Tsang v Mediatronic International Pty Ltd
[2021] FedCFamC2G 120
•8 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Tsang v Mediatronic International Pty Ltd [2021] FedCFamC2G 120
File number(s): SYG 849 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 8 October 2021 Catchwords: PRACTICE AND PROCEDURE – INDUSTRIAL LAW – application for default judgment including the imposition of pecuniary penalties based on alleged contraventions of s 44, s 45, and s 536 of the Fair Work Act 2009 (Cth) – whether statement of claim appears to entitle the applicant to all of the relief claimed in the statement of claim – applicant given leave to file evidence in support of matters alleged in the statement of claim and application for default judgment set down for further hearing Legislation: Fair Work Act 2009 (Cth), ss 44, 45, 87, 90, 91, 536, 545(2)(b), 550(1)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), rr 1.06, 4.04(3)(a), 13.04(2), 13.05
Federal Circuit Court Rules 2001 (Cth), r 6.14(1)
Federal Court Rules 1979 (Cth), Or 35A, r 3(2)(c)
Federal Court Rules 2011 (Cth), r 16.32
Cases cited: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427
Macquarie Bank Limited v Seagle [2005] FCA 1239
Macquarie Bank Limited vSeagle [2008] FCA 1417
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626
Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Division: Division 2 General Federal Law Number of paragraphs: 20 Date of hearing: 17 September 2021 Place: Sydney Solicitor for the Applicant: Ms A Hatton of Adams & Partners Lawyers, by telephone The Respondents: No appearance by, or on behalf of, the respondents ORDERS
SYG 849 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MICHAEL TSANG
Applicant
AND: MEDIATRONIC INTERNATIONAL PTY LTD ACN 058 806 787
First Respondent
KEIJIAN XU
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
8 OCTOBER 2021
THE COURT ORDERS THAT:
1.The application for orders under r 13.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), including orders for the payment of pecuniary penalties, be set down for further hearing at 10:15 am on 9 November 2021.
2.By 29 October 2021 the applicant file an affidavit in which he estimates the total ordinary and overtime hours the applicant worked while employed by the first respondent; and the number of days of personal leave the applicant had taken when employed by the first respondent.
3.By 29 October 2021 the applicant file an outline of submissions on the question of penalty.
4.By 15 October 2021 the applicant serve a sealed copy of these orders on the respondents in the same manner in which the applicant served the respondents with the application and statement of claim.
THE COURT NOTES THAT:
5.These are orders of the Federal Circuit and Family Court of Australia (Division 2).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review 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
INTRODUCTION
The applicant, Mr Tsang, applies under r 13.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) for default judgment against the respondents in a proceeding Mr Tsang has brought under the Fair Work Act 2009 (Cth) (FW Act).
Mr Tsang claims the first respondent (MIPL) contravened s 44, s 45, and s 536 of the FW Act by failing to pay in full entitlements to which Mr Tsang claims MIPL was liable to pay to him under the Building and Construction General On-Site Award 2010 (Award), by failing to pay entitlements that were due to Mr Tsang under s 90 and s 91 of the FW Act, and by failing to provide payslips to Mr Tsang. Mr Tsang also alleges that the second respondent, Mr Xu, was involved in MIPL’s contraventions of the FW Act. Mr Tsang claims an order for compensation and orders for the payment of pecuniary penalties.
PROCEDURAL HISTORY
Mr Tsang commenced the proceeding on 14 May 2021 by filing an application and a statement of claim. The matter was listed before me for a first court date at 9:30 am on 8 June 2021. At the first court date I listed the matter for directions on 15 June 2021 because no party appeared. At 10:18 am on 8 June 2021 the lawyer for Mr Tsang sent the following email to my associate’s inbox:
We act for Mr Michael Tsang.
This matter was listed at 09.30am this morning. Unfortunately it seems that by the time we connected via telephone to appear the matter may have already been heard. We sincerely apologise for our delay and failure to attend this listing.
We intended to appear for Mr Tsang and seek that the matter be stood over for 4 weeks so as to allow the Second Defendant, Mr Xu to be personally served. At this stage service attempts have been unsuccessful as Mr Xu has very recently moved house and we have now received further instructions to pursue other avenues of locating Mr Xu.
Mediatronic International Pty Ltd has been served at their registered address.
Please advise if the Court is willing to make these orders in chambers or whether your [sic] require us to take any further steps to facilitate the matter being stood over for the above reasons.
We look forward to hearing from you and apologise again for our lack of attendance today.
By email sent on 8 June 2021 my associate, at my direction, informed the lawyer for Mr Tsang that the directions hearing of 15 June 2021 will be vacated, and the matter relisted for directions at 9:30 am on 6 July 2021.
On 6 July 2021 I listed the matter for directions on 10 August 2021. On 9 August 2021 Mr Tsang filed an application in a case for an order for substituted service on Mr Xu. That application came before me on 10 August 2021. It was supported by an affidavit made by Mr Tsang’s lawyer, Ms Hatton, in which she deposed to the efforts that had been made to serve the application and statement of claim on Mr Xu. On 10 August 2021 I made an order under r 6.14(1) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) dispensing personal service of the application and statement of claim on Mr Xu, and an order that the application, statement of claim, and the orders I made on 10 August 2021 (Orders) be served on Mr Xu in the manner specified by the Orders. I also ordered that the matter be listed before me on 17 September 2021, either for directions, or for the purpose of Mr Tsang applying for default judgment.
On 17 September 2021 Ms Hatton informed me that the application, the statement of claim, and the Orders were served in the manner specified by the Orders, but there was no appearance by or on behalf of either MIPL or Mr Xu. Ms Hatton then applied for default judgment.
RULE 13.05 OF THE GFL RULES
Mr Tsang originally applied for default judgment under subrule 13.03B(2) of the FCC Rules. The FCC Rules have been superseded by the GFL Rules, and the equivalent rule is contained in r 13.05(2) of those rules.
Subrule 13.05(2) of the GFL Rules applies to a respondent who “is in default”. Under r 13.04(2) of the GFL Rules a respondent is in default if the respondent has not satisfied the applicant’s claim, and the respondent has failed to do one or more of the things identified in r 13.04(2)(b) of the GFL Rules. The things identified in r 13.04(2)(b) of the GFL Rules that are relevant to the application before me are the failure to give an address for service before the time for doing so has expired, the failure to file a response or defence before the time for doing so has expired, and the failure to defend the proceeding with due diligence.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r 13.05(2) of the GFL Rules. Relevant to the application before me is r 13.05(2)(c) of the GFL Rules which provides that the Court may:
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 . . .
Are the respondents in default?
I am satisfied the application and statement of claim were served on MIPL by Ms Hatton arranging to post the documents on 20 May 2021 by pre-paid post in an envelope addressed to MIPL at its registered office.[1] I am also satisfied the application, statement of claim, and the Orders were served on Mr Xu on 10 August 2021 in the manner specified by the Orders.[2] Under order 3 of the Orders, therefore, the application and statement of claim are deemed to have been served on Mr Xu on 17 August 2021.
[1] Affidavit of Service by A Hatton 14.09.2021
[2] Second affidavit of Service by A Hatton 14.09.2021
The respondents have not satisfied Mr Tsang’s claims. Nor have they filed a notice of address for service, or a defence to the statement of claim within 28 days of the date of service of the statement of claim. By not filing a notice of address for service or a defence, both MIPL and Mr Xu have failed to comply with r 4.04(3)(a) of the GFL Rules, which provides that if a statement of claim is filed, a respondent must file a defence; and, by the combined operation of r 1.06 of the GFL Rules, item 15 of Schedule 1 to those rules, and r 16.32 of the Federal Court Rules 2011 (Cth), the respondent must do so within 28 days after service of the statement of claim.[3]
[3] Under r 1.06 of the GFL Rules, the rules of the Federal Court Rules 2011 (Cth) (FC Rules) identified in Schedule 1 to the GFL Rules apply, with necessary changes, to general federal law proceedings. The FC Rules there identified include the rules of pleading.
I am therefore satisfied both MIPL and Mr Xu are in default within the meaning of r 13.05(2) of the GFL Rules.
Principles
Rules 13.04 and 13.05 of the GFL Rules were adapted from, and are substantially similar to, the rules contained in O 35A of the now repealed Federal Court Rules 1979 (Cth) (Old FC Rules); and r 13.05(2)(c) of the GFL Rules is almost identical to O 35A r 3(2)(c) of the Old FC Rules. There are a number of principles that have been formulated in relation to O 35A r (3)(2) of the Old FC Rules which apply to r 13.05 of the GFL Rules. These include the following:
(a)First, r 13.05(2)(c) of the GFL Rules “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[4]
[4] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626, at [9] (Gordon J)
(b)Second, before the Court may make an order under r 13.05(2)(c) of the GFL Rules it must be satisfied that the document, which the applicant has filed with the application, is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.
(c)Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[5]
[5] Macquarie Bank Limited v Seagle [2005] FCA 1239, at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417, at [20] (Jagot J)
(d)Fourth, although r 13.05(2)(c) of the GFL Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought. That point was made by Lord Woolf MR in Phonographic Performance Ltd v Maitra:[6]
It is clear from the terms of O19, r 7 and para 19/7/10 that judgment in default is given upon the facts pleaded in the statement of claim and that affidavit evidence to supplement or support those facts is not appropriate as the pleaded facts are deemed to be admitted. However, that cannot be rigidly applied where the judge has to exercise a discretion whether to grant the relief sought. Where an injunction is sought facts relevant to the grant of that injunction, which are not deemed to be admitted, should be brought to the attention of the judge by way of affidavit or otherwise. Further, if the judge is aware of matters relevant to the exercise of his discretion, he can seek an appropriate explanation before coming to any decision.
It has been confirmed that it is permissible on an application for an order under O 35A r 3(2)(c) of the Old FC Rules to adduce evidence relevant to relief. In Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited , Kiefel J (as her Honour then was) said:[7]
It may be accepted that some further affidavit material may be accepted by the Court in relation to the relief sought. . . . Evidence which would alter the pleaded case should not be admitted. . . .
Regard should not be had to evidence of facts which could have been, but were not, pleaded concerning the conduct of the respondents.
(e)Finally, the Court retains a discretion not to make an order under r 13.05(2)(c) of the GFL Rules even if the preconditions for making an order are satisfied.[8]
[6] Phonographic Performance Ltd v Maitra (1998) 41 IPR 225, at page 230
[7] Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427, at [50] and [51]
[8] See the authorities decided under O 35A of the Old FC Rules referred to by Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, at [20]
MR TSANG’S PLEADED CASE AND CLAIMS FOR RELIEF
The statement of claim pleads the following causes of action against MIPL:
(a)From January 2014 to around July 2019 MIPL employed Mr Tsang as a general construction worker.
(b)Mr Tsang’s employment with MIPL was covered by the Award, and he fell within the classification of “Construction Worker Level 1(d)” (CW) as provided for by schedule B to the Award.
(c)The hourly rate of pay for a CW under cl 1.1 of the Award was as follows (award minimum):
Period
Rate
01.01.2014 – 30.06.2014
$18.14
01.07.2014 – 30.06.2015
$18.69
01.07.2015 – 30.06.2016
$19.16
01.07.2016 – 30.06.2017
$19.62
01.07.2017 – 30.06.2018
$20.27
01.07.2018 – 30.06.2019
$20.98
(d)Under cl 36.2, cl 37.1, and cl 37.5 of the Award respectively, MIPL was required to pay Mr Tsang 1.5 times (Time and a Half) the award minimum for the first two hours Mr Tsang worked in excess of 38 hours for the period Monday to 12 pm Saturday; double the award minimum after such two hours (Double Time); and Double Time for hours Mr Tsang worked in excess of 38 hours a week on Saturdays after 12 pm; and Double Time for all hours Mr Tsang worked on Sundays.
(e)The Time and a Half and Double Time rates were as follows:
Period Time and a Half Double Time 01.01.2014 – 30.06.2014
$27.21
$36.20
01.07.2014 – 30.06.2015
$28.04
$37.28
01.07.2015 – 30.06.2016
$28.74
$38.32
01.07.2016 – 30.06.2017
$29.40
$39.24
01.07.2017 – 30.06.2018
$30.41
$40.54
01.07.2018 – 30.06.2019
$31.47
$41.96
(f)During his employment with MIPL Mr Tsang worked at least 38 ordinary hours per week each week; regularly worked additional hours in excess of 38 hours per week; and he regularly worked on Saturdays and Sundays.
(g)MIPL, therefore, contravened cl 36.2, cl 37.1, and cl 37.5 of the Award and, therefore, s 45 of the FW Act (overtime contraventions).
(h)Further, under s 87 of the FW Act Mr Tsang was entitled to four weeks annual leave and, under cl 38.2 of the Award, if Mr Tsang had taken such leave, MIPL was required to pay to Mr Tsang the amounts Mr Tsang would have been entitled to receive for working ordinary hours and a 17.5% loading on such amounts.
(i)MIPL did not provide Mr Tsang any paid annual leave during his employment; and Mr Tsang, consequently, had accrued 22 weeks of annual leave.
(j)Under s 90(2) of the FW Act, when Mr Tsang ceased his employment with MIPL, MIPL became liable to pay to Mr Tsang the amount it would have been liable to pay to Mr Tsang had he taken annual leave, such amount being $24,557.50.[9]
(k)MIPL did not pay Mr Tsang the $24,557.50 MIPL became liable to pay under s 90(2) of the FW Act and, for that reason, MIPL contravened s 44 of the FW Act (annual leave contraventions).
(l)Further, under cl 21.1(a) of the Award MIPL was required to pay Mr Tsang a weekly allowance, such allowances totalling $12,778.46 for the period of his employment.[10]
(m)MIPL did not pay to Mr Tsang any of the weekly allowance and, for that reason, breached cl 21.1(a) of the Award and, therefore, contravened s 45 of the FW Act (industry allowance contraventions).
(n)Further, under cl 32.2(a) of the Award MIPL was required to make contributions to a superannuation fund for Mr Tsang’s benefit at a level that would avoid MIPL being liable to pay the superannuation guarantee charge.
(o)MIPL did not make any such contributions, and, for that reason, breached cl 32.2(a) of the Award and, therefore, contravened s 45 of the FW Act (superannuation contraventions).
(p)Further, under s 90 and s 91 of the FW Act, Mr Tsang was entitled to accrue ten days of personal leave per year, and to take, and be paid for, such leave in circumstances where he was unfit for work due to illness or injury, or was required to provide care to a family member.
(q)Over the course of his employment, Mr Tsang was absent from work on occasion, and MIPL did not pay him for such absence; MIPL, therefore, failed to comply with s 90 and s 91 of the FW Act and, therefore, contravened s 44 of the FW Act (personal leave contraventions).
(r)Further, MIPL contravened s 536 of the FW Act by failing to provide to Mr Tsang payslips within one working day of each day on which MIPL made payments to Mr Tsang in relation to the performance of work (payslip contraventions).
[9] The sum of the particulars is $20,608.65
[10] The actual sum is $12,778.22
As against Mr Xu the statement of claim alleges Mr Xu was the director, secretary, majority shareholder, and “the controlling mind” of MIPL. On the basis of these allegations the statement of claim further alleges that Mr Xu knew of the nature of MIPL’s engagement of Mr Tsang; Mr Xu controlled the manner in which MIPL engaged Mr Tsang; Mr Xu controlled the hours and days for and on which MIPL engaged Mr Tsang to perform work; and Mr Xu knew of the hours Mr Tsang worked and the money MIPL paid Mr Tsang for that work. In those circumstances, Mr Xu was knowingly involved in MIPL’s contraventions of the FW Act the statement of claim pleads against MIPL and, therefore, under s 550(1) of the FW Act, Mr Xu is taken to have contravened the same provisions of the FW Act as MIPL has contravened.
RELIEF AVAILABLE ON STATEMENT OF CLAIM
On the basis of the matters alleged in the statement of claim, I am satisfied that Mr Tsang appears to be entitled to the following relief:
(a)declarations that MIPL engaged in the annual leave, industry allowance, superannuation, and payslip contraventions, and that Mr Xu was involved in those contraventions;
(b)an order under s 545(2)(b) of the FW Act that MIPL and Mr Xu pay to Mr Tsang $20,608.65 (not the $24,557.50 incorrectly claimed in the statement of claim) (together with interest), being the loss Mr Tsang suffered because of the annual leave contraventions; and
(c)an order under s 545(2)(b) of the FW Act that MIPL and Mr Xu pay to Mr Tsang $12,778.22 (not the $12,778.46 incorrectly claimed in the statement of claim) (together with interest), being the loss Mr Tsang suffered because of the industry allowance contraventions.
I am not satisfied, however, that it appears from the statement of claim that Mr Tsang is entitled to any other relief.
(a)In relation to the overtime contraventions, the statement of claim goes no further than alleging that Mr Tsang “regularly” worked more than 38 hours a week, and he regularly worked on Saturdays and Sundays. It does not identify the amount of overtime Mr Tsang worked or facts on the basis of which the amount of overtime Mr Tsang worked may be estimated.
(b)In relation to the superannuation contraventions, the statement of claim does not identify the amount of hours, including overtime, Mr Tsang worked, or of facts on the basis of which these hours may be calculated. That means it is not possible, from the statement of claim, to assess the contributions MIPL ought to have made to a superannuation fund to avoid liability to pay the superannuation guarantee charge.
(c)In relation to the personal leave contraventions, the statement of claim does not identify the days on which Mr Tsang was absent from work, or facts to the effect he was absent from work because he was unfit to attend work due to illness or injury, or because he was required to provide care to a family member.
What I say in paragraph 17 is not fatal to Mr Tsang obtaining default judgment for compensation in relation to the overtime and personal leave contraventions, or default judgment in relation to the superannuation contraventions requiring MIPL and Mr Xu to pay an amount to a superannuation fund nominated by Mr Tsang. It is open to me to permit Mr Tsang to file an affidavit in which he addresses the absence of information I have identified. I appreciate that Mr Tsang may have difficulty in providing the evidence because of the payslip contraventions. Mr Tsang, nevertheless, bears the burden of alleging sufficient facts and particulars, and, where he has pleaded insufficient particulars, adducing evidence on the basis of which a rational assessment may be made of the losses Mr Tsang has suffered because of these contraventions.
DISPOSITION
I will not at this stage make any orders under r 13.05(2)(b) of the GFL Rules. Instead, I will make the following orders:
(a)The application for default judgment, including penalties, be set down for further hearing at 10:15 am on 9 November 2021.
(b)Within 21 days Mr Tsang file an affidavit in which he estimates the total ordinary hours, the Time and a Half hours, the Double Time hours he worked; and the number of days of personal leave Mr Tsang says he has taken. Mr Tsang should annex to his affidavit such documents as are in his possession that are relevant to these matters; and Mr Tsang should also depose to all of the facts on which he relies for his estimate of the hours he worked with MIPL, and the amount of personal leave Mr Tsang had taken.
(c)Within 21 days Mr Tsang file an outline of submissions that deals with the question of penalty.
(d)Within 7 days Mr Tsang serve a sealed copy of the orders I will make on MIPL and on Mr Xu in the same manner in which the application and statement of claim have been served on MIPL and Mr Xu.
I will also note that the orders I propose to make are orders of the Federal Circuit and Family Court of Australia (Division 2). That is necessary because the seal of this Court that will be affixed to the orders I propose to make only includes the words “Federal Circuit and Family Court of Australia”. The Federal Circuit and Family Court of Australia Act 2021 (Cth), however, does not constitute any court by the name of the “Federal Circuit and Family Court of Australia”.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 8 October 2021
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