Fair Work Ombudsman v The Emperor's Court Pty Ltd
[2022] FedCFamC2G 736
•1 September 2022
Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v The Emperor’s Court Pty Ltd [2022] FedCFamC2G 736
File number: PEG 42 of 2022 Judgment of: JUDGE LADHAMS Date of judgment: 1 September 2022 Catchwords: PRACTICE AND PROCEDURE – Industrial Law – application for default judgment – whether respondents in default – whether respondents on notice of application – whether default judgment should be awarded – default judgment ordered. Legislation: Corporations Act 2001 (Cth) s 109X
Fair Work Act 2009 (Cth) ss 14, 516, 539, 550, 716, 793
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 4.03, 6.01, 6.08, 6.11, 13.04, 13.05
Cases cited: Australian Competition and Consumer Commission (ACCC) v Yellow Page Marketing BV (No 2) (2001) 195 FCR 1; [2011] FCA 352
BJ International Limited v Ashgar (No 2) [2013] FCA 580
Deputy Commissioner of Taxation v Club Culture Pty Ltd [2017] FCA 338
Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
Division: Division 2 General Federal Law Number of paragraphs: 25 Date of hearing: 1 September 2022 Place: Perth Counsel for the Applicant: Mr T de Bes Solicitor for the Applicant: Australian Government Solicitor Respondents: No appearance by or for the respondents ORDERS
PEG 42 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: THE EMPEROR'S COURT PTY LTD (ACN 640 948 376)
First Respondent
GIAN GIAN WONG
Second Respondent
order made by:
JUDGE LADHAMS
DATE OF ORDER:
1 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.Default judgment is entered for the applicant against the respondents pursuant to r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
THE COURT DECLARES THAT:
A.The first respondent contravened s 716(5) of the Fair Work Act 2009 (Fair Work Act) by failing to comply with the compliance notice dated 30 July 2021 (Compliance Notice).
B.The second respondent was involved, within the meaning of s 550(2) of the Fair Work Act, in the contravention by the first respondent of s 716(5) of the Fair Work Act in respect of the Compliance Notice.
THE COURT FURTHER ORDERS THAT:
2.Pursuant to s 545(1) of the Fair Work Act, the first respondent take the steps that were required by the Compliance Notice within 28 days of this Order, by:
(a)calculating and paying to Kanoknapha Bureerak (Employee) the outstanding amounts the first respondent was required by the Compliance Notice to pay to the Employee (Outstanding Amounts); and
(b)preparing and producing to the applicant a schedule outlining the Outstanding Amounts and providing proof that these amounts have been paid.
3.Pursuant to s 547(2) of the Fair Work Act, the first respondent is to pay to the Employee, within 28 days of this Order, interest on the Outstanding Amounts at the applicable pre-judgment interest rates, being:
(a)4.10% for the period 25 August 2021 to 30 June 2022; and
(b)4.85% for the period 1 July 2022 to 1 September 2022.
4.The matter be listed for a penalty hearing on 6 February 2023 at 10:00am.
5.The applicant is to file and serve any further evidence and submissions in relation to penalty on or before 4 November 2022.
6.The respondents are to file and serve any evidence and submissions in relation to penalty on or before 9 December 2022.
7.The applicant is to serve a copy of this Order on the respondents within 7 days of the date of the Order.
8.The applicant is to serve a copy of the ex tempore reasons for judgment delivered on 1 September 2022 within 7 days of receiving a copy of those reasons reduced to writing.
9.The applicant is to file and affidavit of service to prove compliance with orders 5, 7 and 8 of this Order by on or before 4 November 2022.
10.There be liberty to apply.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
(Delivered ex tempore and revised from the transcript)Judge Ladhams:
Introduction
I have before me an application in a proceeding by which the applicant seeks default judgment against the respondents pursuant to r 13.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules).
The substantive proceeding before the Court is an application under the Fair Work Act 2009 (Cth) (Fair Work Act), filed on 16 March 2022 by the applicant, the Fair Work Ombudsman, and accompanied by a statement of claim. The first respondent is a registered company which operated a restaurant, and the second respondent is the director of the first respondent and responsible for the overall operation and control of the first respondent. The applicant seeks declarations that the first respondent contravened s 716(5) of the Fair Work Act by failing to comply with a compliance notice issued on 30 July 2021 (Compliance Notice) and that the second respondent was involved, within the meaning of s 550(2) of the Fair Work Act, with the contravention. The applicant also seeks orders requiring the first respondent to:
(a)take the steps required under the Compliance Notice, including calculating and paying to an employee the outstanding amounts that the first respondent was required to pay to the employee by the Compliance Notice and preparing and producing to the applicant a schedule outlining the outstanding payments and providing proof that they have been paid; and
(b)pay pre-judgment interest on the outstanding amounts.
The applicant also seeks pecuniary penalties against both respondents.
Procedural history and application for default judgment
The application and statement of claim filed on 16 March 2022 were served on the respondents on 18 March 2022. The affidavits of service sworn by Cheryl Lorraine Harrison on 21 March 2022 show that the documents were served on the first respondent by handing them to the second respondent in his capacity as director, and the documents were served on the second respondent by hand. The first respondent was served in accordance with r 6.08(2) of the GFL Rules and s 109X(1)(b) of the Corporations Act 2001 (Cth) (Corporations Act), and the second respondent was served in accordance with rr 6.06 and 6.07(1) of the GFL Rules.
The matter first came before the Court for a directions hearing heard by Judge Kendall on 12 May 2022. At the time of the directions hearing, the respondents had not:
(a)given an address for service as required by r 6.01 of the GFL Rules; or
(b)filed a response to the application within 28 days of service pursuant to r 4.03 of the GFL Rules.
Neither of the respondents appeared at the directions hearing on 12 May 2022. At that directions hearing, Judge Kendall relevantly made an order requiring the respondents to file and serve any response and defence on or before 26 May 2022. The respondents did not file any documents in compliance with this order.
On 1 July 2022 the applicant filed an application in a proceeding seeking default judgment. That application was supported by an affidavit affirmed by the applicant’s lawyer.
The application in a proceeding first came before me for hearing on 3 August 2022. On that occasion, I was satisfied that the second respondent had been properly served with the application in a proceeding and other documents relevant to that application by a method set out in r 6.11(2) of the GFL Rules. However, I was not satisfied that the first respondent had been properly served with a copy of the application in a proceeding and other court documents relevant to the application in a proceeding. This was because the documents had been served on the first respondent by emailing them to the personal email address of the second respondent and posting a copy to the address of the second respondent. Given that the second respondent is the sole director of the first respondent, it is likely that the first respondent was effectively aware of the proceeding. However, in circumstances where the applicant sought default judgment orders to be made in the absence of the respondents, I considered it to be necessary for service to be effected in accordance with the provisions of the GFL Rules.
I therefore made orders, amongst other things, requiring the relevant documents to be served on the first respondent and I adjourned the hearing of the application in a proceeding to 1 September 2022.
The applicant has filed two affidavits in relation to service following the hearing on 3 August 2022. An affidavit affirmed by Samuel Tristan Witton on 5 August 2022 confirms that all relevant court documents were served on the first respondent by posting those documents to the first respondent’s registered office. That affidavit also confirms that a copy of the Order made on 3 August 2022 was served on the second respondent by post and email. In a further affidavit affirmed on 26 August 2022, Mr Witton deposed that the documents posted to the first respondent had been returned to the Australian Government Solicitor offices with a handwritten notation on the envelope, ‘RTS’. That affidavit also annexed an updated company search in relation to the first respondent. The address to which the applicant’s lawyers caused the relevant court documents to be posted to the first respondent corresponds with the registered office and principal place of business recorded in the company search in relation to the first respondent.
I am satisfied that, by posting the documents to the first respondent at its registered office, the applicant has served the documents on the first respondent in accordance with r 6.11(2)(d) of the GFL Rules and s 109X(1)(a) of the Corporations Act. That the documents were returned to sender does not of itself prove that the documents were not served in accordance with the Corporations Act: see Deputy Commissioner of Taxation v Club Culture Pty Ltd [2017] FCA 338 at [26]. I am satisfied that it is appropriate to proceed to hear the application in a proceeding.
Mr de Bes appeared at the hearing on behalf of the applicant. At the commencement of the hearing, the matter was called three times outside of the courtroom. There was no appearance by or for the respondents.
Consideration of default judgment application
The Court will make orders for default judgment where it is satisfied that a party is in default and, in the exercise of its discretion, the Court considers it is appropriate to award default judgment.
The respondents are in default
I first consider whether the respondents are in default. Rule 13.04(2) of the GFL Rules provides that a respondent is in default if the respondent:
(a) has not satisfied the applicant’s claim; and
(b) fails to:
(i)give an address for service before the time for the respondent to give an address has expired; or
(ii)file a response before the time for the respondent to file a response has expired; or
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.
I have before me an affidavit of Isabel Pires affirmed on 28 July 2022. Ms Pires is the Fair Work Inspector who conducted an investigation in relation to the first respondent and she deposes that the first respondent has not provided evidence of compliance with the Compliance Notice that is the subject of this application. Based on this, I am satisfied that the respondents have not satisfied the claim.
I also accept the applicant’s submission that the respondents are in default pursuant to the following rules:
(a)r 13.04(2)(b)(i), because the respondents have not given an address for service in accordance with r 6.01 of the GFL Rules;
(b)r 13.04(2)(b)(ii), because the respondents have failed to file a response or defence within 28 days after service of the originating application in accordance with rr 4.03(3) and 4.04(3)(a) of the GFL Rules;
(c)r 13.04(2)(b)(iii), because the respondents have failed to comply with the Order made by the Court on 12 May 2022; and
(d)r 13.04(2)(b)(vii), because the respondents have failed to defend the proceedings with due diligence.
Principles relevant to the discretion to award default judgment
Having found that the respondents are in default, I then consider whether the Court should exercise its discretion to award default judgment in favour of the applicant.
The discretion to enter default judgment should be exercised with caution: Speedo Holdings BV v Evans(No 2) [2011] FCA 1227 at [20]. When deciding whether to exercise the discretion, it is appropriate to have regard to ‘the nature of the default itself, any explanation provided for the default, the manner in which the party in default has conducted the proceeding to-date and whether the court could have any confidence that a proceeding would henceforth be conducted in an orderly and proper manner’: BJ International Limited v Ashgar (No 2) [2013] FCA 580 at [13].
Rule 13.05(2) of the GFL Rules sets out the types of orders the Court may make where a respondent is in default. The applicant in its application in a proceeding seeks default judgment pursuant to r 13.05(2)(c) of the GFL Rules. This paragraph allows the Court to:
(c)if the proceeding was started by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant; …
This rule does not require the applicant to prove the claim by evidence, but only requires that, on the face of the applicant’s statement of claim, there is a claim for the relief sought: see Australian Competition and Consumer Commission (ACCC) v Yellow Page Marketing BV (No 2) (2001) 195 FCR 1; [2011] FCA 352 at [14].
Exercise of the discretion
The respondents have not filed any documents in this proceeding and have not attended any of the Court hearings. There is no evidence before the Court to show that the respondents have taken any steps to defend this proceeding, or that they propose to take any steps to defend this proceeding.
I am satisfied that the statement of claim filed by the applicant on 16 March 2022 is a statement of claim in accordance with the GFL Rules and that on the face of that statement of claim, there is a claim and entitlement for the relief sought. The applicant has standing pursuant to s 539 of the Fair Work Act to bring this proceeding seeking orders in relation to the contravention of s 716(5) of the Fair Work Act, which is a civil remedy provision.
The applicant has set out an accurate summary of the statement of claim in the written submissions filed in support of the application in a proceeding and I adopt that summary in this judgment. In summary, in the statement of claim, the applicant alleges that:
(a)The first respondent is and was at all relevant times:
(i)a company incorporated under the provisions of the Corporations Act and registered since 14 May 2020;
(ii)a national system employer within the meaning of s 14 of the Fair Work Act;
(iii)a person within the meaning of s 716 of the Fair Work Act; and
(iv)a company that had operated a restaurant.
(b)The second respondent is and was at all relevant times:
(i)a natural person capable of being sued;
(ii)the sole director of the first respondent;
(iii)responsible for the overall operation and control of the business and the first respondent;
(iv)responsible for ensuring that the first respondent complied with its legal obligations under the Fair Work Act; and
(v)a person whose conduct engaged in, or on behalf of, the first respondent within the scope of his actual or apparent authority, is taken to be that of the first respondent pursuant to s 793(1) of the Fair Work Act.
(c)After conducting an investigation, Fair Work Inspector Pires formed a belief that the first respondent had contravened the terms of the Restaurant Industry Award 2020 and the Fair Work Act by failing to pay to an employee certain entitlements.
(d)On 30 July 2021, Fair Work Inspector Pires gave the first respondent the Compliance Notice which required the first respondent to calculate and rectify under payments to the employee.
(e)The first respondent did not take the action required by the Compliance Notice by the due date, or at all, and thereby contravened s 716(5) of the Fair Work Act.
(f)The second respondent was responsible for ensuring that the first respondent complied with the Compliance Notice.
(g)The second respondent:
(i)had actual knowledge of the Compliance Notice that was given to the first respondent, and that the first respondent was required to comply with the Compliance Notice within the timeframe specified;
(ii)had actual knowledge that the first respondent failed to comply with the Compliance Notice;
(iii)was an intentional participant in the first respondent’s failure to comply with the Compliance Notice;
(iv)was involved within the meaning of s 550(2) of the Fair Work Act in the contravention by the first respondent of s 716(5) of the Fair Work Act; and
(v)pursuant to s 550(1) of the Fair Work Act, is taken to have himself contravened s 516(5) of the Fair Work Act.
At the hearing of the application in a proceeding, Mr de Bes referred me to annexure IP-6 of the affidavit of Ms Pires, which comprises an affidavit of service proving service of the Compliance Notice. I am satisfied that the first respondent was served with the Compliance Notice in accordance with s 109X of the Corporations Act.
I am satisfied that the applicant has demonstrated an entitlement to the relief claimed on the face of the statement of claim.
I am satisfied that it is appropriate to exercise the discretion to enter default judgment for the applicant against the respondents pursuant to r 13.05(2)(c) of the GFL Rules. I make the declarations sought and orders requiring compliance with the Compliance Notice and payment of pre-judgment interest. I will defer the determination of penalty to a subsequent hearing, and will make orders allowing both parties a further opportunity to file evidence and submissions.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Ladhams. Associate:
Dated: 30 September 2022
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