Kim v Hasegawa and Ye International Pty Ltd
[2018] FCCA 2881
•5 October 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KIM v HASEGAWA & YE INTERNATIONAL PTY LTD | [2018] FCCA 2881 |
| Catchwords: INDUSTRIAL LAW – Fair Work Act 2009 (Cth) – application for remuneration for unpaid wages and superannuation – settlement agreement entered into by the parties at mediation – merger of applicant’s earlier rights and claims in settlement agreement – disagreement as to amount of tax to be deducted and remitted to the Australian Taxation Office from amount payable by the respondent to the applicant under the settlement agreement – tax return of applicant required to establish true position as to remaining obligations, if any, under the settlement agreement. |
| Legislation: Fair Work Act 2009 (Cth) |
| Cases cited: Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 Otto Energy (Tanzania) Pty Ltd v Swala Energy Ltd (No.2) [2017] FCA 1180 |
| Applicant: | EUN YOUNG KIM |
| Respondent: | HASEGAWA & YE INTERNATIONAL PTY LTD |
| File Number: | SYG 4022 of 2017 |
| Judgment of: | Judge Dowdy |
| Hearing date: | 5 October 2018 |
| Delivered at: | Sydney |
| Delivered on: | 5 October 2018 |
REPRESENTATION
| The Applicant appeared in person. |
| The Respondent appeared through its employee, Ms K. Hasegawa |
THE ORDERS OF THE COURT ARE AS FOLLOWS:
Without prejudice to the right and entitlement of the Applicant to seek to amend the Application filed by her in this Court on 22 December 2017 to seek to enforce the Settlement Agreement between the Applicant and the Respondent dated 22 June 2018, order that the proceeding be permanently stayed in so far as it makes a claim for wages, remuneration or superannuation arising out of the Applicant’s employment by the Respondent in the amount of $29,792, or at all.
Grant to the Applicant leave to file an Amended Application seeking to enforce any balance payable to her under the Settlement Agreement dated 22 June 2018, but dispense with any necessity for her to file any such written Amended Application.
Direct that within seven days from today the Applicant forward a copy of her 2017 to 2018 financial year income tax return, which was lodged with the Australian Tax Office, together with any tax refund notice or other correspondence issued by the Australian Tax Office to her or her accountant in connection with her 2017 to 2018 financial year income tax return, to Mr Raymond Wong of Pearl Gardens, 18 Woodville Avenue, Post Office Box 456, Wahroonga, New South Wales, Australia, 2076.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 4022 of 2017
| EUN YOUNG KIM |
Applicant
And
| HASEGAWA & YE INTERNATIONAL PTY LTD |
Respondent
REASONS FOR JUDGMENT
By Application filed on 22 December 2017, the Applicant sought an order that the Respondent pay to her the amount of $29,792 for unpaid wages and superannuation. It is common ground that the Applicant was employed by the Respondent from at least 2012 to 2015.
The Response filed by the Respondent on 24 April 2018 admitted that the Applicant was entitled to be paid $13,370.10 net after tax, and consented to an order for payment to the Applicant of that amount.
On 27 April 2018, I ordered that the matter go to mediation before a Registrar of this Court.
A mediation took place before a Registrar of this Court on 22 June 2018 when Mr Tony McMinn, solicitor, appeared for the Respondent and the Applicant appeared in person.
On 16 July 2018, Mr McMinn sent an email to my Chambers advising that the matter had settled at the mediation on 22 June 2018. Further, on 16 July 2018 Mr Stewart Young, who is the head of the mediation team within the Registry, advised my Chambers that the records of the Registry indicated that the matter had settled at this mediation.
However, by email of 3 July 2018 the Applicant asserted that the matter had not settled. Ultimately, the matter came before me on 23 August 2018 when the Applicant appeared in person and Ms Hasegawa appeared for the Respondent. Ms Hasegawa said that she could no longer afford a lawyer. Ms Hasegawa put into her evidence an agreement dated 22 June 2018 (Settlement Agreement) which she submitted was entered into at the mediation and which had the effect of resolving all matters in dispute between the Applicant and the Respondent.
It is now the common ground between the parties that the matter did settle at the mediation and that the Settlement Agreement was entered into. The substantive terms of the Settlement Agreement are as follows:
Background
A.The Applicant was engaged by the Respondent on a permanent part-time basis from 9 January 2012 until 22 November 2015.
B.After a discussion the parties have agreed that the Applicant is owed additional remuneration for her period of employment and that payments should be made as provided in clause 1.
C.The parties have agreed to settle all matters arising out of the employment and termination of the employment on the basis outlined below.
The Parties Agree as Follows:
Settlement Terms
1.The Respondent will pay the Applicant the sum of $20,235.00 gross less applicable tax thereon into back account (ANZ JaeShin Kim BSB: 012 245 account number 54 344 9955) by 30 June 2018 plus superannuation payable thereon under the Superannuation Guarantee Levy as directed in writing by the Applicant within 7 days or if not so directed then to the Australian Tax Office (ATO).
2.The Respondent will email a group certificate to [email protected].
3.The Applicant has provided the Respondent with a signed Tax Form Declaration with her tax file number.
4.The amounts payable in 1 will be full and final payment and will settle the matter before the Federal Circuit Court and all other matters as between the parties.
Releases and Indemnity and Bar
7.Each party releases each other from all claims and causes of action that they have, or may have had but for this agreement, arising out of or connected with the employment/engagement of the Applicant by the Respondent. This does not apply to workers compensation.
9.Upon payment under clause 1, this agreement can be used by the parties as a bar to any future proceedings and will be binding on the parties once signed.
Further, it became common ground that of the settlement amount of $20,235 (settlement amount):
a)the Respondent had paid $11,187 to the Applicant; and
b)$9,048 had been paid by the Respondent to the Australian Taxation Office (ATO), purportedly in accordance with an ATO tax deduction table, on account of the Applicant.
However, the Applicant contended that the Respondent had paid far too much to the ATO, being an amount calculated by taking the settlement amount as if it were income received by the Applicant for a single week. In fact and in truth, the evidence shows that the Respondent did pay $9,048 to the ATO based on the Applicant having received income from the Respondent in that amount in the week from 22 June 2018 to 30 June 2018.
On 23 August 2018, I made the following orders:
THE COURT NOTES AND ORDERS AS FOLLOWS:
1. NOTE that the Respondent contends that this matter has settled at a mediation before a Registrar of this Court, which was conducted on 22 June 2018 and that the settlement is comprised in Annexure A to the Affidavit of Ms Hasegawa sworn 22 August 2018 and further that the Respondent has done all things requisite and necessary to be done under the Mediation Agreement of 22 June 2018.
2. Dispense with the necessity for the Respondent to file and serve any formal Application in a Case seeking orders to give effect to the Mediation Agreement of 22 June 2018, either by way of appropriate declaratory relief in relation to the settlement or a permanent stay of the proceeding, or otherwise.
3. Set down for hearing at 2.00pm on Friday 5 October 2018 the Respondent’s application for relief to give effect to the Mediation Agreement of 22 June 2018.
4. That by 14 September 2018 the Applicant file and serve any affidavit evidence upon which she wishes to rely in relation to whether or not the matter has settled at mediation and whether or not the Respondent has satisfied the terms of the Mediation Agreement of 22 June 2018 such that this proceeding should not further proceed or that a declaration should be made that the Mediation Agreement has been complied with by the Respondent.
5. That by 4.00pm on 30 August 2018 the Applicant advise the Respondent in writing of the following:
a. the amount by which the Applicant contends that she has been underpaid by the Respondent under the Mediation Agreement of 22 June 2018 out of the sum payable of $20,235; and
b. how, and in what way, that underpayment is calculated.
They are the orders made on the last occasion. The Applicant has now filed an affidavit sworn or affirmed on 7 September 2018 in which she accepts that she agreed to settle her claim for her “employment and termination” on the mediation date of 22 June 2018.
In these circumstances, all the claims made in this proceeding before 22 June 2018 have been resolved, and all the Applicant's rights in that respect have merged in the Settlement Agreement, which contained mutual releases. It therefore follows that without prejudice to the right and entitlement of the Applicant to amend her application to claim enforcement of the terms of the Settlement Agreement I will order that the Application be permanently stayed.
However, that is not the end of the matter, because I consider that this Court has jurisdiction to give judgment in favour of the Applicant in the amount which the Respondent has agreed to pay by way of settlement of the proceeding without the institution and commencement of a fresh proceeding. In that respect I refer to the decisions of the Full Court of the Federal Court of Australia in Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510; McKerracher J in Otto Energy (Tanzania) Pty Ltd v Swala Energy Ltd (No.2) [2017] FCA 1180; and the decision of the Full Court of the Supreme Court of Victoria in Roberts v Gippsland Agricultural and Earthmoving Contracting Co Pty Ltd [1956] VLR 555.
The Applicant does not have the benefit of a lawyer. I have had in Court, at all previous times, great difficulty in understanding her English and on the last occasion I asked her to have an interpreter with her today and she has done as I asked, and the case has proceeded a lot more efficiently. Of course, I am under the difficulty that the Respondent also does not have the services of a lawyer. However, in the circumstances, I will order:
Grant to the Applicant leave to file an Amended Application seeking to enforce any balance payable to her under the settlement agreement, but dispense with any necessity for her to file any such written Amended Application.
As a Judge I must be intellectually satisfied on the balance of probabilities that an amount, and precisely what amount, is owing under the Settlement Agreement, and I am not entitled to speculate. In my view, the Respondent has paid too much money to the ATO and on an unrealistic commercial basis. The Respondent should have acted on the basis that the settlement amount of $20,235 was earnt within the 52 weeks of the 2017 to 2018 financial year, which would have meant that the gross applicable tax would have been, on the relevant ATO tax deduction tables, the amount of $386.65.
It must be remembered that no tax is payable under the tax free threshold of $18,200. It is further to be recalled that the Respondent was to pay the sum of $20,235 to the Applicant “less applicable tax thereon”. Of course it may be that the Applicant earnt more than $20,235 in the 2017 to 2018 financial year, but in my view the Settlement Agreement does not permit the Respondent to take that possibility into account, but, rather, to pay $20,235 less applicable tax on that amount solely and alone.
So on this basis I would enter judgment in favour of the Applicant for $8,661, plus superannuation at 9.5 per cent on $20,235, being $1,922.33, making a total of $10,583.30. However, as a practical matter of justice, I am unenthused by the possibility of the Applicant getting a double benefit.
It was apparent to me that if Ms Kim had lodged her 2107 to 2018 tax return, and the ATO had issued a refund, or perhaps even if no refund had been received, she would have received the benefit of the $9,048 paid by the Respondent to the ATO, and it would cause practical injustice if I ordered the Respondent to pay $10,583.30 to the Applicant if she had already received the benefit of the $9,048, perhaps leaving the Respondent to commence fresh proceedings against the Applicant to recover the $9,048 as moneys had and received or on some other legal basis.
Accordingly, at the commencement of the proceeding this afternoon I asked Ms Kim whether or not she had not lodged her 2017 to 2018 financial year tax return, and she told me that she had and that the tax return had been processed, and she had received some form of refund, or believed, at least, that she had received some form of refund.
I was further informed by Ms Hasegawa that the Respondent has paid an amount for superannuation to the ATO which is greater than what at an earlier point in time seemed to be an agreed figure for superannuation, but Ms Kim responds by saying that she has recently been in contact with the ATO which denies having received any moneys on account of her superannuation.
In these difficult circumstances, and without the assistance of lawyers, I will have to adopt a somewhat Solomon-like and practical justice approach to the finalisation of this matter.
Today Ms Hasegawa has read her affidavit sworn or affirmed on 22 August 2018 which annexes an accounting report from Raymond W. M. Wong & Co. Accordingly, I will ask and exhort Ms Hasegawa to send the Reasons for Judgment to Mr Raymond W. M. Wong who, from his letterhead, appears to be both an accountant and a lawyer, to see whether he can further opine on the matter in a way that can bring some real clarity to the position, and hopefully to come to Court on the next occasion.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Dowdy
Associate:
Date: 10 October 2018
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