Fair Work Ombudsman v Tsurc Pty Ltd
[2014] FCCA 2472
•29 October 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v TSURC PTY LTD & ANOR | [2014] FCCA 2472 |
| Catchwords: INDUSTRIAL LAW – Application in a Case for default judgment against second respondent – application against first respondent permanently stayed –alleged contraventions of Fair Work Act 2009 (Cth) – default judgment made. |
| Legislation: Corporations Act 2001 (Cth), s.471B Fair Work Act 2009 (Cth), ss.545, 550, 716 Fast Food Industry Award 2010 |
| Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 Luna Park Sydney Pty Limtied (ACN 102 907 184) v Bose [2006] FCA 94 Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615 Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; (2006) 236 ALR 665 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | TSURC PTY LTD (ACN 130 749 969) |
| Second Respondent: | SOTIRIOS THEOCHARIDIS |
| File Number: | SYG 3193 of 2013 |
| Judgment of: | Judge Nicholls |
| Hearing date: | 16 April 2014 |
| Date of Last Submission: | 16 April 2014 |
| Delivered at: | Sydney |
| Delivered on: | 29 October 2014 |
REPRESENTATION
| Appearing for the Applicant: | Mr S Marriott |
| Respondents: | No appearance |
THE COURT NOTES THAT:
The Court notes that the second respondent is in default for the purposes of Rule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), by way of his failure to file documents, in that:
(a)On 12 March 2014, the Court ordered the second respondent to file and serve a Notice of Address for Service and response within 14 days;
(b)To date, no defence or response has been filed by the second respondent, as required by the Federal Circuit Court Rules 2001 (Cth) and ordered by the Court.
THE COURT ORDERS THAT:
Default judgment be entered for the applicant against the second respondent pursuant to Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth).
THE COURT DECLARES THAT:
Upon admissions which the second respondent is deemed to have made by reason of his default, the Court declares that:
(a)The first respondent contravened Section 716(5) of the Fair Work Act 2009 (Cth), by failing to comply with a compliance notice issued under Section 716 of the Fair Work Act 2009 (Cth) by Inspector Paula Cunneen on 12 September 2013;
(b)The Second Respondent was involved in (within the meaning of Section 550(2) of the Fair Work Act 2009 (Cth)) the first respondent’s contraventions set out in order 3(a) above.
THE COURT FURTHER ORDERS THAT
The matter is adjourned to a date fixed for a further hearing to determine whether any, and if in that event the amount of any, penalty that should be imposed upon the second respondent.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3193 of 2013
| FAIR WORK OMBUDSMAN |
Applicant
And
| TSURC PTY LTD (ACN 130 749 969) |
First Respondent
| SOTIRIOS THEOCHARIDIS |
Second Respondent
REASONS FOR JUDGMENT
This is an Application in a Case made by the Fair Work Ombudsman (“the FWO”), on 4 April 2014, seeking default judgment against Mr Sotirios Theocharidis in the relevant substantive application made under the Fair Work Act 2009 (Cth) (“FWA”) on 20 December 2013.
Before the Court
The substantive, or originating, application first came before the Court on 5 February 2014. Mr S Marriott appeared for the FWO. There was no appearance by, or for, the respondents. Before the Court was an Affidavit of Service sworn on 16 January 2014 in relation to Tsurc Pty Ltd (ACN 130 749 969) (“Tsurc Pty Ltd”). However, the FWO noted, before the Court, that it had not been able to serve Mr Theocharidis. Further, that Tsurc Pty Ltd (a company) was subject to a “wind up application” before the Federal Court (NSD 2568/2013). In light of these matters, I listed the matter for further directions on 12 March 2014.
On that date Mr S Marriott again appeared for the FWO. There was no appearance by, or for, the respondents. I proceeded to hear an application made by the FWO, on 5 February 2014, for substituted service on Mr Theocharidis, dispensing with the requirement of service by hand, and that in lieu the documents in the proceedings be served on Mr Theocharidis by email, and at the business address of Tsurc Pty Ltd.
At that time the following affidavits were read into evidence:
1)the affidavit of attempted service on Mr Theocharidis made by Joseph Khoury, licensed process server, on 4 February 2014;
2)the affidavit of attempted service on Mr Theocharidis made by Morrie Fahd, licensed process server, on 4 February 2014;
3)the affidavit of attempted service on Mr Theocharidis made by Andrew Ng Saad, licensed process server, on 4 February 2014;
4)the affidavit of Stephen Marriott, lawyer, made on 4 February 2014; and
5)the affidavit of Paula Cuneen, Fair Work Inspector, made on 4 February 2014.
From the evidence before me I was satisfied that reasonable steps had been taken to serve the documents on Mr Theocharidis. In doing so, I had regard to the evidence of the relevant and “successful” correspondence of the FWO by email, directed to the business address of Tsurc Pty Ltd, and to the address of its “accountant”, and by email to Mr Theocharidis. In those circumstances, I made the orders sought for substituted service and set the matter down for further directions on 16 April 2014.
I should note that the “wind up application” of Tsurc Pty Ltd, that had been indicated at the first Court date by the FWO, was effected on 5 February 2014. Therefore, Tsurc Pty Ltd is now in liquidation. In those circumstances the application against Tsurc Pty Ltd is permanently stayed (s.471B of the Corporations Act 2001 (Cth)).
When the matter was next called on 16 April 2014, Mr S Marriott appeared for the FWO. There was no appearance by or for Mr Theocharidis. The affidavit of Mr S Marriott, lawyer, made on 4 April 2014 was read into evidence. I was satisfied on all the evidence before the Court, including the affidavits read into evidence on 12 March 2014, that Mr Theocharidis had knowledge of both the Court event on 16 April 2014 and the FWO’s intention to press for default judgment.
In light of Mr Theocharidis’ non-appearance I proceeded to hear the FWO’s application for default judgment pursuant to r.13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”). I note also that it was appropriate to proceed to a hearing pursuant to r.13.03C(1)(e) of the Rules, given I was satisfied as to service and reasonable notice of the proceedings having been given to Mr Theocharidis (see Mr Marriot’s affidavit of 4 April 2014 at [2] – [7] and annexures).
The relevant history to these proceedings is set out in the FWO’s written submissions of 11 April 2014. I adopt that relevant part of the FWO’s written submissions for the purposes of this judgment (see applicant’s written submissions at [11] – [24]):
“[11] On 20 December 2013, the Applicant filed an Application and Statement of Claim. The matter was listed for first directions at 9.30 am on 5 February 2014.
[12] On 15 January 2014, the Application, Statement of Claim and a letter addressed to the Proper Officer of the First Respondent (Service Letter) was served on the First Respondent at its registered business address, as outlined in the Affidavit of Joseph Khourry dated 16 January 2014. The Service Letter stated that the proceedings had been listed for a directions hearing at 9.30 am on 5 February 2014 and that the Respondents were required to file a notice of appearance within 14 days of being served with the proceedings.
[13] Paragraph 16 of the Affidavit of Stephen Marriott dated 4 February 2014 states that on 31 January 2014 he emailed
the Second Respondent using his email address [email protected] and attached the Service letter, the Application and the Statement of Claim. That email address had been established during the investigation to be the email which was used by the Second Respondent.
[14] That email told the Second Respondent that the matter was set down for a directions hearing on 5 February 2014 at 9.30 am and further that either he or his legal representative must be present at that directions hearing.
[15] Paragraph 17 of the Affidavit of Stephen Marriott dated 4 February 2014 states that on 3 February 2014, he received a call from Mr Max Bardella, the Second Respondent's Accountant who said that he had spoken to the Second Respondent who had received the email referred to in paragraph 13 above.
[16] Exhibited on the Court file is a further email from Mr Bardella dated 4 February 2014, copied to the email address of the Second Respondent in which Mr Bardella notes that the Second Respondent is prepared to admit the allegations noted.
[17] At the Directions Hearing on 5 February 2014, there was no appearance for the First or Second Respondent.
[18] On 7 February 2014, the Applicant filed an Application in a Case, being an application for an order for substituted service (the substituted service application).
[19] On 12 March 2014, Judge Nicholls granted the orders in the substituted service application. He also ordered the Second Respondent to file a Notice of Address for Service and any response or defence within 14 days.
[20] As noted in paragraph 2 of the Affidavit of Stephen Marriott dated 4 April 2014, he emailed the Second Respondent and his accountant, Mr Max Bardella on 13 March 2014. That email attached the orders made by Judge Nicholls regarding the substituted service application, as well as the original Application and Statement of Claim.
[21] As noted in paragraph 5 of the Affidavit of Stephen Marriott dated 4 April 2014, he also sent the documents referred to in paragraph 20 above to the registered office of the First Respondent, now in liquidation.
[22] The letter dated 13 March 2014 which was attached to the email referred to in paragraph 2 of the Affidavit of Stephen Marriott noted that the date for the next directions hearing was 16 April 2014 at 12.15 pm.
[23] The Second Respondent has not filed a notice of address for service as required by rule 6.01 of the Rules and the Court's order of 12 March 2014.
[24] The Second Respondent has not filed a response and any defence in accordance with rules 4.03 and 4.04 of the Rules and the Court's order of 12 March 2014.”
Principles of Default Judgment
As the FWO submits, the Court’s ability to give judgment pursuant to r.13.03B(2)(c) of the Rules against Mr Theocharidis in these proceedings without his attendance is pursuant to r.13.03C(2) of the Rules. For a default judgment to be made, two elements must be met:
1)The FWO appears entitled to the claim for relief sought on the statement of claim; and
2)The Court is satisfied that on what is before it, it is within its powers to grant the relief sought.
Further, as the FWO submits, there is no requirement of proof by way of evidence for item 1 above (Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3], Luna Park Sydney Pty Limtied (ACN 102 907 184) v Bose [2006] FCA 94at [20], Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615 at [5] and Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352). [I note that these authorities related to the now repealed Order 35A of the Federal Court Rules 1979 (Cth), however that rule was in identical terms to r.13.03B(2)(c) of the Rules.]
The originating proceeding involved alleged contraventions of s.716(5) of the FWA. In particular, the FWO alleges that Tsurc Pty Ltd failed to comply with a notice pursuant to s.716(2) of the FWA. In relation to Mr Theocharidis, the allegation is that he was involved in the contravention, with reference to s.550 of the FWA.
The FWO also relied on the following from the Rules:
1)Rule 4.03 of the Rules, which requires any Response to an application to be filed and served by the respondent within 14 days of the application to which it relates; and
2)Rule 6.01 of the Rules, which requires a party to a proceeding to file a notice of address for service.
The FWO’s reliance on r.13.03B of the Rules for orders in the relief it seeks, immediately directs attention to r.13.03A of the Rules. To enable any order to be made pursuant to r.13.03B of the Rules, it requires a finding that Mr Theocharidis is in default as prescribed in the Rules.
Establishing such default requires a finding that Mr Theocharidis has not satisfied the FWO’s claim (here arising from the notice referred to above) and, relevant to the current matter, any one of the items set out at r.13.03A(2)(b) of the Rules:
“(2) For rule 13.03B, a respondent is in default if the respondent:
…
(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.”
Entitlement to Relief
In relation to the question as to whether Mr Theocharidis has satisfied the FWO’s claim, the following is relevant.
The FWO alleges that Tsurc Pty Ltd and Mr Theocharidis, as the sole director of Tsurc Pty Ltd, contravened the terms of the Fast Food Industry Award 2010 by failing to pay wages and entitlements owed to their employees following an audit of wages conducted by Fair Work Inspector Paula Cunneen (“Inspector Cunneen”).
Inspector Cunneen issued a Compliance Notice on Tsurc Pty Ltd on 12 September 2013 requiring it to pay the outstanding amount to the employees as a result of the audit ($25,995.13). A compliance notice was also issued on Mr Theocharidis following correspondence with Tsurc Pty Ltd’s accountant (see [15] – [16] of the statement of claim). I note that following this, as the applicant submits, it is open on the evidence to infer that Mr Theocharidis corresponded directly with Inspector Cunneen regarding the Compliance Notice ([17] – [18] of the statement of claim).
The failure of Tsurc Pty Ltd to comply with the Compliance Notice is a contravention of s.716(5) of the FWA. The evidence before the Court supports, as the FWO asserts, the involvement of Mr Theocharidis in the contravention of the first respondent. In these circumstances, I am satisfied that Mr Theocharidis is, therefore, taken to have committed that contravention pursuant to s.550 of the FWA.
I am satisfied that the FWO has made out a prima facie case for the relief sought on the face of the Statement of Claim.
Further, I agree with the FWO that Mr Theocharidis is in default pursuant to r.13.03A(2) of the Rules in, at least, two ways.
First, as required by r.6.01 of the Rules, and for that matter by an order of the Court made on 12 March 2014, which invokes r.13.03A(2)(b)(iii) of the Rules, Mr Theocharidis has not given an address for service.
Second, as required by r.4.03 of the Rules, and also by an order of this Court made on 12 March 2014, which also invokes r.13.03A(2)(b)(iii) of the Rules, Mr Theocharidis has not filed a Response within 14 days of being served with the proceedings.
In all, Mr Theocharidis is in default because of r.13.03A(2)(a) and r.13.03A(2)(b)(i) and (ii) of the Rules which, in the circumstances, also results in a failure to defend the proceeding with due diligence. The latter also gives rise to a breach of r.13.03A(2)(b)(vii) of the Rules.
The Court’s Power to Make Orders Sought
The FWO submitted that the Court has the power to make any order it considers appropriate pursuant to s.545(1) of the FWA if it is satisfied that a person has contravened a civil remedy provision. I see no reason not to accept this proposition in the current circumstances.
Orders Sought
The orders and relief relevantly sought by the FWO against Mr Theocharidis in the Application in a Case filed on 4 April 2014 are in the following terms:
“1. The Court notes that the Second Respondent is in default for the purposes of sub-rule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’), by way of its failure to file documents, in that:
a. On 12 March 2014, the Court ordered the Second Respondent to file and serve a Notice of Address for Service and response within 14 days;
b. To date, no defence or response has been filed by the Second respondent, as required by the Rules and ordered by the Court.
2. Default judgment be entered for the Applicant against the Second Respondent pursuant to sub-rule 13.03B(2)(c) of the Rules.
3. Upon admissions which the Second Respondent is deemed to have made by reason of his default, the Court declares that:
a. The First Respondent contravened section 716(5) of the Fair Work Act 2009 (FW Act), by failing to comply with a compliance notice issued under section 716 of the FW Act by Inspector Paula Cunneen on 12 September 2013;
b. The Second Respondent was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contraventions set out in order 3 a above.
4. The matter is to be adjourned to a date fixed for a further hearing to determine the penalty that should be imposed upon the Second Respondent.
…”
As stated above, a number of affidavits were read into evidence in support of this application.
As the FWO submitted, the Court has a wide discretionary power to make declarations of right (see s.16 of the Federal Circuit Court of Australia Act 1999 (Cth)). I am satisfied that the declarations sought by the FWO in the Application in a Case, in the circumstances presented, have been framed accurately, and concisely identify the contravening conduct.
Further, I accept the FWO’s submission that the making of the declarations will serve a public interest. I note that the orders and declarations sought reflect the suggested wording of Kiefel J (when her Honour was a Judge of the Federal Court) in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; (2006) 236 ALR 665 at [59] of “deemed admissions”.
I will grant the relief in the terms sought by the FWO. The matter should now proceed for hearing of the FWO’s application of the imposition of any appropriate penalty.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Associate:
Date: 29 October 2014
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