Hall v Active Towing Sydney Pty Ltd

[2021] FedCFamC2G 385

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Hall v Active Towing Sydney Pty Ltd [2021] FedCFamC2G 385

File number:

SYG 1506 of 2020

Judgment of:

JUDGE CAMERON

Date of judgment:

2 December 2021

Catchwords:

INDUSTRIAL LAW – Breaches of civil remedy provisions – declarations of breach.

PRACTICE AND PROCEDURE – Default judgment for failure to file response or notice of address for service – declarations of breaches of the Fair Work Act 2009 (Cth).

Legislation:

Fair Work Act 2009 (Cth) ss 90, 324, 325, 545, 546, 547, 550

Federal Court of Australia Act 1976 (Cth) s 51A

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.07, 13.04, 13.05

Cases cited:

Alexander v Ajax Insurance Co Ltd [1956] VLR 436

Division:

Fair Work Division

Number of paragraphs:

17

Date of hearing:

2 December 2021

Place:

Sydney

Solicitor for the Applicant:

Mr T. Gardner (Clayton Utz)

Counsel for the First Respondent:

No appearance by or on behalf of the First Respondent

Counsel for the Second Respondent:

No appearance by or on behalf of the Second Respondent

Solicitor for the Third Respondent:

Mr S. Karnib (Macquarie Law Group)

ORDERS

SYG 1506 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

ALAN HALL

Applicant

AND:

ACTIVE TOWING SYDNEY PTY LTD ACN 003 705 539

First Respondent

WAYNE THOMAS WILLIAMSON

Second Respondent

RICHARD TUNCHON

Third Respondent

ORDER MADE BY:	JUDGE CAMERON
DATE OF ORDER:	2 DECEMBER 2021

THE COURT DECLARES THAT:

1.The first respondent contravened ss.324 and 325 of the Fair Work Act 2009 (Cth) (“FW Act”) by deducting various amounts from the applicant’s wages during the employment period April 2015 to January 2018.

2.The first respondent contravened s.90 of the FW Act by failing to pay the applicant his accrued annual leave when his employment terminated.

3.The second respondent was involved in the first respondent’s contraventions of ss.90, 324 and 325 of the FW Act.

THE COURT ORDERS THAT:

4.The second respondent pay the applicant compensation in the amount of $26,955.52.

5.The second respondent pay the applicant interest on the compensation sum in the amount of $5,819.16.

6.The matter be listed for directions on 17 December 2021 at 9:30am by telephone.

7.The third respondent be excused from attending the directions hearing on 17 December 2021.

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

JUDGE CAMERON

INTRODUCTION

1. According to his amended application, from January 2014 until around 8 October 2018 the applicant, Mr Hall, was employed as a tow truck driver by Active Towing Sydney Pty Ltd (“Active Towing”), the first respondent.  Mr Hall has alleged that Active Towing contravened the Fair Work Act 2009 (Cth) (“FW Act”) and claims compensation for underpayment by Active Towing of his wages and his accrued annual leave entitlements as at 8 October 2018.

2. Mr Hall relevantly alleges that:

   (a)by deducting various amounts totalling $18,881.95 from his wages during the employment period between April 2015 and January 2018, Active Towing contravened:

   (i)s.324 of the FW Act; and

   (ii)s.325 of the FW Act; and

   (b)by failing to pay him his accrued annual leave valued at $8,073.57 when his employment terminated, Active Towing contravened s.90 of the FW Act.

3. Mr Hall further alleges that Wayne Thomas Williamson, the second respondent, was the secretary and director of Active Towing, that Richard Tunchon, the third respondent, was an employee of Active Towing, and that they were both involved in the contraventions as accessories.  In that regard, Mr Hall alleged that Mr Williamson was responsible for the overall management and operations of Active Towing and oversaw Mr Tunchon's management of wages payments, payroll issues and the preparation of rosters at Active Towing.

4. In his amended application, Mr Hall relevantly seeks:

   (a)declarations that by deducting various amounts from his wages and by failing to pay him his accrued annual leave entitlements upon termination, Active Towing contravened ss.324, 325 and 90 of the FW Act;

   (b)declarations that pursuant to s.550 of the FW Act, Messrs Williamson and Tunchon were involved in each of those contraventions;

   (c)an order pursuant to s.545(2)(b) of the FW Act, that the respondents are jointly and severally liable to pay the combined total of the amounts not paid to him, which he calculated at $27,585.52, but which upon closer inspection should be $26,955.52;

   (d)an order pursuant to s.547 of the FW Act and s.51A of the Federal Court of Australia Act 1976 (Cth), that the respondents jointly and severally pay interest on the amount owing to him; and

   (e)orders for penalties. 

5. On 11 February 2021, David Ingram of Hall Chadwick was appointed liquidator of Active Towing.  In orders made on 15 October 2021, the Court also noted advice from the parties that the proceeding as between Mr Hall and Mr Tunchon had been settled.  

6. On 8 November 2021, Mr Hall filed an application in a proceeding seeking default judgment against the second respondent, Mr Williamson, for the amounts unpaid or deducted, plus interest.  He also sought penalties and costs.

   LEGISLATION

7. The FW Act relevantly provides:

   90       Payment for annual leave

   (1)If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period.

   (2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.

   …

   324     Permitted deductions

   (1)An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

   (a)the deduction is authorised in writing by the employee and is principally for the employee's benefit; or

   (b)the deduction is authorised by the employee in accordance with an enterprise agreement; or

   (c)the deduction is authorised by or under a modern award or an FWC order; or

   (d)the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

   …

   325     Unreasonable requirements to spend or pay amount

   (1)An employer must not directly or indirectly require an employee to spend, or pay to the employer or another person, an amount of the employee's money or the whole or any part of an amount payable to the employee in relation to the performance of work, if:

   (a)the requirement is unreasonable in the circumstances; and

   (b)for a payment–the payment is directly or indirectly for the benefit of the employer or a party related to the employer.

   …

   545     Orders that can be made by particular courts

   (1)The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

   …

   546     Pecuniary penalty orders

   (1)The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

   Determining amount of pecuniary penalty

   (2)The pecuniary penalty must not be more than:

   (a)if the person is an individual–the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); …

   547     Interest up to judgment

   (1)This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument.

   (2)In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.

   …

   550     Involvement in contravention treated in same way as actual contravention

   (1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

   (2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:

   (a)has aided, abetted, counselled or procured the contravention; or

   (b)has induced the contravention, whether by threats or promises or otherwise; or

   (c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

   (d)has conspired with others to effect the contravention.

8. Until 2017, s.325 of the FW Act was in somewhat different terms, but the differences are not relevant to the outcome of this proceeding.

9. The Federal Circuit and Family Court of Australia, (Division 2) (General Federal Law) Rules 2021(Cth) (“Rules”) relevantly provide:

   13.04 When a party is in default

   …

   (2)For the purposes of rule 13.05, 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

   …

   13.05   Orders on default

   …

   (2)If a respondent is in default, the Court may:

   …

   (b)if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:

   (i)the debt or liquidated damages; and

   (ii)if appropriate—costs; or

   (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; or

   (d)give judgment or make any other order against the respondent; or

   …

   APPLICANT’S ALLEGATIONS

10. In support of his application for default judgment, Mr Hall has relied on:

    (a)his affidavit signed on 12 August 2021 but dated 23 July 2021; 

    (b)an affidavit of service of Jessica Morath, affirmed on 23 July 2021; 

    (c)an affidavit of service of Thomas John Gardner, affirmed 1 December 2021;  and

    (d)a further affidavit of Ms Morath affirmed 24 November 2021, setting out interest calculations in relation to individual monetary claims made by Mr Hall. 

    CONSIDERATION

    Substituted Service

11. I should note that I am satisfied that Mr Williamson was served with the amended application, a matter dealt with in Ms Morath's affidavit of 23 July 2021.  I am also satisfied, by virtue of Mr Gardner's affidavit of 1 December 2021, that substituted service of the application in a proceeding has been effected on Mr Williamson in accordance with the Court's orders of 11 November 2021.

    Compensation

12. As a preliminary matter, regard should be had to the terms of r.13.05 of the Rules and the characterisation of this matter. Whether it is one for debt or liquidated damages or for unliquidated damages must be addressed. Although the sum claimed appears to be certain, it could not be said that the sums Mr Hall claims are properly characterised as debts or liquidated demands in the sense discussed by Sholl J in Alexander v Ajax Insurance Co Ltd [1956] VLR 436. The amounts claimed, at least in relation to the deductions, would require some assessment by the Court, thus rendering the claim an unliquidated one.

13. The Rules make no express provision for default judgment in respect of unliquidated claims, instead referring to matters which proceed on pleadings or by way of a statement of claim. Although this matter has not in terms proceeded on pleadings, the amended application is nevertheless pleaded in a conventional way, and the fact that that pleading appears in the amended application rather than in separate points of claim or statement of claim does not, I think, mean that r.13.05(2)(c) of the Rules does not apply to it. To the extent that I am incorrect in that view, I conclude that it is nevertheless appropriate, relying on r.1.07, to proceed as if r.13.05(2)(c) of the Rules applied to the determination of the present application.

14. Having considered the amended application, I am satisfied that the applicant appears entitled on that pleading to compensation in the total sum of $26,955.52. 

    Interest

15. On the question of interest, Ms Morath has annexed to her affidavit of 24 November 2021 a detailed breakdown of interest calculations in respect of the sorts of claims advanced by Mr Hall.  I notice that on annexures A and B to her affidavit, she has set out the rates of interest used in her calculations, which seem to me to be unremarkable.  I am satisfied that interest in the total amount of $5,819.16, as calculated by Ms Morath, is appropriate to award Mr Hall, and there will be orders to that effect.

    Declarations

16. I also consider it appropriate to make the declarations which the applicant has sought in the amended application, as far as they relate to Active Towing and Mr Williamson. 

    Penalty

17. The matter will be listed for directions on 17 December 2021 on the question of penalty.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron.

Associate:

Dated:       27 April 2022