NoBrace contested the allegations, I have held that NoBrace contravened the relevant provisions. I have also held that the Masters are liable as accessories for the majority of those contraventions. The scope of the Masters respective liability differed.
Procedural history
The proceeding was commenced by application filed on 31 August 2015. Thereafter, the preparation for trial was regulated by a series of orders including those made since early 2016. On 22 March 2016, a consent order was made for the matter to be listed for trial on 17 February 2017. Shortly afterwards, orders were made by consent for the filing of an agreed statement of facts and affidavits, confined to issues of liability. On 26 August 2017, orders were made granting the Ombudsman leave to file an amended statement of claim (AMSOC) and for an amended defence to be filed thereafter.
A detailed statement of agreed facts was filed recording matters agreed as between the Ombudsman and NoBrace. The statement of agreed facts was expressed to be for the purposes of s 191 of the Evidence Act 1995 (Cth). It was not a statement given by or on behalf of Mrs Masters or Dr Masters. By this statement, NoBrace admitted that it had contravened the majority of the provisions alleged by the Ombudsman. However, for the avoidance of doubt, the statement also identified those alleged contraventions which were contested by NoBrace. While NoBrace had admitted the majority of the allegations pleaded against it, at the same time Mrs Masters and Dr Masters denied those allegations in as much as they each denied having had actual knowledge of, or being intentional participants in, those alleged contraventions. Although the statement of agreed facts pre-dated the parties’ pleadings, it is convenient to identify agreed matters in the consideration of the AMSOC and defence.
The AMSOC post-dated the respondents’ amended defence, but as events occurred the amended defence was treated as being responsive to the Ombudsman’s claims. In opening addresses it was confirmed that this defence was filed on behalf of all defendants.
Pleaded issues
As augmented by the agreed statement of facts and their opening submissions, the issues at the hearing in relation to the substantive allegations raised by the AMSOC and the amended defence thereto, may be distilled as follows:
Parties
It was not in issue that the Ombudsman was a statutory appointee of the Commonwealth pursuant to s 687, that the Ombudsman was a fair work inspector pursuant to s 701 and that it had standing to bring the proceeding. Nor was it in issue that one witness, Mr Dane Stella, was at all relevant times a fair work inspector pursuant to s 700.
It was common ground that NoBrace was a corporation incorporated on 4 September 2006 pursuant to the Corporations Act 2001 (Cth) and both a constitutional corporation and national system employer within the meaning of ss 12 and 14(1)(a) of the FW Act. Also agreed was that NoBrace was exclusively engaged in the business of providing dental services, that it acted as corporate trustee of a trust styled the MyoBrace Centre Trust and that it was Ms Lee’s employer.
As concerned Mrs Masters, it was agreed that she had been NoBrace’s sole director and secretary in the period between 4 September 2006 and 31 October 2012. It was accepted that Mrs Masters had been responsible for retaining Ms Lee in employment on behalf of NoBrace and that she was aware of the duties performed by Ms Lee in her employ. By the amended defence, Mrs Masters also admitted that she had been responsible for the direction, supervision and control of NoBrace’s bookkeeper, Ms Wong, at all relevant times.
Mrs Masters made further admissions that she had been aware of and responsible for determining Ms Lee’s rate of pay on behalf of NoBrace and also that she had been aware of and responsible for the method of payment of Ms Lee’s wages on behalf of NoBrace.
As to an allegation that Mrs Masters and Dr Masters were jointly responsible for the day-to-day operation of the NoBrace business, Mrs Masters accepted that she had responsibility for corporate matters but disclaimed responsibility for the conduct of the dental practice. Dr Masters accepted that he was a registered dental practitioner who carried on a dental practice on NoBrace’s premises and that Dr Masters had been NoBrace’s sole director and secretary from 31 October 2012. As concerned the involvement of Dr Masters in the day-to-day operation of NoBrace’s business and his knowledge of Ms Lee’s employ, pay and conditions, Dr Masters took the stance that until 31 October 2012 he had been responsible for the delivery of dental services, but that he had a limited role in the administration of the practice and no responsibility for checking arrangements made with respect to the payment of employees. Dr Masters ascribed these responsibilities to Mrs Masters.
Otherwise, Dr Masters pleaded that while he knew of Ms Lee’s duties as dental technician and her rate of pay, he had taken no steps to ascertain whether the rate complied with the requirements of the relevant instruments (again, having left that responsibility to Mrs Masters). Moreover, Dr Masters pleaded that with effect from 31 October 2012, Ms Lee had worked happily in the dental practice for a period of some two years such that Dr Masters had seen no need to investigate compliance with the requirements of relevant instruments.
Ms Lee’s employment
It was common ground that Ms Lee was a Korean national who had been sponsored by NoBrace on a Temporary Work (Skilled) Visa (subclass 457). Particulars to this allegation stated that on about 19 January 2011 an application had been made on behalf of NoBrace to the Department of Immigration and Citizenship for a Business Nomination visa in respect of Ms Lee, nominating a salary of $50,000 payable to Ms Lee by NoBrace in respect of 38 hours work in each week of employment. It was also common ground that Ms Lee was a national system employee within the meaning of the FW Act.
The parties were further agreed that Ms Lee had been employed by NoBrace on a full time basis as a dental technician from 2 April 2011 to 2 February 2014, and that she had performed the duties of dental technician in that period.
Also agreed was that in about March 2011, Ms Lee and NoBrace had entered the Agreement pursuant to which Ms Lee was to commence employment with NoBrace and that terms of the Agreement included that Ms Lee would:
(a)be employed as a dental technician by NoBrace on a full time basis;
(b)be paid an initial salary of $50,000 per annum, which would be subject to an initial review after three months and thereafter on 1 December each year;
(c)perform designated tasks.
Further admissions made in respect of Ms Lee’s employ included that she had worked in the capacity of a dental technician for NoBrace from Mondays to Saturdays, working from 8:00am to 5:00pm and on average 78 hours per fortnight. The Ombudsman’s pleading provided particulars as to certain time sheets that had been completed each day by Ms Lee during the period of her employment.
Also agreed was that on 3 November 2013, NoBrace had entered into an agreement with Ekera Dental Pty Ltd (Ekera) styled a Dental Practice Acquisition Agreement pursuant to which NoBrace sold its dental practice to Ekera. This sale was completed on 2 February 2014. Completion of this sale became the catalyst for the proceeding inasmuch as: (a) Ms Lee’s employ was terminated on about 2 February 2014; (b) upon completion of the Ekera sale, NoBrace withdrew its sponsorship for Ms Lee’s 457 visa application; (c) termination of her employment thus gave rise to complications with Ms Lee’s application.
The parties were agreed that NoBrace paid Ms Lee $15.00 per hour throughout the period from 2 April 2011 to 2 February 2014.
Legislation
The AMSOC pleaded out certain legislative provisions, all of which were admitted by each respondent in respect of NoBrace’s employment of Ms Lee. The respondents accepted that:
(a)NoBrace was bound by the FW Act and Fair Work Regulations 2009 (Cth);
(b)NoBrace was bound by the Health Award;
(c)the Australian Pay and Classification Scale, derived from the Health and Community Services Industry Sector – Minimum Wage Order – Victoria 1997 (Health Pay Scale), applied to NoBrace for the purposes of wage rates and penalties in accordance with Schedule A to the Health Award.
It was accepted, that by reason of: (a) the Agreement made in March 2011; (b) the duties undertaken by Ms Lee, and; (c) the hours she had worked, Ms Lee was at all relevant times performing the duties of a dental technician and was properly classified as a Support Services Employee – Level 4 in accordance with the Health Award, Schedule B.
The AMSOC raised a series of thirteen alleged contraventions of the FW Act or FW Regulations. In opening, Mr McKenna of counsel for the Ombudsman classified the contraventions according to four broad categories: (1) underpayment of award entitlements; (2) underpayment of national standard entitlements; (3) impermissible deductions; (4) documentary contraventions. While many of the contraventions involved multiple counts (e.g. continuous underpayment of wages), others involved a single count (e.g. the notice to produce).
While NoBrace admitted the majority of those contraventions, they were not admitted by the Masters. In the course of opening addresses, the position was further clarified. The pleaded position[1] as to the thirteen contraventions is set out below.
1st Contraventions – failure to pay minimum wages
[1]There was some disconformity in the order of the alleged contraventions as between the Ombudsman’s pleading and the submissions (in particular the Ombudsman’s written opening – see the order in which: (1) the seventh and eighth contraventions; (2) the tenth and eleventh contraventions, respectively were addressed). These Reasons adhere to the order in which the alleged contraventions are addressed in the amended pleading (AMSOC).
As to the 1st Contraventions, the Ombudsman alleged and NoBrace admitted that it was obliged by cl 14.3 of the Health Award and cl A.2.5 of Schedule A to that award to pay Ms Lee not less than the minimum wage for her classification for hours that she worked.
The particulars to that allegation identified the respective minimum wage rates that were payable pursuant to the Health Award ($17.46) and those payable under the Health Pay Scale ($16.08). The particulars then identified the minimum wage said to be payable to Ms Lee with effect from certain dates (being from 1 July 2010 to 1 July 2013), expressed as a percentage of the transitional amount specified in the Health Pay Scale.
A cursory examination of the pleading and Health Award underscores the complexity of the process by which that minimum wage was to be ascertained in this case.
It was alleged that NoBrace was obliged to pay Ms Lee as follows:
Pay period commencing after
Pay rate (per hour)
2 April 2011
$16.90
2 July 2011
$17.64
2 July 2012
$18.30
2 July 2013
$18.93
NoBrace admitted that those were the minimum hourly pay rates with effect from each of those respective dates and that during the period 2 April 2011 to 2 February 2014, Ms Lee had worked a total of 6,561 hours[2] for which period she had been underpaid the sum of $20,155.
[2]The Ombudsman’s computations of hours worked and amounts not paid were calculated to two decimal points but these Reasons have adopted rounded numbers.
In the circumstances, NoBrace accepted that it had contravened s 45 by failing to pay Ms Lee the minimum wage required by cl 14.3 of the Health Award and cl A.2.5 of Schedule A thereto.
2nd Contraventions – failure to pay overtime penalties
The 2nd Contraventions – failure to pay overtime penalty rates – stemmed from the circumstance that Ms Lee had at all relevant times performed the duties of a dental technician and had been entitled to such overtime in accordance with cl 28.1 of the Health Award.
Without intending any disservice to the detailed attention that was paid to pleading the AMSOC, it is now sufficient to recognise that NoBrace admitted to having contravened s 45 by failing to pay Ms Lee certain overtime penalties as required by cl 28.1 of the Health Award. NoBrace admitted to non-payment to Ms Lee of such penalties in respect of a total of 1,344 hours worked as overtime during the period 2 April 2011 to 2 February 2014, resulting in underpayments to Ms Lee of the sum of $20,613.
3rd Contraventions – failure to pay weekend loading
The 3rd Contraventions – failure to pay weekend loading – stemmed from the circumstance that Ms Lee had worked and been entitled to, but not paid, such weekend loading in accordance with cl 26.1 of the Health Award and cl A.7.3 of Schedule A thereto.
Again, it is sufficient to recognise that NoBrace admitted to having contravened s 45 by failing to pay Ms Lee certain weekend loading as required by cl 26.1 of the Health Award and cl A.7.3 of Schedule A to that award. NoBrace admitted to non-payment to Ms Lee of such weekend loading in respect of a total of 479 hours worked during the period 2 April 2011 to 2 February 2014, during which period it had underpaid Ms Lee by the sum of $2,296.
4th Contraventions – failure to pay public holiday penalty rates
The 4th Contraventions – failure to pay public holiday penalty rates – derived from Ms Lee’s entitlement to such penalty rates in accordance with cl 32.2 of the Health Award and cl A.7.3 of Schedule A to that award in respect of hours worked on public holidays.
NoBrace admitted to having contravened s 45 by failing to pay Ms Lee at holiday penalty rates as required by cl 32.2 of the Health Award and cl A.7.3 of Schedule A to that award. NoBrace admitted to non-payment to Ms Lee in respect of a total of 15 hours worked during the period 28 April 2011 to 13 June 2011, resulting in underpayments to Ms Lee of the sum of $77.
5th Contraventions – failure to pay public holidays not worked
The 5th Contraventions concerned the failure to pay Ms Lee for public holidays not worked and derived from Ms Lee’s entitlement to such pay in accordance with s 116.
NoBrace admitted to having contravened s 44 by failing to pay Ms Lee her base rate of pay for specified public holidays as required by s 116. NoBrace admitted to underpayment in respect of a total of 142 hours as related to those public holidays, resulting in underpayments to Ms Lee amounting to the sum of $2,509.
6th Contravention – failure to pay annual leave
The 6th Contravention – failure to pay during periods of annual leave – derived from Ms Lee entitlement to such holiday pay in accordance with ss 87 and 90(1).
NoBrace admitted to having contravened s 44 by failing to pay Ms Lee her base rate of pay for a period of specified leave as required by s 90(1). NoBrace admitted to underpayment to Ms Lee in respect of the period 14 September 2011 to 15 October 2011 and that such underpayments to Ms Lee amounted to the sum of $1,105.
7th Contravention – failure to pay 17.5% loading on annual leave
The 7th Contravention – failure to pay leave loading of 17.5% upon her pay in respect of periods of annual leave – derived from Ms Lee’s entitlement to such loading pursuant to cl 31.2 of the Health Award.
NoBrace admitted to having contravened s 45 by failing to pay Ms Lee annual leave loading upon her base rate of pay for a period of specified leave as required by cl 31.2 of the Health Award. NoBrace admitted to non-payment of such leave loading in respect of the period 14 September 2011 to 15 October 2011 amounting to an underpayment to Ms Lee of $194.
8th Contravention – failure to pay accrued annual leave
The 8th Contravention – failure to pay Ms Lee for annual leave not taken – derived from Ms Lee’s entitlement to such pursuant to s 90(2).
NoBrace admitted to having contravened s 44 by failing to pay unpaid accrued annual leave as required by s 90(2). NoBrace admitted to non-payment to Ms Lee of such accrued annual leave for an amount of $7,806.
9th Contraventions – unauthorised deductions (PAYG)
The 9th Contraventions – deduction of unauthorised amounts from Ms Lee’s pay – arose from the requirement to pay Ms Lee in full the amounts payable in respect of work performed by her: s 323(1)(a).
At trial, NoBrace admitted the matters comprising the 9th Contraventions, including the sum by which it was alleged that Ms Lee had been underpaid; namely, $12,190.
However, it is necessary to understand the factual basis for these contraventions. Before trial, the only pleaded admission made in relation to this series of allegations was that NoBrace accepted it was obliged (pursuant to s 323(1)(a)), to pay Ms Lee in full those amounts as alleged. NoBrace did not admit to having contravened s 323(1)(a) by failing to pay Ms Lee in full the amounts payable in respect of work she had performed. It was alleged that NoBrace had: (a) made unauthorised deductions from Ms Lee’s wages of $24,394 and; (b) underpaid Ms Lee the sum of $12,190. NoBrace did not admit to these allegations, raising additional matters in relation to them.
The Ombudsman alleged that during the period of Ms Lee’s employment, NoBrace had deducted from Ms Lee’s wages the amount of PAYG income tax that was required to be remitted to the ATO and that it had so deducted such sums on the footing that the Agreement was operative; that is, as though Ms Lee was in fact being paid in accordance with its terms (as distinct from being paid $15.00 per hour). The particulars given to this allegation identified a series of steps that were said to describe the method by which NoBrace had determined the amount of net pay to be paid to Ms Lee and her PAYG tax:
(a)first, on the basis that Ms Lee was to be paid at fortnightly intervals, a calculation was made of the gross amount that would have been due to Ms Lee on an assumption that her annual salary had been $50,000 (later $55,000). For example, upon an annual salary of $50,000, the gross entitlement was $1,923.00;
(b)secondly, a deduction was made from that gross amount, of the amount of PAYG income tax that would have been payable upon the preceding assumption, which was remitted to the ATO;
(c)thirdly, a calculation was made of Ms Lee’s gross pay based upon the number of hours that she had worked, multiplied by a base rate of $15.00 per hour;
(d)fourthly, a like deduction was made from Ms Lee’s gross pay in respect of PAYG income tax that would have been payable upon the product of the calculation made under the third step above;
(e)fifthly, the deducted amount made pursuant to the fourth step above was retained by NoBrace for its use and benefit;
(f)sixthly, the residual amount was then paid to Ms Lee.
These matters were agreed as between the Ombudsman and NoBrace.
Inherent in the adoption of this methodology was that NoBrace made both a deduction and payment of PAYG tax based on the sham annual salary of $50,000 and a further deduction from Ms Lee’s gross pay of the amount of tax that would be payable upon earnings calculated at the rate of $15.00 per hour (see Steps 2 and 4 above).
The Ombudsman alleged that the amounts deducted from Ms Lee’s pay as a result of the implementation of these steps resulted in the making of deductions that were not permitted in accordance with s 324 by reason that the amounts so deducted were not: (a) authorised by Ms Lee in writing; (b) for her benefit; (c) authorised by Ms Lee in accordance with an enterprise agreement; (d) authorised by or under a modern award or a Fair Work Commission order; (e) authorised by or under a law of the Commonwealth, a State, a Territory or court order.
NoBrace pleaded that it had made the PAYG deductions that it believed were required by the relevant laws of the Commonwealth and not otherwise: see FW Act, para 324(1)(d). As stated above, at trial, NoBrace admitted the matters comprising the 9th Contraventions.
10th Contraventions – failure to keep records
The 10th Contraventions – failure to keep records – arose from the requirement pursuant to s 535(1) to make, and to keep, a record in accordance with regs 3.33, 3.34 and 3.36, being a recording in relation to Ms Lee of: (a) her rate of remuneration; (b) the gross and net amounts paid to her; (c) any deductions made from those amounts; (d) details of loadings or penalties paid to her; (e) overtime records; and (f) leave records. NoBrace admitted each of these allegations (i.e. the content of the legislative obligations).
The Ombudsman then alleged, and NoBrace did not admit, that it had failed to make or keep such records. The failure to do so grounded alleged contraventions of s 535(1).
In opening, this issue was refined in as much that it was admitted NoBrace’s bookkeeper, Ms Wong, had kept the records of Ms Lee’s pay, including the hours that she had worked and prepared her pay on the multiplier of $15.00 per hour. What was described as the key point in relation to these contraventions was whether Ms Wong was acting in her own private capacity as the owner of a bookkeeping business or acting as on behalf of NoBrace. In addition to the QuickBooks records kept for NoBrace, Ms Wong also retained a separate record by way of an Excel spreadsheet being a record of the amounts that they were paid at the rate of $15.00 per hour and the tax that would have been payable on that basis. The Ombudsman contended that by force of s 793(1), the conduct engaged in by Ms Wong above was to be taken for the purposes of the Act to be the conduct of NoBrace.
11th Contraventions – false & misleading records
Mrs Masters had knowledge of the essential matters constituting the 12th Contraventions. However, Mrs Masters was not involved in any of the 12th Contraventions that occurred after 31 October 2012.
Dr Masters
By letter dated 20 February 2007, the Office of Workplace Services wrote to Dr Masters, relevantly, stating:
Please note that it is a legal requirement to issue pay slips in accordance with the above regulation. The payslips issued to an employee need to contain the following information: . . .
The letter continued, advising Dr Masters that ‘you are requested to take immediate action to ensure you have met the requirements of the award and Act for all relevant existing and former employees, including the issues of pay slips.’ (emphasis added).
Dr Masters was instrumental in the decision to enter the sham and to give effect to it thereafter.
Dr Masters was involved in the 12th Contraventions, including those that occurred in the period up to 2 February 2014. I incorporate the matters stated in relation to the 1st Contraventions in support of that conclusion.
13th Contravention – failure to comply with notice to produce
I have found that NoBrace committed the 13th Contravention.
Dr Masters
Accessorial liability was only alleged against Dr Masters.
The elements of this contravention are whether Dr Masters knew that:
(1)an inspector of the Ombudsman had served a notice to produce;
(2)the notice to produce stipulated the period within which NoBrace was required to comply with that notice;
(3)NoBrace failed to comply with the notice in the stipulated period.
Dr Masters was the person with direct involvement in the events which constituted this contravention. Dr Masters was served personally with the notice to produce and so knew its contents. He dealt with Mr Stella upon being so served and failed to ensure that the notice was properly complied with, within the designated 14 day period.
On 9 February 2015, Dr Masters provided Mr Stella with some documents. The documents were presented in a highly disorganized manner and in many cases included documents that were not relevant.
In a series of communications with Mr Stella, Dr Masters was essentially dismissive of the Ombudsman’s request for production of the documents the subject of the notice to produce. Dr Masters took the view that Mr Stella had been told that all documents were now held by Ekera, or were obtainable from Ms Wong, that he had sought and obtained the assistance of past employees to locate any residual documents and that these remaining documents had been supplied (whether or not relevant) in a box as his final effort at compliance.
Dr Masters was involved in the 13th Contravention.
Relief
The declaratory relief sought by the Ombudsman is appropriate. Questions raised by the proceeding were real and not theoretical. The Ombudsman had a real interest in raising them. The respondents were proper contradictors and had a true interest to oppose the declarations sought: see Grouped Property Services at [1129] and cases cited.
The present case is not the type of case in which the court would generally decline to grant declaratory relief: Smith v Boné [2015] 233 FCR 568, [8]. To the contrary, it is appropriate that the court should mark out its disapproval of the relevant conduct with a view to encouraging compliance with the subject legislation: Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832, [7]; Grouped Property Services at [1130].
Although injunctions were sought to restrain each of the Masters from engaging in similar conduct in respect of employees who were employed in the Health Industry that contravened the Health Award or NES, the parties did not address any submissions on this issue.
In proceedings brought by a statutory authority it may not be determinative to refusal of an injunction that a risk of further contravention is not demonstrated: cf Trade Practices Commission v Sterling (1979) 28 ALR 497, 521-2 (Lockhart J).
However, I conclude it would not be appropriate to grant an injunction in cirumctances where there is a real question whether the Ombudsman has proved any risk of continuation of the relevant conduct: Maggbury Pty Ltd v Hafale Australia Pty Ltd (2001) 210 CLR 181, [50].
Had I been satisfied that the Ombudsman was otherwise entitled to such relief, I consider that in this case there would be no utility in the grant of the injunctions sought. In Sterling, Lockhart J granted an injunction despite a submission that there was no real risk of the continuation of the offending conduct. His Honour granted that injunction because it was considered to be in the public interest to do so. However, in Sterling no declarations were sought or granted.
In the present case declarations were sought, are being made and will adequately serve the public interest in promoting observance with the FW Act. In my opinion, that public interest is properly served in the present case by the making of declarations.
Conclusion
As concerns the primary allegations, NoBrace has admitted or the court has found that the contraventions in contest are proved.
NoBrace has not paid Ms Lee the sum of $66,945.24 in respect of her entitlements as established and now admitted. However, it has paid quarterly installments of PAYG tax calculated on the basis of the sham Agreement and her supposed annual salary of $50,000. It did so in order to preserve the sham to which Ms Lee was a party.
The allegations of accessorial liability as against Dr Masters and Mrs Masters have also been made out, save in respect of: (1) allegations made against Mrs Masters for the period post 31 October 2012; (2) the 11th Contraventions, for the period post 31 October 2012.
The parties were agreed that issues of compensation, interest and penalties should be stood over for separate determination. Directions have been made to regulate the further hearing on those matters. The court acknowledges the assistance that was provided by counsel in the hearing and determination of the issues on liability.
I certify that the preceding six hundred and fourteen (614) paragraphs are a true copy of the reasons for judgment of Judge A Kelly
Associate:
Date: 22 February 2018
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