Roberts v A1 Scaffold Group Pty Ltd
[2015] FCCA 422
•27 February 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ROBERTS v A1 SCAFFOLD GROUP PTY LTD & ORS | [2015] FCCA 422 |
| Catchwords: INDUSTRIAL LAW – Application in a Case for default judgment – alleged contraventions of Fair Work Act 2009 (Cth) – default judgment made. |
| Legislation: Fair Work Act 2009 (Cth), ss.45, 311, 340, 341, 343, 345, 346, 347, 348, 536, 539, 545, 550, Workplace Relations Act 1996 (Cth), ss.719, 728, 836 |
| Fair Work Ombudsman v Tsurc Pty Ltd & Anor [2014] FCCA 2472 Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 Luna Park Sydney Pty Limited (ACN 102 907 184) v Bose [2006] FCA 94 Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615 Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 Devonshire v Magella Powertronics Pty Ltd [2013] FMCA 207; (2013) 275 FLR 273 Torpia v Empire Printing (Australia) Pty Ltd & Anor [2009] FMCA 853; (2009) 234 FLR 103; Buckingham v KSN Engineering[2008] FMCA 546; (2008) 177 ILR 427 Cotis v Oggy Pty Ltd & Ors [2009] FMCA 21 |
| Applicant: | JOHN THOMAS ROBERTS |
| First Respondent: | A1 SCAFFOLD GROUP PTY LTD |
| Second Respondent: | CHRISTOPHER JAMES DUNSTAN |
| Third Respondent: | JAMES ANTHONY DUNSTAN |
| Fourth Respondent: | ADAM DUNSTAN |
| Fifth Respondent | MAURICE SHIELDS BELL (DISCONTINUED) |
| Sixth Respondent: | DAVID MOORE |
| File Number: | SYG 3047 of 2013 |
| Judgment of: | Judge Nicholls |
| Hearing date: | 19 November 2014 |
| Date of Last Submission: | 19 November 2014 |
| Delivered at: | Sydney |
| Delivered on: | 27 February 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr I Latham |
| Solicitors for the Applicant: | Construction, Forestry, Mining and Energy Union |
| Respondents: | First, Second and Third Respondents In person No Appearance for the Fourth and Sixth Respondents |
THE COURT DECLARES THAT:
The sixth respondent is in default of the Orders of 12 March 2014 requiring that the sixth respondent file and serve evidence and submissions in reply to the applicant’s evidence and submissions by 16 May 2014.
The first, second, third and fourth respondents are in default of the Orders of 16 April 2014 requiring that the first, second, third and fourth respondents file and serve all affidavits relied upon on or before 18 August 2014.
THE COURT ORDERS THAT:
Default judgment be entered for the applicant against the first, second, third, fourth, and sixth respondents pursuant to Rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3047 of 2013
| JOHN THOMAS ROBERTS |
Applicant
And
| A1 SCAFFOLD GROUP PTY LTD |
First Respondent
| CHRISTOPHER JAMES DUNSTAN |
Second Respondent
| JAMES ANTHONY DUNSTAN |
Third Respondent
| ADAM DUNSTAN |
Fourth Respondent
| MAURICE SHIELDS BELL (DISCONTINUED) |
Fifth Respondent
| DAVID MOORE |
Sixth Respondent
REASONS FOR JUDGMENT
John Thomas Roberts (“the applicant”) made an application on 9 December 2013 under the Fair Work Act 2009 (Cth) (“the FWA”) alleging dismissal in contravention of a general protection by A1 Scaffold Group Pty Ltd (“the first respondent”), Mr Christopher James Dunstan (“the second respondent”), Mr James Anthony Dunstan (“the third respondent”), Mr Adam Dunstan (“the fourth respondent”), Mr Maurice Shields Bell (“the fifth respondent”) and Mr David Moore (“the sixth respondent”).
The asserted factual background (see further below) begins prior to the enactment of the FWA. In these circumstances, the applicant has alleged contraventions of the now superseded Workplace Relations Act 1996 (Cth) (“the Workplace Relations Act”).
Before the Court
This application first came before the Court at a first Court date on 5 February 2014. The first and second respondent were legally represented and their representative appeared at that time. Subsequently, the legal representative filed a notice of withdrawal on 1 May 2014.
The third and fourth respondent attended, subsequently, at directions on 12 March 2014 and 16 April 2014. The fifth and sixth respondents have not appeared before the Court.
At the directions listing on 17 September 2014, following the expiry of the procedural orders for the filing of evidence, there was no appearance by, or for, any of the respondents. None of the respondents had complied with the orders by the Court for the filing of evidence. The applicant filed an Application in a Case (on 16 September 2014) seeking default judgment against the first, second, third, fourth and sixth respondent due to their claimed default under r.13.03B(2) of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”).
The applicant discontinued the application against the fifth respondent on 10 November 2014, following the publication of an obituary in the Sydney Morning Herald on 17 September 2014, revealing that the fifth respondent had died on 13 September 2014. The applicant sought no orders against the fifth respondent.
At the hearing of the Application in a Case on 19 November 2014 the second respondent appeared in person, and on behalf of, and as director of, the first respondent. The third respondent appeared in person. There was no appearance by, or for, the fourth and sixth respondents.
Relevant Legislation
Rule 13.03A of the FCC Rules is in the following terms:
“13.03A When a party is in default
(1) For rule 13.03B, an applicant is in default if the applicant fails to:
(a) comply with an order of the Court in the proceeding; or
(b) file and serve a document required under these Rules; or
(c) produce a document as required by Part 14; or
(d) do any act required to be done by these Rules; or
(e) prosecute the proceeding with due diligence.
(2) For rule 13.03B, 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
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.”
Rule 13.03B of the FCC Rules is in the following terms:
“13.03B Orders on default
(1) If an applicant is in default, the Court may order that:
(a) the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or
(b) a step in the proceeding be taken within the time limited in the order; or
(c) if the applicant does not take a step in the time mentioned in paragraph (b)—the proceeding be stayed or dismissed, as to the whole or any part of the relief claimed by the applicant.
(2) If a respondent is in default, the Court may:
(a) order that a step in the proceeding be taken within the time limited in the order; or
(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 commenced 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
(e) make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.
(3) The Registrar must enter judgment for the debt or liquidated damages, costs and interest against the respondent as specified in leave granted under paragraph (2)(b), without giving notice, or further notice, to the respondent, if the applicant has filed in the Registry:
(a) an affidavit, or affidavits, proving:
(i) service of the application claiming judgment for the debt or liquidated damages; and
(ii) that the respondent is in default; and
(b) an affidavit for the debt or liquidated damages in accordance with the approved form.
(4) Unless the Court otherwise orders, if a respondent to a cross‑claim is in default:
(a) a judgment or decision on any claim, question or issue in the proceeding on the originating process; or
(b) any other cross‑claim in the proceeding;
is binding as between the cross‑claimant and the respondent to the cross‑claim, to the extent that the judgment or decision is relevant to any claim, question or issue in the proceeding on the cross‑claim.
(5) In subrule (4):
decision includes a decision by consent.
judgment includes a judgment by default or by consent.
(6) The Court may make an order of the kind mentioned in subrule (1), (2) or (4), or any other order, or may give any directions, and specify any consequences for non‑compliance with the order, that the Court thinks just.”
Rule 13.03A of the FCC Rules relevantly defines when a respondent is in default:
“13.03A When a party is in default
…
(2) For rule 13.03B, 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
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.”
Section 340 of the FWA is in the following terms:
“340 Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
(2) A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.”
Section 341 of the FWA defines a “workplace right”:
“341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee—in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2) Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a) a conference conducted or hearing held by the FWC;
(b) court proceedings under a workplace law or workplace instrument;
(c) protected industrial action;
(d) a protected action ballot;
(e) making, varying or terminating an enterprise agreement;
(f) appointing, or terminating the appointment of, a bargaining representative;
(g) making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;
(h) agreeing to cash out paid annual leave or paid personal/carer’s leave;
(i) making a request under Division 4 of Part 2‑2 (which deals with requests for flexible working arrangements);
(j) dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;
(k) any other process or proceedings under a workplace law or workplace instrument.
Prospective employees taken to have workplace rights
(3) A prospective employee is taken to have the workplace rights he or she would have if he or she were employed in the prospective employment by the prospective employer.
Exceptions relating to prospective employees
(4) Despite subsection (3), a prospective employer does not contravene subsection 340(1) if the prospective employer makes an offer of employment conditional on the prospective employee accepting a guarantee of annual earnings.
(5) Despite paragraph (1)(a), a prospective employer does not contravene subsection 340(1) if the prospective employer refuses to employ a prospective employee because the prospective employee would be entitled to the benefit of Part 2‑8 or 6‑3A (which deal with transfer of business).”
Section 343 of the FWA is in the following terms:
“343 Coercion
(1) A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:
(a) exercise or not exercise, or propose to exercise or not exercise, a workplace right; or
(b) exercise, or propose to exercise, a workplace right in a particular way.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2) Subsection (1) does not apply to protected industrial action.”
Section 345 of the FWA is in the following terms:
“345 Misrepresentations
(1) A person must not knowingly or recklessly make a false or misleading representation about:
(a) the workplace rights of another person; or
(b) the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.”
Section 346 of the FWA is in the following terms:
“346 Protection
A person must not take adverse action against another person because the other person:
(a) is or is not, or was or was not, an officer or member of an industrial association; or
(b) engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or
(c) does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g).”
“Engages in industrial activity” is defined at s.347 of the FWA as follows:
“347 Meaning of engages in industrial activity
A person engages in industrial activity if the person:
(a) becomes or does not become, or remains or ceases to be, an officer or member of an industrial association; or
(b) does, or does not:
(i) become involved in establishing an industrial association; or
(ii) organise or promote a lawful activity for, or on behalf of, an industrial association; or
(iii) encourage, or participate in, a lawful activity organised or promoted by an industrial association; or
(iv) comply with a lawful request made by, or requirement of, an industrial association; or
(v) represent or advance the views, claims or interests of an industrial association; or
(vi) pay a fee (however described) to an industrial association, or to someone in lieu of an industrial association; or
(vii) seek to be represented by an industrial association; or
(c) organises or promotes an unlawful activity for, or on behalf of, an industrial association; or
(d) encourages, or participates in, an unlawful activity organised or promoted by an industrial association; or
(e) complies with an unlawful request made by, or requirement of, an industrial association; or
(f) takes part in industrial action; or
(g) makes a payment:
(i) that, because of Division 9 of Part 3‑3 (which deals with payments relating to periods of industrial action), an employer must not pay; or
(ii) to which an employee is not entitled because of that Division.”
Section 348 of the FWA is in the following terms:
“348 Coercion
A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.
Note: This section is a civil remedy provision (see Part 4‑1).”
Section 536 of the FWA is, relevantly, in the following terms:
“536 Employer obligations in relation to pay slips
(1) An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Note 1: This subsection is a civil remedy provision (see Part 4‑1).
Note 2: Section 80 of the Paid Parental Leave Act 2010 requires an employer to give information to an employee to whom the employer pays an instalment under that Act.”
Sections 545 and 550 of the FWA are in the following, relevant, terms:
“545 Orders that can be made by particular courts
Federal Court and Federal Circuit Court
(1) The Federal Court or the Federal Circuit Court 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.
Note 1: For the court’s power to make pecuniary penalty orders, see section 546.
Note 2: For limitations on orders in relation to costs, see section 570.
Note 3: The Federal Court and the Federal Circuit Court may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).
Note 4: There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).
…
When orders may be made
(4) A court may make an order under this section:
(a) on its own initiative, during proceedings before the court; or
(b) on application.
Time limit for orders in relation to underpayments
(5) A court must not make an order under this section in relation to an underpayment that relates to a period that is more than 6 years before the proceedings concerned commenced.
…
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.”
Section 311 of the FWA is in the following relevant terms:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
…
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.”
Section 836 of the Workplace Relations Act is in the following terms:
“836 Records relating to employees
(1) The regulations may make provision in relation to:
(a) the making and retention by employers of records relating to the employment of employees; and
(b) the inspection of such records.
(2) The regulations may require employers of employees to issue pay slips to those employees at such times, and containing such particulars, as are prescribed.”
Section 719 of the Workplace Relations Act is in the following relevant terms:
“719 Imposition and recovery of penalties
(1) An eligible court may impose a penalty in accordance with this Division on a person if:
(a) the person is bound by an applicable provision; and
(b) the person breaches the provision.
…
(6) Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision (except a term of an ITEA), the court may order the employer to pay to the employee the amount of the underpayment.”
Section 728 of the Workplace Relations Act is in the following terms:
“728 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 treated as having contravened that provision.
(2) For this purpose, 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.”
Evidence Before the Court
The evidence before the Court from the applicant was as follows:
1)The affidavit of John Thomas Roberts affirmed on 15 April 2014 (“the Roberts affidavit”).
2)The affidavit of Pamela Lesley Rodney sworn on 14 April 2014, including Exhibits PR1 – PR9 as referred to in the affidavit (“the Rodney affidavit”).
3)The affidavit of Darren John Greenfield affirmed on 10 April 2014 (“the Greenfield affidavit”).
Also before the Court were a number of affidavits of service filed by the applicant in respect of each respondent, in relation to each Court event. I am satisfied that, on the affidavits of service affirmed by Ms Sherri Lee Hayward on 16 September and 19 September 2014, the fourth and sixth respondents were cognisant of the Court event on 19 November 2014. I was satisfied that each of the following respondents were served with the originating application as follows:
1)A1 Scaffold Group was served by prepaid post by David Andrew Holmes, Legal Assistant, on 9 December 2013 (see affidavit of service affirmed on 17 December 2013).
2)Christopher Dunstan was served by hand by Joseph Khoury, Licensed Commercial Agent, on 14 January 2014 (see affidavit of service affirmed on 28 January 2014).
3)James Dunstan was served by hand by Joseph Khoury, Licensed Commercial Agent, on 10 January 2014 (see affidavit of service affirmed on 28 January 2014).
4)Adam Dunstan was served by hand by Joseph Khoury, Licensed Commercial Agent, on 14 January 2014 (see affidavit of service affirmed on 28 January 2014).
5)David Moore was served by hand by Joseph Khoury, Licensed Commercial Agent, on 12 January 2014 (see affidavit of service affirmed on 28 January 2014).
I am satisfied that each of the following respondents were served with the notice of the hearing of the Application in a Case as follows:
1)A1 Scaffold Group was served the Application in a Case by express post by Sherri Lee Hayward, Industrial Officer, on 16 September 2014 (see affidavit of service affirmed on 16 September 2014). A1 Scaffold Group was served the Orders made by the Court 17 September 2014 by express post by Sherri Lee Hayward, Industrial Officer, on 19 September 2014 (see affidavit of service affirmed on 19 September 2014).
2)Christopher James Dunstan was served by express post by Sherri Lee Hayward, Industrial Officer, on 16 September 2014 (see affidavit of service affirmed on 16 September 2014). Christopher James Dunstan was served the Orders made by the Court 17 September 2014 by express post by Sherri Lee Hayward, Industrial Officer, on 19 September 2014 (see affidavit of service affirmed on 19 September 2014).
3)James Anthony Dunstan was served by express post by Sherri Lee Hayward, Industrial Officer, on 16 September 2014 (see affidavit of service affirmed on 16 September 2014). James Anthony Dunstan was served the Orders made by the Court 17 September 2014 by express post by Sherri Lee Hayward, Industrial Officer, on 19 September 2014 (see affidavit of service affirmed on 19 September 2014).
4)Adam Dunstan was served by express post by Sherri Lee Hayward, Industrial Officer, on 16 September 2014 (see affidavit of service affirmed on 16 September 2014). Adam Dunstan was served the Orders made by the Court 17 September 2014 by express post by Sherri Lee Hayward, Industrial Officer, on 19 September 2014 (see affidavit of service affirmed on 19 September 2014).
5)David Moore was served by express post by Sherri Lee Hayward, Industrial Officer, on 16 September 2014 (see affidavit of service affirmed on 16 September 2014). David Moore was served the Orders made by the Court 17 September 2014 by express post by Sherri Lee Hayward, Industrial Officer, on 19 September 2014 (see affidavit of service affirmed on 19 September 2014).
[I note that evidence as to the service of the documents was also heard orally in Court at the hearing of the Application in a Case from Ms Leah Charlson, solicitor for the applicant.]
Background
The following background is a summary of the facts as alleged in the affidavits filed by the applicant and the written submissions in support of the Application in a Case.
The applicant has worked in the building and construction industry since approximately 1972 and has been a member of the Construction, Forestry, Mining and Energy Union (“the CFMEU”) since 1993.
He commenced work as a scaffolder with the business entity “A1 Scaffolding Pty Ltd” in 2005 following an employment offer from the fifth respondent. The third, fifth and sixth respondents were directors of this company. The applicant was continuously employed on a permanent and full time basis from June 2005 to 17 May 2013 by the following entities:
1)A1 Scaffolding Pty Ltd
2)A1 Scaffolding (NSW) Pty Ltd
3)A1 Scaffold Pty Ltd
4)A1 Scaffold Group Pty Ltd – the first respondent.
Each of these entities performed scaffolding work. The current state of the entities is as follows (the table is as found in the applicant’s submissions at [19]):
| Name of company | Dates between which company was registered | Dates between which company employed the applicant | Directors/ former directors | Secretary/ former secretary | Shareholders/ former shareholders | Current Status |
| A1 Scaffolding Pty Ltd | 22/12/03 to 5/3/07 | ~ June 2005 to November 2005 | James Dunstan, David Moore, Maurice Bell | James Dunstan | Titanium Nominees Pty Ltd | Deregistered |
| A1 Scaffolding (NSW) Pty Ltd | 21/10/05 to 22/9/11 | November 2005 to December 2008 | James Dunstan, David Moore, Maurice Bell | David Moore | Titanium Nominees Pty Ltd | Deregistered |
| A1 Scaffold Pty Ltd | 28/11/09 to present | December 2008 to 30/11/12 | Adam Dunstan | Adam Dunstan, formerly Maurice Bell | Maurice Bell | In Liquidation |
| A1 Scaffold Group Pty Ltd | 23/11/2012 to present | 1/12/12 to 17/5/13 | Christopher Dunstan | Christopher Dunstan | Christopher Dunstan | Registered |
Throughout the applicant’s employment he performed scaffolding work under the direction of, initially, the third, fifth and sixth respondents, and subsequently, the second, third, and fifth respondents.
The following from the applicant’s submissions in support of his Application in a Case is relevant (see [22] – [27], see also the Roberts affidavit at [34] to [51]):
“[22] On 11 November 2005, an administrator was appointed to A1 Scaffolding Pty Ltd. The assets and employees of A1 Scaffolding Pty Ltd, including the Applicant, were transferred to A1 Scaffolding (NSW) Pty Ltd. A1 Scaffolding Pty Ltd was deregistered on 5 March 2007. The Applicant continued in employment in the business, employed by A1 Scaffolding (NSW) Pty Ltd, the directors of which were James Dunstan, Maurice Bell and David Moore. James Dunstan represented to the Applicant that the ‘old company’ by which he was employed had ‘changed over’ to A1 Scaffolding (NSW).
[23] On 11 December 2008, an administrator was appointed to A1 Scaffolding (NSW) Pty Ltd. James Dunstan, Maurice Bell and David Moore were disqualified from managing corporations as a result of issues arising from the liquidation of A1 Scaffolding Pty Ltd and A1 Scaffolding (NSW) Pty Ltd. A1 Scaffolding (NSW) Pty Ltd was deregistered on 22 September 2011.
[24] The assets and employees of A1 Scaffolding (NSW) Pty Ltd, including the Applicant, were transferred to A1 Scaffold Pty Ltd immediately prior to the appointment of the liquidator. Part or all of the business was transmitted from A1 Scaffolding (NSW) Pty Ltd to A1 Scaffold Pty Ltd. The Applicant continued in employment in the business, employed by A1 Scaffold Pty Ltd, the director of which was the Fourth Respondent, Adam Dunstan, and the sole shareholder of which was Maurice Bell. Either Maurice Bell or David Moore represented to the Applicant that ‘the company’ had been ‘changed’ and was ‘operating under a different name’.
[25] David Moore left the business in approximately October 2012.
[26] In approximately December 2012, Christopher Dunstan held a meeting of the employees of the business. This meeting was also attended by Michael Quinn, a solicitor; and Christopher Dunstan; Maurice Bell; James Dunstan; and Adam Dunstan. Christopher Dunstan said at this meeting words to the effect:
Christopher Dunstan: [The company is starting up again under A1 Group.]
The Applicant at this meeting said words to the effect:
John Roberts: ‘What about our holidays?’
Christopher Dunstan said words to the effect:
Christopher Dunstan: ‘I am taking the company over and you will lose your holidays.’
[27] In or about December 2012, a transfer of business occurred from A1 Scaffold Pty Ltd to A1 Scaffold Group Pty Ltd. The sole director, secretary and shareholder of A1 Scaffold Group Pty Ltd is Christopher Dunstan. Assets and employees of A1 Scaffolding (NSW) Pty Ltd, including the Applicant, were transferred to A1 Scaffold Pty Ltd immediately prior to the appointment of the liquidator. The Applicant continued in employment in the business, employed by A1 Scaffold Group Pty Ltd…”
The applicant alleges that neither following the transfer in December 2012, nor, prior to that transfer were accrued entitlements such as annual leave, and long service leave, paid out to the applicant. Nor were they transferred to the applicant by the “new” entity.
In approximately April 2013 the second respondent required the applicant to sign “letters of offer of employment” dated 1 December 2012. The applicant refused to sign the letter due to “discrepancies” in the letter and the offer made to the applicant.
In May 2013 the applicant made an inquiry with the CFMEU in relation to the letter of offer (see the Greenfield affidavit at [5]). Following the CFMEU’s recommendation that the applicant not sign the letter, he spoke with the other employees of the first respondent and conveyed this information. Further, the applicant distributed CFMEU membership application forms.
Shortly after this the second and fifth respondent confronted the applicant about his interaction with the CFMEU. The applicant attended a meeting on 17 May 2013 where his employment with the first respondent was terminated.
The applicant alleges that this termination of his employment was “adverse action”, taken because he exercised a workplace right and engaged in industrial activity (see the Greenfield affidavit at [7]).
Further, the applicant alleges that he was not provided with payslips prior to December 2012.
The applicant also alleges that he was underpaid during his employment in relation to the Building and Construction Industry (State) Award NAPSA prior to 1 January 2010, and the Building and Construction General On-site Award 2010 following that date. The underpayments owed to the applicant are quantified in the affidavit of Ms Rodney (see at [10] – [54]).
Principles of Default Judgment
As the applicant submitted, in the circumstances of this case, the Court is able to make orders pursuant to r.13.03B(2)(c) of the FCC Rules. For such a default judgment to be made two elements must be met:
1)The applicant appears entitled to the claim for relief sought on the application.
2)The Court is satisfied that on what is before it, it is within its powers to grant the relief sought.
As I stated in Fair Work Ombudsman v Tsurc Pty Ltd & Anor [2014] FCCA 2472, there is no requirement of proof by way of evidence for item one above (Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3], Luna Park Sydney Pty Limtied (ACN 102 907 184) v Bose [2006] FCA 94 at [20], Tyco (Australia) Pty Ltd t/as ADT Security v Signature Security Group Pty Ltd (No 7) [2011] FCA 615 at [5] and Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352). [I note that these authorities related to the now repealed Order 35A of the Federal Court Rules 1979 (Cth), however that rule was in identical terms to r.13.03B(2)(c) of the Rules.]
In the circumstances of this case, the circumstances in which a respondent can be said to be in default are as set out at r.13.03A(2) of the FCC Rules (see [8] above).
The applicant relied on the following FCC Rules to establish default on the part of each respondent:
1)The sixth respondent is in default of the Orders made by the Court on 12 March 2014, which required the sixth respondent to file and serve his evidence in reply and written submissions by 16 May 2014. No evidence or submissions were filed. Therefore, the applicant submitted that the sixth respondent was in default as prescribed by r.13.03A(2)(b)(iii) of the FCC Rules.
2)The first, second, third and fourth respondents are in default of the Orders made by the Court on 16 April 2014, which required each of these respondents to file and serve their evidence by way of affidavit on or before 18 August 2014. No evidence by way of affidavits were filed. Therefore, the applicant submitted that the first, second, third and fourth respondents were also in default as prescribed by r.13.03A(2)(b)(iii) of the FCC Rules.
I agree with the applicant, and find that the first, second, third, fourth and sixth respondents are in default in the ways explained above. The sixth respondent has not engaged with the Court in these proceedings either by filing a notice of address for service or otherwise complied with the Orders made by the Court. I find that he is in default as explained above. Further, the sixth respondent, who on the evidence, and with reference to the list of filings in this matter, has done nothing to defend the proceedings, is in default pursuant to r.13.03A(2)(b)(vii) of the FCC Rules. The first, second, third and fourth respondents have not complied with the Orders made by the Court in relation to evidence. I find that they are all in default in this regard.
As set out above the first, second and third respondent appeared at the hearing of the applicant’s Application in a Case. While various submissions were made, no satisfactory explanation was provided for the failure to comply with the Court orders, or to seek any extension of time. While a number of other events in their respective affairs may have diverted their attention, or competed for their time, none of these amounted to a satisfactory explanation for the particular default as alleged by the applicant.
As also set out above, the fourth and sixth respondents did not appear at the hearing of the applicant’s Application in a Case. Therefore, no explanation whatsoever was provided by them for the default, as alleged by the applicant. Nor was any attempt made by them to otherwise put any satisfactory explanation to the Court made by them.
Entitlement to Relief
In relation to the question of the appearance of entitlement to the relief sought, the applicant, in summary, has three claims:
1)The “adverse action” claim.
2)The “payslip” claim.
3)The “underpayment” claim.
The Adverse Action Claim
In relation to the adverse action claim, the applicant submitted that the adverse action that was allegedly taken against the applicant was due to his exercise of a workplace right. The relevant definitions of the protection (s.340 and s.346 of the FWA) and a workplace right (s.341 of the FWA) are outlined above. The applicant submitted that the first and second respondents took the adverse action, the termination of his employment, against the applicant for reasons including his assertion of a workplace right and his engagement in industrial activity. Further, that the first and second respondent contravened s.343, and s.348, of the FWA, due to conduct against the applicant, “threatening to shut down the business” if the letters of offer were not signed, and for the applicant making an enquiry with the CFMEU.
Further, the applicant submitted that the first and second respondent contravened s.345 of the FWA by misrepresenting to the applicant that he would “lose” his accrued annual leave entitlements.
I am satisfied with reference to the affidavit of Mr Roberts and the applicant’s submissions, that the applicant has made out a prima facie case for the relief sought. I will make the declarations sought by the applicant against the first and second respondent.
The first and second respondent are to compensate the applicant pursuant to ss.545 and 550 of the FWA an amount equivalent to the applicant’s wages, as determined at the date of termination, from the date of termination until the date of summary judgment in this matter, plus interest pursuant to r.26.01 of the FCC Rules.
The Payslip Claim
In relation to the payslip claim, as outlined above, s.536(1) of the FWA requires an employer to provide a payslip to each of its employees within one working day of payment of an amount to the employee for work performed. The maximum penalty under s.539 of the FWA is 30 penalty units. A penalty unit is currently $170.
With reference to the period of employment prior to the enactment of the FWA, the Workplace Relations Act contained a similar requirement, as outlined above. At the relevant time, the maximum penalty for individuals was 5 penalty units and for body corporates was 25 penalty units, a penalty unit was $110.
I am satisfied that the applicant has made out a prima facie case for the relief sought in this regard. I will make the declarations sought by the applicant against the third, fourth and sixth respondents.
The Underpayment Issue
In relation to the underpayment issue, the applicant submitted that the respondents had not provided any response to argue that the underpayment, as alleged, did not occur. On the evidence before the Court, not challenged by the respondents, I find that the underpayments did occur, as alleged. The primary issue was whether the underpayments could be retrieved from persons other than the company responsible for underpayments.
The applicant submitted that although the entities “changed” over the time of the applicant’s employment (applicant’s written submissions at [44]):
“This case is a classic case of a phoenixing arrangement. A phoenix arrangement is
named after the mythical bird that would arise rejuvenated from the funeral pyre. The Australian Securities and Investments Commission defines “phoenix” activities as those where an incorporated entity:
• fails and is unable to pay its debts; and/or
• acts in a manner which intentionally denies unsecured creditors equal access to the entity’s assets
in order to meet unpaid debts; and
• within 12 months, another business commences which may use some or all of the assets of the
former business, and is controlled by parties related to either the management or directors of the previous entity.”
[Footnotes omitted.]
The applicant submitted that, while debts due by a “collapsed” company are generally unenforceable, the Workplaces Relations Act, and the FW Act, allow for liabilities to be “sheeted” home to “accessories” in some circumstances.
The applicant referred to Devonshire v Magella Powertronics Pty Ltd [2013] FMCA 207; (2013) 275 FLR 273 at [85] per Judge Lucev:
“Under a provision which provides for accessorial liability for breach of civil remedy provisions action may be taken against accessories without taking action against the principal: Australian Competition and Consumer Commission v Black on White Pty Ltd & Ors [2001] FCA 187; (2001) 110 FCR 1 at 14 per Spender J; [2001] FCA 187 at para.51 per Spender J. An action may continue against an accessory when discontinued against a principal: Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853; (2009) 188 IR 306 at 319 per Barnes FM; [2009] FMCA 853 at para.65 per Barnes FM. An accessory may also be liable where a company has been deregistered: Fair Work Ombudsman v Proplas Industries Pty Ltd & Anor and Fair Work Ombudsman v Blacklight Investments Pty Ltd & Anor [2011] FMCA 506 at paras.21-26 per Lucev FM…”
The applicant also referred to Judge Barnes in Torpia v Empire Printing (Australia) Pty Ltd & Anor [2009] FMCA 853; (2009) 234 FLR 103 at [69], with reference to the Workplace Relations Act:
“…The fact that s.728 provides for accessorial liability for a ‘contravention of a civil liability provision’ does not mean that a liability to pay the amount of an underpayment can be imposed on an accessory under s.719(6), which refers not to the person who breaches or contravenes a provision, but to the employer. I am not satisfied that an order to pay the amount of the underpayment can be made under s.719(6) against a person other than ‘the employer’. Section 719 does not contain a provision such as s.665(1)(d) under which compensatory orders may be made against a person other than the employer.”
Further, the applicant submitted that the legal test for sheeting liability to an accessory was summarised in Buckingham v KSN Engineering [2008] FMCA 546; (2008) 177 ILR 427 at [40] – [44] per Judge Lucev:
“[40] The nature of s.728 of the WR Act, and its similarity to s.75B of the Trade Practices Act 1974 (Cth) was discussed in Dowling v Kirk and 16 Ors where the requirements for liability were summarised as follows:
‘What these authorities show is that in order for a person to have accessorial liability under s.728(2) of the Act he or she
• must have knowledge of the essential facts constituting the contravention;
• must be knowingly concerned in the contravention;
• must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient under paragraph (c) in cases of wilful blindness; and
• need not know that the matters in question constituted a contravention.’
[41] In Giorgianni v The Queen the High Court was dealing with an appeal involving s.351 of the Crimes Act 1900 (NSW) which provided that:
‘Any person who aids, abets, counsels, or procures, the commission of any misdemeanour…may be indicted, convicted and punished as a principal offender.’
[42] In relation to the question of the knowledge required to be convicted of aiding, abetting, counselling or procuring the commission of an offence the High Court said that ‘actual knowledge…must be proved and not knowledge which is imputed or presumed.’ The High Court also said that:
‘Those offences require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law…he need not recognise the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constituted it. It is not sufficient if his knowledge or belief extends only to the possibility or even probability that the acts which he is assisting or encouraging are such, whether he realises it or not, as to constitute the factual ingredients of a crime…intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts.’
[43] The majority in Giorgianni went on to point out that:
‘The shutting of one’s eyes to the obvious is not, however, an alternative to the actual knowledge which is required as the basis of an attempt to aid, abet, counsel or procure.’
[44] In the context of ancillary liability under s.75B of the [Trade Practices Act] the principle has been crystallised as follows:
‘In particular, there will be no liability unless it is established that the alleged wrongdoer had actual knowledge of the essential elements of the primary contravention. Wilful blindness may be equivalent to actual knowledge.’”
The applicant submitted, on the authorities cited, that it was now clear that when a company acts through a particular person, then that person must be, in the absence of contrary evidence which was the case here, accessorily liable (with reference to Cotis v Oggy Pty Ltd & Ors [2009] FMCA 21 at [66] – [67]).
On the evidence presented, I am satisfied that the applicant has made out a prima facie case that the corporate respondent acted through all the “personal” respondents at various times.
I will make the declarations that the applicant seeks against the first, second, third, fourth and sixth respondents, in relation to the underpayments, and their involvement in the failure of the previous entities (see [19] above).
The first, second, third, fourth and sixth respondents are to compensate the applicant:
1)pursuant to s.45 of the FW Act by paying him his underpaid “fares and travel patterns allowance”, “transfer during work hours”, accrued annual leave, annual leave loading, redundancy, “rostered days off” and superannuation, pursuant to the Building and Construction General Onsite Award 2010 and the Building and Construction Industry (State Award) NAPSA, as appropriate, plus interest, pursuant to r.26.01 of the FCC Rules;
2)pursuant to the Long Service Leave Act 1955 (NSW), by paying him his underpaid long service leave entitlement plus interest, pursuant to r.26.01 of the FCC Rules.
Conclusion
I find that each of the first, second, third, fourth and sixth respondents were in default pursuant to r.13.03A(2) of the FCC Rules.
Pursuant to r.13.03B(2)(c) of the FCC Rules, I find that the proceedings were commenced by an application supported by a statement of claim. Further, that the applicant appears entitled to the relief claimed and further, I am satisfied that that Court has the power to grant the relief the applicant seeks.
The relief sought is in the nature of the 301 orders sought by the applicant as against, variously, the first, second, third, fourth and sixth respondents. Not all are appropriate to be made at this time, if at all. In relation to “penalties”, that issue remains outstanding.
In order to clarify orders the applicant now seeks, leave is granted to the applicant to, within 28 days of the date of this judgment, file and serve a draft short minutes of orders and declarations, drawn from the schedule of 301 orders, which he proposes, and which is consistent with the findings made above in this summary judgment application.
The matter should now otherwise proceed to a hearing of the applicant’s application of the imposition of any appropriate penalty or penalties.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Associate:
Date: 27 February 2015
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