Wang v Liu - [2017] FCCA 437

FEDERAL CIRCUIT COURT OF AUSTRALIA

WANG v LIU

[2017] FCCA 437

Catchwords:

INDUSTRIAL LAW – Breach of an order of the Fair Work Commission, Respondents to an order made in the Fair Work Commission wound up – order of the Fair Work Commission a civil penalty provision – whether a director of the companies subject to the orders of the Fair Work Commission is liable as an accessory pursuant to s.550(1) of the Fair Work Act 2009.

Legislation:

Fair Work Act 2009, ss.405, 550, 551
Corporations Act2001, s.556

Cases cited:

Fair Work Ombudsman v Proplas Industries Pty Ltd & Anor [2011] FMCA 506
Fair Work Ombudsman v Step Ahead Security Services Pty Ltd& Anor [2016] FCCA 1482

Applicant:

MO HAN WANG

Respondent:

LIN QING LIU

File Number:

MLG 1204 of 2016

Judgment of:

Judge McNab

Hearing date:

16 December 2016

Date of Last Submission:

16 December 2016

Delivered at:

Melbourne

Delivered on:

10 March 2017

REPRESENTATION

Solicitors for the Applicant:

Maddocks

The Respondent in person

ORDERS

The Application filed 8 June 2016 be dismissed.
There be no order as to costs.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1204 of 2016

MO HAN WANG

Applicant

And

LIN QING LIU

Respondent

REASONS FOR JUDGMENT

Introduction

The Applicant seeks orders against the Respondent on the grounds that she was involved in a contravention of a civil penalty provision of the Fair Work Act 2009 (Cth) (‘the Act’).
This matter came before the court for final hearing on 16 December 2016. The Applicant was represented by Mr Grigg, solicitor. The Respondent was not represented. The court was assisted by the oral and written submissions prepared by Mr Grigg.
The matters said to give rise to the claim in this proceeding are as follows:
a)On 5 September 2012, the Fair Work Commission ordered that the Chen Family Trust, trading as Horizon Holdings Pty Ltd (‘Horizon’) and Telpac International Pty Ltd (‘Telpac’) pay the Applicant $6,346, taxed as a genuine redundancy;
b)At the time the Fair Work Commission order was made, the Respondent was a director of the companies subject to the order;
c)The Fair Work Commission order required the payment to be made within 21 days of 5 September 2012;
d)The Fair Work Commission order has not been paid and on 30 January 2013 and 6 February 2013, Telpac and Horizon respectively were placed in liquidation.
The Applicant relies on s.550(1) of the Act and alleges that the Respondent is a person involved in the contravention of a civil remedy provision. The civil remedy provision relied upon is s.405 of the Act which provides that a person must not contravene a term of an order made under Part 3-2 of the Act. The Fair Work Commission order was made under that part of the Act. It is said that the Respondent is a person involved in the contravention within the meaning of s.550(2)of the Act. That section provides:
(2) a person is involved in a contravention of a…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2017] FCCA 437
Decision Date: 10 March 2017

CaseChat Overview and Summary

In *Wang v Liu*, the applicant, Mr. Wang, sought to recover unpaid wages and entitlements from two companies, L&L Hospitality Pty Ltd and L&L Catering Pty Ltd, pursuant to an order made by the Fair Work Commission. The companies were subsequently wound up, and Mr. Wang then sought to hold Mr. Liu, a director of both companies, personally liable as an accessory for the companies' contravention of the Fair Work Commission's order, which imposed a civil penalty. The matter came before Judge McNab in the Federal Circuit and Family Court of Australia.

The central legal issue before the Court was whether Mr. Liu could be held liable as an accessory under section 550(1) of the *Fair Work Act 2009* (Cth) for the contravention of the Fair Work Commission's order by the companies. This required the Court to consider the nature of the order, the definition of a contravention, and the elements necessary to establish accessory liability, particularly in circumstances where the primary corporate respondents were in liquidation.

Judge McNab determined that section 550(1) of the *Fair Work Act 2009* requires proof that a person aided, abetted, counselled, or procured the contravention. The Court found that Mr. Liu, as a director, was aware of the Fair Work Commission's order and the companies' obligation to comply with it. However, the evidence did not establish that Mr. Liu actively took steps to ensure the companies contravened the order or that he intended for the companies to breach their obligations. The Court held that mere knowledge of a contravention, without more, is insufficient to establish accessory liability. The fact that the companies were wound up did not alter the fundamental requirements for proving accessory liability.

Consequently, Judge McNab dismissed the application against Mr. Liu, finding that the applicant had failed to discharge the onus of proving that Mr. Liu was an accessory to the companies' contravention of the Fair Work Commission's order.

Orders