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Moteki v Legnor Pty Ltd

Moteki v Legnor Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

MOTEKI v LEGNOR PTY LTD & ANOR

[2018] FCCA 1988

Catchwords:
INDUSTRIAL LAW – Breach of general protections under the Fair Work Act 2009 – second respondent owner and controller of the applicant’s employer – default judgment against both respondents – first respondent contravened ss 44, 45, 340(1)(a)(iii) and 535(3) of the Fair Work Act 2009 – no application made by second respondent to this court or appeal court to argue set aside the default orders – first respondent in liquidation – second respondent’s liability in this litigation not contingent upon solvency of first respondent – second respondent an accessory to contraventions committed by first respondent – applicant sought relief only as against second respondent – applicant a full-time permanent employee – employment covered by the Restaurant Industry Award 2010 – level 5 food and beverage supervisor – second respondent was director and chief executive officer of first respondent – first respondent underpaid applicant – applicant complained to second respondent about respondent underpaying – applicant complained that first respondent had not provided signed version of employment contract and employee records despite request – complained that first respondent did not pay superannuation entitlements – complained that first respondent did not pay accrued entitlements – complaints amounted to exercise of workplace right – second respondent terminated employment of applicant by telephone – second respondent later sent email to applicant with reasons for termination – second respondent wanted to agitate threshold issues that went to liability – second respondent was knowingly concerned in all acts done by the first respondent – no contrition exhibited by second respondent – no corrective measures were taken – second respondent’s actions in paying incorrect amounts were deliberate – second respondent driven by profitability of company – second respondent argumentative, defiant and confrontational – second respondent penalised for deliberateness in refusing to pay applicant amounts to which she is legitimately entitled.

COMPANY LAW – Applicant’s employer was first respondent – first respondent was aligned to group of companies based in Japan – entire business was funded by the group – second respondent was sole director and shareholder of first respondent – first respondent was a separate legal entity – second respondent did not challenge he was controlling mind of first respondent – second respondent an accessory to contraventions committed by the first respondent.

Legislation:
Fair Work Act 2009, ss.44, 45, 340(1)(a)(iii), 550, 535(3)
Fair Work Regulations 2009, reg.3.42
Restaurant Industry Award 2010

Other materials:

Davies & Worthington, Gower & Davies’ Principles of Modern Company Law (Sweet & Maxwell, 7^th ed, 2003)

Cases cited:

Adams v Cape Industries plc [1990] Ch 433
Australasian Temperance & General Mutual Life Assurance Society v Howe (1922) 31 CLR 290
Australian Competition & Consumer Commission v Giraffe World Australia Pty Ltd (No.2) (1999) 95 FCR 302
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Australian Securities & Investments Commission v Adler [2002] NSWSC 171
Community and Public Sector Union (CPSU) v Telstra…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FCCA 1988
Decision Date: 23 July 2018

CaseChat Overview and Summary

The applicant, a full-time permanent employee and food and beverage supervisor, brought proceedings against her employer, the first respondent, and the second respondent, who was the owner and controller of the employer. The dispute concerned alleged breaches of general protections under the *Fair Work Act 2009* (Cth), including underpayments, failure to provide employment contract and records, and non-payment of superannuation and accrued entitlements. The applicant contended that these complaints constituted the exercise of a workplace right, and that her subsequent termination was a contravention of the Act. Default judgment had been entered against the first respondent, which was now in liquidation. The applicant sought relief solely against the second respondent.

The court was required to determine whether the second respondent was liable as an accessory to the contraventions committed by the first respondent, notwithstanding the first respondent's liquidation. Specifically, the court had to consider if the second respondent was knowingly concerned in the first respondent's actions, and whether the second respondent's own conduct warranted a finding of contravention. The court also needed to assess the appropriate relief to be granted against the second respondent, given the applicant's claims and the second respondent's conduct.

His Honour Judge Wilson found that the second respondent was the controlling mind of the first respondent and was knowingly concerned in all the acts done by the first respondent. The court reasoned that the second respondent's actions in underpaying the applicant and failing to provide entitlements were deliberate, driven by a desire for profitability, and not a result of oversight. The second respondent's argumentative, defiant, and confrontational stance, coupled with a lack of contrition or corrective measures, demonstrated a wilful refusal to pay amounts legitimately owed to the applicant. The court concluded that the second respondent was an accessory to the contraventions and that his liability was not contingent upon the solvency of the first respondent.

The court ordered that the second respondent pay pecuniary penalties for his contraventions of sections 44, 45, 340(1)(a)(iii), and 535(3) of the *Fair Work Act 2009* (Cth). The specific amount of the penalties was to be determined at a later hearing.

Orders