Fair Work Ombudsman v Sakuraya Warrigal Pty Ltd

Case

[2016] FCCA 2033

1 August 2016


FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SAKURAYA WARRIGAL PTY LTD & ORS [2016] FCCA 2033
Catchwords:
INDUSTRIAL LAW – Underpayment of employees – admission of liability on the morning of hearing – calculation of maximum penalty – s.557 – pecuniary penalty – partial costs order made.

Legislation:

Fair Work Act 2009 (Cth), ss.45, 535(1), 536(1), 550(2)(c), 545(1), 546, 547(2) 557(1), 559(1) 570.

Cases cited:

Fair Work Ombudsman v Java Spice Australia Proprietary Limited and Others [2015] FCCA 2930
Fair Work Ombudsman v Hiyi Proprietary Limited and Others [2016] FCCA 1634

Applicant: FAIR WORK OMBUDSMAN
First Respondent: SAKURAYA WARRIGAL PTY LTD (ACN 146 904 350)
Second Respondent: CHANG MING LIU
Third Respondent: A-HSUEH LAI
File Number: BRG 471 of 2015
Judgment of: Judge Vasta
Hearing date: 28 July 2016
Date of Last Submission: 28 July 2016
Delivered at: Brisbane
Delivered on: 1 August 2016

REPRESENTATION

Counsel for the Applicant: Ms Hartigan
Solicitors for the Applicant: Fair Work Ombudsman
Counsel for the First, Second and Third Respondent: Mr Mackie
Solicitors for the First, Second and Third Respondent: Piper Alderman

ORDERS

  1. That the First Respondent has contravened the following civil remedy provisions of the Fair Work Act.

    (a)Section 45 of the Fair Work Act by contravening the following provisions of the Award:

    (i)Clause 17 of the Award and clause A.2.5 of Schedule A to the Award, by failing to pay the Employees the applicable minimum rate of pay for ordinary hours worked;

    (ii)Clause A.2.5 of Schedule A to the Award, by failing to pay Miss Kim the applicable minimum junior rate of pay for ordinary hours worked;

    (iii)Clause 13.2 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay the Employees the applicable casual loading for all hours worked by the Employees;

    (iv)Subclause 25.5(a)(i) of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay the Employees the applicable evening loading for all hours worked in the evening, between 9.00pm and midnight;

    (v)Subclause 25.5(b) of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay the Employees the applicable Saturday loading for all hours worked on Saturdays;

    (vi)Subclause 25.5(c)(ii) of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay the Employees the applicable Sunday loading for all hours worked on Sundays; and

    (vii)Clause A.5.4 of Schedule A to the Award, by failing to pay the Employees the applicable public holiday penalty rates for all hours worked on a public holiday;

    (b)Subsection 535(1) of the Fair Work Act by failing to make and keep records in respect of the Employees as prescribed by the Fair Work Regulations, being the kind of records referred to in paragraph 116 of the Amended Statement of Claim; and

    (c)Subsection 536(1) of the Fair Work Act by failing to issue pay slips to each of the Employees within one working day of paying an amount to an Employee in relation to the performance of work or at all.

  2. THAT IS DECLARED, that the Second Respondent was involved, within the meaning of subsection 550(2)(c) of the Fair Work Act, in the First Respondent's contraventions in paragraph above, and, therefore, is taken to have committed those contraventions pursuant to subsection 550(1) of the Fair Work Act.

  3. THAT IS DECLARED that the Third Respondent was involved, within the meaning of subsection 550(2)(c) of the Fair Work Act, in the First Respondent's contraventions in paragraph 1 above, and, therefore, is taken to have committed those contraventions pursuant to subsection 550(1) of the Fair Work Act.

  4. THAT IS DECLARED that, by reason of the First Respondent's contraventions in paragraph 1, the Employees have suffered loss of wages and entitlements in the amount of:

    (a)$12,581.87 to Miss Fang;

    (b)$8,354.93 to Miss Chong;

    (c)$8,323.89 to Mrs Smith;

    (d)$6,990.27 to Miss Kim; and

    (e)$18,344.01 to Miss Wu;

    (the Outstanding Wages).

  5. That pursuant to subsection 545(1) of the Fair Work Act that within twenty-eight (28) days the First Respondent pay to the Employees the Outstanding Wages.

  6. That pursuant to section 547(2) of the Fair Work Act that, within twenty-eight (28) days, the First Respondent pay interest to the Employees on the Outstanding Wages, to be calculated from the last day of the Employees' respective employment periods at the Federal Court of Australia's Pre−Judgment Interest Rate applying as at the date these orders are made.

  7. That pursuant to subsection 546(1) of the Fair Work Act, that the First Respondent pay pecuniary penalties in the amount of $140,000.

  8. That pursuant to subsection 546(1) of the Fair Work Act that the Second Respondent pay pecuniary penalties in the amount of $28,000.

  9. That pursuant to subsection 546(1) of the Fair Work Act that the Third Respondent pay pecuniary penalties in the amount of $28,000.

  10. That pursuant to subsection 546(3)(a) of the Fair Work Act that pecuniary penalties be paid by:

    (a)The First Respondent; and/or

    (b)The Second Respondent; and/or

    (c)The Third Respondent,

    (Pecuniary Penalty Order) be paid to the Consolidated Revenue Fund of the Commonwealth within one hundred and fifty (150) days of the Pecuniary Penalty Order.

  11. That, in the event that the First Respondent is unable to locate any of the persons listed in paragraph 4 above within the period specified in that order, the First Respondent is to pay the amount that it is required to pay that person to the Consolidated Revenue Fund of the Commonwealth pursuant to subsection 559(1) of the Fair Work Act within seven (7) days.

  12. That the Applicant have liberty to apply on seven (7) days' notice in the event that any of the preceding orders are not complied with.

  13. That the First, Second and Third Respondents jointly and severally pay the costs of the Applicant fixed in the sum of $12,131.83.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 471 of 2015

FAIR WORK OMBUDSMAN

Applicant

And

SAKURAYA WARRIGAL PTY LTD (ACN 146 904 350)

First Respondent

CHANG MING LIU

Second Respondent

A-HSUEH LAI

Third Respondent

REASONS FOR JUDGMENT

(Ex tempore)

  1. On 29 May 2015, the Applicant, the Fair Work Ombudsman, filed in this court an application seeking declarations that the First Respondent company and the Second and Third Respondent directors of that company had breached the provisions of the Fair Work Act 2009 (Cth) (“FW Act”) and were liable to civil penalties.

  2. This matter was first mentioned before me on 29 June 2015, where I made certain orders including one for mediation.  The mediation was not successful and, in October 2015, I set the matter down for hearing for four days commencing 25 July 2016. 

  3. On the first day of the hearing, counsel for the Respondents informed me that his clients now admitted liability and there would be no need for a hearing.  As the hearing had been set for four days, I adjourned the penalty hearing until the afternoon of the fourth day to enable the parties to ready their submissions. 

  4. The facts of the matter are set out fully in the statement of agreed facts that was filed in this Court on the day of the penalty hearing.  In short compass, the Respondents admit that they employed the following people: 

    a)Ms Ho Chi Feng from 19 November 2013 to 4 August 2014;

    b)Ms Hu Yung Chung from 6 January 2014 to 28 July 2014;

    c)Mrs Leilani Smith from 28 January 2014 to 4 August 2014;

    d)Ms Min Chi Kim from 22 October 2013 to 8 July 2014; and

    e)Ms Meng Chung Wu from 3 September 2013 to 8 July 2014. 

  5. The Respondents admit that there were underpayments to those five employees.  Those underpayments fit into seven categories.  These categories are: 

    a)failing to pay the employee the applicable minimum rate of pay for ordinary hours; 

    b)failing to pay Ms Kim the applicable minimum junior rate of pay for ordinary hours; 

    c)failing to pay the employees the applicable casual loading for all hours worked by the employees; 

    d)failing to pay the employees the applicable evening loading for all hours worked in the evening between 9 pm and midnight; 

    e)failing to pay the employees the applicable Saturday loading for all hours worked on Saturdays; 

    f)failing to pay the employees the applicable Sunday loading for all hours worked on Sundays and;

    g)failing to pay the employees the applicable public holiday penalty rates for all hours worked on a public holiday.

  6. The Respondents also admit that they have breached s.535(1) of the FW Act by failing to make and keep records and they also admit that they have breached s.536(1) by failing to issue pay slips to each of the employees within one working day of paying wages.

  7. The Respondents have simply paid the Applicants a flat rate of pay.  That flat rate has been between $10.00 and $14.50 an hour.  That rate is far below the minimum rate of pay and ignores the provisions for extra remuneration under the Award as have been identified in the amended breaches. 

  8. One can understand an employer having trouble with the provisions of the award.  That is why many employers do prefer a flat rate of pay but the rate of pay must be in excess of the award payment so that the safety net provisions of the National Employment Standards are met. 

  9. Without going through each of the different components, the underpayments to each of the employees are as follows:

    a)Ms Feng, $12,581.97; 

    b)Ms Chung, $8354.93; 

    c)Mrs Smith, $8323.89; 

    d)Ms Kim, $6990.27; and

    e)Ms Wu, $18,344.01. 

    This gives a total underpayment to the employees of $54,594.97. 

  10. Having admitted those breaches, the Court must now determine what the appropriate pecuniary penalties should be so that such penalty can be imposed upon each of the Respondents. 

  11. The first task is to determine what is the maximum penalty involved. The legislative provisions relating to how contraventions arising under the FW Act are to be grouped for the purposes of calculation of penalty are contained in s.557(1) of the FW Act which reads as follows:

    “(1)  For the purposes of this Part, two or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

    (a) the contraventions are committed by the same person; and

    (b) the contraventions arose out of a course of conduct by the person.”

  12. In this case, the Respondents have simply ignored the provisions of the award.  They have instituted a flat rate system of pay but that does not mean that there has just been one course of conduct in relation to the underpayments. 

  13. I am of the view that the underpayment of the minimum wage and the underpayment of Ms Kim’s junior wages are one course of conduct.

  14. The Fair Work Ombudsman has submitted that the failure to pay Saturday rates and the failure to pay Sunday rates is one course of conduct because the Respondents failed to pay weekend rates.

  15. I do have some misgivings as to this distinction because the Saturday rates are quite different to the Sunday rates.  It is for this reason that there are a number of establishments that simply do not open on Sundays because of the penalty rates that apply. 

  16. It seems to me that, if it is a course of conduct that saw the Applicant simply ignore the penalty rates that apply to weekends then, by the same token, the ignoring of public holiday rates would be an extension of that same course of conduct.

  17. I would have normally looked at the failure to pay these rates as three separate groupings, however, there has been a concession by the Fair Work Ombudsman as to the Saturday and Sunday rates. Therefore, because of the way in which I have looked at the penalty rates, I have decided to treat the breaching of the Saturday, Sunday and public holiday rates as one course of conduct.

  18. The failure to pay casual loading is one particular course of conduct and the failure to pay evening loading is one course of conduct.  The failure to keep records is one course of conduct and the failure to provide pay slips is one course of conduct. 

  19. Therefore, when looking at the groupings, this means, on my calculations, that the First Respondent is liable to a maximum penalty of $255,000.00 and each of the Second and Third respondents is liable to a maximum penalty of $51,000.00.

  20. Having established the parameters upon which the Court should proceed, the Court must now look at the relevant considerations in assessing penalty.  These are:

    a)the nature and extent of the conduct which led to the breaches; 

    b)the circumstances in which the conduct took place;

    c)the nature and extent of any loss or damage sustained as a result of the breaches;

    d)whether there has been similar previous conduct by the respondent; 

    e)whether the breaches were properly distinct or arose out of one course of conduct; 

    f)the size of the business enterprise involved;  whether or not the breaches were deliberate; 

    g)whether senior management was involved in the breaches;

    h)whether the party committing the breaches has exhibited contrition;

    i)whether the party committing the breaches has taken corrective action;

    j)whether the party committing the breaches has cooperated with the authorities; 

    k)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

    l)the need for general and specific deterrence. 

    Whilst these considerations need to be undertaken, the Court must ensure that it is not conducting a formulaic or “tick-the-box” mentality when assessing these considerations. 

  21. It seems to me that there is no doubt the First Respondent runs a small business.  There are very few employees and, going by the profit and loss statements, the business has not been particularly successful.  The business has utilised persons who are on student visas and are visiting Australia for a short time. 

  22. Whether by design or not, these students are amongst the most vulnerable of employees.  They do not have a ready understanding of the employment regime within this country and have a far less understanding of whom to turn to than would a resident of this country. 

  23. Whilst it may be said that an underpayment of just under $55,000.00 for five employees over less than a 10-month period is not a huge amount, these sums of money have to be seen in their proper context.  An underpayment of an average $11,000.00 over a 10-month period is a significant matter for someone who is living on the minimum wage.  In this case, simply looking at the quantum of underpayments does not paint the full picture. 

  24. There has been much debate by the parties as to whether or not the course of action undertaken by the Respondent has been deliberate.  Realistically, there can be no doubt that the course of conduct was deliberate.  It is really a question of degree.  This was not a case of inadvertence.  This was not truly a case of ignorance.  The business had been operating since 2010.  The Second and the Third Respondents have been involved in other businesses. 

  25. The Applicant points to other locations where the Fair Work Inspector has had dealings with the Third Respondent.  These matters were annexed to the affidavit of Mr Dangerfield filed on 26 July 2016. 

  26. In Annexure 1 to that affidavit, Mr Dangerfield wrote to the Third Respondent, on 7 April 2011, informing him of possible breaches of the Act in relation to another employee.  The next annexure is an email sent on 30 May 2011 by Mr Dangerfield to the Third Respondent again speaking of possible breaches of the Act but also in relation to that same employee of which 7 April correspondence related. 

  27. The Respondents submit that, whilst those dealings did occur, neither of them involved complaints about hourly rates and that the matters were able to be successfully resolved.  I do not think that that means much because, realistically, what has happened is that the existence of the Fair Work Ombudsman, and what the Fair Work Ombudsman was to do, was made well and truly known to, at the very least, the Third Respondent at that time.

  28. In January 2014, which was about the midway point of the time period for the present breaches, the Fair Work Ombudsman wrote to the Third Respondent.  The letter was headed, “Employer Education” and, whilst not detailing any specific complaint, does warn the Third Respondent that there was information that another company of the Third Respondent was not issuing appropriate payslips to his employees. 

  29. It would seem that the Second and Third Respondents then sought out the assistance of a solicitor by name of Steve Watkinson.  Mr Watkinson phoned the Fair Work helpline and a transcript of the phone call is annexed to the affidavit of Mr Dangerfield. 

  30. What is clear from that phone call is that the information given to the solicitor was that payslips needed to be issued.  The helpline took Mr Watkinson through the steps on the Fair Work website and Mr Watkinson acknowledged that he was looking at that website.  The significant aspect of this is that the website shows how to create a payslip and Mr Watkinson acknowledged that he could see how this was done. 

  31. Notwithstanding that, the Second and Third Respondents did nothing to ensure that payslips were issued.  By looking at the website where the payslips information is, the information regarding payslips speaks of awards, penalty rates and loadings.  The Respondent submits that the fact that they contacted a solicitor shows that there was no deliberateness in their conduct.

  32. However, as can be seen from the transcript, the solicitor was taken to the website where all the pertinent information existed and he acknowledged that he had seen it and had followed what the Fair Work operator had been saying.  There is no claim by the Respondent that the solicitor did not pass on this information as part of the brief he had been given by the Respondents when they engaged him. 

  33. Therefore, it is difficult for me to see why it is that there was no change in the method by which the First, Second and Third Respondents dealt with the five employees after the phone call by Mr Watkinson.  Therefore, I consider that there is at the very least a case of extreme wilful blindness or, at worst, a defiance as to what the law mandated that the Respondents do. 

  34. There is little evidence of contrition on behalf of any of the Respondents.  As I have noted, these proceedings were commenced in this Court over 13 months ago and it was only on the morning of the final hearing that the Respondents admitted their liability.  There has yet to be any repayment of the moneys owed to the employees.

  35. The Third Respondent, in his affidavit of 27 July 2016, suggested that he and the Second Respondent were insulted by the insistence of the Fair Work Ombudsman that their employees were covered by the Fast Food Industry Award rather than the Restaurant Industry Award.  In the affidavit, he says at paragraph 14:

    “If the Fair Work Ombudsman had agreed that the company operated a restaurant or a tea room and talked about contraventions in operating a restaurant, I believe I would have admitted the contraventions sooner.  I felt the Fair Work inspector was insulting me and my family generally by the way he always spoke to us and calling the business a fast food place or take away.”

  36. This does not make any sense to me.  The Respondents were represented by solicitors from the time that they entered their response on 29 June 2015.  Whilst it may be a source of pride for the Respondents, any solicitor would have known that a rose by any name would still smell as sweet. 

  1. I cannot accept that this is a legitimate reason why the matter did not resolve until the morning of the final hearing.  The Fair Work Ombudsman submits to me that there has been no co-operation. 

  2. I do not accept this submission.  Whilst is may be said that there was no discernible reason as to why the attitude of the Respondents changed on the morning of the first day of the final hearing, this does not take into account the way in which the human mind works. 

  3. In my experience, it often happens that litigants can have an attitude of wanting to take up the fight, right up until the day of the Court hearing; but, when the rubber hits the road and upon the Court doors open, the reality hits home and the litigant often re-assesses their position.  This is why there are so many pleas of guilty on the morning of trial in the criminal jurisdiction and why there are so many settlements of matters on the morning of trial in the civil jurisdiction. 

  4. In my view, it would be unjust to dismiss this phenomenon and to insist that it is illustrative of an attitude of non-cooperation. 

  5. There is a need for deterrence in this matter and one might see that it’s a great need. The Second and Third Respondents operate other businesses and there must be a deterrent to them to act in any way that is contrary to the provisions of the FW Act. More importantly, the Court needs to send a message to unscrupulous employers who chose to ignore the FW Act and exploit the vulnerable workers in our society.

  6. The actions of such persons will not be tolerated by the Court, or by society in general, especially those honest employers who do adhere to the precepts of the law. 

  7. I acknowledge that there are many approaches as to how to affix the pecuniary penalty.  What I have done is fix what I perceive to be the appropriate penalty for a breach of the kind that has occurred here.  I have then looked at the mitigating factors and applied a discount.  I have had regard to all the authorities that have been relied upon by the parties. 

  8. No two cases are ever alike and any approach that seems to compare cases as if applying a mathematical formula must be deprecated. 

  9. I do especially note the cases referred to by the respondents.  The first is the Fair Work Ombudsman v Java Spice Australia Proprietary Limited and Others [2015] FCCA 2930. The Respondents acknowledged that this case is less serious than the present case. I do note that there was no appearance for the Respondents in that case and that one of the Respondents had subsequently been declared bankrupt.

  10. The second case was Fair Work Ombudsman v Hiyi Proprietary Limited and Others [2016] FCCA 1634. The Respondents submit that this case provides the high water mark. However, I do note in that case that there were agreed penalties. Her Honour’s judgment in that matter was an examination by the Court to ensure that the penalties were not unjust. Her Honour did not come to her conclusions on quantum through an independent assessment, but rather conducted her own independent assessment to ensure that the agreed penalties were proper. Therefore, I don’t gain a great deal of assistance from that particular case, other than it is extremely helpful as to looking at what are the proper principles upon which the Court must act.

  11. In a case where there are agreements as to penalties, there could be a number of reasons why both the Fair Work Ombudsman and the particular Respondents can come to an agreement of penalty which are not contained in the judgment and are not contained within the reasons. Because of these “unknowables”, it is impossible to say that such a case provides proper comparison for the purpose of ascertaining quantum.  Therefore, I have had a look at all the matters. 

  12. I make the following calculations:  For failing to pay the minimum payments, including the junior worker’s minimum payments, the maximum penalty for the First Respondent is $51,000.00 and for the Second and Third Respondents, each $10,200.00.

  13. I am of the view that an appropriate penalty for this breach is $40,000.00 for the First Respondent and $8,000.00 for each of the Second and Third Respondents. 

  14. For failing to pay the appropriate casual loading for all employees, the maximum penalty for the First Respondent is $51,000.00 and for the Second and Third Respondents, $10,200.00. 

  15. I am of the view that the appropriate penalty for this breach is $20,000.00 for the First Respondent and $4,000.00 for each of the Second and Third Respondents. 

  16. For failing to pay the appropriate evening casual loading for all employees, the maximum penalty for the First Respondent is $51,000.00 and for the Second and Third Respondents, $10,200.00.

  17. I am of the view that the appropriate penalty for this breach is $10,000.00 for the First Respondent and $2,000.00 for each of the Second and Third Respondents. 

  18. For failing to pay the weekend and public holiday penalty rates for all employees, the maximum penalty for the First Respondent is $51,000.00 and for the Second and Third Respondents, $10,200.00. 

  19. I am of the view that an appropriate penalty for this breach is $40,000.00 for the First Respondent and $8,000.00 for each of the Second and Third Respondents. 

  20. The failure to keep proper records is a serious breach of the FW Act. The system can only work when employers keep proper business records.

  21. The failure to give payslips to the employees is also a serious breach.  As was said during the course of the hearing, a payslip enables an employee to know exactly what they are being paid, what penalties or overtime are being paid, what tax or superannuation has been paid out of those amounts, what the leave entitlements are and the payslip can assist in obtaining rental accommodation.  It certainly assists in bank loans.  So I do take a very dim view of what the Respondents have done in this regard. 

  22. For failing to keep proper records, the maximum penalty for the First Respondent is $25,000 and for the Second and Third respondents, $5,100.00. 

  23. I am of the view that an appropriate penalty for this breach is $25,000.00 for the First Respondents and $5,000.00 for each of the Second and Third Respondents. 

  24. For failing to provide payslips, the maximum penalty for the First Respondent is $25,500.00 and for the Second and Third Respondents, $5,100.00. 

  25. I am of the view that an appropriate penalty for this breach is $25,000.00 for the First Respondent and $5,000 from each of the Second and Third Respondents.

  26. That means that the total assessment of pecuniary penalties against the First Respondent is $160,000.00 and against the Second and Third Respondents is $32,000.00 each. 

  27. There are mitigating factors that I have touched upon in these reasons. They include the size and profitability of the business, the fact that only five employees were affected, the fact that there was an admission of liability, albeit it a late admission, and that the Respondents have indicated that they will now be implementing a regime that is in accordance with the FW Act.

  28. I assess those mitigating factors as deserving of a discount from the proper penalty of 12.5 %.

  29. This means that I assess the pecuniary penalty for the First respondent at $140,000.00 and for the Second and Third Respondents, a pecuniary penalty of $28,000.00.  I will order that the respondents pay those respective amounts. 

  30. The Fair Work Ombudsman has asked that I issue an injunction restraining the Respondents from contravening the provisions of the FW Act. For reasons that I explained during the hearing, I am not minded to make such an order.

  31. The Fair Work Ombudsman now well and truly knows these Respondents and if the Fair Work Ombudsman were to take future action against the Respondents, the matter would end up in my docket. The Respondents have been warned that they will receive very little sympathy from me if there were further breaches of the FW Act. I would hope that such a warning would be a sufficient deterrent and obviate the need for a specific injunction.

  32. The Applicant has also asked for an order that the Respondents pay their costs. Section 570 of the FW Act says:

    “(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

    Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

    (2) The party may be ordered to pay the costs only if:

    (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

    (b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

    (c) the court is satisfied of both of the following:

    (i) the party unreasonably refused to participate in a matter before the FWC;

    (ii) the matter arose from the same facts as the proceedings.

    For the present purposes that each party should bear their own costs, except in a case where I find that the unreasonable act of the respondents have cause the applicant to incur costs.”

  33. I see this as a two-step process.  Firstly, I must find that there was an unreasonable act by the Respondents that caused the incurring of costs.  Such a finding opens the door and enlivens the discretion. 

  34. The second step is whether to exercise that discretion. 

  35. What is claimed to be the unreasonable act in this case is the respondent’s admission of liability at the door of the Court on the first morning of final hearing.  As I have previously indicated, this phenomenon is not unknown.  Whilst it defies logic and common sense, it is something that is peculiar to human behaviour. 

  36. Notwithstanding the existence of the phenomenon, that does not mean that the action is any the less unreasonable.  In this case, from March 2016 onwards, the Respondents knew that there was going to be difficulty in the Applicant assembling the five employees because they had left the jurisdiction. 

  37. The Applicant had made requests of the Respondents as to whether the witnesses would be needed and for how long was their testimony expected to last.  This was because interpreters needed to be booked for the witnesses. 

  38. The expense was of real concern to the Applicant and the Respondents knew of this fact.  Such is obvious, when one looks at the contents of the affidavit of Mr Stavros.  The attitude of the Respondents was that this matter was going to be contested up until the morning of the hearing.  Whilst I accept that the phenomenon of a plea on the morning does exist, when looked at logically in this case, such action was unreasonable when there was knowledge that the Applicant was going to great expense to procure the attendance of the witnesses.

  39. The unreasonable act of the Respondents did cause the Applicant to incur costs.  In the circumstances of this case, I am of the view that I should exercise my discretion and order that the Respondents pay the costs of the travel of the witnesses and the interpreter’s fee.  That total is the sum of $12,131.83. 

I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Judge Vasta

Date:31 August 2016

Actions
Download as PDF Download as Word Document


Cases Citing This Decision

0

Cases Cited

2

Statutory Material Cited

2