Fair Work Ombudsman v Sierra Fleet Services Pty Ltd

[2018] FCCA 3354

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SIERRA FLEET SERVICES PTY LTD & ANOR [2018] FCCA 3354

Catchwords:
INDUSTRIAL LAW – Application for imposition of pecuniary penalties – whether worker employed by first respondent or other entity – whether second respondent was involved in contraventions of first respondent.

Legislation:

Fair Work Act 2009 (Cth)

Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299
Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510
Briginshaw v Briginshaw (1938) 60 CLR 336
Cohen v iSoft Group Pty Limited [2012] FCA 1071

Applicant: FAIR WORK OMBUDSMAN

First Respondent: SIERRA FLEET SERVICES PTY LTD

Second Respondent: HAROLD VAN HALTREN

File Number: BRG 557 of 2014

Judgment of: Judge Jarrett

Hearing date: 11 and 12 March 2015

Date of Last Submission: 12 March 2015

Delivered at: Brisbane

Delivered on: 19 November 2018

REPRESENTATION

Counsel for the Applicant: Ms Hartigan

Solicitors for the Applicant: Fair Work Ombudsman

Counsel for the Respondents: Mr Nell SC

Solicitors for the Respondents: Ausship Lawyers

ORDERS

1. The application filed on 20 June, 2014 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 557 of 2014

FAIR WORK OMBUDSMAN

Applicant

And

SIERRA FLEET SERVICES PTY LTD

First Respondent

HAROLD VAN HALTREN

Second Respondent

REASONS FOR JUDGMENT

1. In these proceedings, the applicant alleges that the first respondent contravened certain provisions of the Fair Work Act 2009 (Cth). The claim against the second respondent is that he was involved in the first respondent’s contraventions of the Act and so too, is liable for the first respondent’s contraventions.

2. The claim is predicated on the proposition that Mr Wayne Smith was employed by the first respondent between at least 5 May, 2012 and 19 March, 2013.  A number of issues arise in these proceedings, the principal one being the identity of Mr Smith’s employer at the relevant time.  Whilst the applicant contends that Mr Smith was employed by the first respondent, the first and second respondents contend that the applicant was employed by a separate but related company incorporated in Papua New Guinea – Sierra Fleet Services (PNG) Limited. 

3. If I conclude that Mr Smith was not employed by the first respondent the application must be dismissed.  If I conclude that Mr Smith was employed by the first respondent some consequential issues arise concerning the terms and conditions of his employment with the first respondent and whether Mr Smith has been paid all that he is entitled to be paid by his employer. 

4. A reference in these reasons to “Sierra” without stipulation as to whether it is the first respondent or the PNG company is taken directly from the evidence when there is no distinction between the two.

The facts

1. The first respondent has its registered office and place of business in New South Wales.  It is a wholly-owned subsidiary of Gaia Products International Pty Ltd.  Its sole director is the wife of the second respondent, Andrea Jackson.  The second respondent describes himself as the first respondent’s general manager.

2. Sierra Fleet Services (PNG) Limited is a company that is incorporated in Papua New Guinea.  It too, is a wholly-owned subsidiary of Gaia Products International Pty Ltd.  The second respondent is the sole director of the PNG company.  He is also the managing director.  He is the controlling mind of the PNG company.

3. The business that the PNG company could carry on in Papua New Guinea is subject to restriction because it is wholly owned by interests foreign to Papua New Guinea.  The evidence shows that the PNG company obtained a “CERTIFICATE PERMITTING A FOREIGN ENTERPRISE TO CARRY ON BUSINESS IN AN ACTIVITY” pursuant to the Investment Promotion Act 1992 (PNG).  Amongst other things, the certificate permits the PNG company to carry on business in the activities of:

   a)BUILDING AND REPAIRING OF SHIPS – MARINE SERVICES AND REPAIRS

   b)SEA AND COASTAL WATER TRANSPORT. 

4. The second respondent’s evidence was that the PNG company was the owner of five vessels all of which were moored in or close to the Rivergate Marina and Shipyard on the Brisbane River, at Murarrie.  They were an oceangoing tug vessel the Tarragal, a work boat called West Reef, a landing craft called the Six Eighty One, a second landing craft called Eight Twenty and a fishing boat called Harold Anne.  The evidence does not reveal if it owned any other vessels.

5. The evidence suggests that the second respondent and the PNG company intended to use the Tarragal to tow Six Eighty One and Eight Twenty from Brisbane to Kavieng, in Papua New Guinea.  There they would be employed for the transportation of goods in the waters of Papua New Guinea, consistent with a business of sea and coastal water transport.  They were self-propelled barges which could not undertake ocean transits on their own, but which could undertake transits within enclosed waters. 

6. The first respondent, as part of its business, was the manager of the PNG company’s vessels and the second respondent was the “fleet manager” of those vessels.  However, there is no evidence about what that entailed.  There is no evidence about the relationship whereby the first respondent acted as a manager for the PNG company’s vessels.  The first respondent is the registered Australian manager of the Tarragal.

7. The second respondent says that he undertook the day-to-day management of the fleet and other administrative tasks associated with the fleet.  Again, there is no evidence about what that entailed either.  Some of the evidence suggests that the second respondent had a hands on role and yet on his own case he had no or very little knowledge of matters that one might have expected to be part of the day-to-day management of the “fleet”.  It is tolerably clear, however, that as part of its fleet management, the first respondent participated in the preparation of the vessels and, in particular, the Tarragal for sea journeys.  The second respondent was engaged as the first respondent’s general manager.  It was not suggested that the first respondent had any other employees or representatives that were so engaged.

8. Tarragal needed a crew to operate.  Despite being responsible for the day-to-day management of the PNG company’s fleet, in cross-examination, the second respondent denied that his duties or those of the first respondent included the provision of crew for the purposes of manning the PNG company’s vessels.  This evidence seemed a little disingenuous on the part of the second respondent because he was clearly the person who was involved in the recruitment of crew for the PNG company’s vessels.  There is nothing in the evidence to suggest that when he was embarking on such a process he made it clear to prospective employees for whom it was, or in what capacity he was acting.

9. Tarragal was purchased by the PNG company on 12 January, 2012 in Hobart.  The evidence of that transaction is contained in the second respondent’s affidavit filed on 16 February, 2015.  Sometime after it was purchased, but before Mr Smith arrived in Brisbane, the Tarragal made a voyage to Brisbane, stopping in Sydney for resupplying and refuelling.  Mr Smith says the second respondent personally told him that the vessel had difficulty travelling to Brisbane because an oil line in the engine room burst during the journey. Mr Smith saw evidence of that when he commenced working on Tarragal because he had to fix the ruptured line.

10. I accept that the PNG company was the owner of the Tarragal.  The evidence demonstrates that was so.  As the vessel was no longer owned by an Australian company after its purchase by the PNG company, it was no longer permitted to be registered under the Australian Shipping Registration Act unless it was demise chartered to an Australian company.  There is no evidence that was the case and so its registration was closed.  The vessel was registered in Papua New Guinea, seemingly on a provisional basis, on or about 29 February, 2012. 

11. The annexures in the 9 March, 2015 affidavit of the second respondent show that the PNG company is also the owner of the other vessels that were in Brisbane in the beginning of 2012.  It appears that they too were provisionally registered in PNG in April, 2012. 

12. Mr Wayne Smith is a Jamaican national.  He lives in Jamaica.  He is a licensed marine engineer and at the time of his evidence he had worked as an engineer on boats for about nine years. 

13. Mr Smith has sworn two affidavits upon which the applicant relies in these proceedings.  The first was filed on 1 December, 2014 and the second was filed on 23 January, 2015.

14. In his first affidavit, Mr Smith swears that:

    6.  Early in 2012 I applied for a job as a chief engineer at Sierra Fleet Services Pty Ltd (Sierra) after seeing an advertisement online on a job recruitment company called Dalmar Recruitment, based in the United Kingdom.

15. This paragraph in Mr Smith’s affidavit is important in two respects.  The first is that it sets up that each time Mr Smith uses the word “Sierra” in the rest of his affidavit, it should be taken to mean the first respondent.  That is significant because Mr Smith’s affidavit is drawn in such a way that he avoids giving the words spoken in any conversations to which he deposes.  He does not even purport to give evidence of the effect of the words that were said in any of the conversations said to be important in the case.  His recounting of conversations occurs as a series of statements that are in the nature of conclusion or opinion, without giving any evidence about what, in fact, might have been said.  Whilst he is not required to give his evidence in the first person, the form of his evidence detracts substantially from its probity, especially when it incorporates a single word to stand in the stead of the critical issue – the name of his employer. 

16. The second is that it demonstrates that some considerable care needs to be exercised when approaching Mr Smith’s evidence.  That is not to say that I formed the view that he was a dishonest witness who was prepared to say anything that suited his cause – far from it.  I thought that he gave his evidence honestly and forthrightly.  But the paragraph under consideration purports to give evidence that Mr Smith applied for a job with a particular entity – the first respondent.  The way in which the evidence is drawn leads to the conclusion that there was an online advertisement for a job with the second respondent listed with a job recruitment agency – Dalmar Recruitment – to which Mr Smith responded.  In cross-examination, however, it became apparent that this evidence was not accurate.  Mr Smith’s evidence in cross-examination revealed that he had sent his resume to Dalmar Recruitment sometime in 2011.  He made an unsolicited enquiry about job opportunities.  He was not responding to any particular advertisement that he had seen for a job.  He said in cross-examination that after a couple of weeks or so “they contacted me and told me that an Australian company has an opening for an engineer, but nothing was concrete when they contacted me”.

17. Mr Smith sought details of the opportunity with the “Australian company” from the people he was dealing with at Dalmar Recruitment.  He was interested to know about the type of boats he would be working on in Australia and the type of engines that he would be “coming to – to work on and the salary and such”.  He says in his affidavit that the recruitment agency could not provide that information to him.  However, in cross-examination he said that he signed a “code of ethics” and that the recruitment agency gave him a contract with the amount of money that he would be paid and that he was told at the time that he would be receiving US$300 per day at sea and US$150 per day when not at sea.  That was contained within a document given to him he says by the recruitment agency.  Presumably, if he had been given a contract it would have had the proposed employer’s name on it.  But there is no evidence about that.  He no longer has any of the documents.  There is no evidence that any attempt has been made to secure copies of those documents from the recruitment agency.

18. Mr Smith does say that he was given contact details for the second respondent so that he could speak further to someone about the position.  He began corresponding with the second respondent and Mr Tony Kunac about the position on offer in Australia.  The evidence shows that Mr Kunac was the master of the Tarragal.  According to Mr Smith’s evidence, his correspondence with the second respondent and Mr Kunac lasted for about three months before he accepted an offer to work.  There is no written evidence of what that offer was.  Apart from the evidence that I have already recorded, there was no oral testimony about the terms of the offer.

19. The applicant pleads in paragraph 13 of its statement of claim that the contract of employment between Mr Smith and the first respondent was partly oral and partly in writing.  Insofar as it is said to be partly in writing, two matters are identified:  those in paragraphs 14 and 15 of the statement of claim.  The first identified in paragraph 14 of the statement of claim is said to be an email dated 6 January, 2012 sent by the “second respondent on behalf of the first respondent” and which made representations that:

    a)Mr Smith would be paid $1,200 (USD) a week; and

    b)that entitled Mr Smith to an annual salary of $62,400.

20. However, Mr Smith gave no evidence about such an email.  It is not to be found in any of the evidence in the case.

21. The second matter is identified in paragraph 15 of the statement of claim.  It is said to be a written contract dated 4 April, 2012.  That appears to be a reference to the document which is exhibit CD17 to Inspector Dangerfield’s affidavit filed on 1 December, 2014.  However, the respondents took objection to that evidence being led through Inspector Dangerfield.  The consequence is that there is no evidence before me about that written contract.  Other evidence tends to suggest that there were difficulties with the authenticity of the document in any event.  It is significant, I think, that Mr Smith did not give any evidence about that document.

22. To the extent that it is pleaded that the contract was partly oral, the applicant plead that a conversation took place about three weeks after Mr Smith commenced working for whichever entity it was for which he worked.  It was not explained how a post-contractual representation could itself be a contractual statement which formed or informed the terms of the contract said to be made three weeks before the relevant statement was made.  In any event, the evidence of the conversation given by Mr Smith throws no light on the identity of his employer.

23. In submissions, counsel for the applicant suggested that the evidence of Mr Smith was that prior to arriving in Australia he had discussions with the second respondent and Toni Kunac about his employment.  It was submitted that his evidence was that he was told by the second respondent in a telephone conversation that he would be working for a company which was an Australian company, that he would be performing work in Australia refitting boats before taking them to PNG and that the company would apply for a working visa as soon as he arrived in Australia.  However, he gave no evidence that he was told by the second respondent in a telephone conversation that he would be working for a company which was an Australian company.  In his affidavit filed on 1 December, 2014 Mr Smith deposed:

    7. I was negotiating by email and telephone with Harold Van Haltren (Mr Van Haltren) and Toni Kunac (Mr Kunac) for a period of about three months before I accepted the offer to work as chief engineer for Sierra.

    8. The negotiation took a considerable period of time because I was working on a rotation roster at the time so I was only able to have contact with Sierra one week out of every five.

    9. During my negotiations with Mr Van Haltren and Mr Kunac I was told that my duties would include refitting boats. I was told that Sierra had boats in Papua New Guinea and boats in Brisbane and that the boats in Brisbane would eventually need to go to Papua New Guinea. I was told that I would be responsible for the refits of the boats before they left Brisbane and then I would be the engineer manager for the boats in Papua New Guinea. I also had a lot of discussions with Mr Van Haltren and Mr Kunac about the type of engine I would be working on.

    10. I was told that I would be working full−time on a rotation of three months ‘on’ and one month ‘off’.

24. Mr Smith did not give any oral evidence to the effect that he was told by the second respondent in a telephone conversation that he would be working for a company which was an Australian company.  On his evidence, that suggestion was made by the recruitment agency.

25. Mr Smith’s evidence in cross-examination was that he thought that Mr Kunac was the Fleet Master.  His written evidence was to the effect that he understood from his discussions that the second respondent was the owner of “Sierra”.

26. On 27 April, 2012 Mr Smith departed Jamaica and on 29 April, 2012 he arrived in Singapore.  Whilst in Singapore, he arranged a transit visa to allow him to travel to the vessel upon his arrival in Australia.  He says that he arranged for that himself at the Australian Embassy in Singapore.  He stayed in a pre-booked hotel for about five days, for which, he says, the second respondent paid, before departing Singapore and arriving in Brisbane on 5 May, 2012.  Mr Smith had received a maritime crew visa that permitted his entry into and continued presence in Australia.  That was organised by the first or second respondents or Mr Kunac. 

27. The application for the maritime crew visa is in evidence.  It reveals that it was applied for by a migration agent, presumably upon instructions from the second respondent.  Mr Smith gave no evidence that he gave the migration agent instructions, and it is the same agent that the second respondent later used to apply for a 457 visa for Mr Smith.  The form of the application for the maritime crew visa required the nomination of an employer.  The employer nominated in the maritime crew visa application was the PNG company.  There is no evidence that Mr Smith knew about that or even how to go about obtaining such a visa.  But it is not surprising that the PNG company was nominated as Mr Smith’s employer for the purposes of obtaining that visa.  The vessel that he was to join was owned by the PNG company.  According to the evidence of the second respondent and the little evidence about this matter given by Mr Smith, Tarragal was to spend considerable time in Papua New Guinea.  The inference is plainly open that the PNG company was nominated in the application for that visa because it was Mr Smith’s employer.

28. Upon his arrival in Brisbane, Mr Smith stayed overnight at a hotel in Brisbane that Mr Kunac arranged and paid for him.

29. The next day, 6 May, 2012 Mr Kunac drove Mr Smith to the Rivergate Marina, Brisbane, where he went on-board the Tarragal and met the other crew members.  Living on-board the Tarragal was Mr Kunac, the vessel’s captain or master, Nemad Serovich, the oiler, and Jurica Folic, the watch keeper.  Ilaitia Ratumainaceva, the chief officer, joined the crew in May, or June, 2012 and Mr Rayon Wilks, second engineer, joined later still.  Mr Smith signed on as the chief engineer.  Signing onto the vessel was a condition of his maritime crew visa – he had to sign onto a vessel within five days of his arrival in Australia for his visa to remain valid.

30. Despite his evidence that he worked pursuant to a “457 visa”, Mr Smith did not at that stage have a 457 visa to work in Australia.  One was to be organised for him.

31. The second respondent’s evidence was that he met Mr Smith three or four days later after Mr Smith arrived on board Tarragal.  He says that Mr Kunac gave to him a copy of Mr Smith’s employment contract with “Sierra Fleet Services (PNG) Ltd that he countersigned, a copy of the “code of conduct” and a copy of the entry into the ship’s log of Mr Smith signing on as chief engineer”.  However, none of those documents have been produced in evidence.  It is said by the second respondent that the originals of those documents are still aboard the Tarragal which is now in the possession of the PNG authorities.  Whilst the second respondent gave evidence that a copy of Mr Smith’s employment contract must have been given to the PNG Department of Labour so that Mr Smith could obtain a “PNG white card”, no copy of that document has been secured from the PNG Department of Labour either.  Copies have not been secured from the agent that made the relevant permit application in PNG.

1. Mr Smith’s evidence is that shortly after he started working he asked the second respondent about his salary and he was told that he would get US$1,200 per week.  He was told that he would receive a bonus of US$10,000 every six months and that everyone on the boat would be getting paid the same regardless of their rank or position.  In cross-examination the second respondent denied that he had such a conversation with Mr Smith but he suggested that there was indeed an email exchange in which he told Mr Smith that he would be paid AU$1200 per week for working on the landing craft utility vessel known as Bebeli Pride.

2. This evidence is important in two respects.  First, it tends to suggest that if Mr Smith signed and returned any documents to the recruitment agency it was not an employment contract because one might reasonably expect that would contain details of his remuneration and an enquiry about his salary would be unnecessary.  Secondly, it is important because it tends to suggest that Mr Smith’s role extended beyond work on Tarragal.  As I discuss below, there is a dispute between the parties about the extent of the work undertaken by Mr Smith.  The evidence of the second respondent about discussions concerning work on other vessels tends to suggest that Mr Smith’s work was not confined to Tarragal.  It was also conducted upon the four other vessels I have referred to above.

3. Upon joining the vessel, Mr Smith lived aboard Tarragal with the rest of the crew.

4. About six weeks after Mr Smith commenced working, he had a conversation with the second respondent about his pay.  He had not been paid.  Mr Smith alleges that, the second respondent told him that he was having difficulties trying to send the money from Queensland to Jamaica and into Mr Smith’s Jamaican bank account.  The second respondent told Mr Smith that he was depositing his pay into an Australian ANZ Bank account.  Oddly, however, Mr Smith gives no evidence about asking for the particulars to that account and accessing it.  When asked about this conversation and the matter of the payment of Mr Smith’s wages, however, the second respondent raised a different explanation which had not formed part of any of his prior evidence:

   MS HARTIGAN:         You say that – I withdraw that.  In relation the payment for his work, after six weeks of working, Mr Smith approached you and asked to be paid, didn’t he?  

   MR VAN HALTREN:   No.  At the end of the – the month – I had – I had left Brisbane, I came back to Sydney.  Our – our son was in hospital, having been involved in a motor vehicle accident.  It was about 20 May, the end of the month, that I – that I eventually got back.  And we – it was when the issue of the Australia Defence Force became apparent, that we’re stuck there for a while.  I had a long conversation with Toni Kunac, the master of the vessel, about what to do with the crew and – and how long we’re going to be there.  I’ve said to him what we should now do is step everyone down, so that not on this – on the day rates, on – on duty rates, and just pay everybody casually, according to the amount of work they do.

   MS HARTIGAN:         Again, Mr Van Haltren, you’ve provided four affidavits to the court in relation to this matter, and this is the first occasion that you have ever raised any information about employees being stood down at the end of the May;  do you accept that?

   MR VAN HALTREN:   This is the first time I’ve said that, yes.

   MS HARTIGAN:         And I put to you:  the reason why this is the first time you’ve raised it is that you’re – you’re providing this evidence in a disingenuous manner?

   MR VAN HALTREN:   That’s not true at all.  That’s not true at all.

5. The second respondent was then cross-examined about whether he had told Mr Smith that there were difficulties paying money into a Jamaican bank account.  The second respondent accepted that he had said that to Mr Smith.  He said that he asked Mr Smith to set up an Australian bank account but that Mr Smith had refused to do so.

6. However, shortly afterwards in his cross-examination the second respondent alleged (again for the first time) that he had given money to the master of the vessel, Mr Kunac and that Mr Kunac had paid Mr Smith his wages in cash on a regular basis and wrote “all of that down in the logs and kept records of all of that”.  He said that he did not keep any records of it but the amount that was paid to Mr Smith varied depending upon the days he worked and what days he did not work.

7. I prefer the evidence of Mr Smith about this conversation.  I accept that he sought details about why he had not been paid from the second respondent.  I am not satisfied that Mr Smith was paid his wages in cash by Mr Kunac.  Mr Smith’s evidence was that he only ever received one payment into his bank account of US$5,000.  Apart from minor amounts for food from time to time he received no cash.  His evidence was that he did not receive any cash in payment of his wages.  I accept that evidence.  Mr Kunac was not called by the respondents to give evidence.

8. On 11 May, 2012 the first respondent, through a migration agent, applied for a Subclass 457 – Business (Long Stay) visa for Mr Smith.  On 27 September, 2012 that visa was granted.  Until the grant of the 457 visa, the only visas Mr Smith held were a transit visa and the maritime crew visa.

9. This is another example of why caution must be taken with Mr Smith’s evidence.  In his affidavit filed on 23 January, 2015 he swears:

   4.  I refer to paragraphs 45 to 48 of Harold’s Affidavit and say that I arrived in Australia on 5 May 2012 and worked for Sierra Fleet according to and subject to the 457 work visa that they sponsored me for. I worked for Sierra Fleet from when I arrived in Australia until I returned home to Jamaica. I could not have stayed in Australia from 5 May 2012 until 19 March 2013 if I did not have an Australian sponsor and the appropriate visa to allow me to work in Australia. Documentation in relation to my 457 work visa is annexed to my First Affidavit and marked WS−4.

10. The evidence demonstrates that Mr Smith was permitted to enter Australia because he had a maritime crew visa.  That visa permitted him to transit in and out of Australia for a period of three years from the ground of the visa provided he was part of the crew of a vessel.  There is nothing in the evidence to suggest that he needed a 457 visa to work in Australia on the Tarragal or the other vessels owned by the PNG company.

11. Annexed to Mr Smith’s affidavit filed on 1 December, 2014 are the application documents that are required for the grant of a subclass 457 Business (Long Stay) visa.  The first document is a form 956 – “Appointment of a migration agent or exempt agent or other authorised recipient”.  That document demonstrates:

    a)that the relevant applicant is the first respondent, Sierra Fleet Services Pty Ltd;

    b)Superior Migration and Mr Khalsa was appointed migration agent for Sierra Fleet Services Pty Ltd; and

    c)the appointment was signed by the second respondent on 8 May, 2012.

12. The second document is a form 1196N – “Nominating overseas employees to work temporarily in Australia”.  That form reveals that:

    a)the legal name of the business, organisation or company to which the application relates is the first respondent;

    b)the position to be filled by the visa applicant is ships engineer;

    c)the industrial arrangement between the nominator and the visa applicant was said to be an employment contract;

    d)the terms and conditions of employment was said to be “Standard conditions as for Ship’s Engineer as at present there are no Australian workers in the same position.  Also required to repair boats in Australia and overseas”;

    e)the base rate of pay was said to be AU$62,400;

    f)the base rate of pay was said to be “as agreed with employee”;

    g)the nominated person was Mr Smith;

    h)the second respondent completed the employer’s declaration on 8 May, 2012 declaring “that the details provided on this form are correct.”;

    i)the second respondent signed the document in his position in the business as “General Manager”; and

    j)the second respondent signed the nominator’s declaration at part H of the form again declaring “that the details provided on this form are correct”.

13. The third document is a form 1066 – Application for a Subclass 457 – Business (Long Stay) visa.  That document, which appears to have been prepared by the migration agent appointed by the first respondent records that Mr Smith’s employer was to be the first respondent.

14. The second respondent was asked about these forms and his signature on them and the various declarations that he made.  His evidence was:

    MS HARTIGAN:         You accept that.  Do you accept, finally, that by signing part F of the form, which is at page 39 – it was the first provision that I took you to – that you were signing on behalf of Sierra as the employer – as the sponsoring employer of Mr Smith?  

    MR VAN HALTREN:   To a job that – yes.  I agree.  And that’s for a job that was meant to commence once this visa was granted, which takes four months from the date of lodgement.  That job never commenced.  It’s something that I’ve stated very clearly in my affidavit.

15. In his affidavit of evidence in chief filed on 22 December, 2014 the second respondent had given evidence about the “job that was meant to commence once this visa was granted” referred to in his oral testimony set out above.  In that affidavit he asserted that Mr Smith was offered employment in May, 2012 by the first respondent “expecting his application to take several months to approve and timed to occur after the delivery of the barges 820 and 6812 PNG”.  The second respondent accepted that the first respondent made an application for a 457 visa on Mr Smith’s behalf but contended that Mr Smith never took up his employment under the 457 visa with the first respondent “due to the delays in the departure of the M.T Tarragal and the shelving of a marine engineering project in Australian.”

16. This evidence, however, is difficult to accept because in the same affidavit the second respondent swears that Mr Smith’s “workplace and country of employment is Papua New Guinea on board the Tug M.T Tarragal”.  If that truly was the case, then Mr Smith would have no need for a 457 visa at all.  Moreover, the second respondent gives no evidence, detailed or otherwise about any negotiations for Mr Smith to be employed by the first respondent.  The only evidence that bears on this issue is that contained in paragraph 43 of the second respondent’s first affidavit.  Mr Smith was not cross-examined about an offer of employment from the first respondent that was allegedly made to him in May, 2012.

17. In paragraph 38 of the second respondent’s affidavit filed on 22 December, 2012 he states that a copy of Mr Smith’s employment contract with Sierra Fleet Services (PNG) Limited was sent to the PNG Department of Labour for the purpose of securing a white card for Mr Smith.  A white card is a permit which allows a foreign national to be employed in PNG.  The would-be employer is granted the permit to employ the potential employee and the employee is given a “white card”.  The legislation that sets up that scheme is before me.  The legislation imposes no restriction upon the employer who proposes employing foreign workers in PNG in the sense that they do not have to be PNG nationals or a PNG registered company.  Nonetheless, the evidence here demonstrates that the employer in respect of whom Mr Smith was issued a white card was the PNG company. 

18. A pro-forma application for the issue of a work permit and white card is in evidence.  It demonstrates that the proposed employer must be nominated for the purposes of the application.  The form requires provision for the employment contract to be signed by the employer and the employee.  The application form too, is to be signed by the employer and the employee.  Mr Smith denies having ever signed a contract with the PNG company.  In paragraph 3 of Mr Smith’s second affidavit he states that after arriving in Australia and commencing work for Sierra he received a work permit for PNG to allow him to deliver boats to PNG and to complete any required work whilst there.

19. The respondents contend that it is significant that Mr Smith held a white card.  The second respondent says that the PNG white card was required, not to perform work in PNG, but to be employed on the Tarragal.  The second respondent organised for the white card for Mr Smith.  He says that he was handed by Mr Kunac a copy of Mr Smith’s employment contract with the PNG company when he was on-board the Tarragal, which he countersigned.  He says this contract remains on-board the Tarragal and a copy was sent to the Department of Labour (PNG) for the purposes of securing a white card for Mr Smith.  Presumably the second respondent organised for that to be done, but did not keep a copy of the relevant documents.  Otherwise they would have been produced in evidence.

20. Mr Rayson Wilks is also a Jamaican national who came to work on-board the Tarragal.  The identity of his employer is also in dispute.  Mr Wilks gave evidence in the proceedings, both by affidavit and orally.  Much of Mr Wilks’s evidence is uncontroversial.

21. Mr Wilks was contacted by Mr Smith sometime in August, 2012 about an employment opportunity in Brisbane.  He says that subsequently he received an email from the second respondent, who Mr Wilks described as “the owner of Sierra”.  The second respondent said to him that he “could have the job as second engineer for Sierra.”  The email is not in evidence.

22. Subsequently, Mr Wilks received an email from Mr Toni Kunac.  The email was in these terms:

    Hi Rayon.

    Attached is contract which is applied for the first 3 months with Sierra Fleet Services Company.

    As spoken before if Ch Engineer will be satisfied with your working skills we will issue full time contract for you.

    Let me know if you are happy with this so I can arrange your Maritime Visa and organise your flights to Australia this week.

    Brgds!

    Toni Kunic

    Fleet Master/ Captain

    Sierra Fleet Services Pty Ltd Australia

    Project: AUS / PNG

23. Then followed some more emails between Mr Wilks and Mr Kunac which culminated in Mr Wilks sending to Mr Kunac a completed form of employment contract.  It is dated 27 October, 2012.  The position dealt with in the contract is expressed to commence on 1 November, 2012.  Mr Wilks’s evidence was that he understood that his employment was initially for a three month probationary period in accordance with the emails he had with Mr Kunac. 

24. Significantly, the form of contract sent to Mr Wilks prior to him joining the vessel provided that:

    a)the employer was the first respondent, Sierra Fleet Services Pty Ltd;

    b)the first respondent would be responsible for arranging the appropriate work visa for Australia and Mr Wilks would be responsible for the sponsorship undertakings that he signed off against on his visa application Form 1066 (in respect of a 457 visa);

    c)his position was second engineer;

    d)he would be paid AU$5,140 per month together with a superannuation contribution in accordance with the superannuation guarantee legislation (then 9%); and

    e)his employment conditions whilst working in Australia would be in accordance with the Australian Fair Pay and Conditions Standards.

25. On 27 September, 2012 Mr Wilks flew from Jamaica to Singapore, where he stayed for around two weeks while his transit and maritime crew visas were being organised.  He arrived in Brisbane on 7 October, 2012 and subsequently boarded the Tarragal.  He signed on as second engineer.  When he entered Australia he did not have a 457 visa. 

26. In his affidavit filed on 11 December, 2014 Mr Wilks deposes that (faithfully reproduced):

    (20) Mr Van Haltren told me that he was the owner of the boats and that his wife, Andrea Jackson was the general manager of Sierra.

    (21) From my observations while working for Sierra, Mr Van Haltren was the person who managed everything to do with the boats and paid all of the bills in relation to the boats.

    (22) I never had any contact with Andrea Jackson in relation to my work for Sierra.

    (23) My immediate supervisor was Mr Smith.  Mr Smith would give me directions on what tasks I needed to do.  Occasionally Mr Kunac would give me directions on what needed to be done.

27. Mr Wilks said that his duties as second engineer included the repairing of barges and boats so as to be functional and capable of being taken to PNG, where they would then be used for the shipping of goods and to transport people between the islands of PNG.  His evidence about these matters was consistent with that of Mr Smith.

28. During his first month of work, Mr Wilks asked the second respondent for his pay a number of times.  The second respondent told him that he needed “some more time”.  It was only after Mr Wilks had been working for about six weeks that he received his first month’s pay.  He received some of it in cash and some of it was deposited into an Australian bank account which Mr Wilks had opened.  He opened the bank account because the second respondent had told him that he was having difficulties paying him money into his Jamaican bank account. 

29. At the end of his probationary period, Mr Wilks was shown a further employment contract for him by Mr Kunac.  The contract provided for an annual salary of $70,000 per year with a $30,000 bonus at the discretion of the second respondent.  However it seems Mr Wilks never signed that contract.

30. Mr Wilks was also told by the second respondent that a “457 visa” was being organised for him, or that an application had been made, although Mr Wilks never received any confirmation of a grant of such 457 visa. 

31. Subsequently, when the Tarragal entered Papua New Guinean waters, Mr Wilks’s understanding was that the second respondent organised a work permit from the Papua New Guinean authorities to allow him to work in Papua New Guinea as a foreigner.  Mr Wilks’s evidence identified a visa placed in his passport as evidence of his work permit for Papua New Guinea, but on inspection of that visa, it clearly prohibits work in Papua New Guinea.  It remains unclear if Mr Wilks ever had a “white card”.

32. An issue arises on the evidence about whether Mr Smith’s engagement went beyond being the chief engineer for the Tarragal.  He contended that he was the engineer for the five boats in Rivergate Marina, not just the Tarragal.  He did not sign on as a member of the crew for any of those other vessels but, as he pointed out, none of those other vessels had any crew at all.  However, it is unnecessary to resolve this issue because what is plain is that in the course of his employment (with whichever entity that might have been) Mr Smith performed work on all of the vessels that were moored in and around Rivergate Marina.  His evidence was that 50% of the time he worked on Tarragal but the other half of his time was spent amongst the other vessels.  His evidence is consistent with that of Mr Wilks who gave evidence of work performed on some of the other vessels in and around Rivergate Marina.

33. The second respondent, when asked about the work performed by Mr Smith and Mr Wilks in cross-examination, was entirely disingenuous:

    MS HARTIGAN:           They performed work on the Tarragal;  you accept that?

    MR VAN HALTREN:     Yes.

    MS HARTIGAN:           And they also performed work on the four other vessels in the fleet?

    MR VAN HALTREN:     You mean – I don’t quite understand the question when you say work – work as      

    MS HARTIGAN:           In their roles as the chief engineer and as the engineer?

    MR VAN HALTREN:     I don’t really – I genuinely don’t understand the question.  It’s really quite ambiguous as to what do you define as work.

    MS HARTIGAN:           Did Mr Smith perform duties on other vessels?  When I say duties, he was employed as the chief engineer.  Did he perform engineering duties on the other vessels?

    MR VAN HALTREN:     It’s a very hard question to answer in one word.

    HIS HONOUR:             Do your best?

    MR VAN HALTREN:     Okay.  If – on the balance of probability I would say no.

    MS HARTIGAN:           So you reject that they worked on the other vessels?

    MR VAN HALTREN:     Well, I can’t define what you mean by work.

    HIS HONOUR:             What would you mean by work, Sir?

    MR VAN HALTREN:     Well, if we’ve got –was a vessel operational, was the vessel sailing, was the vessel…

    HIS HONOUR:             The question – you’re making much more of this than you ought to?

    MR VAN HALTREN:     Okay.

    HIS HONOUR:             Did they do any work on the other vessels whilst they were employed by whomever it was that they were employed by as chief engineers – chief engineer and the other position?  Did they do any work at all on the other vessels, to your knowledge?

    MR VAN HALTREN:     It’s just hard to define, Sir.  I’m not trying to be evasive, but it’s just very hard to define.

    HIS HONOUR:             Well, that’s a matter for me to judge, I’m afraid?

    MR VAN HALTREN:     Okay.  What do you call work?  Well, I will agree with you.  Yes.  They did some work.

    HIS HONOUR:             What do you say they did?

    MR VAN HALTREN:     I have no idea.  That’s the whole point.

    HIS HONOUR:             You have no idea.  So you wouldn’t know whether they did any work, irrespective of how you would describe it or not?

    MR VAN HALTREN:     I didn’t – I just can’t be certain, Sir.  It – it really is a ‑ ‑ ‑

    HIS HONOUR:             So you don’t know whether they did any work, howsoever you might describe work, on the other vessels or not.  Is that right or not right?

    MR VAN HALTREN:     I don’t know what work they did. 

1. That evidence was particularly perplexing given the second respondent’s own evidence and concessions that he was responsible for the day-to-day management of the PNG company’s fleet.  Later in his cross-examination the second respondent denied that Mr Smith or Mr Wilks did any work at all in relation to any vessels other than Tarragal.  However, he agreed with counsel for the applicant that in the course of the telephone conversations that he had with Mr Smith before Mr Smith had agreed to join Tarragal he told Mr Smith that he would be working in Australia and his job would be refitting boats before they were to be taken to Papua New Guinea.  The second respondent’s evidence was that the relevant conversation took place in August, 2011 but that Mr Smith in an email to him had told him that he was not capable of refit work.  Notwithstanding that evidence, the second respondent then went on to say that in any event, there were no refits to be done by Mr Smith.  Any refits were undertaken by a shipwright and external contractors.  The second respondent claimed to have a spreadsheet of all of the contractors and the labourers that were used for the work that was done on the other vessels, but he put no evidence of that before me.

2. The second respondent says that the purpose of the Tarragal’s presence in Brisbane in 2012-2013 was the ship making its innocent passage from Hobart to Kavieng Harbour, PNG.  The stop in Brisbane was “to collect her towage” and it was intended to be much shorter than it turned out to be.  The second respondent’s evidence was that he expected the vessel to have departed Brisbane by October, 2012.  He explains that the delay in the vessel’s departure was largely due to requiring clearance from the Department of Defence (Aus).  The two landing barges had been imported from the United States some time before.  They were ex-military landing barges.  As it transpired, the necessary import, or perhaps export documents had not been properly completed for the purposes of exporting those vessels from the United States.  The issue needed to be rectified before the Australian Department of Defence would authorise the barges leaving Australia.  That took some time.  Further, by October, 2012 when the Tarragal might have been able to set sail, the second respondent claimed that cyclone season was upon the area through which the crew would venture.  The second respondent made a decision in the interests of safety of the crew to further delay departure until March, 2013.

3. Mr Smith contends that the delay in the Tarragal’s departure was due to the unseaworthiness of the vessel.  He said that it needed considerable work before it could be put to sea.  However, there is little support for his contention in the evidence.  Whilst Mr Wilks suggested that work was done to the Tarragal and some of the other vessels, the import of his evidence was not that the Tarragal was unseaworthy.  Some of the other vessels required the fitting of alarms and other safety devices, but the only two vessels that were undertaking the journey to PNG were the Tarragal and one of the barges. 

4. The respondents’ case was that because of the delay, the opportunity was seized to undertake some work to the Tarragal, such as refitting some of her electronics and appliances. 

5. Mr Smith’s evidence was that he reported to the second respondent and would send him a report of his work on a daily basis.  He would receive instructions from the second respondent in the form of a job list that needed to be completed each week.  In cross-examination, the second respondent accepted that he would “occasionally” send Mr Smith “job lists”.  It seems to me more likely, however, that Mr Smith received job lists from the second respondent more than occasionally and that they were sent to Mr Smith regularly as his evidence suggests.

6. Mr Smith says his usual work hours were from 8:00am until 5:00pm Monday to Friday, with a one hour lunch break from 12:00pm to 1:00pm and two 30 minute breaks at 10:00am and 3:00pm, and from 8:00am to 12:00pm on Saturday.  He would also work Sundays, he says, if the boat he was on was “moving”, and not moored at a marina, as the Tarragal mostly was.  Mr Smith says in addition to these usual work hours, and because he was living on the Tarragal, he would complete work that needed to be done outside of the usual working hours, if required.

7. Mr Wilks claims that while in Australia he worked Monday to Saturday, usually from 7:00am to 7:00pm, and if he worked late then would sometimes only work half a day on the Saturday.  He says he was told by both the second respondent and Mr Kunac that once all of the repairs were effected he would be responsible for training incoming engineers and for assisting “Mr Smith with managing the boats and all of the work.”

8. In his position as chief engineer, Mr Smith was responsible for the refitting, upgrading, general maintenance, repair and “managing” of the vessels, he says, for the purpose of and in anticipation of their service in PNG.  Mr Smith and Mr Wilks said that they completed specific work on the Tarragal.  On the applicant’s evidence, equipment was installed and upgraded on the Tarragal.  Certain equipment which was fitted ran on alternating currents, including, on Mr Wilks’ evidence, a freezer and a microwave.  Prior to the work the engineers completed on the Tarragal, it was fitted with two direct current generators, although it seems on Mr Wilks’ evidence one DC generator had “attached to” it a small AC generator incapable of supporting all of the AC equipment.  In order for the AC equipment to be utilised, a third generator was required.

9. Other work carried out included installing safety equipment such as fire alarms, repairing engines and gearboxes, repairing generators and equipment on other boats, including a crane truck, and upgrades of other machinery and equipment.  Mr Wilks gave oral evidence that the installation of safety devices and the work on gearboxes is classified as “the usual nature of repair and maintenance of the vessel” and such other work as “improvement of the vessel consistent with it being improved and refitted at the time”.

10. I accept the evidence of Mr Smith and Mr Wilks about the work that they did on the Tarragal and the other vessels that were at Rivergate Marina.  Their evidence about those matters was clear and concise and supported by Mr Wilks’s log entries.

11. It is common ground that about three weeks prior to the Tarragal’s planned departure, a sea trial was conducted for the Tarragal for the purpose of testing the newly installed systems and equipment including the autopilot and other navigational equipment.  On the first occasion a test was attempted, the Tarragal ran aground in the Brisbane River and returned to the marina. 

12. A further sea trial was conducted for the purpose of assessing the towage link between the Tarragal and the barge that was to be towed to PNG, as well as assessing the integrity of the hull of the Tarragal following the grounding during the previous trial.  Mr Smith says he was on-board the Tarragal as chief engineer in this instance and Mr Wilks was on-board the barge as second engineer.  The barge was self-propelled and navigated its way out of the river into the seaway for the purpose of that test.  No damage was detected and the trial provided satisfactory results.

13. According to Mr Smith, the Tarragal moved from its mooring on another two occasions.  The first was a navigational matter – a compass deflection test – and the second occasion was a short shift for refuelling.  At no time was the vessel used for the purpose of carrying any cargo within the river or enclosed waters of the river.  There were no other occasions, prior to the departure for PNG in March, 2013 and as far as Mr Smith is aware, on which the Tarragal moved from its mooring.  I accept all of that evidence.

14. Over the Christmas period in 2012 Mr Smith says that he was instructed by the second respondent to travel with him, Mr Kunac and Mr Wilks and stay at his son-in-law’s house in Gosford, NSW, for a period of six weeks.  Mr Smith says the second respondent refused to send him home to Jamaica because he was “worried that if I went home, I might not come back.”  He further says that the second respondent gave him $1,000 over this period.

15. Upon arrival at the property in Gosford Mr Smith says he realised why the second respondent suggested they go to Gosford.  He says the property was less of a farm and more of a junkyard and he spent those six weeks working on engines, but not working on vessels.  He gives little particularity about this however. He does not say how much work was undertaken or even if he was required to undertake the work.  Mr Wilks’ gave evidence consistent with Mr Smith’s accounts of this.  Mr Wilks also said the second respondent paid for the other two crew members to return home to Croatia for the Christmas period and due to this, the second respondent was unable to send Mr Wilks to Jamaica when he requested.

16. When questioned on this, Mr Wilks confirmed that the purpose of the the travel to Gosford was because there was no further work to be done on Tarragal over the period for which they were in Gosford.  Whilst no work was conducted in his capacity as second engineer, Mr Wilks denied senior counsel’s suggestion that this period of time was in fact annual leave or some other type of leave because the time was spent working on vehicles, equipment and the farm.

17. The Tarragal departed Brisbane on 19 March, 2013 and arrived in Kavieng, PNG on 30 March, 2013.  Mr Smith and Mr Wilks say they continued to work on the boats upon arrival in PNG.  Although any work completed after 19 March, 2013 falls outside of the alleged contravention period, it is relevant to detail the events that occurred from 30 March, 2013 until about 11 September, 2013 when Mr Smith returned to Brisbane.

18. Upon arrival in Kavieng, PNG, the crew of the Tarragal awaited customs, immigration and or quarantine officials to come on-board for the purpose of clearing the crew to leave the vessel.  The second respondent, who had flown to PNG prior to the arrival of the Tarragal, boarded the vessel and secured each crew member’s passport.  Thereafter, the crew remained on-board the Tarragal for about five months because, Mr Smith says, “the Authorities” had said so.  They were only allowed to depart to collect food and to complete work.

19. The second respondent’s evidence is that upon the arrival of the Tarragal in Kavieng, the PNG company “was placed under extreme pressure to pay various “service fees” to the Customs Manager” (emphasis in original).    

20. The passports were returned to the crew after their PNG entry visas had expired, at which time they were told by the authorities that without a visa they were in the country illegally.

21. On 12 May, 2013 or thereabouts the crew had contact with Mr Daniel Mathew of the PNG Maritime and Transport Workers’ Union.  Mr Mathew took the crew’s statements and asked how much money they were owed by Sierra.  Mr Mathew referred the complaint to the Maritime Union of Australia.  On 3 June, 2013 “Mr Matthews sent a letter to the Maritime Union of Australia, ITF Maritime Operations, the Fijian High Commissioner and other bodies saying that we had received our salaries and that our complaints were not valid.”  Mr Smith says Mr Kunac gave him a copy of this letter, or email, although he does not know how Mr Kunac obtained such a copy.  The same email is attached to the second respondent’s affidavit.

22. The email is addressed to Mr Cyril Poscal (Customs Kavieng), Customs Officer (POM), Fiji High Commissioner, Mr Finlay McIntosh (ITF Maritime Operations), Mick Doleman (Maritime Union of Australia) and Mr Douglas Gadebo (Ass. Gen. Secretary, PNGMTWU).  It seems to address a few issues including: detainment of crew passports by “the owner”; wages, which the letter states the owners have committed to pay after the issue with customs is resolved; a statement about the provisions provided to crew including phone credits per week, internet access and meals; and that the position of the PNGMTWU is that there is no case against the owners to be brought.

23. The substance of the email is as follows (errors in original, faithfully reproduced):

    Good Day All,

    I hope this mail finds you all well.

    As you are all aware of the Tug Boat TARRAGAL and the crew issue, here is a brief report of the progress to the issue and our position as PNGMTWU.

    The crew gave us a call on the 12^th May 2013, in regards to their concerns of

    -PASSPORTS held by Owner

    -WAGES unpaided claims

    The issue was raised by the master of the ship, Mr TONY KUNAC.

    Issue/concerns were raised to the Owner about what the crew raised in a meeting I organised with the owners.  In respond to the issue the owners confirmed they just got the Passports from the Customs after it was brought into Port Moresby by customs boarding officer and waiting advice from superiors.  As per instructions from customs and safe keeping, owner kept in his custody, reached an understanding with owner and passports were sent back to crews during the week.

    Passport issue was solved.  At no time we believe the owner had the passports illegally because the passport was brought into Port Moresby by customs on their call of duty.

    In regards to wages I have raised the issue, the owners have committed to paying the wages and to date the owners have paid and sent in receipts of bank statements of payments done.  The understanding we reached was the owner will pay after the issue with customs in regards to the ships.

    But some of the crew have been paid but were not honest with me in raising this issue until the owner brought in receipts to show bank statement showing money deposited into accounts of various crew.  The owners have also bought phone credits for crew @ K100.00 per week and internet access, dinner meals provided by NUSA RESORT and supplies provided weekly to crew on board the Tug, Tarragal.

    Water is also bought from the shops even there is a water making machine on board tug.

    As all is provided and taken care off, our stand as PNG Maritime & Transport Workers Union to find or build a case against the owner/owners, our investigation finds no case to bring against the owners right now as we have an understanding with owner that wages will be paid and is been paid as per our agreement and discussions and as Tug is PNG register, we wish to solve this, get foreign crew flown back to their homes and have our PNG Crew on board employed, pay tax and union dues with bread and butter for families of Papua New Guineans, which the owners have agreed to.

    PNGMTWU will only seek help from our friends in maritime Union of Australia or ITF when and if the owner/owners don’t fulfil their commitment in paying wages to the foreign crew.

    As per discussions with owners and crew meetings, we have and believe this an in house matter and owner and crew can resolve.

    For any further developments I will raise to your attention.

    Brdgs

    Daniel Mathew

24. On 18 May, 2013 the second respondent sent an email to Mr Smith and Mr Wilks to which he attaches “the real contract of employment that we use”.  The substance of the email is the second respondent apparently explaining the issue involving what he claimed were allegedly fraudulent contracts drafted and signed by Mr Kunac purportedly on behalf of the first respondent.

25. Annexed to the second respondent’s affidavit filed by leave on 23 February, 2012 and marked SC001 is an email exchange between Mr Kunac and the second respondent.  In the first email, Mr Kunac says:

    Hi Boss

    please find attached contracts as requested.

    I told guys you will check it and probably make some changes.

26. In the response to that email the second respondent told Mr Kunac that “These are not contracts, These documents are your own creation.  You are not authorised to sign documents or contracts on behalf of the company.”  The “contracts” are dated 1 May, 2013 and, relevantly for Mr Smith’s, contain a salary provision of AUD70,000 with a AUD30,000 loyalty bonus.  This contract is not contended for by either party and I am not asked to attach any significance to this document.

27. In early July, 2013 some of the crew left the Tarragal with the assistance of their relevant countries’ embassies – “the Fijian Embassy and the Croation High Commission”.  For most of July, 2013 only Mr Smith and Mr Wilks remained on-board the Tarragal because they could not afford plane tickets home and were unsuccessful in obtaining the assistance of the Jamaican authorities. 

28. Between 8 July and 11 July, 2013 Mr Smith and a person named Michael Titus, of Titus Lawyers engaged in email correspondence.  In the course of that correspondence, Mr Smith particularised the claim for his wages owing as AUD$100,000 (as at 11 July, 2013). 

29. In email correspondence annexed to Mr Wilks’ affidavit, Mr Wilks asserts outstanding pay of $40,833.33 to which the second respondent responded “Your figures are not exactly correct but, I will pay it as I earn it and we can sort it out later.  I simply don’t have it during this disaster.”

30. In early August, 2013 PNG customs officers came on-board the Tarragal and told both Mr Smith and Mr Wilks that they would have to “pull up the anchor and start the Tarragal”.  They were told to “put the boat alongside the pier” and that they would have to disembark the vessel because “customs were taking over control of the boat” as the second respondent “had not declared the boats correctly”.  Mr Smith and Mr Wilks were thereafter without accommodation but they were able to find some at Nusa Island, which had a number of bungalows available for them to stay.  He says that he maintained telephone and email contact with the second respondent during this time.

31. It is apparent from the evidence that from the vessel’s arrival in PNG, the second respondent and perhaps the first respondent or the PNG company became embroiled in a dispute with PNG customs officials and perhaps others.  At the same time it seems that the first respondent and the second respondent were also dealing with some investigation by the Department of Immigration (Australia).  With respect to the inquiries in relation to the status of the workers by the Department of Immigration, the second respondent said he was dealing with it “second hand”, that there were other people dealing with it and that he had no knowledge of it.  He later suggested he “was getting third and fourth hand information” about the immigration matter.  But the evidence is not consistent with that.

32. Annexed to Inspector Dangerfield’s affidavit, marked as CD-5, particularly at page 21, appears an email thread between the second respondent and Mr Smith and, inferring from the below text, probably Mr Wilks as well.  In an email dated 28 July, 2012 the second respondent says the following (errors in original, faithfully reproduced):

    Hello Gentlemen,

    can you send me full names and home addresses.

    Dates you left Jamaica.

    Also exactly how much I owe you.

    I am drawing up the contract and payments like the one we did for Iliata

    Thanks

    HVH

33. Mr Smith’s response appears above with the date stamp 29 July, 2013.  In his response he says the following (errors in original, faithfully reproduced):

    ello Boss,

    I departed Kingston April 27,2012

    m here 15mopnths and 2 days.

    I was already paid 5000 usd

    as per my calculation am owed 112000 Aud

    Full home address: lot 81 Whitehouse housing scheme,Ewarton Post

    Office,Saint Catherine, Jamaica,West Indies

34. The second respondent responds on 31 July, 2013 “Hello Mate, Please read carefully and advise.  We will sign and return to you.  Thanks”.  Notably no attachment accompanies that email in the evidence. 

35. Sometime in August, 2013 the second respondent sent to Mr Smith and Mr Wilks a document entitled “ENGAGEMENT AGREEMENT”.  The document, clearly purporting to be a contract of employment, is dated 27 April, 2012.  The document states that the first respondent is offering to Mr Smith “full time engagement as Engineering Management”. 

1. On 4 August, 2013 the second respondent emailed Mr Smith again, with the subject “version 3” and the following text (errors in original, faithfully reproduced):

   Hello Mate,

   Spotted another mistake I the contract

   Can you look at this

   ask Shaun to print and sign so i can resolve anoth battle I am having in Australia caused by Kunac.

   Thanks

2. On 5 August, 2013 Mr Smith sent an email to Ms Elizabeth Donnellan from the Department of Immigration (Australia).  He asked for advice with respect to an email he received from the second respondent.  That email from the second respondent is not dated.  In that email the second respondent says the following (errors in original, faithfully reproduced):

   Hello Mate,

   Please follow the thread carefully.

   We need this contract signed to shut

   down the Australian Immigration Dept

   investigation started by Toni.

   They are happy Toni has been paid and

   dealt with according to his contract

   however, the contract for you and

   Rayon was not done properly in

   Brisbane

   or in PNG.

   Please study and let me know.

   hanks

   HVH

3. On 7 August, 2013 the second respondent emailed Mr Smith requesting him to “please sign the contract so I can put this to bed.”  He assured Mr Smith that the contract “guarantees the payment to you before you go home and will be properly signed and executed by my wife under the company seal.”

4. The second respondent’s evidence is that he created the document, that Mr Smith demanded it be back dated to 27 April, 2012 and that the first respondent be named as the employer. That document was signed by the second respondent but not by Mr Smith.

5. The second respondent did not accept that the contract was being offered as a result of the Immigration issue.  It is the second respondent’s evidence that the contract was created to “meet Mr Smith’s demands”.  But apart from the second respondent’s own testimony, there is no evidence that Mr Smith was making any demands other than that he be paid what he considered he was owed.  That had nothing to do with the creation of a contract and, it is difficult to envisage what it had to do with the Department of Immigration given that the second respondent’s case is that at all times Mr Smith was employed by the PNG company on a vessel that was flagged in that country and which operated out of a PNG port.  It is difficult to see why, at all, there was a need for a 457 visa for Mr Smith.  Moreover, and with due respect to Mr Smith, it seems very curious that he would make demands about the identity of his employer when it seems highly likely that he did not know of the distinction between the Australian company and the PNG company.  There is certainly no evidence that he was made aware of the distinction.  To the extent that his evidence suggests that he understood that there was a distinction, there is no evidence as to how he formed an understanding.

6. The second respondent accepted that by the terms of the contract offered, the first respondent was offering to engage Mr Smith, that the applicable legislation was the Fair Work Act 2009 and the salary, inclusive of superannuation, on offer was $64,000 (or $1,200 per week). But, as the second respondent points out, it was not accepted by Mr Smith.

7. On 25 August, 2013 or thereabouts, Mr Wilks departed PNG, after securing a loan to purchase an airline ticket.

8. In late August, 2013 the second respondent returned to PNG and met with Mr Smith at Nusa Island.  A few days later the second respondent bought Mr Smith a ticket to Port Moresby where he stayed for around ten days before flying to Brisbane on 11 September, 2013.

9. The second respondent says in his affidavit that after returning to Brisbane Mr Smith was signed onto the West Reef.  Annexed to Inspector Dangerfield’s affidavit and marked as CD-26, particularly page 241 thereof, is a document headed “Seaports – Notification of sign-on”.  That document appears to list Mr Smith as having been signed-on the West Reef on 1 November, 2013 although the documents are very confusing because there are several dates upon them.  In any event, Mr Smith disagrees entirely with the suggestion that he signed on to the West Reef.  His evidence is that upon his return to Brisbane he stayed in the Queensport Motel.  He further adds that the West Reef was damaged – it was leaking – and was not moored but in dry dock so no one was signed onto it.  He says that he continued to do “odd jobs” for the second respondent upon request.  There is nothing signed by Mr Smith to suggest that he did in fact sign-on to the West Reef and it was not necessary for him to have signed onto a vessel to maintain the currency of his maritime crew visa because by this time he had been granted a 457 visa on the first respondent’s application.

10. On 18 October, 2013 Mr Smith met with the second respondent and according to Mr Smith’s evidence, the second respondent organised and paid for a plane ticket for him to return home to Jamaica.  That was his last day of work for the first or second respondent.  Mr Smith flew from Brisbane to Jamaica. 

11. Mr Smith says he received one payment “from Mr Van Haltren” of USD5,000 on or around 6 May, 2013 in his Jamaican bank.  He says “Sierra” made no taxation or superannuation payments/contributions on his behalf, he did not receive any allowances, overtime or penalty rates and he never received a payslip.  In any event, Mr Kunac did not give evidence.

12. The second respondent asserts that Mr Smith has been paid in full for his services to the PNG company. 

13. The second respondent’s evidence, and in fact some of the emails from the second respondent annexed to the affidavits of Inspector Dangerfield and Mr Smith, suggests that Mr Kunac was not an honest employee and on at least one occasion fraudulently created documents purporting to be employment contracts for several crew members.  Furthermore, the emails suggest some civil or criminal proceedings were instigated in PNG with respect to that fraud or perhaps some other acts committed by Mr Kunac.  The second respondent refers to “extortion” by Mr Kunac of “Sierra”.

14. On 23 September, 2013 Mr Smith lodged a complaint with the Fair Work Ombudsman and on 16 October, 2013 he attended upon Inspector Dangerfield for an electronically recorded interview.  The transcript of that interview is in evidence.

15. The Fair Work Ombudsman commenced an investigation into the first respondent on or about 23 September, 2013.  On 3 October, 2013 the Department of Immigration and Border Protection made a formal referral of this matter to the applicant.  On 1 October, 2013 Inspector Craig Dangerfield was referred Mr Smith’s complaint for investigation. Several meetings, interviews and conference ensued, the brief details of which, are contained in Inspector Dangerfield’s affidavit.

Consideration

1. The parties agreed that the principles that are to be applied when determining the identity of a worker’s employer were conveniently summarised by Flick J in Cohen v iSoft Group Pty Limited [2012] FCA 1071:

   26.    In Re C & T Grinter Transport Services Pty Ltd; Ex parte Fitzgerald [2004] FCA 1148 Finn J summarised the principles to be applied when seeking to identify the employer of an employee as follows:

   APPLICABLE PRINCIPLES

   [20]The principles to be applied in the identification of the employer of an employee where there are two or more possible employers, are reasonably well settled.  For present purposes I would note the following:

   (1)          A contract of service cannot be transferred by one employer to another or novated as between them without the employee’s consent: Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014; Re Coogi Nominees Pty Ltd (Administrators appointed); McCluskey v Karagiosis (2002) 120 IR 147. Questions of estoppel apart: Smith v Blandford Gee Cementation Co Ltd [1970] 3 All ER 154; the employee’s consent must be a real one whether express or implied and is “not to be raised by operation of law”: Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437 at 443.

   (2)         The totality of the circumstances surrounding the relationships of the various parties including conduct subsequent to the creation of an alleged employment relationship is relevant to the assessment to be made: Romero v Auty (2001) 19 AGLC 206 at [10] and [42]-[44].

   (3)         Documentation created by one or more of the parties describing or evidencing an apparent employment relationship will be relevant to, but not necessarily determinative of, the true character of that relationship: Pitcher v Langford (1991) 23 NSWLR 142; Marrs Fabrics Pty Ltd & Nathan Wholesale Fabrics Pty Ltd v Whipps (1991) 33 AILR 167. In determining the identity of a disputed employer, the Court is entitled to consider “the reality of purported contractual arrangements”: Dalgety Farmers Ltd t/a Grazcos v Bruce, NSWCA, 3 August 1995.  The documentation may have been brought into existence for other purposes, for example, tax minimisation or the reduction of insurance premiums, without reflecting the reality of the parties relationship: ibid; Pitcher v Langford, at 149; Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454.

   (4)          Conversations and conduct at the time of the alleged engagement of the employee is of considerable significance: Romero, at [9]. The beliefs of the employees as to the identity of their employer is admissible and is entitled to weight: Pitcher v Langford.

   (5)         In cases of the engagement of new employees to work in a business in which a number of separate corporate entities participate otherwise than as partners:

   “… it was open to those controlling the business to select which company should be the employer provided that the selection was consistent with the financial and administrative organisation of the business and was not otherwise a sham.”

   See Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd, FCA, Ryan J, 19 November 1998.

   The identity of a contracting party is to be determined looking at the matter objectively: Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429 at [28], 77 NSWLR 299 at 304 per Allsop P and Handley AJA (Hodgson J agreeing); City & Suburban Group Pty Ltd v Gambetta Holdings Pty Ltd [2011] WASCA 233 at [21] per Newnes JA, at [45]-[48] per Murphy JA (Hall J agreeing). See also: Mediterranean Olives Financial Pty Ltd v Gita Lederberger [2011] VSC 301 at [5]-[7] per Pagone J.

2. As senior counsel for the respondents points out, that decision was reversed on appeal, but it was reversed on the application of the facts to the principles.  There was no doubt expressed about the principles set out above although, senior counsel for the respondents emphasised the following passage from Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299:

   28 The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer): The Starsin at 770 and the cases considered in Wilford et al Time Charters (5th Ed Informa Publishing 2003) Ch 21. Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances: see Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174; Protean (Holdings) Ltd v American Home Assurance Co (1985) 4 ANZ Ins Cas 60-683 at 74,055–74,056; Coulls v Bagot’s Executor and Trustee Co Ltd [1967] HCA 3; 119 CLR 460 at 477 at 478-479 and 486.

3. The applicant bears the onus of establishing her case. She must prove on the balance of probabilities that Mr Smith was employed by the first respondent. In that respect, it is as well to recognise that a successful outcome of these proceedings for the applicant will see the imposition of penalties upon the first and second respondents for contraventions of the Fair Work Act. In those circumstances, and remembering that the civil burden of proof continues to apply, the well-known words of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 are worth repeating:

   The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.

4. The common factor between the employer contended for by the applicant and that contended for by the respondents is the second respondent.  He was the sole and managing director of the PNG company and the general manager of the first respondent.  There is no evidence to suggest that Mr Smith knew any of that at the time he was engaged to work on Tarragal.  All his evidence reveals is that by reason of some unparticularised information he received from a recruitment agency, he thought that he was to be employed by an Australian employer.  Further, he “understood” that the second respondent owned “Sierra”.

5. Notwithstanding the uncertainty around the corporate entity that the second respondent was representing and what seems to be a complete failure to identify who the employer would be, the applicant does not contend that Mr Smith’s employer was in fact the second respondent.  It seems to me that there may well have been an obligation upon the second respondent to ensure that it was made absolutely clear to Mr Smith (and bring evidence to court to that effect) that he was being employed by the first respondent: cf. Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510.

6. There is no written employment contract and there is no reliable, probative evidence of the discussions between Mr Smith and presumably Mr Kunac or the second respondent that led evidence to the offer of employment and the taking up of that offer. 

7. Both parties approach their submissions on the basis that the identification of Mr Smith’s employer is left to inference – an inference to be drawn from the other evidence in the case.

8. The applicant argues that the following matters are relevant to determining the identity of Mr Smith’s employer:

   a)the Department of Immigration and Citizenship form 1196N (Nominating overseas employees to work temporarily in Australia) lodged on 11 May, 2012 which names the first respondent as the relevant employer company and Mr Smith as the relevant nominated person and is signed by the second respondent on behalf of the first respondent under Part F “Employers Declaration” and further under Part H “Nominators Declaration”2;

   b)a Department of Immigration and Citizenship application form 1066 for Mr Smith’s sub-class 457 - Business (Long Stay) visa lodged on 11 May, 2012 nominating the first respondent as the sponsoring employer of Mr Smith and identifying terms and conditions of the contract of employment including the earnings;

   c)notification of decision to grant Mr Smith a Temporary Business Entry (Class UC) Business (Long Stay) (Subclass 457) visa which identifies the first respondent as Mr Smith’s employing sponsor and Mr Smith’s guaranteed earnings;

   d)the proposed engagement agreement dated 27 April, 2012 (but not emailed to Mr Smith until 4 August, 2013 by the second respondent) on the first respondent’s letterhead stating that the employment between the first respondent and Mr Smith commenced on 27 April, 2012 and that for the purposes of the agreement the applicable legislation is the Fair Work Act;

   e)the evidence of Wayne Smith;

   f)and the evidence of the engagement of Rayon Wilks.

9. The evidence of Mr Smith as to the identity of his employer is unhelpful.  Whilst he says what he understood to be the case about the identity of his employer, he does not say how he reached that understanding.

10. The evidence of Mr Wilks points towards the employer being the first respondent.  That is because his probationary contract was with the first respondent.  The respondents did not argue that that contract was ineffective.  It was signed by Mr Wilks.  He says that Mr Kunac sent it to him.  It does not appear to be signed, however, by or for the first respondent.  

11. The 457 visa application and accompanying documents are significant pieces of evidence according to the applicant’s argument.  They are, curious.  If it was the case that Mr Smith was to work only on the Tarragal and it was to apply between Brisbane and PNG towing vessels to PNG for the PNG company, then there would be no need for a 457 visa.  Mr Smith had his white card that permitted him to work on the Tarragal and he had a maritime crew visa to permit him to enter and leave Australia.

12. The 457 visa must have been to fulfil some purpose.  Mr Smith’s evidence about his initial discussion with the second respondent and Mr Kunac suggest that he was to work in Australia refitting vessels to go to PNG.  His evidence is that he was told that he would be responsible for the refits of the boats before they left Brisbane and then he would be the engineer manager for the boats in Papua New Guinea.  I accept that evidence.  It is consistent with the details in the 457 visa and ultimately, it is consistent with the second respondent’s evidence about his plan for the way the venture he, the first respondent and the PNG company or undertaking would come together.  The second respondent envisaged just what it was that Mr Smith described, only according to the second respondent that was not offered to Mr Smith in the first instance, it would come later after the vessels were all in PNG.

13. The visa documents are consistent with Mr Smith’s view that his position was, or would become much broader than simply the chief engineer of the Tarragal.   That it was broader than simply the chief engineer of the Tarragal is supported by the evidence of Mr Wilks about the nature and the extent of the work that they did on the other vessels.  Mr Smith’s own evidence about this aspect of the matter was convincing.  Indeed on one view of his evidence, he had already embarked upon the job description that he and the second respondent both described whereby Mr Smith was responsible for the refit, repair and maintenance of boats before they left Brisbane for PNG.  But if he was already undertaking that work, and it was beyond work which was directly within his responsibility as chief engineer of the Tarragal, that is to say he performed work other than work that was required in relation to the usual operational requirements of the Tarragal, his maritime crew visa would cease and he would thereafter be in Australia unlawfully.

14. There is no evidence that Mr Smith appreciated that consequence.  Indeed his evidence is that at all times he worked in Australia pursuant to a 457 visa.  He was plainly mistaken about that.

15. The second respondent’s case is that the 457 visa which was organised for Mr Smith because at some future point his duties may increase in Australia and it would be necessary for him to have that visa to be able to perform that work.  The impression I formed of the second respondent’s evidence was that it all depended upon how the venture that he was undertaking or proposed to undertake in Papua New Guinea fared.  It seems to me that the second respondent intended the voyage from Brisbane to PNG to be undertaken much sooner than it was.  The work that was necessary to prepare Tarragal and the barge to be towed to PNG was limited to repair and maintenance of each of those vessels and the certification of the towage link between the two.  It was not suggested that work alone was not within his remit as chief engineer of Tarragal.

1. If that was the extent of the work to be done before Tarragal set sail for PNG and she was expected to sail much earlier than she did, it is entirely conceivable that Mr Smith’s employer was the PNG company.  That is because:

   a)the PNG company owned the vessel;

   b)the PNG company was conducting or intended to conduct the relevant business in PNG;

   c)the PNG company held the necessary permit to conduct the business in PNG; and

   d)to obtain work visas or entry permits (the white card) the employment contract needed to be with the PNG company.  If it were not, the PNG company could not get its employees into the country for them to work.

2. Ultimately, I think the 457 visa documents are just as consistent with the second respondent’s explanation as to how they came to be as they are with the applicant’s theory that the first respondent was Mr Smith’s employer from the outset.

3. To infer that the first respondent was Mr Smith’s employer from the outset of his engagement would require me to determine that the second respondent had engaged in deliberately misleading conduct with respect to:

   a)obtaining Mr Smith’s maritime crew visa; and

   b)Mr Smith’s white card and the PNG company’s employment permit.

4. As senior counsel for the respondents observed in the course of submissions, to make such a finding would be a serious matter and it was not something that was put to the second respondent in the course of his cross-examination. 

5. It is curious that the second respondent proffered to Mr Smith in August 2013, a contract of employment with the first respondent with the commencement date of 27 April, 2012.  The second respondent’s explanation about that was unconvincing.  As I have earlier observed in these reasons, there is no evidence that Mr Smith had any reason at all to demand that the contract reflect any particular employer or that it be back dated.  Why that was done remains entirely unexplained.  To some extent it is consistent with the proposition advanced by the applicant that the first respondent was Mr Smith’s employer.  It is something that I take into account.

6. The matters identified by the respondents as consistent with an objective assessment that Mr Smith’s true employer was the PNG company are:

   a)immediately upon his arrival in Australia Mr Smith joined the vessel Tarragal and thereafter resided on board the vessel until it left Brisbane in March, 2013; save for a period of time when he went to Gosford, over Christmas 2012 consistently with the requirements of the maritime crew visa;

   b)the vessel was owned by the PNG company, was PNG registered and flagged;

   c)Mr Smith held a maritime crew temporary visa issued on 26 March, 2012.  The PNG company was nominated as his employer in the application for that visa;

   d)Mr Smith was issued with a PNG general work permit or white card on 15 June, 2012; and

   e)when Mr Smith was paid money on account of his work, it was paid by the PNG company. 

7. Each of these matters, is consistent with Mr Smith being employed by the PNG company.  None of them are consistent with him being employed by the first respondent. 

8. Moreover, the explanation provided by the second respondent for the 457 visa documents is not far-fetched or fanciful.  His explanation for the timing of that application, bearing in mind that the voyage to PNG was to be completed much sooner than it was, and his plans for the PNG operation, optimistic though they might have been, provide a rational explanation for the 457 visa application.

9. It also provides a rational explanation for the nomination of the PNG company as Mr Smith’s employer and the maritime crew visa application and the PNG general work permit application.  The explanation is consistent with attempts by all of the parties but in particular the PNG company and the second respondent to comply with the law.  Having said that, I am conscious that once the Tarragal’s trip to PNG was delayed and Mr Smith performed perhaps more and more work on some of the other vessels it might be the case that he went beyond the conditions of his maritime crew visa.  But it seems to me that if that was the case then it was unintentional and inadvertent.  There is no suggestion that he would have deliberately gone about breaching the conditions of his maritime crew visa. 

10. Bearing those matters in mind, I am satisfied that Mr Smith’s employer from the time he signed on with the Tarragal until the time of departure of that vessel from Brisbane to Papua New Guinea (the contravention period) was the PNG company.  I find that Mr Smith was employed by Sierra Fleet Services (PNG) Pty Ltd for that period.

11. The parties agree that if I was to so find, the application could not succeed.  In those circumstances, the application must be dismissed

I certify that the preceding one hundred and forty-four (144) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 19 November, 2018.

Date: 19 November, 2018