Vickery v The Trustee for Roderick Trust T/As Encompass Books
[2014] FCCA 546
•14 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| VICKERY v THE TRUSTEE FOR RODERICK TRUST T/AS ENCOMPASS BOOKS & ANOR | [2014] FCCA 546 |
| Catchwords: INDUSTRIAL LAW – Application seeking order for compliance with order of Fair Work Commission – breach of civil remedy provision – consideration of factors relevant to penalty – no appearance by respondents. |
| Legislation: Fair Work Act 2009 (Cth) ss.12, 405, 539, 540, 545, 546(3), 547, 548 |
| Mayberry v Kijani Investments Pty Ltd as Trustee for The Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238 Meadley v Sort Worx Pty Ltd [2013] FCA 1012 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 Kelly v Fitzpatrick (2007) 166 IR 14 Plancor Pty Ltd v Liquor Hospitality Miscellaneous Union [2008] FCAFC 170 |
| Applicant: | LEE VICKERY |
| First Respondent: | THE TRUSTEE FOR RODERICK TRUST T/AS ENCOMPASS BOOKS |
| Second Respondent: | DAVID VLAHOS |
| File Number: | MLG 1974 of 2013 |
| Judgment of: | Judge O’Sullivan |
| Hearing date: | 14 March 2014 |
| Date of Last Submission: | 14 March 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 14 March 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jenshel |
| Solicitors for the Applicant: | Ari Jenshel |
| The First Respondent: | No appearance |
The Second Respondent: | No appearance |
ORDERS
The applicant have leave to proceed undefended pursuant to Rules 13.03A(2)(a), (b)(ii), (iii), (iv) and (vii), 13.03B(2)(d) and 13.03C(l)(e) of the Federal Circuit Court Rules 2001 (“the Rules”).
The first respondent pay the applicant the sum of $15,865 plus interest thereon of $743.61 forthwith.
The first respondent pay a pecuniary penalty of $10,000 for the contravention of the orders of Fair Work Australia and the second respondent pay a pecuniary penalty of $1,000 for his involvement in the contravention by the first respondent.
The above penalties be paid to the applicant within three (3) months on the date of these Orders.
The applicant serve the first and second respondents with a sealed copy of these orders within 14 days.
Pursuant to Rule 16.05 the respondents have liberty to apply within
14 days of service of these orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1974 of 2013
| LEE VICKERY |
Applicant
And
| THE TRUSTEE FOR RODERICK TRUST T/AS ENCOMPASS BOOKS |
First Respondent
And
DAVID VLAHOS
Second Respondent
REASONS FOR JUDGMENT
Introduction
Lee James Vickery the applicant in these proceedings is 34 years old. In November 2011 Mr Vickery started working at a book shop in Rundle Mall Adelaide. The book shop was operated by the Trustee for Roderick Trust (ABN 80385734491) trading as Encompass Books which is the first respondent in the proceeding. Mr David Vlahos a director of Encompass Books is the second respondent in this proceeding.
On 14 March 2014 for the reasons given the Court made orders in the proceedings on an undefended basis. These are those reasons.
Background
The applicant worked for the first respondent from early November 2011 until 8 March 2013. The circumstances that led to the termination of the applicant’s employment led to him making an application to the Fair Work Commission (“the FWC”) on 24 March 2013 complaining that his dismissal was unfair.
On 11 September 2013 a Commissioner of the FWC found that the termination of the applicant’s employment by the first respondent was harsh, unjust and unreasonable (and unfair for the purposes of the Fair Work Act 2009 (Cth) (“the FW Act”)).[1] The Commissioner of the FWC ordered the first respondent to pay the applicant $15,865 (less any required deduction of taxation) within 21 days of the date of the order.[2]
[1] See [2013] FWC 6424
[2] See PR 541595
The first respondent failed to comply with the order of the FWC.
On 18 November 2013 the applicant filed an application with the Court seeking the following relief:
“1.The first respondent pay the applicant the sum of $15,865 (less applicable tax)
2.The first and second respondents pay a pecuniary penalty under s.546 of the Fair Work Act 2009 (“FWA").
3.Such penalty be paid to the applicant.”
The application, which was filed in the small claims list of the Fair Work Division of the Court and supported by a Form 5 also filed 18 November 2011, was given a first directions date of 19 February 2014.
Before the first directions date the applicant had also filed an application in a case on 21 January 2014 supported by an affidavit sworn 8 January 2014.
On 19 February 2014 there was no appearance by or on behalf of either the first or second respondents. However on the basis of 2 affidavits of service filed by the applicant on 4 February and 17 February 2014 respectively there was sufficient evidence they had both been served.
Section 548 of the FW Act provides:
“1.Proceedings are to be dealt with as small claims proceedings under this section if:
(a)a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Circuit Court; and
(b)the order relates to an amount referred to in subsection (1A); and
(c)the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.[3]
(1A) The amounts are as follows:
(a)an amount that an employer was required to pay to, or on behalf of, an employee:
(i) under this Act or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1);
(b)an amount that an outworker entity was required to pay to, or on behalf of, an outworker under a modern award.
Limits on award
(2)In small claims proceedings, the court may not award more than:
(a)$20,000; or
(b)if a higher amount is prescribed by the regulations--that higher amount.” (emphasis added)
Given the orders sought by the applicant and the provisions of s.548 of the FW Act the following orders were made:
“THE COURT ORDERS THAT:
1.The application filed on 18 November 2013 in the small claims list be transferred to the Fair Work Division of this Court.
2.The proceedings be adjourned to 14 March 2014 at 10.00 am for interim hearing at the Federal Circuit Court of Australia at Melbourne in relation to the Applicant’s application in a case filed on 21 January 2014.
3.The Applicant shall serve the First and Second Respondents with a sealed copy of the orders made this day by not later than 26 February 2014.
4.The First and Second Respondents shall file and serve a response and affidavit by not later than 4.00 pm on
12 March 2014.
AND THE COURT NOTES THAT:
A.The affidavits of service filled 4 February 2014 and
17 February 2014 deposing to service on the respondents of the applicant’s material.
B.In the event of non-compliance by any party with the orders, directions, Rules or Regulations of this Court relating to:
i.the filing of documents;
ii.the payment of any applicable filing, setting down, mediation or enforcement fee or fees; and/or
iii.any other procedural issues,
the application may be struck out, the proceedings may be directed to proceed undefended or the hearing date may be vacated and the Court may direct that a further date not be fixed until all parties have complied with the said orders, directions, Rules and Regulations.
C.To the extent that it is or may be practicable to do so, a compliance check is to be carried out by an Associate or Deputy Associate of the trial Judge, or by another appropriate court officer, shortly prior to the hearing date.”
D.In the event the First Respondent and/or Second Respondent do not comply with order (4) herein and/or fail to attend Court on the adjourned date, the Applicant may seek leave, at the discretion of the presiding Judge, to proceed undefended pursuant to Rule 13.03A, 13.03B and 13.03C of the Federal Circuit Court Rules 2001 (“the Rules”) for the orders:
i.the respondent pay the applicant the sum of $15,865 (less applicable tax).
ii.The first and second respondents pay a pecuniary penalty under s.546 of the Fair Work Act 2009 (“FWA”).
iii.Such penalty be paid to the applicant.”
The applicant then filed a further affidavit on 19 February 2014 along with an affidavit of Amnon Kelemen, an industrial advocate (who assisted him in the FWC) on the same date. The applicant also caused to be filed 2 further affidavits of service on 11 and 12 March 2014.
On 14 March 2014 and on the basis of that affidavit material the Court was satisfied the applicant had complied with the orders of 19 February 2014 and the respondents had been served in accordance with those orders and the Federal Circuit Court Rules 2001 (“the Rules”).
On the evidence before the Court the respondents had been made aware of the application made by and orders sought by the applicant.
The respondents had been served with the applicant’s material and the orders made on 19 February 2014. In all the circumstances the Court was satisfied the respondents were aware the proceedings were listed on
14 March 2014 and that (and the) orders may be made in their absence.On 14 March 2014 Mr Jenshel appeared on behalf of the applicant and in the face of the respondent’s failure to appear, default in compliance with the orders of 19 February 2014 and failure to satisfy his clients claim sought the orders that had been foreshadowed may be sought in the above mentioned orders.
Orders on default
Rules 13.03A, 13.03B and 13.03C of the Rules provide:
“Rule 13.03A:
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
(v) file and serve a document required under these Rules; or
Rule 13.03B
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 13.03C
(1)If a party to a proceeding is absent from a hearing (including a first court date), the Court may do 1 or more of the following:
(a) adjourn the hearing to a specific date or generally;
(b) order that there is not to be any hearing, unless:
(i) the proceeding is again set down for hearing; or
(ii) any other steps that the Court directs are taken;
(c)if the absent party is an applicant--dismiss the application;
(d)if the absent party is a party who has made an interlocutory application or a cross-claim--dismiss the interlocutory application or cross-claim;
(e)proceed with the hearing generally or in relation to any claim for relief in the proceeding.
2.If a party to a proceeding is absent from a hearing, the Court may also make an order of the kind mentioned in subrule 13.03B(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.”
Those rules provide the Court with authority to give judgment or to make any other order against the respondents. I am satisfied the respondents have not satisfied the applicant’s claim. The respondents have not filed a notice of address for service, a response, or affidavit as required under the Rules.
The respondents have not complied with an order of this Court and having regard to rules 13.03A(2)(a), 13.03A(2)(b)(i), (ii), (iii), (iv) and (vii) the respondents are in default for the purposes of rules 13.03B(2). A combination of rules 13.03B(2), 13.03B(6) and /or 13.03C(1) provides the Court with ample authority to give judgment or make any other order against the respondents.
Consideration of application
The application is supported by the affidavits referred to above which provide the evidential basis to deal with the applicant’s claim. In the applicants affidavit filed 19 February 2014 he deposes he was formerly employed by the first respondent and following his termination in March 2013 he commenced proceedings in the FWC.
The applicant deposes to the history of the proceedings in the FWC and annexed to the affidavits of Amnon Kelemen also filed 19 February 2014 is a copy of the decision of the FWC and the order made upon finding the termination of the applicant’s employment by the first respondent had been harsh unjust or unreasonable.
The applicant’s affidavit refers to requests and ultimately demands made by and on his behalf of the first and second respondents following the decision and order of the FWC that the first respondent comply with the order. The first respondent has not complied.
The orders of the FWC were made under Part 3-2 of the FW Act which deals with unfair dismissals. Section 405 of the FW Act, falling within Part 3-2 of the FW Act provides that a person to whom an order under that part applies must not contravene a term of that order. Section 539 of the FW Act provides that a contravention (amongst other things) of s.405 is a civil remedy provision.
The Court has power to make any order it considers appropriate if it is satisfied that the first respondent has contravened a civil remedy provision (see s.545(1) FW Act). By s.545(2)(h) of the FW Act the Court has power to order a payment of compensation for loss that a person has suffered “because of” a contravention.
The applicant, as an employee has standing to apply for the orders he seeks (see s.540(1)(a) FW Act). The approach to what is effectively an application seeking an order for compliance with orders of the FWC has been the subject of at least 2 decisions of the Federal Court (see Mayberry v Kijani Investments Pty Ltd. as Trustee for The Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238 per Katzmann J and Meadley v Sort Worx Pty Ltd [2013] FCA 1012 per Tracey J).
Section 545 of the FW Act confers on the Court broad powers to grant relief to persons who have suffered as a result of a contravention of a civil remedy provision. Had the orders of the FWC been complied with the applicant would have been entitled to the compensation referred to in the order. The applicant has been deprived of this because of the first respondent’s failure to comply with the order of the FWC.
There is no reason the applicant should not be entitled to the monies due pursuant to the orders of the FWC. Pursuant to s.547(2) of the FW Act where an order is made in relation to an amount that a person was required to pay another the Court must include an amount of interest on the sum ordered, unless good cause is shown to the contrary. In this case given the above these should be orders for the applicant to receive. $15,865 plus $743.61 in interest.
Penalty
The applicant has also sought the imposition of a pecuniary penalty on the first and second respondents because of the first respondent’s failure to comply with the FWC orders.
As Katzmann J said in Mayberry v Kijani Investments Pty Ltd. as Trustee for the Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238 at [20]:
“The Court may make a pecuniary penalty order in addition to any other order. This is a proper case to make such an order. Employers, no less than employees, are expected to comply with the orders of Fair Work Australia. Failure to do so is liable to bring the system of regulation of industrial disputes into disrepute. Kijani’s conduct signifies a refusal to accept the umpire’s decision. It should not go unpunished.”
In terms of the approach to fixing an appropriate penalty, in Meadley v Sort Worx Pty Ltd [2013] FCA 1012 Tracey J said:
“41.In exercising this power the Court is required “to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations”: see Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 580 (per Buchanan J).
42.In Kelly v Fitzpatrick (2007) 166 IR 14 at [14] I identified a number of factors which were potentially relevant and applicable in determining an appropriate penalty. These factors were:
•The nature and extent of the conduct which led to the breaches.
•The circumstances in which that conduct took place.
•The nature and extent of any loss or damage sustained as a result of the breaches.
•Whether there had been similar previous conduct by the respondent.
•Whether the breaches were properly distinct or arose out of the one course of conduct.
•The size of the business enterprise involved.
•Whether or not the breaches were deliberate.
•Whether senior management was involved in the breaches.
•Whether the party committing the breach had exhibited contrition.
•Whether the party committing the breach had taken corrective action.
•The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
•The need for specific and general deterrence.
Each of these considerations, to varying degrees, bear on the determination of a penalty in the present case.”
Section 550 of the FW Act provides that a person (in this case that includes the second respondent) who is involved in a contravention of a civil remedy provision is treated as having contravened the civil remedy provision. Section 546 of the FW Act enables a Court to impose a penalty upon a person who has contravened a civil remedy provision.
Under the FW Act the maximum penalty that can be imposed on the first respondent is 300 penalty units and on the second respondent is 60 penalty units.
Section 12 of the FW Act provides that “penalty unit” has the same meaning as the Crimes Act 1914 (Cth). At the time the contravention took place, section 4AA of that Act defined “penalty unit” to be $170.
The Court should take into account that whilst there is no evidence that the first and second respondents have previously offended this is a very serious matter. The applicant has had to go to the cost, expense and time of seeking compliance with the FWC orders through these proceedings. He ought to have been entitled to expect that the first respondent would abide by the umpires decision (i.e. the FWC order). There is no evidence of any appeal or other action taken by the respondents in relation to this. The conduct in question (failure to comply with the FWC Order) involved senior management in the form of the second respondent who on the evidence was involved at every stage of the proceedings in the FWC and did not answer requests to comply.
There is no evidence to mitigate the seriousness of the conduct no evidence in relation to the size of the business or any contrition or
co-operation. Any penalty should be imposed at sufficient level to deter the first respondent from similar conduct along with a measure of general deterrence so that others understand the need to accept the umpires decision.
The same considerations should apply in determining penalty in respect of the conduct of both the first and the second respondent. The material before the Court makes clear the second respondent who purported to represent the first respondent during the proceedings before the FWC as a director of the first respondent was and has continued to hold positions with the first respondent and was/is involved in the contravention.
The material before the Court makes clear the second respondent was directly involved in what can only be described as the deliberate conduct by the first respondent in defying the FWC order.
Given the maximum penalty that may be imposed it seems to me that the proper penalties given all of the above and the orders made in these proceedings thus far are $10,000 for the first respondent and $1000 for the second respondent.
The applicant sought an order, as the initiating party for payment of penalty. In accordance with s.546(3) of the FW Act which gives the Court power to order that the pecuniary penalty be paid to a particular person and the decision of Grey J in Plancor Pty Ltd v Liquor Hospitality Miscellaneous Union [2008] FCAFC 170 at [44] that is an appropriate order.
Therefore there will be a declaration to mark the unlawful conduct of the first and second respondents and orders for the reasons set out above.
I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of Judge O’Sullivan
Date: 14 March 2014
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