Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor
[2019] FCCA 1148
•2 May 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v NOBRACE CENTRE PTY LTD & ANOR | [2019] FCCA 1148 |
| Catchwords: INDUSTRIAL LAW – Fair work action – unpaid wages – failure to comply with s. 716 compliance notice – accessorial liability – director’s liability for company breach – reasonable excuse defence – liability found. |
| Legislation: Corporations Act 2001 (Cth) s.500 Evidence Act 1995 (Cth) s.191 Fair Work Act 2009 (Cth), ss.14, 116, 539, 550, 701, 715, 716, 717 |
| Cases cited: Australian Competition and Consumer Commission v Albert [2005] FCA 1311 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | NOBRACE CENTRE PTY LTD |
| Second Respondent: | ARI MASTERS |
| File Number: | MLG 1462 of 2018 |
| Judgment of: | Judge Blake |
| Hearing date: | 20 March 2019 |
| Date of Last Submission: | 20 March 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 2 May 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr McKenna |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Advocate for the Respondents: | Mr Hassett |
| Solicitors for the Respondents: | Hassett Lee & Co Lawyers |
ORDERS
THE COURT DECLARES THAT:
The Second Respondent was involved, within the meaning of s 550 of the Fair Work Act 2009, in the First Respondent’s contravention of section 716(5) of the Fair Work Act 2009 in failing to comply with the Compliance Notice dated 16 February 2018, and is thereby, pursuant to section 550(1) of the Fair Work Act 2009, taken to have himself committed that contravention.
THE COURT ORDERS THAT:
The proceedings be adjourned to 16 May 2019 at 10:00am for submissions as to penalty.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1462 of 2018
| FAIR WORK OMBUDSMAN |
Applicant
And
| NOBRACE CENTRE PTY LTD |
First Respondent
And
| ARI MASTERS |
Second Respondent
REASONS FOR JUDGMENT
(As Corrected)
Introduction
By Application and Statement of Claim dated 24 May 2018, the Applicant sought orders against each of the First Respondent and the Second Respondent. The claim advanced by the Applicant against the First Respondent is that the First Respondent failed to comply with a compliance notice issued under section 716 of the Fair Work Act 2009 (‘FW Act’). The Applicant also advances the claim that the Second Respondent was involved in the First Respondent’s failure to comply with the compliance notice under section 550 of the FW Act.
In a Response dated 26 June 2018, the First Respondent consented to the making of various orders sought against it in the Application and the Statement of Claim.
It is common ground that on 19 February 2019, the First Respondent was placed into voluntary liquidation. The proceedings are therefore stayed against the First Respondent. The Applicant has not sought and does not propose to seek leave from the Federal Court of Australia to proceed against the First Respondent. The matter therefore only proceeded against the Second Respondent.
Relevantly, the Second Respondent in the Response denied any involvement in the First Respondent’s contravention of the FW Act.
Accordingly, the issue for determination in this proceeding is whether the Second Respondent was involved, within the meaning of section 550 of the FW Act, in the First Respondent’s contravention of section 716(5) of the FW Act.
For the reasons that follow, I have determined that the Second Respondent was involved in the First Respondent’s contravention of section 716(5) of the FW Act, within the meaning of section 550 of the FW Act.
Factual Findings
This matter proceeded on the basis of a Statement of Agreed Facts and Matters in Issue (‘Statement of Agreed Facts’) filed on behalf of all parties to the proceeding. The findings of fact I make below are based on the Statement of Agreed Facts, dated 29 November 2018, and filed by the parties pursuant to section 191 of the Evidence Act 1995.
The First Respondent is and was a registered corporation incorporated under the Corporations Act 2001 (Cth) since 4 September 2006.
The First Respondent employed Mr Ruimin Yao from 5 March 2012 to 8 February 2014 (‘Employment Period’) as a dental technician. Mr Yao was engaged by the First Respondent as a full time employee.
Mr Yao was classified as a ‘Support Services Level 4’ employee under the Health Professionals and Support Services Award 2010 (‘the Health Professionals Award’). The transitional instrument relevant to Mr Yao’s employment was the Health and Community Services Industry Sector-Minimum Wage Order-Victoria 1997 [AP747047].
During the Employment Period:
(a)Mr Yao was paid a flat rate of $15 per hour for all hours worked for the First Respondent; and
(b)Mr Yao worked on weekdays, Saturdays, public holidays and also worked some overtime.
From 4 July 2017, Fair Work Inspector Kawthar Girach (‘Inspector Girach’) undertook an investigation into the employment of Mr Yao by the First Respondent and the First Respondent’s compliance with Commonwealth workplace laws (‘Investigation’).
The Applicant is an inspector, pursuant to section 701 of the FW Act and has standing, pursuant to section 539(2) of the FW Act, to bring proceedings for a contravention of section 716(5).
During the Employment Period, the First Respondent was a national system employer within the meaning of section 14 of the FW Act.
During the Employment Period, Mr Yao was a national system employee within the meaning of section 13 of the FW Act.
The Second Respondent is, and was from 31 October 2012, the sole director and secretary of the First Respondent.
The Second Respondent was, at all relevant times, responsible for the management of the First Respondent’s business.
The First Respondent was bound by the FW Act in respect of the employment of Mr Yao.
The First Respondent was covered by the Health Professionals Award which applied to the employment of Mr Yao.
As a result of the Investigation, Inspector Girach reasonably believed that the First Respondent had contravened the following terms of the Health Professionals Award and the National Employment Standards:
(a)clause 14.3 and clause A.2.5 of Schedule A to the Health Professionals Award by failing to pay Mr Yao his minimum rates of pay for ordinary hours worked;
(b)clause 26.1 of, and clause A.7.3 of Schedule A2 to, the Health Professionals Award, by failing to pay Mr Yao the required loading for work performed on Saturdays;
(c)clause 28.1(a)(i) of the Health Professionals Award, by failing to pay Mr Yao the penalty rates for the first two hours of overtime worked;
(d)clause 28.1(a)(ii) of the Health Professionals Award, by failing to pay Mr Yao the penalty rates for overtime worked after the first two hours of overtime;
(e)clause 32.2 of, and clause A.7.3 of Schedule A to, the Health Professionals Award, by failing to pay Mr Yao the required rate for work undertaken on a public holiday; and
(f)section 116 of the FW Act, by failing to pay Mr Yao for absences from work on a day that was a public holiday.
Inspector Girach determined that the First Respondent had underpaid Mr Yao an amount of $36,693.01 as a result of the First Respondent’s contraventions outlined above.
On 16 February 2018, Inspector Girach prepared a compliance notice pursuant to section 716 of the FW Act, in respect of the First Respondent’s contraventions outlined above (the ‘Compliance Notice’).
On 16 February 2018 the Compliance Notice was served on the First Respondent by way of personal service on the Second Respondent, by Fair Work Inspector Katherine Goonan.
The Compliance Notice required the First Respondent to pay $36,693.01 to Mr Yau by 12 March 2018.
The Compliance Notice met the requirements set out in section 716(3) of the FW Act.
The First Respondent was required to comply with the Compliance Notice by 12 March 2018, or apply to have the Compliance Notice reviewed by an eligible court prior to the date of compliance, in accordance with section 717 of the FW Act.
The First Respondent did not apply to have the Compliance Notice reviewed by an eligible court pursuant to section 717 of the FW Act.
As at the date of the Compliance Notice, the First Respondent had not entered into, and has not since entered into, an enforceable undertaking with respect to the contraventions the subject of the Compliance Notice.
The First Respondent did not comply with the Compliance Notice by 12 March 2018, or at all.
The First Respondent did not have a reasonable excuse for failing to comply with the Compliance Notice.
The First Respondent did not respond to or otherwise contact the office of the Applicant, in respect to the Compliance Notice, by 12 March 2018.
At all relevant times, the Second Respondent was aware of the matters above.
By reason of the Statement of Agreed Facts, the First Respondent contravened section 716(5) of the FW Act by failing to comply with the Compliance Notice.
In addition to the Statement of Agreed Facts, at the hearing on liability, the Court also had before it an affidavit filed by Inspector Girach dated 20 December 2018. No objection was taken to the filing of that affidavit and Inspector Girach was not required for cross examination. I accept the evidence of Inspector Girach contained within the affidavit.
In the affidavit, Inspector Girach annexed a copy of the Compliance Notice given to the First Respondent and the Second Respondent. She also annexed correspondence and records documenting the Applicant’s attempts to secure compliance with the Compliance Notice by the Second Respondent.
Furthermore and relevantly, Inspector Girach deposed in her affidavit to the following:
(a)On 14 March 2018, she had a telephone conversation with the Second Respondent. In that conversation, Inspector Girach enquired as to whether the Second Respondent had received an email about the First Respondent’s failure to comply with the Compliance Notice and notes the Second Respondent’s confirmation that he received the email.
(b)On 14 March 2018, she had a conversation with the legal representative of the First and Second Respondents enquiring as to whether the First Respondent was intending to comply with the Compliance Notice. Inspector Girach notes that the representative replied ‘No. The Company has no money’.
Finally, the affidavit of Inspector Girach annexed to her affidavit bank records for the First Respondent and the Second Respondent obtained from the National Australia Bank Limited. Those bank records show a range of transactions being made in respect of each of the respondents. Among other things, the bank statements show that in the period from 1 November 2010 to 6 February 2014, a period in which the First Respondent was trading, approximately $1.6 million was withdrawn from the First Respondent’s account and a further $2.1 million dollars was withdrawn thereafter. There is no dispute that these amounts were withdrawn.
The Second Respondent did not lead any evidence as to the nature of the withdrawals from either the First Respondent’s bank account, or from his own bank account. In light of the failure of Dr Masters to lead any evidence about this, I infer and find that a number of the withdrawals including those made to ‘BMW Aust Finance’, ‘Home Loan Account/Home Loan Repayment’ and ‘purchase of merc’ were of a personal nature and were not related to the First Respondent’s business activities, as were payments variously described as ‘Withdrawal’, ‘Payoffccdec Ari’ and ‘Ari CC Payment’. I find that these withdrawals were made either by the Second Respondent, or for the Second Respondent’s benefit.
A review of the bank statements annexed to the Affidavit of Inspector Girach also show a large withdrawal of $4,852,178.20 on 10 February 2014. This withdrawal comes after the first Respondent sold his business. Again, the Second Respondent led no evidence about this. In the circumstances, I find that the withdrawal was made in the amount set out by the Second Respondent or for his benefit.
While the Second Respondent did not lead any evidence as to the nature or purpose of any of the transactions, he submitted into evidence bank statements of the First Respondent for the period from April 2015 to March 2016, and from May 2017 to April 2018. Those bank statements show that on the date the Compliance Notice was issued, the First Respondent had an amount of $14,122.67 in its account. Further, as at the date of compliance (12 March 2018) the First Respondent had an amount of $14,040.77 in its bank account.
In light of the evidence that has been tendered, the assertion that the First Respondent had no money when the Compliance Notice was due is unsustainable. I find that the First Respondent had an amount of at least $14,040.77 in its account on the final date that the Compliance Notice was due.
Relevant Legislation
Section 716 – Compliance Notices
Section 716 of the Act deals with compliance notices.
Relevantly, subsection (1) provides that section 716 will apply if an inspector reasonably believes that a person has contravened a term of a modern award.
Section 716(2) permits an inspector, except as provided by section 716(4), to give a person a notice requiring the person to do either or both of the following within such reasonable time as is specified in the notice. Firstly, a person may take specified action to remedy the direct effects of the contravention referred to in subsection (1). Or, a person may produce reasonable evidence of the person’s compliance with the compliance notice.
Section 716(3) sets out the content to be included in a compliance notice.
Section 716(4) provides that an inspector must not give a notice under subsection (1) in relation to a contravention if the person has given an undertaking under section 715 of the Act in relation to the contravention and the undertaking has not been withdrawn.
Section 716(4A) provides that an inspector must not apply for an order under Division 2 of Part 4-1 in relation to a contravention if, among other things, the inspector has given the person a notice in relation to the contravention and that notice has not been withdrawn and the person has complied with the notice, or the person has made an application under section 717 of the Act to review the notice. By virtue of subsection (4B), a person who complies with a compliance notice is not taken to have admitted contravening the provision, or to have been found to have contravened the provision.
Section 716(5) creates a civil offence. It provides that a person must not fail to comply with a compliance notice that is given under section 716.
Finally, it is a defence under section 716(6) to fail to comply with a compliance notice if the person has a reasonable excuse.
Section 550 – Accessorial Liability
Section 550 of the Act deals with what is commonly termed accessorial liability. Section 550(1) provides that a person who is involved in a contravention of a civil remedy provision of the Act is taken to have contravened that provision. Section 550(2) provides that a person is involved in a contravention of a civil remedy provision if, and only if, the person:
a)has aided, abetted, counselled or procured the contravention; or
b)has induced the contravention, whether by threats or promises or otherwise; or
c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
d)has conspired with others to effect the contravention.
The Applicant in this matter relied in particular on sections 550(2)(a) and 550(2)(c).
The general principles relating to accessorial liability were discussed by the High Court in Yorke v Lucas (1985) CLR 661.
The Full Court of the Federal Court of Australia in Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman (2018) 360 ALR 261 referred to the discussion of subsections 550(2)(a) and 550(2)(c) by Justice White in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 (‘Devine Marine’). In that matter, Justice White stated:
‘[176] Although the general principles relating to accessorial liability are settled, their application in a case such as the present is not without difficulty. In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of “the essential matters” which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]–[160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful.
…
[177] Actual, rather than imputed, knowledge is required. So much was made clear in Giorgianni v The Queen (1985) 156 CLR 473 at 506–7 by Wilson, Deane and Dawson JJ
…
[178] The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]–[325].
[179] As indicated, these principles are not in doubt. The more difficult question arises from their application to the circumstances of this case and, in the identification of the essential facts about which an accessory must have actual knowledge.’
In CFMEU v Clarke (2007) 164 IR 299, the Full Court of the Federal Court of Australia stated in relation to accessorial liability:
‘Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct-the accessory should be linked in purpose with the perpetrators (per Gibbs CJ in Giorgianni v The Queen (1985) 156CLR 473 at 479 – 480; see also Mason J at 493 and Wilson, Deane and Dawson JJ at 500). The words “party to, or concerned in” reflect that concept. The accessory must be implicated or involved in the contravention (Ashbury v Reid [1961] WAR 49 at 51; R v Thomas (1987) 10 NSWLR 303 per Lee J at 307E- 308D (agreed with by Street CJ at 304 and Finlay J at 310)) or, as put by Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588 at [34], must participate in, or assent to, the contravention.’
In this Court, His Honour Judge Burchardt stated in Fair Work Ombudsman v Oz Staff Career Services Pty Ltd [2016] FCCA 105, at paragraph [150]:
‘He was aware that the deductions were being made. He had knowledge of this, as I find. He knew that the deductions were not lawful from his interrelationship with the Fair Work Inspectors he had met in 2012 and 2013. He thus had knowledge of the constituent parts of the contravention, albeit that he may not have known which section of the FW Act, if any, was capable of being contravened. This state of knowledge in my view is sufficient, if nothing else, to constitute involvement within the meaning of s.550(2)(c) of the FW Act. A person who knows of the contravention and takes no steps to correct it is clearly in some way, at least indirectly, a person who has “in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.’
Finally, in the matter of Fair Work Ombudsman v Chia Tung Development Corp Ltd & Anor [2016] FCCA 2777, His Honour Judge Altobelli of this Court found that a director of a corporate respondent was an intentional participant in the primary contravention of the corporate respondent of section 716(5) of the Act on the basis that, firstly, the director was aware that the applicant had served the compliance notice on the corporate respondent, and secondly, that the director was the person who made a decision on behalf of the corporate respondent not to comply with the Compliance Notice.[1]
[1] Fair Work Ombudsman v Chia Tung Development Corp Ltd & Anor [2016] FCCA 2777 at [34] – [35].
I have had regard to and applied the principles enunciated above to this matter.
Finding of accessorial liability in the absence of a declaration made against a primary contravenor
In this matter, no declaration has been made by this Court that the First Respondent has contravened section 716(5) of the Act. Further, the Applicant in this proceeding does not seek that any further order or declaration be made against the First Respondent having regard to section 500(2) of the Corporations Act 2001. The First Respondent admitted, however, its contravention of section 716(5) of the FW Act in the Statement of Agreed Facts.
At the outset of the proceedings, I asked Counsel for the Applicant whether the absence of a declaration of contravention made by a Court against the First Respondent carried the consequence that I was unable to make a finding of accessorial liability against the Second Respondent.
Counsel for the Applicant submitted that it was enough that the First Respondent had admitted contravening section 716(5) of the Act. Counsel indicated that he would, subsequent to the hearing, provide a list of authorities to the Court which support the proposition that a person can be found to be an accessory to a contravention even where a Court has not made a finding or declaration of a primary contravention.
I have reviewed the authorities provided by Counsel for the Applicant. It is clear on those authorities that a Court is not required to declare that a primary contravenor has committed a contravention of the Act in order for another respondent to be found to be an accessory to the contravention. See, for example, Re Matheson Engineers Pty Ltd and Exearne Pty Ltd v Sami El Raghy; Michael John Brenz Kriewaldt and Kevin Bond [1992] FCA 417; Richardson and Wrench (Holdings) Pty Ltd and Richardson and Wrench Ltd v Ligon [1994] FCA 1222; Australian Competition and Consumer Commission v Albert [2005] FCA 1311 at [34]; Fair Work Ombudsman v Contracting Solutions Australia Pty Ltd [2013] FCA 7 at [3]; Fair Work Ombudsman v Centennial Financial Services Pty Ltd and Ors [2010] FCMA 863; Veeraragoo v Goldbreak Holdings Pty Ltd [2018] FCA 1148 and CFMEU v Asbestos Removalist Pty Ltd & Anor [2018] FCCA 529.
Determination
In this matter, the First Respondent has admitted contravening section 716(5) of the FW Act. That admission is set out in the Statement of Agreed Facts and is based on the content of the Statement of Agreed Facts.
The Second Respondent has admitted in the Statement of Agreed Facts that:
(a)he had knowledge that the Compliance Notice had been issued by Inspector Girach to the First Respondent on 16 February 2018;
(b)he was, at all relevant times, responsible for the management of the First Respondent’s business; and
(c)he had actual knowledge of the First Respondent’s failure to comply with the Compliance Notice.
For the purposes of the accessorial liability claim, the Second Respondent does not contest the contravention by the First Respondent of section 716(5) of the FW Act. He does not admit, however, any involvement in the Contravention within the meaning of section 550 of the FW Act.
While the Second Respondent has not made an express admission that he was involved in the contravention by the First Respondent within the meaning of section 550 of the FW Act, he has made various admissions, and the Court has made findings of fact.
Those findings of fact lead me to conclude that:
a)The Second Respondent aided, abetted, counselled or procured the contravention. He had knowledge of the essential matters which go to the make up of events and that he was an intentional participant in those events; and
b)The Second Respondent was knowingly concerned in the contravention of section 716(5) of the Act. He engaged in acts or conduct, including by omission, which implicated or involved him in the contravention such that there was a practical connection between him and the contravention.
The facts upon which I have formed this view include the following:
a)the Compliance Notice was received by the Second Respondent on behalf of the First Respondent. He was aware of its contents, including the date by which compliance was required;
b)the Second Respondent was the sole director and secretary of the First Respondent, and therefore its guiding mind;
c)the Second Respondent was responsible for the management of the First Respondent’s business;
d)the Second Respondent had actual knowledge of the essential matters constituting the contravention, including the First Respondent’s failure to comply with the Compliance Notice;
e)the Second Respondent was the person with whom Inspector Girach spoke in respect of the Compliance Notice; and
f)neither the First Respondent nor the Second Respondent responded to or otherwise contacted the Fair Work Ombudsman’s office with respect to the Compliance Notice by 12 March 2018.
In the hearing, the Second Respondent did not contest the above matters. The Second Respondent simply submitted that he was not involved in the contravention pursuant to section 550 of the Act. The principal argument raised by the Second Respondent is that in order to comply with the Compliance Notice, he would have been required to contribute funds or shares to the First Respondent so that the First Respondent could then make the payment required under the Compliance Notice. The Second Respondent says that there is no obligation on him as a Company Director or otherwise to personally lend money to the First Respondent.
The Second Respondent also submitted that had the Applicant sought to establish personal liability in the present case on the same basis as was done in Fair Work Ombudsman v NoBrace Centre Pty Ltd [2018] FCCA 378, then he would have been required to have made a payment to Mr Yao. However, that is not the case here because the Applicant has chosen a different path.
Finally, the Second Respondent contended that by the time the Compliance Notice was issued, the First Respondent had been moribund for years. The money from the sale of the business had long since been disbursed. The Second Respondent was entitled to take the money from the company at the time that he did and nothing requires the Second Respondent to provide funds to the company years after dispersal of those funds.
The argument that the Second Respondent ought not be found to be an accessory because to do so would require him to lend or otherwise give funds to the First Respondent fails to grapple with the key provisions of the FW Act. Section 550(1) of the Act is in plain terms. It makes clear that a person who is involved in a contravention is taken to have contravened that provision. Section 550(2) sets out various matters a court must consider in reaching a conclusion as to whether a person is ‘is involved in’ a contravention. Once a Court is convinced that there are facts falling within the requirements of section 550 of the FW Act, accessorial liability attaches. Whether or not a person may be required to pay an amount to another to avoid a contravention is not to the point.
As I have already stated, the question here is whether the facts as I have found them produce the outcome that the Second Respondent is a person who was involved in the contravention of the First Respondent within the meaning of section 550 of the FW Act.
I find, given the findings of fact I have made, that the Second Respondent was an intentional participant in the contravention of the First Respondent. He had knowledge of the essential matters which make up the events leading to the contravention. There was a practical connection between his actions and the contravention. He knew the Compliance Notice was issued. He knew it had to be complied with. As the sole director and the person with management control of the First Respondent, he elected that the First Respondent not comply with the Compliance Notice. The evidence shows that he was knowingly concerned in the contravention.
It is the case that the failure of the Second Respondent here was an omission. That is, it was his inaction which led to the contravention by the First Respondent. An omission, however, is conduct that is captured by section 550 of the FW Act. Indeed, section 550(2)(c) expressly provides that a person can be involved in the contravention if they have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to a contravention.
For completeness, I deal with the submission made by the Second Respondent that the First Respondent could not meet the terms of the Compliance Notice because it has no funds. That assertion does not reflect the evidence in this matter. It is apparent, given the bank records that are in evidence, that at the time the Compliance Notice was issued, the First Respondent had an amount of approximately $14,000 in its bank account. Further, I observe that it was open to the Second Respondent to put into evidence the overall financial position of the First Respondent as it stood at the time. He did not do so. There is not any evidence before me as to whether the First Respondent owns any assets, has any accounts and/or whether it has other investments or sources of income available to it. For the reasons in this paragraph, I do not accept the contention that the First Respondent did not have available to it funds to meet the obligations contained in the Compliance Notice. It had, at least, funds available in the amount of around $14,000 which it could have used to pay toward the Compliance Notice.
It is also relevant to observe that at no stage did either the First Respondent or the Second Respondent seek to engage with the Applicant about the terms of the Compliance Notice, or seek to address the Compliance Notice in other ways. The solicitor for the Second Respondent contended (without any evidence to support the proposition) that the only option available to the Second Respondent was to contribute funds to the First Respondent in order to enable the First Respondent to comply with the Compliance notice. A brief consideration of the circumstances discloses that this is not correct. It was, for example, open to the First Respondent and the Second Respondent to argue that there was a reasonable excuse for failing to comply with the Compliance Notice. This route was not taken at the time.
Having regard to the above, I find that the Second Respondent was involved in the contravention by the First Respondent in failing to comply with section 716(5) of the Act. I will make an order to that effect.
In light of the findings and orders I have made, the matter will be relisted for submissions as to what penalty or other consequences should flow from the orders I have made.
I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of Judge Blake
Associate:
Date: 2 May 2019
CORRECTIONS
Reasons for Judgment: Page 14, Paragraph 73, first line delete “Applicant” and insert “Second Respondent”.
Reasons for Judgment: Page 5, Paragraph 35, line 22 delete “he” and insert “her”.
Reasons for Judgment: Page 5, Paragraph 36, line 26 delete “he” and insert “she”.
Reasons for Judgment: Page 5, Paragraph 36(a), line 28 delete “he” and insert “she”.
Reasons for Judgment: Page 6, Paragraph 36(b), line 3 delete “he” and insert “she”.
Reasons for Judgment: Page 6, Paragraph 37, line 8 delete “he” and insert “her”.
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