FWO v Oz Staff Career Services Pty Ltd

[2015] FCCA 3552

FEDERAL CIRCUIT COURT OF AUSTRALIA

FWO v OZ STAFF CAREER SERVICES PTY LTD & ORS [2015] FCCA 3552

Catchwords:
INDUSTRIAL LAW – Ruling on objections to evidence.

Legislation:

Evidence Act 1995, ss.135, 136

Rich v Australian Securities and Investments Commission [2004] 220 CLR 129
Australian Securities and Investments Commission (ASIC) v Mining Projects Group Ltd [2007] FCA 1620
Construction, Forestry, Mining and Energy Union (CFMEU) v Boral Resources (Vic) Pty Ltd [2015] HCA 21

Applicant: FAIR WORK OMBUDSMAN

First Respondent: OZ STAFF CAREER SERVICES PTY LTD (IN LIQUIDATION) (ACN 147 550 865)

Second Respondent: TRAVICE BLOM

Third Respondent: ALESSANDRO LINOSSI

File Number: MLG 2306 of 2013

Judgment of: Judge Burchardt

Hearing date: 4 November 2015

Date of Last Submission: 4 November 2015

Delivered at: Melbourne

Delivered on: 4 November 2015

REPRESENTATION

Counsel for the Applicant: Ms Dowsett

Solicitors for the Applicant: Office of the Fair Work Ombudsman

Counsel for the First and Second Respondents: Mr McDougall

Solicitors for the First and Second Respondents:

Counsel for the Third Respondent:

Solicitors for the Third Respondent:

Baker & McKenzie

Mr McKenny

Kliger Partners

ORDERS

1. That paragraphs 103 to 107, paragraph 111 and paragraphs 115 to 123 of the Affidavit of Ashley Kate Hurrell affirmed 13 July 2015 (“the affidavit”) not be admitted into evidence. 

2. That the Respondents’ objections to the affidavit be otherwise dismissed. 

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 2306 of 2013

FAIR WORK OMBUDSMAN

Applicant

And

OZ STAFF CAREER SERVICES PTY LTD (IN LIQUIDATION) (A.C.N. 147 550 865)

First Respondent

TRAVICE BLOM

Second Respondent

ALESSANDRO LINOSSI

Third Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. Objection has been taken on the part of the Second Respondent to paragraphs 94 to 123 of Ms Hurrell’s affidavit affirmed on 13 July of this year.  And further objection is taken to paragraphs 124 to 148 by the third respondent.  The objections are both pressed on the grounds of relevance.  And although other objection is also taken by the third respondent, I think I should deal with the question of relevance as best I can first.

2. It has taken me some time to endeavour to work through the matter because you have to work out, first of all, what is in issue on the pleadings which takes a bit of time and then try and apply yourself to the facts that emerge from that.  Put in a rather global way, the paragraphs to which objection is taken by the second respondent refer to matters revealed by searches made with what are clearly business records within the meaning of the Evidence Act 1995 (“the Evidence Act”) by Ms Hurrell in relation to what could be described as prior complaints involving the second respondent from a period from about 2006 to a period 2007 – 2008 almost. And go to suggest in a broad way that Mr Blom may have had a state of mind or an awareness of matters to do with deductions of the sort with which we are in part concerned in this case.

3. The matters of which the third respondent complains are a series of similar searches revealing what would otherwise be admissible matters relating to calls made to the applicant’s phone records, if I can describe it in that way, designed to identify the way in which it is said that the third respondent was involved with matters to do with pay and rates of pay and the like on behalf of the first respondent.

4. The pleading in the amended Statement of Claim at paragraph 4 alleges that between 5 December 2011 and 12 May 2013, the second respondent was relevantly having knowledge of practices and processes for payment of wages, including at subparagraph (v) the deduction of administration fees and meal deductions from employee’ wages and, at (vi) pay slips issued by the first respondent.

5. In the Defence to the amended Statement of Claim, the second respondent pleads in response to subparagraph 4(c)(v) that it is “vexatious, ambiguous and embarrassing” and under cover of that objection declines to plead further relying on his penalty privilege and privilege against self-incrimination.  The same pleading is repeated in relation to paragraph 4(c)(vi) of the amended Statement of Claim.  So in that sense – and I will deal with the second respondent first – the objection as to relevance needs to be seen against the context that what is in issue on the pleadings is the state of knowledge of the second respondent as to the deduction of administration fees, practices as to this matter and to payslips.

6. Against that background, when you come to the Affidavit itself, my first response, as indicated to counsel for the second respondent in submissions, was that this was material that might be likely to be relevant in relation to penalty were such an issue to arise.  But looked at in more detail, paragraphs 97 to 102, all of which relate to a period in 2006, relate precisely in part to the state of knowledge of Mr Blom about the question of deductions from wages.  Paragraphs 108 to 110 inclusive seem to me to be of the like character.  And, likewise, paragraphs 112 to 114. 

7. The question then becomes, bearing in mind that these are events posited as taking place between 2006 and essentially 2008, and bearing in mind that the earliest date disclosed by the narrative of Ms Hurrell is in early 2012, whether the material put therein can be relevant.  In my view, when we are talking about a state of mind over a period of time, it cannot be said that those aspects of the Affidavit are incapable of having significance.  The weight to be given to them will of course depend on the course of events.  It may be, of course, that the respondents do not give evidence and then the weight will be very much in issue.  But I do not think that given the issues on the pleadings, that those matters can be said to be irrelevant.  And I am therefore going to admit into evidence the paragraphs 92 to 102 inclusive, paragraphs 108 to 110 inclusive and paragraphs 112 to 114 inclusive.  All the other matters asserted between paragraphs 93 and 123 are not admitted into evidence.  They are not, in my view, relevant to the matter.  That’s the second respondent.

8. That brings us then to the third respondent.  And, once again, one has to start with the pleadings.  Paragraph 6, there is an assertion as to the third respondent’s position which I think, from memory, is admitted.  Paragraph 7 follows a similar pattern to paragraph 4 and it asserts that between December 2011 and May 2013, the third respondent had knowledge of a number of practices including, once again, the deduction of administration fees and meal deductions and payslips at subparagraph 7(a)(v) to (vi) respectively.

9. The Defence to paragraph 7(a)(v) admits subparagraph (v) so there is no issue in the matter as to the fact that Mr Linossi had knowledge of the practices relating to administration fees and meal deductions.  In subparagraph (vi) the third respondent repeats a matter set out in subparagraph (iii) which is to this effect:

   “The Third Respondent does not have responsibility for issuing payslips and denies sub-paragraph (iii) and does not plead further relying on his penalty privilege.”

10. Subparagraph (iii) was an assertion that the first respondent issued payslips to employees that were generated by the FastTrack system.  So that’s the pleading issue between the parties.  It’s the extent and knowledge of the practices of the first respondent in relation to payslips including the matters detailed in subparagraph 7(a)(vi) that is in issue between the parties.

11. When one turns to the Affidavit itself, paragraphs 100 and – I beg your pardon.

    RECORDED  :  NOT TRANSCRIBED.

12. Paragraphs 124 to 128.  One sees that what is put in issue, essentially, is a whole series of alleged phone calls otherwise obviously admissible as business records given the breadth of s.69 and the definition of business in part 2 of the dictionary as to things asserted to have been said by Mr Linossi from time to time.  These are said to be relevant by the applicant as going to the third respondent’s role in the company.  The objection is put on the contrary that these are not relevant to whether or not the particular matters presently before the Court can be made out.

13. When one looks at the timescale noted in the impugned paragraphs, it commenced on 11 January 2010 and goes on thereafter.  That is actually quite proximate in time in the scheme of things to the matters that are presently otherwise before the Court in Ms Hurrell’s Affidavit.  So, once again, I cannot at this stage uphold the suggestion that they are incapable of being relevant and should be struck out accordingly.

14. The third respondent, however, relies upon penalty privilege and refers to a number of authorities in that regard.  It is certainly the case that in cases such as Rich v Australian Securities and Investments Commission [2004] 220 CLR 129 at [24] and in Australian Securities and Investments Commission (ASIC) v Mining Projects Group Ltd [2007] FCA 1620 at [12] and following and in the recent case Construction, Forestry, Mining and Energy Union (CFMEU) v Boral Resources (Vic) Pty Ltd [2015] HCA 21 at [55] per Nettle J; it has been made very clear that the penalty privilege operates to ensure that a party asserting the civil contravention is required to prove it. It has been said that:

    “It is monstrous to require an accused or a person said to have contravened a penalty provision to prove the other side’s case out of their own mouth.”

15. The difficulty I have, however, is that this all arises, so to speak, in the context of proceedings being commenced and prosecuted.  The remarks recorded that are now impugned as objectionable were all made wholly voluntarily as far as I can see from the materials by Mr Linossi, assuming he made them.  And there was no compulsion on him to do anything.  This was material perfectly properly in the hands of the applicant at the time the case started.  And, in my view, the suggestion that the extent it has fallen from him it is inadmissible as a result is simply not sustainable.

16. It is put that I should consider, of course, ss.135 and 136 in the Evidence Act.  But, in my view, those do not properly operate in these circumstances to exclude this material.  I repeat again, as I did in relation to the impugned aspects by the second respondent, obviously there will be questions as to the weight to be put into such material, whether the respondents elect in the ultimate to go into evidence or not but for all these reasons I decline otherwise to uphold the objections.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Associate: 

Date: 19 January 2016