FEDERAL COURT OF AUSTRALIA
Potter v Fair Work Ombudsman [2014] FCA 1171
Citation: Potter v Fair Work Ombudsman [2014] FCA 1171 Appeal from: Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139 Parties: JUDITH MADGE POTTER v FAIR WORK OMBUDSMAN File number(s): NSD 249 of 2013 Judge(s): YATES J Date of judgment: 7 November 2014 Catchwords: PRACTICE AND PROCEDURE – applications for disbursement of moneys paid into Litigant’s Fund Legislation: Workplace Relations Act 1996 (Cth)
Fair Work Act 2009 (Cth)Cases cited: Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139
Quincolli Pty Ltd v Fair Work Ombudsman [2013] FCA 321
David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353Date of hearing: 29 October 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 29 The Appellant: In person Counsel for the Respondent: Ms C Howell Solicitor for the Respondent: Office of the Fair Work Ombudsman
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 249 of 2013
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: JUDITH MADGE POTTER
AppellantAND: FAIR WORK OMBUDSMAN
Respondent
JUDGE:
YATES J
DATE OF ORDER:
7 NOVEMBER 2014
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The appellant’s application dated 4 April 2014 be dismissed.
2.The stay on 11 April 2013 of Orders 1 to 39 and 45 made by the Federal Magistrates Court of Australia (the Federal Magistrates Court) on 18 February 2013 (proceeding number SYG1898 of 2010) be lifted.
3.Pursuant to rule 2.43 of the Federal Court Rules 2011, the money paid into the Litigant’s Fund on 19 April 2013 by Quincolli Pty Ltd (in liquidation) (the company) in the amount of $20,762.00 be paid from the Litigant’s Fund to the Consolidated Revenue Fund of the Commonwealth of Australia within 28 days of the date of this order.
4.The money paid pursuant to Order 3 above, in part payment of Orders 1 to 33 made by the Federal Magistrates Court on 18 February 2013, be disbursed by the respondent to the former employees of the company named in the Schedule to these orders, such payments to be made in the amounts specified in column 5 therein.
5.Payment to the former employees referred to in Order 4 above be made within 90 days of the date of this order.
6.If at the expiration of the 90 day period provided in Order 5 above, the respondent is unable to locate any former employee named in the Schedule to make payment in accordance with Orders 4 and 5 above, any amount owed to the former employee is to remain in the Consolidated Revenue Fund of the Commonwealth as unclaimed moneys pursuant to s 726 of the Workplace Relations Act 1996 (Cth) and s 559(1) of the Fair Work Act 2009 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Schedule
1 2 3 4 5 No. Former…
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- Case
- [2014] FCA 1171
- Decision Date
CaseChat Overview and Summary
In examining the matter, the court delved into the financial circumstances surrounding the payment. The court noted that the appellant had made limited evidence of her financial position available, and the information provided suggested that the appellant’s company was not currently trading and had no capacity to trade without support from the appellant and her husband. The court also considered the financial situation of the company involved and the implications of the payment on the company's assets and liabilities. Based on these findings, the court concluded that the money should be released to the Commonwealth to ensure the underpaid employees received compensation.
The court dismissed Potter's application and lifted the stay on certain orders made by the Federal Magistrates Court. It ordered the money paid into the Litigant’s Fund to be disbursed to the Consolidated Revenue Fund of the Commonwealth and subsequently paid to the underpaid employees. The court also provided guidelines for the disbursement process and what to do if employees could not be located within a specified timeframe.
Orders
Orders of the court
1. The appellant’s application dated 4 April 2014 be dismissed.
2. The stay on 11 April 2013 of Orders 1 to 39 and 45 made by the Federal Magistrates Court of Australia (the Federal Magistrates Court) on 18 February 2013 (proceeding number SYG1898 of 2010) be lifted.
3. Pursuant to rule 2.43 of the Federal Court Rules 2011, the money paid into the Litigant’s Fund on 19 April 2013 by Quincolli Pty Ltd (in liquidation) (the company) in the amount of $20,762.00 be paid from the Litigant’s Fund to the Consolidated Revenue Fund of the Commonwealth of Australia within 28 days of the date of this order.
4. The money paid pursuant to Order 3 above, in part payment of Orders 1 to 33 made by the Federal Magistrates Court on 18 February 2013, be disbursed by the respondent to the former employees of the company named in the Schedule to these orders, such payments to be made in the amounts specified in column 5 therein.
5. Payment to the former employees referred to in Order 4 above be made within 90 days of the date of this order.
6. If at the expiration of the 90 day period provided in Order 5 above, the respondent is unable to locate any former employee named in the Schedule to make payment in accordance with Orders 4 and 5 above, any amount owed to the former employee is to remain in the Consolidated Revenue Fund of the Commonwealth as unclaimed moneys pursuant to s 726 of the Workplace Relations Act 1996 (Cth) and s 559(1) of the Fair Work Act 2009 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The appellant seeks an order that the money paid into Court be disbursed to her. The respondent seeks an order that this money be released to the Commonwealth subject to a requirement that it be disbursed, on a proportionate basis, to the employees who have been underpaid, as set out in a schedule provided to the Court.Consideration To understand the basis on which the appellant seeks an order that the money be paid to her, it is necessary to descend to some more detail concerning the circumstances in which the payment came to be made on 19 April 2013. In my reasons for making the orders on 11 April 2013 (Quincolli Pty Ltd v Fair Work Ombudsman [2013] FCA 321) (my earlier reasons), I made certain findings about the financial position of the company (there referred to as the first appellant) and the involvement of the appellant (there referred to as the second appellant) with the company. At [13]-[14], I said: 13 The appellants say that they are unable to pay the penalties and, in the case of the first appellant, the sums ordered to be paid to employees at the Nowra Call Centre. The appellants say that, if no stay is granted, and the first appellant is required to pay the sums as ordered, as well as the penalties imposed on it, liquidation will be its only course. 14Some evidence has been adduced of the respective financial positions of the appellants. As I will come to explain, the evidence of the second appellant’s financial position is, to say the least, scant. I will deal, firstly, with the first appellant’s financial position, as revealed by the evidence, and then turn to consider the second appellant’s financial position. At [15]-[16], I found: 15It emerged in the course of the second appellant’s evidence in the proceeding before the Federal Magistrates Court that, on 5 March 2011, the employment of the employees at the Nowra Call Centre was transferred to a company called Browns Road Pty Limited. Both the first appellant and Browns Road Pty Limited are companies controlled by the second appellant and her husband, Norman Charles Potter. In her affidavit read in this application, the second appellant said that the first appellant’s “physical assets” – being some call centre stations, desks, chairs, telephones and headsets – were purchased by “Well Done Contact Centres” which, I infer, is the name of a business which now conducts the Nowra Call Centre. 16The second appellant’s affidavit includes a copy of the first appellant’s 2012 tax return and an accountant’s declaration made on 28 March 2013 showing the first appellant’s current financial position. This material records that the first appellant has total current assets of $20,762 and total debts of $69,810, said to be derived wholly from shareholders’ loans. I note that the second appellant and Mr Potter are recorded as the first appellant’s only shareholders. The first appellant’s current year loss is $7,064. The first appellant’s 2012 tax return reports that it had total income for the relevant year of $2,829 and total expenses of $8,286. It thus reports a loss of $5,457. The second appellant’s affidavit makes clear that the first appellant’s only present asset is the sum of $20,762 comprising funds in a bank account. There is no evidence that the first appellant is currently trading and, from the available evidence, I infer that it is not trading, has not traded for some time, has no intention of trading and has no capacity to trade absent some support from the second appellant and Mr Potter.