Fair Work Ombudsman v Sapphire Freighters Pty Ltd

[2021] FCCA 197

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SAPPHIRE FREIGHTERS PTY LTD [2021] FCCA 197

Catchwords:
PRACTICE & PROCEDURE – application for default judgment – failure to comply with the Federal Circuit Court Rules 2001 (Cth) – failure to comply with court orders – failure to defend the proceedings with due diligence – application for default judgment granted.

Legislation:

Fair Work Act 2009 (Cth)

Federal Circuit Court Rules 2001 (Cth), rr. 13.03A, 13.03B

Applicant: FAIR WORK OMBUDSMAN

Respondent: SAPPHIRE FREIGHTERS PTY LTD

File Number: MLG 825 of 2020

Judgment of: Judge Mercuri

Hearing date: 1 February 2021

Date of Last Submission: 1 February 2021

Delivered at: Melbourne

Delivered on: 1 February 2021

REPRESENTATION

Advocate for the applicant: Ms Clemens

Solicitors for the applicant: None

Advocate for the respondent: Ms Newell

Solicitors for the respondent: None

ORDERS

THE COURT ORDERS THAT:

1. Default judgement be entered for the applicant against the respondent pursuant to sub-rule 13.03B(2)(d) of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) by reason of the respondent’s failure to comply with rule 13.03A(2) of the FCC Rules, by failing to:

   a.file and serve a response or defence within 28 days of service of the applicant, as required by rules 4.03 and 4.05(3) of the FCC Rules;

   b.comply with an order of the Court, being order 3 of the orders dated 31 July 2020, to file and serve a response or defence by 18 August 2020; and

   c.defend the proceedings with due diligence.

UPON ADMISSIONS TAKEN TO HAVE BEEN MADE BY REASON OF THE RESPONDENT’S DEFAULT, THE COURT DECLARES THAT:

1. The respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (“the FW Act”) by failing to comply with the Compliance Notice issued on 6 December 2019 (“the Compliance Notice”).

THE COURT FURTHER ORDERS THAT:

1. Pursuant to s 545(1) of the FW Act, the respondent take the steps that were required by the Compliance Notice within 28 days by:

   a.calculating and paying the outstanding entitlements it was required to pay to Mr Anthony Lawlor and to Mr Lawlor’s Superannuation Fund; and

   b.preparing and producing to the applicant a schedule outlining its calculation of the outstanding entitlements it was required to pay Mr Lawlor referred to in order 3(a) above, and providing proof that the outstanding entitlements were rectified as set out in order 3(a) above.

2. Pursuant to s 547(2) of the FW Act, the respondent pay interest on the amounts owed to Mr Lawlor pursuant to order 3(a) above within 28 days.

3. The matter be adjourned to 4 May 2021 at 10:00am for further hearing in respect of the applicant’s claim for penalties to be imposed on the respondent for the contravention declared at paragraph 2 above.

4. The respondent be served with a copy of this order within 28 days.

5. The applicant file and serve evidence and an outline of submissions relating to penalty no later than 35 days prior to the adjourned date.

6. The respondent file and serve evidence and an outline of submissions relating to penalty no later than 21 days prior to the adjourned date.

7. The parties have liberty to apply.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

No. MLG 825 of 2020

FAIR WORK OMBUDSMAN

Applicant

and

SAPPHIRE FREIGHTERS PTY LIMITED

Respondent

REASONS FOR JUDGMENT

(revised from the transcript)

1. These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. Before the Court today is an application in a case by which the applicant seeks default judgment pursuant to rule 13.03B 2(d) of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) by reason of the respondent’s failure to comply with rule 13.03A(ii) of the Rules.[1]

   [1] Applicant’s application in a case filed on 14 October 2020.

3. The applicant points to the respondent’s failure to:

   a)file and serve the response or defence within the requisite time specified under the Rules;

   b)its failure to file and serve the response or defence pursuant to orders made by this court; and

   c)by its conduct, failure to defend these proceedings with due diligence.

4. The applicant further seeks:

   a)declarations that the respondent has contravened the Fair Work Act 2009 (Cth); and

   b)orders for the listing and programming of a penalty hearing.

5. Leave was granted today for the respondent to be represented by Ms Newell on the basis that the applicant did not oppose such leave being granted.  Ms Newell was invited to respond to the application in a case,[2] noting that no response had been filed in relation to that application by the respondent.  Indeed, I note that the only documents filed for the respondent in these proceedings since they were commenced in March 2020 were:

   a)a notice of address for service;[3]

   b)a notice of intention to withdraw as lawyer;[4] and

   c)a consequential notice of withdrawal.[5]

   [2] Applicant’s application in a case filed on 14 October 2020.

   [3] Notice of address for service filed on 30 April 2020.

   [4] Notice of intention to withdraw as lawyer filed on 10 August 2020.

   [5] Notice of withdrawal of lawyer filed on 18 August 2020.

6. When invited by the court to respond to the application in a case today, Ms Newell said:

   a)‘the respondent tried to resolve this matter when it was initially brought to the company’s attention, but its proposal was not accepted’;

   b)the respondent is a small family-owned business which only has one truck;

   c)it is not contrary to the impression created by the applicant, a large corporate conglomerate;

   d)comments made by the applicant in relation to this matter have been incorrect and damaging to the respondent and its business;

   e)the respondent has always tried to do the right thing and whilst it may have made some errors in calculating the correct rate of pay, this was not intentional;

   f)the worker who has claimed to have been underpaid approached the respondent, begged for a job and agreed to the rate of pay which he received; and

   g)the respondent had engaged lawyers early on in the proceedings, but then was not able to continue to afford to pay the lawyers and therefore, it has recently been not legally represented. 

7. Ms Newell also said that the respondent believed it would be given the opportunity to have its day in court and respond to the matters raised.  Ms Newell indicated that as legal proceedings are not matters with which she is familiar, she may not have properly understood what was required of the respondent.

8. The applicant, in her submissions, outlined the power of the court to grant default judgment and the principles which applied to the court considering whether to exercise its power to grant such judgment.  I do not propose to repeat those submissions, however, I have had regard to them in considering this application.

9. The applicant relied upon two affidavits affirmed by Ms Clemens.[6]  As stated, the respondent has not filed any material in response either to the substantive application or to this application in a case.  Based on Ms Clemens’ affidavits, I find the respondent was put on notice as early as 27 April 2020 that if it did not file a response in the substantive proceedings, the applicant might apply for default judgment.

   [6] Affidavit of Annabel Elizabeth Rose Clemens affirmed and filed on 29 January 2021; Affidavit of Annabel Elizabeth Rose Clemens affirmed on 1 October 2020 and filed on4 October 2020.

10. It is also clear from Ms Clemens’ affidavits that that the applicant repeatedly told the respondent of the need to file and serve its responding material or face the prospect of default judgment.

11. In addition, on 20 October 2020 when this matter last came before me, Ms Newell and Mr Demasi were present for the respondent.  At that time, orders were made adjourning the applicant’s application for default judgment to today.  Also, orders were made on that occasion providing the respondent with a further opportunity to file and serve a response and defence within 14 days.  The respondent has again failed to comply with that order.  The only explanation given is that the respondent has not been trading during the COVID-19 pandemic and therefore cannot afford legal representation.

12. Having regard to the circumstances deposed in Ms Clemens’ affidavits, I am satisfied that the respondent has been given numerous opportunities to file its responding material to the applicant’s claim.  This included a period of time during which the respondent was in fact legally represented.  The respondent has failed to properly engage with this litigation and I’m satisfied that the respondent has not complied with orders of this court and has failed to defend the proceedings with due diligence.  For the reasons outlined in the applicant’s submissions, I’m satisfied that it is therefore appropriate to grant the relief sought by the applicant in its application in a case.[7]

    [7] Applicant’s application in a case filed on 14 October 2020.

13. There is no material before the court which would suggest that the applicant is not entitled to the relief sought in the statement of claim, or that the court lacks the power to grant the relief sought.  I find that both of those matters are, in fact, established.  That is, that the applicant is entitled to the relief sought and that the court does not lack the power to grant the relief sought.  In those circumstances, I make the orders sought by the applicant in its application in a case.[8]

    [8] Applicant’s application in a case filed on 14 October 2020.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Mercuri

Associate: 

Date: 4 March 2021