Fair Work Ombudsman v Sails Waterfront Bar and Grill Pty Ltd
[2021] FCCA 1511
•6 July 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Fair Work Ombudsman v Sails Waterfront Bar & Grill Pty Ltd [2021] FCCA 1511
File number(s): SYG 1518 of 2020 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 6 July 2021 Catchwords: PRACTICE AND PROCEDURE – Industrial Law – application for default judgment based on statement of claim alleging contraventions of s 716(5) of the Fair Work Act2009 (Cth) (FW Act) – whether on the face of the statement of claim the applicant has established an entitlement for declaratory relief and relief for penalties – whether Court has power to order person to comply with the requirements of a notice issued under s 716(2) of the FW Act – declarations made – liberty granted for the making of submissions on whether the Court has power to order compliance with the requirements of a notice issued under s 716(2) of the FW Act. Legislation: Fair Work Act 2009 (Cth) ss 12, 90(2), 545, 546, 550(2), 700, 701, 716(1), 716(2), 716(4A), 716(5)
Federal Circuit Court Rules 2001 (Cth) rr 13.03(2)(c), 13.03A, 13.03B, 13.03C(2)
Federal Court Rules 1979 (Cth) Or 35A
Cases cited: Macquarie Bank Limited v Seagle [2005] FCA 1239
Macquarie Bank Limited v Seagle [2008] FCA 1417
Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626
Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble [1995] FCA 1408
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Number of paragraphs: 24 Date of hearing: 1 July 2021 Place: Sydney Solicitor for the Applicant: Mr A Fiorenza of Office of the Fair Work Ombudsman, by telephone First Respondent: No appearance Second Respondent: Appeared in person, by telephone ORDERS
SYG 1518 of 2020 BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SAILS WATERFRONT BAR & GRILL PTY LTD (ACN 612 286 030)
First Respondent
ROBERT SUNNA
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
6 JULY 2021
THE COURT DECLARES THAT:
1.The first respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the requirements of a notice dated 26 February 2020 issued pursuant to s 716(2) of the FW Act.
2.The second respondent was involved, within the meaning of s 550(2) of the FW Act, in the first respondent’s contraventions referred to in declaration 1.
THE COURT ORDERS THAT:
3.The matter is listed for hearing before Judge Manousaridis at 10:00 am on 3 August 2021 for penalty and to hear submissions on whether s 545 of the FW Act empowers, or purports to empower, a court to order that a person to whom a notice under s 716(2) of the FW Act has been issued comply with the requirements of such notice.
REASONS FOR JUDGMENT
INTRODUCTION
The applicant (FWO) applies under r 13.03B(2) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) for default judgment against the respondents in a proceeding the FWO has brought under the Fair Work Act 2009 (Cth) (FW Act).
The FWO claims the first respondent (SWB) contravened s 716(5) of the FW Act by failing to comply with the requirements of a compliance notice issued under s 716(2) of the FW Act, and that the second respondent, Mr Sunna, was involved with SWB’s contravention.
PROCEDURAL HISTORY
The FWO commenced the proceeding on 23 June 2020 by filing an application and a statement of claim. The FWO served the application and statement of claim on SWB on 25 June 2020, and Mr Sunna was personally served with these documents on 26 June 2020.
The matter came before Judge Baird on a first court date on 24 July 2020. Mr Sunna appeared for himself and was given leave to appear for SWB. Her Honour directed that by 14 August 2020 the respondents file and serve a notice of address for service, and a response, and a defence. The matter was listed on 4 September 2020 for further directions.
According to an affidavit made by Mr Fiorenza, the lawyer for the FWO, Judge Baird’s associate sent him an email noting that the matter was listed for directions before her Honour on 4 September 2020 and requesting that the FWO provide a draft of the orders the FWO would be seeking at the directions hearing. On 1 September 2020 Mr Fiorenza sent an email to Mr Sunna attaching proposed orders, but Mr Sunna did not respond. On 1 September 2020 Mr Fiorenza sent to Judge Baird’s associate the proposed orders, and he copied this email to Mr Sunna.
On 3 September 2020 Judge Baird made orders in chambers in which her Honour noted the respondents had not filed a notice of address for service, or a reply or defence. Her Honour ordered that the respondents file and serve a response and defence by 18 September 2020. On 4 September 2020 Mr Fiorenza sent an email to Mr Sunna attaching a copy of the orders made on 3 September 2020.
On 7 October 2020 Mr Sunna sent the following email to Judge Baird’s associate:
I write to you in regards to the above matter that has been brought before your honour.
I am aware that it is a legal requirement that Sails Waterfront Bar and Grill Pty Ltd have legal representation. I advise that the company does not earn an income at all and the business is no longer running.
Our contract was terminated abruptly during peak season and has left the company and myself in a great amount of debt.
I have not only lost my livelihood but also my family and am currently going through depression. I can not afford legal representation and do not know how to proceed with any directions by the court.
I respectfully ask for leniency in this matter, no I beg for leniency as my life can not get any worse at this stage. I have no job and am on Centrelink and barely have enough money to survive.
Kindest regards,
Robert Sunna
On 23 October 2020 the FWO filed an application in a case for default judgment. That application, together with an affidavit made by Mr Fiorenza, were served by email sent to Mr Sunna on 30 October 2020.
The application for default judgment was listed before me on 1 July 2021. Mr Sunna appeared. He did not apply to appear on behalf of SWB, even though I offered him the opportunity to do so.
At the hearing I explained to Mr Sunna the nature of the application for default judgment that was before me. Mr Sunna explained that he has been unable to obtain legal assistance; and he did not really understand what was before the Court other than a claim that he pay superannuation that SWB had failed to pay. Although Mr Sunna did not apply for an adjournment, I considered whether I should adjourn the matter. I explained to Mr Sunna, however, that there would be no utility in grating an adjournment because, given he has been unable to obtain any legal assistance since the proceeding commenced one year ago, it is unlikely he would be able to obtain legal assistance if I were to adjourn the matter. I said, however, that I would give judgment on 6 July 2021 and, assuming I made the orders for which the FWO applied, I would set the matter down for a penalty hearing some 4 to 6 weeks after I give judgment. I told Mr Sunna that it would be open to him in that time to seek legal assistance and, if there is a basis for doing so, apply to set aside the orders I might make. I then proceeded to hear the application for default judgment.
RULE 13.03B(2)
Sub-rule 13.03B(2) of the FCC Rules applies to a respondent who “is in default”. Under r 13.03A(2) of the FCC Rules a respondent is in default if the respondent has not satisfied the applicant’s claims, and the respondent has failed to do one or more of the things identified in r 13.03A(2)(b) of the FCC Rules. The things identified in r 13.03A(2)(b) that are relevant to the application before me are the failure to give an address for service before the time for doing so has expired, the failure to file a response or defence before the time for doing so has expired, the failure to comply with an order of the Court in the proceeding, and the failure to defend the proceeding with due diligence. Also relevant is r 13.03C(2) of the FCC Rules which provides that the Court may make an order of the kind mentioned in r 13.03B(1), (2) or (4), if a party to a proceeding is absent from a hearing.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r 13.03B(2) of the FCC Rules. Relevant to the application before me is r 13.03B(2)(c) which provides that the Court may:
if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings – give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant . . .
ARE THE RESPONDENTS IN DEFAULT?
The respondents have not filed a notice of address for service. Nor have they filed a reply or defence. By not filing any defence the respondents failed to comply with orders of this court made on 14 August and 3 September 2020. Further, the respondents have failed to defend the proceeding with due diligence. I am therefore satisfied the respondents are in default within the meaning of r 13.03A(2) of the FCC Rules.
PRINCIPLES
Rules 13.03A and 13.03B of the FCC Rules were adapted from, and are substantially similar to, the rules contained in O 35A of the now repealed Federal Court Rules 1979 (Cth); and r 13.03B(2)(c) of the FCC Rules is almost identical to O 35A r 3(2)(c).There are a number of principles that have been formulated in relation to O 35A r (3)(2) which apply to r 13.03B. These include the following:
(a)First r 13.03B(2)(c) of the FCC Rules “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[1]
(b)Second, before the Court may make an order under r 13.03B(2)(c) of the FCC Rules it must be satisfied that the document, which the applicant has filed with the application, is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[2]
(c)Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[3]
(d)Fourth, although r 13.03B(2)(c) of the FCC Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought.[4]
(e)Finally, the Court retains a discretion not to make an order under r 13.03B(2)(c) of the FCC Rules even if the preconditions for making an order are satisfied.[5]
[1] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626, at [9] (Gordon J)
[2] Under r 1.05 of the FCC Rules, the rules of the Federal Court Rules 2011 (Cth) (FC Rules) identified in Pt 2 of Schedule 3 to the FCC Rules apply, with necessary changes, to general federal law proceedings. The FC Rules there identified include the rules of pleading.
[3] Macquarie Bank Limited v Seagle [2005] FCA 1239, at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417, at [20] (Jagot J)
[4] Phonographic Performance Ltd v Maitra (1998) 41 IPR 225, at page 230
[5] See the authorities decided under O 35A Federal Court Rules 1979 (Cth) referred to by Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, at [20]
THE FWO PLEADED CASE AND CLAIM FOR RELIEF
In its statement of claim the FWO alleges the following.
(a)Until about December 2019 SWB operated a restaurant trading as “Sails Waterfront Bar & Grill” in Sandringham.
(b)Mr Sunna was the sole director and controlling mind of SWB; and he was responsible for the overall management and control of SWB, and for ensuring SWB complied with all its legal obligations.
(c)In around January and February 2020 Mr Malafiej (FWI), a Fair Work Inspector appointed under s 700 of the FW Act, conducted an investigation into SWB, after which FWI formed a reasonable belief that:
(i)SWB employed Mr Rahman as a full time food and beverage attendant from 1 February 2017 to 16 December 2019;
(ii)Mr Rahman’s employment with SWB ended on 16 December 2019;
(iii)as at 16 December 2019 Mr Rahman had accrued but untaken annual leave;
(iv)SWB did not pay to Mr Rahman his accrued annual leave when his employment with SWB ended; and
(v)because of the matters in (i)-(v), SWB contravened s 90(2) of the FW Act (Contravention).
(d)On 26 February 2020 FWI gave SWB a compliance notice pursuant to s 716(2) of the FW Act (Compliance Notice) in relation to the Contravention in which SWB was required to do the following (Specified Action):
(i)calculate the number of hours of annual leave that had accrued to Mr Rahman when his employment with SWB ended;
(ii)calculate the full amount SWB should have paid Mr Rahman for his accrued annual leave loading under cl 35.2 of the Restaurant Industry Award 2010 (Award) and rectify outstanding amounts SWB owed to Mr Rahman, and the superannuation payable in relation to those amounts;
(iii)pay Mr Rahman the outstanding amount; and
(iv)produce reasonable evidence of compliance with the requirements of the compliance notice.
(e)SWB failed to take the Specified Action and, for that reason, failed to comply with the Compliance Notice and, therefore, contravened s 716(5) of the FW Act.
(f)Given the matters referred to in (b), Mr Sunna had knowledge the Compliance Notice and SWB’s failure to comply with the Compliance Notice and, for those reasons, was a person involved, within the meaning of s 550(2) of the FW Act, in SWB’s contravention of s 716(5) of the FW Act.
The FWO seeks the following relief:
(a)Declarations that SWB contravened s 716(5) of the FW Act and that Ms Sunna was a person involved in SWB’s contravention of s 716(5) of the FW Act.
(b)Orders pursuant to s 545(1) of the FW Act that SWB take the steps the Compliance Notice required it to undertake; and
(c)An order under s 546 of the FW Act for a pecuniary penalty.
TO WHAT RELIEF IS THE FWO ENTITLED?
The statement of claim alleges a cause of action based on a contravention of s 716(5) of the FW Act, which provides that a “person must not fail to comply with a notice given under this section”. The “notice” referred to in s 716(5) is the notice which s 716(2) of the FW Act authorises “an inspector” to issue. “Inspector” is defined in s 12 of the FW Act as a “Fair Work Inspector” which, in turn, is defined in s 12 of the FW Act to mean a person appointed as a Fair Work Inspector under s 700 of the FW Act, or the FWO in his or her capacity as a Fair Work Inspector under s 701 of the FW Act. Subsection 716(2) provides for the giving of a notice in the circumstances identified in s 716(1) of the FW Act, namely, where an inspector reasonably believes that a person has contravened, among other things, a provision of the National Employment Standards (NES). The notice s 716(2) of the FW Act authorises an inspector to give is one which requires the person whom the inspector reasonably believes has contravened (among other things) a provision of the NES to take specified action “to remedy the direct effects of the contraventions referred to in subsection (1)”.
I am satisfied that the facts alleged in the statement of claim establish SWB contravened s 716(5) of the FW Act, and that Mr Sunna was a person involved, within the meaning of s 550(2) of the FW Act, in SWB’s contraventions. I am also satisfied that declarations to this effect should be made.
I have doubts, however, whether the Court has power under s 545 of the FW Act to make an order that, in effect, compels AWB to comply with the requirements of the Compliance Notice. There are two reasons for my doubt. First, there is s 716(4A) of the FW Act, which provides:
An inspector must not apply for an order under Division 2 of Part 4-1 in relation to a contravention of a civil remedy provision by a person if:
(a) the inspector has given the person a notice in relation to the contravention; and
(b) either of the following subparagraphs applies:
(i)the notice has not been withdrawn, and the person has complied with the notice;
(ii) the person has made an application under section 717 in relation to the notice that has not been completely dealt with.
This subsection contemplates that the remedy for a person’s failure to rectify the effect of the contraventions identified in a notice issued under s 716(2) of the FW Act is by commencing and prosecuting an application for remedies in relation to the contraventions identified in the notice, where the contraventions will need to be proved before a court having jurisdiction.
The second reason for my doubting that the Court has power to compel a person to comply with the requirements of a notice issued under s 716(2) of the FW Act is that this would assume that such notice – an administrative act –conclusively determines that the person to whom the notice is issued has committed the contravention identified in the notice. That, however, could be taken as impermissibly purporting to confer the judicial power of the Commonwealth on the inspector who has issued the notice.[6]
[6] See, for example, Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble [1995] FCA 1408; (1995) 58 FCR 391
I will not, therefore, make orders requiring SWB to comply with the requirements of the Compliance Notice. I will, however, reserve to the FWO an opportunity to make submissions in relation to whether the Court has power to make an order requiring a person to whom a notice under s 716(2) of the FW Act has been issued to comply with the requirements of such notice.
I should record that I have considered the matters Mr Sunna raised in the email he sent to Judge Baird’s associate on 7 October 2020. Those matters, unfortunately, are not relevant to whether the respondents are in default or whether, given they are in default, I should make any of the orders the FWO claims I should make.
DISPOSITION
I propose to make declarations substantially to the effect of the declarations the FWO claims. I will also set the matter down for hearing at 10:00 am on 3 August 2021 to hear submissions on penalty, and also submissions on whether the Court has power to make orders requiring AWB to comply with the requirements of the Compliance Notice.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 6 July 2021
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