2013 WAIRC 00831
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2013 WAIRC 00831

CORAM
: INDUSTRIAL MAGISTRATE D. SCADDAN

HEARD
:
WEDNESDAY, 11 SEPTEMBER 2013

DELIVERED : MONDAY, 16 SEPTEMBER 2013

FILE NO. : M 43 OF 2011

BETWEEN
:
FAIR WORK OMBUDSMAN
CLAIMANT

AND

VINCENZO SALVATORE TODARO
RESPONDENT

CatchWords : Application for default judgment; Determination of preliminary issue; Whether Claimant is estopped from litigating the issue; Whether an estoppel is established; Abuse of process.
Legislation : Fair Work Act 2009
: Workplace Relations Act 1996
: Workplace Relations Regulations 2006
Industrial Magistrates Courts (General Jurisdiction) Regulations 2005
Instrument : Restaurant, Tearoom and Catering Workers’ Award
Notional Agreement Preserving the State Award
Result : Claimant’s application for default judgment is granted and judgment is entered against the Respondents. Respondent’s application to stay the proceedings for an abuse of process is refused.
REPRESENTATION:
1

APPLICANT : MR A.J. POWER, OF COUNSEL, AND WITH HIM MS K THOMSON, APPEARED FOR THE APPLICANT
RESPONDENT : MR C. STOKES, OF COUNSEL, APPEARED FOR THE RESPONDENT



Cases referred to: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (ACN 075 400 529) & Ors [2006] FCA 1427
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Carnegie Capital Pty Ltd v Interstyle Building Pty Ltd and Others [2004] WASC 65
Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (Receivers and Managers Appointed) (in liq) (1993) 43 FCR 510
Goldberg v Morrow [2003] VSCA 127
Hunter v The Chief Constable of the West Midlands Police [1982] AC 529
Karam v Palmone Shoes Pty Ltd & Anor [2012] VSCA 97
Neil Pearson & Co Pty Ltd & Anor v The Comptroller-General of Customs (1995) 38 NSWLR 443
Ning Wei Lei; Kenny Meng Wai Ng v VST Pty Ltd 2010 WAIRC 00896
Ramsay v Pigram (1968) 118 CLR 271
Stellec Pty Ltd and Others v Carnegie Capital Pty Ltd [2004] WASCA 268
Walton v Gardiner (1993) 177 CLR 378
Wiedenhofer v The Commonwealth of Australia [1970] 122 CLR 172


REASONS FOR DECISION


(Given extemporaneously at the conclusion of the hearing, extracted from the transcript of proceedings and edited by her Honour)

Background
1 On 16 September 2013, I gave oral reasons for decision refusing the Respondent’s application for a stay of proceedings, and granting the Claimant’s application for default judgment to be entered against the Respondent. These are my written reasons edited from the transcript. As indicated to the parties I have expanded upon the nature of the Claimant’s claim in the written Reasons.
The Claim
2 The Claimant, the Fair Work Ombudsman (FWO), alleges that the Respondent, Mr Todaro, aided, abetted, counselled or procured various contraventions by VST Pty Ltd (VST) and/or was by his acts or omissions, directly or indirectly knowingly concerned in, or party to, the various contraventions by VST in that he was the person responsible for hiring and paying Kenny Meng Wai Ng (Ng) and Ning Wei Lei (Lei), and was aware that they were entitled to be paid in accordance with the Restaurant Tearoom and Catering Workers’ Award and Notional Agreement Preserving the State Award (NAPSA), including higher rates of pay for overtime, and superannuation entitlements, (see section 728 of the Workplace Relations Act 1996 (WR Act) and section 550 of the Fair Work Act 2009 (FW Act)).
3 On 13 September 2010, Industrial Magistrate Boon delivered reasons for decision in Ning Wei Lei; Kenny Meng Wai Ng v VST Pty Ltd (2010 WAIRC 00896) (the 2010 Decision). Her Honour made a number of findings and ordered VST to pay to Lei and Ng certain entitlements pursuant to the WR Act and the NAPSA.
4 On 22 November 2011, the FWO lodged a claim in this Court alleging that Mr Todaro failed to comply with an award, agreement, instrument or order, was involved in the breaches of the WR Act and the NAPSA by VST, and contravened or failed to comply with another written law. The FWO sought orders that Mr Todaro pay a penalty and for the Court to make declarations that Mr Todaro was involved in the contraventions of VST.
5 The statement of claim lodged with the claim was amended and re-filed on 29 November 2011, where the only amendment made was that the Court makes findings rather than a declaration relevant to Mr Todaro’s involvement in the contravention of VST. The findings sought to be made are contained in paragraph A of the amended statement of claim. The orders sought by the FWO included an order that:
· Mr Todaro pay pecuniary penalties pursuant to section 719(1) of the WR Act, regulation 14.4 of the Workplace Relations Regulations 2006 (Cth) (WR Regulations) and section 546(1) of the FW Act;
· all pecuniary penalties payable by Mr Todaro be apportioned and paid to Ng and Lei within 28 days; and
· other ancillary orders in relation to listing the claim for a penalty hearing.
6 The FWO makes its claim pursuant to section 718(1) of the WR Act.
7 On 27 August 2013, the FWO applied for judgment to be entered against Mr Todaro pursuant to regulation 8(2) of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (IMC Regulations) on the basis that Mr Todaro failed to file an amended response to the FWO’s claim dated 22 November 2011, as required by orders of the Court made on:
· 15 August 2012, where the amended response was to be filed by 3 September 2012;
· 28 November 2012, where the amended response was to be filed by 5 December 2012;
· 6 March 2013, where the amended response was to be filed by 15 March 2013; and
· 12 June 2013, where the amended response was to be filed by 17 June 2013.
8 I note that on that on 12 June 2013, the Court also made orders striking out Mr Todaro’s original response filed on 12 December 2011 on the basis that there was no objection to this by him. I also note that from 15 August 2012, Mr Todaro has been represented by the same Counsel and had periodic legal representation prior to that time.
9 The FWO’s application was listed for hearing on the first day of the trial of the FWO’s claim. On that day, the Respondent also sought to argue a preliminary issue identified by Mr Todaro on 15 August 2012, which was never properly identified by him, but set out in submissions filed with the Court on 28 November 2012. The preliminary issue was originally to be heard on 28 November 2012 but was adjourned on that day and subsequently relisted for hearing in March of 2013. As a result of Mr Todaro’s failure to comply with associated Court orders, the hearing of the preliminary issue was vacated.
10 Notwithstanding this, the FWO did not object to the preliminary issues being heard at the same time as its application for default judgment.
11 Mr Todaro raises two preliminary issues. The first is that an issue estoppel arises where the FWO could have, but took no action in respect of VST or Mr Todaro in 2009 and Mr Todaro relied upon representations made by the FWO to his and VST's detriment (referred to as the ‘Verwayen estoppel’ by Mr Todaro’s Counsel and is referred to in Australian Securities Commission v Marlborough Gold Mines (1993) 177 CLR 485, [1993] HCA 15 at [41]) (the Marlborough decision).
12 The second is that the current proceedings are an abuse of process where it was open to the FWO in 2009, or before, to prosecute VST or Mr Todaro or to bring or join the original proceedings against them, and no explanation has been given why they did not.
13 Mr Todaro submitted that unlike res judicata or issue estoppel, the fact that the 2010 Decision and the current proceedings do not involve the same parties is not a barrier to there being an abuse. Further, unlike the Australian Securities Commission in the Marlborough decision, there is no event that changed the legal landscape which, hence, renders it unjust or unconscionable for the FWO to proceed with the current proceedings. The cessation to trade by VST in 2010 is not relevant because this was not contemplated nor could it be contemplated as a possibility by the FWO in 2009-2010.
14 The FWO’s response to the two preliminary issues is twofold: Firstly, no res judicata, issue estoppel or Anshun estoppel arises where the parties and the cause of action are not the same. Second, Mr Todaro bears the onus of demonstrating an abuse and has not done so by relying upon her Honour’s comments in paragraph 6 of the 2010 Decision, which are not findings, but an observation of the history of the proceedings.
15 Further, Mr Todaro’s affidavit sworn on 27 November 2012 contains untested assertions and has not been tendered into evidence in the proceedings, and the aspects of Mr Todaro’s affidavit relied upon do not make good the propositions referred to in his submissions.
16 Therefore, Mr Todaro has not demonstrated an abuse of process where the FWO is precluded from bringing a claim and where there is no operable estoppel.
Preliminary Issue 1 - does an estoppel arise?
17 In respect of Mr Todaro’s first preliminary issue as to whether an estoppel arises, for the following reasons I find that the FWO is not precluded from commencing the current proceedings.
18 Res judicata operates so that once a cause of action between certain parties has been finally determined by a competent tribunal; neither of those parties can challenge the adjudication in subsequent litigation between them.
19 In the original proceedings, which gave rise to the 2010 Decision, the parties were the employees of VST (Ng and Lei) and VST. In the current proceedings, the parties are the FWO and Mr Todaro.
20 Importantly, the cause of action litigated in the 2010 proceedings was the alleged failure by VST, as the employer, to pay various entitlements to its employees, Ng and Lei.
21 In the original proceedings, no issue arose, nor were there any findings or claims made concerning Mr Todaro in any personal capacity for any liability in respect of, or on behalf of, VST. The current proceedings are directed towards the alleged involvement by Mr Todaro in the contraventions by VST (as found and determined by Industrial Magistrate Boon in the 2010 Decision) by allegedly aiding, abetting, counselling or procuring the contraventions by reason of Mr Todaro being the directing mind and will of VST, and a civil penalty is sought.
22 Notwithstanding that there may be some overlap in relation to evidence given in the current proceedings by Ng and Lei, essentially the claim sought to be run by the FWO in the current proceedings is directed towards a different issue requiring a Court to make separate findings in relation to the involvement, if any, of Mr Todaro in the running of the business owned by VST.
23 In terms of privity, the basic requirement of a privy of interest is that a privy must claim under or through the person of whom he is said to be a privy: see Ramsay v Pigram [1968] 118 CLR 271 where it is stated:
“A person is not a privy because he has participated so actively in the first litigation that he has assumed a de facto role of an actual party.”
24 Further reference is made to Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd [1993] 43 FCR 510. Whatever may be the case between VST and Mr Todaro, the FWO is not a privy of the employees who instituted proceedings in 2009. In the first instance, the employees commenced the proceedings in their own right after the workplace inspector declined to pursue the employees' claims in a formal court process.
25 I refer to the observations made by Industrial Magistrate Boon at paragraph 6 of the 2010 Decision. It would appear that the FWO had nothing to do with the progress of the claims from the point that the workplace inspector made a decision at an earlier point in time not to initiate formal Court proceedings. Whatever occurred between the employees and the FWO, action taken by the employees in no way bound the FWO. The employees did not seek a penalty as part of their claim, albeit that they made submissions on penalty against VST either at the conclusion, or during the course of the proceedings.
26 I also refer to issue 4 in paragraph 5 of the 2010 Decision. The Court declined to impose a civil penalty, as it had not been claimed as part of the original proceedings and VST was ordered to back pay a considerable sum of money.
27 Issue estoppel asserts that a relevant issue or matter has been decided by a prior action. The difference between issue estoppel and res judicata lies in whether the issue said to have been resolved constituted the tribunal's formal conclusion or whether the issue is subsidiary to or underlays the conclusion.
28 For the same reasons I've already given in relation to res judicata, an issue estoppel does not arise here. In particular, and importantly, the same question to which the current proceedings are directed has not, and was not, decided as part of the 2010 Decision.
29 Paragraph 5 of the 2010 Decision sets out the questions to be determined, including at question 1 whether the Claimants as employees were ever employed by VST. Industrial Magistrate Boon found that they were. At no stage during the 2010 Decision was the Court required to find that Mr Todaro was involved in the contraventions by VST. While it is true that Mr Todaro took part in the original proceedings, he did so as a director of VST, electing to call no evidence on behalf of the company.
30 Further, Mr Todaro via his Counsel, conceded in these proceedings that the findings of fact made in the 2010 Decision are no longer challenged.
31 Accordingly, the only issue for determination in the current proceedings is Mr Todaro’s involvement, if any, in the contraventions by VST.
32 An Anshun estoppel, again, is a matter involving the same parties where the second action is so relevant to the subject matter of the first action that it would be unreasonable not to rely upon it; that is, having regard to the pleadings or the nature of the Claimant's claim and its subject matter, it would be expected that the totality of the claim should have been raised and dealt with in the first proceedings.
33 In my view, it is difficult, if not impossible, to see why employees seeking to recover entitlements from an alleged employer company, later found to be their employer, would seek to claim against an individual director, and in doing so resolve the issue of whether the director is the directing mind and will of the employer company, effectively foreshadowing that the company may not be able to meet judgment obligations at some point in the future. Further, for the reasons I have given, the parties are not the same between the original and current proceedings and certainly in the case of the FWO. In my view, the employees are not privies.
Preliminary Issue 2 – are the current proceedings an abuse of process?
34 The IMC Regulations empower this Court to control and manage cases before it and to ensure that those cases are dealt with efficiently, economically and expeditiously. There is also a requirement that the Court ensures that its judicial and administrative resources are used as effectively as possible. The Court has wide powers to achieve those ends.
35 In particular, I refer to regulation 7(1)(c) of the IMC Regulations which provides that the Court may:
“stay any case, either generally or until a specific date.”
36 This can occur when a Court prevents a party from litigating an issue because to do so would amount to an abuse of process.
37 In the first instance, Mr Todaro relies upon the following comments by Acting Chief Justice Kirby in Neil Pearson and Co Pty Ltd & Anor v The Comptroller-General of Customs [1995] 38 NSWLR 443, at 451 (where his Honour also referred to Hunter v The Chief Constable of the West Midlands Police [1982] AC 529):
“The third and most limited form of estoppel by record occurs when a court prevents a party from litigating an issue because to do so would amount to an abuse of process. This mechanism will most often be employed where, although not technically bound by an earlier determination, a party should, in substance, be so adjudged.”
38 In Walton v Gardiner I note that Walton v Gardiner was in reference to a stay of proceedings in a disciplinary context where the Court formulated a balancing act between the public interest in protecting the public from incompetence.
[1993] 177 CLR 378, Mason CJ and Deane and Dawson JJ at 393 said (as it related to the inherent jurisdiction of a superior Court to stay proceedings, although in principle there is no reason why this cannot relate to the Industrial Magistrates Court, provided a written law so empowers the Court to make such an order):
“Thus, it has long been established that regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail.
Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them.
Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it sought to litigate a new case which has already been disposed of by earlier proceedings.”
39 This, in my view, is similar to Mr Todaro’s submissions concerning the FWO's decision in 2009 to not proceed with a prosecution and that to commence the current proceedings is unjust or unconscionable so as to amount to there being an abuse of process.
40 Thus, the question is whether the FWO in not commencing the original proceedings in 2009, but commencing the current proceedings in 2011, amounts to an abuse of process.
41 This question, in my view, is answered by reference to their Honours’ decision at page 393 in Walton v Gardiner. That is, is the continuance of the current proceedings unjustifiably vexatious and oppressive for the reason that the FWO seeks to litigate a new case which has already been disposed of by earlier proceedings? It can also be answered by reference to whether the apparent change in the FWO’s position since 2009 is unjust or unconscionable so as to amount to, in essence, an equitable estoppel.
42 In my view, the answer to both of those questions is no, and accordingly, no abuse of process arises warranting a stay of the proceedings under regulation 7(1)(c) of the IMC Regulations.
43 The following are my reasons why:
· section 718(1) of the WR Act outlines the person who may apply for penalties or remedies under Division 2. This includes an employee or an inspector, amongst others. It does not appear from the WR Act that one or the other is confined by the application;
· in terms of proceedings for contraventions of applicable provisions, Part 14 of the WR Act does not preclude a party from instituting proceedings over and above, or to the exclusion of, any other party;
· the powers of the workplace inspector under Part 6 of the WR Act make no reference to the workplace inspector being required to undertake a particular function, albeit that they have various powers directed to ensuring the observance of various employment instruments;
· whatever the reason for the workplace inspector declining to pursue the original proceedings to a formal Court process (giving rise to the 2010 Decision), purportedly on the basis of there being insufficient evidence to proceed in each case, did not preclude the employees from instituting and proving their own claim, as they did;
· the workplace inspector was not obliged to provide reasons for not proceeding with the original proceedings;
· to the extent that Mr Todaro relies upon the content of his affidavit sworn on 27 November 2012, I note the following: paragraphs 33 to 39 and paragraph 47 notably these paragraphs are numbered in that affidavit as paragraphs 33, 34, 34, 34, 35, 36, 30 and 38) contain information which is untested, hearsay and Mr Todaro’s opinion, which in no way supports his submission that the FWO represented to him that it would not, nor never, proceed against him personally. At best, paragraph 47 of Mr Todaro’s affidavit supports that the FWO or workplace inspector did not proceed with the employees' claim, which is obvious. Accordingly, I place little weight on the contents of Mr Todaro’s affidavit, particularly when the paragraphs referred to do not go to the issues in the current proceedings;
· the latter event whereby VST ceased trading approximately 17 days after judgment was given in the 2010 Decision cannot be overlooked in the manner suggested by Mr Todaro in his submissions. It can be reasonably inferred that if VST continued to carry on the business of Venezia Cafe Restaurant and was able to satisfy the amount awarded in the 2010 Decision, the current proceedings would not have been contemplated by the FWO. I refer specifically to the response to invitation to admit signed by Mr Todaro and lodged in the Industrial Magistrates Court Registry on 30 July 2012. As admitted by Mr Todaro, and also pleaded by the FWO in its amended statement of claim dated 29 November 2011, VCR Pty Ltd took over the operation of the Venezia Restaurant at the same time and Mr Todaro is the sole director of this company;
· what the employees could or could not have done to enforce judgment of the 2010 Decision against VST, who had ceased to trade as Venezia Cafe Restaurant, is not to the point. This is entirely a matter for them and I have no information from either party about that and put it to one side;
· Mr Todaro was the sole director of VST. A competent claim can be brought against him in that capacity and the other party, being the FWO, will be required to demonstrate to the requisite standard the case it alleges;
· there is nothing unjustifiably vexatious or oppressive, in the manner contemplated in Walton v Gardiner, in the FWO bringing or continuing the current proceedings where the issues sought to be litigated have not been disposed of nor were they even contemplated, or necessarily should have been contemplated, by the earlier proceedings; and
· further, there have been two significant changes since the FWO's decision not to take formal Court action in 2009. The first is that the 2010 Decision made findings of fact regarding VST being the employees' employer and that it had contravened various provisions relating to the employees' entitlements. Secondly, VST ceased to trade a very short time after the 2010 Decision was delivered ordering VST to repay certain entitlements to the employees.
44 In those circumstances, I consider that the FWO’s decision to commence and proceed with the current proceedings is neither unjust nor unconscionable, again, particularly, where the cause of action is not the same nor are the parties the same and where the FWO will be required to demonstrate to the requisite standard different issues to that required to be demonstrated by the employees in the 2010 Decision.
45 While public policy demands that there should be an end to litigation, in this case it is not the same litigation and nor were the issues in the original proceedings fully argued or argued at all to finality, and on that basis I decline to exercise my discretion under regulation 7(1)(c) to stay the proceedings as an abuse of process.
Application for Default Judgment
46 The FWO applied for default judgment on or around 27 August 2013, pursuant to regulation 8(2) of the IMC Regulations, on the basis that Mr Todaro failed to file an amended response to the FWO’s claim dated 22 November 2011 as required by orders of the Court made on:
· 15 August 2012 where an amended response was to be filed by 3 September 2012;
· 28 November 2012 where an amended response was to be filed by 5 December 2012;
· 6 March 2013 where an amended response was to be filed by 15 March 2013; and
· 12 June 2013 where an amended response was to be filed by 17 June 2013.
47 I note that on 12 June 2013, the Court also made orders striking out Mr Todaro’s original response filed on 12 December 2011, on the basis that there was no objection to this by him. From 15 August 2012, Mr Todaro has been represented by the same Counsel and had periodic legal representation prior to that time.
48 The FWO submitted that default judgment should be entered because there was no explanation by Mr Todaro for his failure to comply with four previous orders by the Court requiring him to file an amended response. Secondly, the document entitled “Substituted Defence” filed by Mr Todaro on 10 September 2013, the day before the trial was scheduled to commence, did not disclose a proper defence or a defence on its merits.
49 The FWO relied on older authorities to submit that without an explanation for the delay and the provision of a document which disclosed no defence, default judgment should be entered in favour of the FWO, notwithstanding Mr Todaro had filed the substituted defence the day before the hearing and notwithstanding that there is capacity for the Court to extend time, but where no application has been made to do so.
50 Mr Todaro submitted that nothing in the substituted defence catches the FWO by surprise and that Mr Todaro has made numerous concessions in a letter [to the FWO] that the findings of fact in the 2010 Decision will no longer be contested. Accordingly, in effect, the issues in dispute between the parties are contained in paragraphs 60 to 63 of the FWO’s amended statement of claim and paragraph 2 and paragraphs 3(d), (c), (e) of the substituted defence and amended statement of claim. In addition, the substance of Mr Todaro’s defence is contained in his affidavit sworn on 27 November 2012, filed in the Registry on or around 28 November 2012. There has been no prejudice suffered by the FWO.
51 In Wiedenhofer v The Commonwealth [1970] 122 CLR 172 at 174, Gibbs J said, in relation to similar High Court rules (some cases removed):
“…that the Court has a discretion to refuse to make the order asked for, and that a defence served after the expiration of the prescribed time but before judgment has been given cannot be disregarded.
It was, however, submitted on behalf of the plaintiff in the present case that judgment ought to be given for the plaintiff and that an extension of time should be refused because the defendant has failed to file an affidavit showing that it has a good defence on the merits. It was said in reliance on the remarks of the Earl of Selborne L.C., in Gibbings v Strong, that the reason why regard is had to a defence delivered out of time is to avoid the circuity which would result if judgment were given by default and subsequently set aside and that therefore the general principle applicable to the setting aside of default judgments ought to be followed, namely, that a defendant ought not only to explain his default but ought also to file an affidavit of merits - that is an affidavit which shows that he has a prima facie defence.
In my opinion, however, the discretion of the Court is not limited in that way. In the present case, where I have before me not only a motion for judgment but also a motion for extension of time for filing the defence, and where a defence has in fact been delivered although out of time, and there is no ground to suggest that this defence is merely frivolous or filed for the purpose of delay and an explanation has been given of the failure to deliver it within time, in my opinion, it would lead to an injustice to take any other course than to grant a reasonable extension of time and to refuse the motion for judgment.”
52 Therefore, as I understand Gibbs J’s comments, the Court's discretion is not limited in determining whether to grant a defendant's application to extend time for delivery of the defence to the principles applicable to consideration of setting aside default judgment; that is, on affidavit the defendant is to set out the merits of the defence and an explanation for the delay.
53 However, before Gibbs J was the following relevant material: a motion for judgment, a motion for extension of time for filing defence, the defence which was delivered out of time, no ground to suggest the defence was merely frivolous or filed for the purpose of delay, and an explanation had been given for the failure to deliver within time.
54 It should be noted that in Wiedenhofer, two days after the defence was due, the defendant wrote to the plaintiff with an explanation for the delay and requested an extension of time. The defendant also requested the plaintiff’s statement of claim be amended. On 7 October 1970, the plaintiff took out a motion for judgment, and on 21 October 1970 the defendant delivered the defence to the plaintiff. Thus the delay was 15 days.
55 I note that Gibbs J also stated that a Court has discretion to refuse to make orders asked for and that a defence served after the expiration of the prescribed time, but before judgment is given, cannot be disregarded.
56 The FWO relied upon a decision by Master Sanderson in Carnegie Capital Pty Ltd v Interstyle Building Pty Ltd and Others [2004] WASC 65. This decision was reversed by the Full Court in Stellec Pty Ltd and Others v Carnegie Capital Pty Ltd [2004] WASCA 268. Relevantly, neither decision advanced any new principle to that stated by Gibbs J in Wiedenhofer, but in the Full Court decision the following is relevant.
57 Prior to entering a defence by the due date, the defendants' solicitors wrote to the plaintiff's solicitors requesting an extension of time within which to file a defence to the amended statement of claim, which was due by 23 October 2003. The plaintiff refused, and without notice to the defendant, the plaintiff entered judgment in default of defence against the third defendant on 5 November 2003. The Full Court considered that the amendments to the statement of claim were extensive and significantly different to the claim originally pleaded. This applied to the three defendants.
58 The pleadings against the third defendants were, in part, defective. Each of the three defendants and their solicitors swore an affidavit in support of the defendants' application on the issue of delay. The delay was considered insignificant in the context of the litigation. Notably, the decision related to an application to extend time to file a defence and a refusal to set aside default judgment.
59 Two other cases are worth mentioning, both of which refer to Wiedenhofer, and are from the Court of Appeal in Victoria. They are Goldberg v Morrow [2003] VSCA 127 and Karam v Palmone Shoes Pty Ltd & Anor [2012] VSCA 97.
60 In Goldberg, the defence was delivered 20 days late, albeit after an application for default judgment was made. The statement of claim was improper and was subsequently struck out and the Court specifically referred to the waste of time and money entering default judgment in circumstances where it would then be set aside where the nature of the defence or objection to the claim is obvious.
61 In Karam, the defence was delivered after 21 days, but before the application for default judgment was made. The fact that a defence was filed late was not necessarily a bar to the entry of judgment in default of defence, but where the defendant had filed a defence out of time, the Court had a discretion to refuse to give judgment, and at [25] stated:
“Strictly speaking, it was incumbent on the respondent to provide an explanation for its delay in filing its defence and to seek an extension of time in which to file it. In effect, Magistrate Wright cut short correct procedure, albeit in order to achieve the same result, and in a sense, that was arguably an error.”
62 Further, at [26]:
“If so, however, it was an error of law made within jurisdiction and, just as importantly, there is no reason to think that it was productive of substantial injustice. As the rest of their Magistrate Wright's and Macaulay J's reasons serve to show, the appellant has not established that the defence is frivolous or vexatious or is otherwise deficient and, consequently, if an extension of time in which to file the defence had been sought, it is to be assumed that it would have been granted.”
63 Turning now to the facts of the FWO’s application before this Court. The FWO provided a chronology of events referenced to, or referable to, the affidavits in support of the FWO’s application for default judgment. The FWO's application for default judgment was lodged in the Registry on 29 August 2013 with an affidavit in support affirmed by Keelyann Thomson on 9 August 2013. In that affidavit, Ms Thomson also refers to previous affidavits affirmed by her on 19 February 2013 and 28 May 2013 and refers to matters deposed to in both of those affidavits.
64 At annexure “KT31” is a letter dated 7 August 2013 where Mr Todaro, via his representative, is put on notice of the application for default judgment. Mr Todaro had previously been informed on 30 May 2013 that an application for default judgment was possible. The FWO’s application was served on Mr Todaro’s representative by pre-paid post on 2 September 2013 and emailed to the same person on 30 August 2013. The application was listed for hearing on 11 September 2013, being the first day of the trial. Accordingly, the FWO's application accords with the requirements in regulations 61 and 62 of the IMC Regulations.
65 The FWO’s application is predicated on Mr Todaro’s failure to lodge an amended response within time, or at all, at the time the application was lodged and served. On 10 September 2013, Mr Todaro lodged a document entitled “Substituted Defence” in the Registry. However, no application was lodged within time, or at all, seeking an extension of time to file and serve an amended response, nor was there any supporting affidavit outlining the merits of the defence or giving an explanation for what can only be described as an extraordinary delay and Mr Todaro’s repeated failure to comply with the Court orders.
66 The history of the proceedings is outlined in the FWO’s chronology of events and the key dates are as follows:
· 22 November 2011, proceedings were filed by the FWO;
· 30 November 2011, an amended application and statement of claim was filed by the FWO;
· 8 December 2011, the amended statement of claim was personally served on Mr Todaro;
· 12 December 2011, Mr Todaro filed a response to the amended statement of claim. The nature of the response was, in essence, a bare denial and a dispute of the 2010 Decision;
· 18 June 2012, a notice of trial was sent to the parties for a trial listed on 12, 13 and 19 September 2012;
· 15 August 2012, orders were made to vacate the trial and for Mr Todaro, amongst other things, to file an amended response by 3 September 2012. There was an identification of a preliminary issue by the respondent at that stage;
· 28 November 2012, orders were made for Mr Todaro to file an amended response. This was also the date where the preliminary issue was scheduled to be heard;
· 28 November 2012, the hearing of the preliminary issue was adjourned and the respondent was ordered to file an amended response by 5 December 2012;
· 20 February 2013, the FWO filed an application for orders to be made requiring Mr Todaro to file an amended response;
· 6 March 2013, orders were made requiring Mr Todaro to file an amended response by 15 March 2013 (in terms of the orders sought). Further, springing orders were made to vacate the hearing of the preliminary issue if Mr Todaro failed to file submissions on the preliminary issue. He did fail to do so;
· 29 April 2013, the current proceedings were listed for hearing on 11, 12 and 18 September 2013;
· 28 May 2013, the FWO filed an application to strike out Mr Todaro’s response filed on 12 December 2011;
· 30 May 2013, the FWO informed Mr Todaro’ solicitor that it would reserve the right to apply for default judgment in the event of further non-compliance;
· 1 June 2013, Mr Todaro’s solicitor sent to the FWO a letter advising that Mr Todaro did not object to the orders sought;
· 12 June 2013, the Court made orders in terms of the orders sought, and not objected to, including that the respondent file an amended response by 17 June 2013;
· 7 August 2013, Mr Todaro was informed that the FWO intended to apply for default judgment; and
· 10 September 2013, a document entitled “Substituted Defence” was filed by Mr Todaro in the Registry.
67 Notably, save for the letter dated 1 June 2013, Mr Todaro did not respond to the FWO's inquiries concerning the whereabouts of the amended response.
68 I note that on 17 September 2012 a telephone call was made to Mr Todaro’s solicitors and the FWO was informed that the amended response would be filed on 19 September 2012. It was not.
69 Mr Todaro says that his defence is outlined in his affidavit sworn on 27 November 2012 and filed with the Court on the same day; that is, one day prior to the hearing of the preliminary issue and directions hearing listed on 28 November 2012. There are two issues in relation to this. The first is that is it not for the Court or a Claimant to fossick through an affidavit filed in response to orders for the parties to file evidence in a claim. This is not the same as a party filing an amended response, clearly setting out the nature and particulars of the party's case.
70 Secondly, if the content of the affidavit represented Mr Todaro’s defence, then it could have been of little difficulty to have filed an amended response, given the affidavit was sworn on 27 November 2012. Accordingly, Mr Todaro’s response was known to him for some nine to 10 months, at least.
71 The following is relevant in respect of the Court's discretion whether or not to enter judgment against Mr Todaro:
· the delay in providing an amended response is extraordinary; that is, approximately 12 months;
· Mr Todaro was ordered to file an amended response on four occasions and complied with none;
· Mr Todaro has failed to comply with other orders of the Court in relation to the filing of documents relevant to the claim;
· this is indicative, in my view, of Mr Todaro’s attitude to defending the claim, which is that he will file what he wants, when he wants, with the outcome being that the claim has been delayed by almost two years, of which the vast majority of the delay, if not all of the delay, is attributable to Mr Todaro’s failure to comply with the Court orders;
· the substituted defence, save for the paragraphs in relation to the preliminary issue, which was to be heard on 28 November 2012 and in March of 2013, is nothing more than a series of admissions, denials and nonadmissions. He does not in any way outline a defence to the claim. The FWO is no better off than the Court in understanding the nature of Mr Todaro’s defence or response or its merits;
· at the absolute last minute, Mr Todaro filed a document entitled “Substituted Defence” and it is open to infer that the document's purpose was to further delay the proceedings;
· no accompanying application was filed by Mr Todaro requesting an extension of time to file the defence, much less a supporting affidavit outlining the merits of his defence and an explanation for the considerable delay; and
· Mr Todaro was on notice of an impending application for default judgment approximately one month prior to the application being made.
72 Having regard to the above, the circumstances of this case are substantially different to, and distinguishable from, the cases I have referred to.
73 There are two further issues to be noted: firstly, Mr Todaro says the FWO has suffered no prejudice by reason of the late filing of the substituted defence, given that it is aware of the content of Mr Todaro’s affidavit sworn on 27 November 2012. As stated previously, Mr Todaro’s affidavit is not his response to the claim and is untested evidence filed late in compliance with Court orders.
74 The prejudice suffered by the FWO is that the claim has taken almost two years to be heard and it still does not know the content of Mr Todaro’s amended response, save for a series of denials, admissions and non-admissions made the day before the hearing.
75 Secondly, the purported concessions made by Mr Todaro in a letter with the substituted defence, conceding the findings of fact made in the 2010 Decision, as it related to the failure by VST to pay certain entitlements, are not concessions at all. Findings of fact and contraventions by VST made by Industrial Magistrate Boon have not been challenged on appeal or in any other forum. To challenge those findings in these proceedings would amount to a collateral attack of the very kind referred to by Kirby ACJ in Neil Pearson when he referred to Hunter v The Chief Constable of West Midlands Police [1982] AC 529.
76 Thus, in all the circumstances, and having regard to the factors I have referred to, in my view, my discretion should be exercised in favour of the FWO and judgment be entered against Mr Todaro pursuant to regulation 8(2) of the IMC Regulations on the basis of Mr Todaro’s failure on four occasions to file an amended response as ordered by the Court.
Findings and Orders
77 Having regard to Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427, I make the following findings and orders.
78 Upon the admission which the Respondent is taken to have made consequent upon his noncompliance with orders of the Court, the Court FINDS that:
· The Respondent was involved in the contraventions of VST Pty Ltd (ACN 101611072) as found by the Industrial Magistrates Court in Lei and Ng and Lei v VST Pty Ltd [2010] WAIRC 896 and is, therefore, taken pursuant to section 72(8) of the Workplace Relations Act 1996 (Cth) and section 550 of the Fair Work Act 2009 (Cth) to have contravened:
(a) section 182 of the Workplace Relations Act 1996 in that he was involved in VST Pty Ltd’s (VST) failure to pay Kenny Meng Wei Ng (Ng) and Ning Wei Lei (Lei) the basic periodic rate of pay pursuant to the Restaurant Tearoom and Catering Workers' Award 1979 (WA) as it continued to operate pursuant to item 31 of schedule 8 of the Workplace Relations Act 1996 as a Notional Agreement Preserving the State Award;
(b) section 235(1) of the Workplace Relations Act 1996 in that he was involved in VST's failure to pay Ng and Lei annual leave at an hourly rate no less than the basic periodic rate of pay for annual leave taken;
(c) section 235(2) of the Workplace Relations Act 1996 in that he was involved in VST's failure to pay Ng and Lei accrued but untaken annual leave entitlements on termination of employment;
(d) clause 18(1)(a) of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei annual leave at their ordinary rate of wage paid for annual leave taken;
(e) clause 18(2) of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei a loading of 17 and a half per cent of their ordinary rate of wage for annual leave taken;
(f) clause 18(6)(b) of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei their accrued but untaken annual leave entitlement on termination of employment;
(g) clause 9(1) of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei additional rates for ordinary hours worked after 7 pm;
(h) clause 9(2) of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei additional rates at time and a half for ordinary hours worked on Saturdays and Sundays;
(i) clause 10 of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to pay Ng and Lei at the correct overtime rates for work performed outside of the rostered ordinary hours of work; and
(j) clause 37 of the Notional Agreement Preserving the State Award in that he was involved in VST's failure to make superannuation contributions on behalf of Ng and Lei.
79 And the Court ORDERS that:
· Judgment for the Applicant be entered against the Respondent pursuant to regulation 8(2) of the Industrial Magistrates Court (General Jurisdiction) Regulations 2005;
· Pursuant to 719(1) of the Workplace Relations Act 1996, regulation 14.4 of the Workplace Relations Regulations and section 546(1) of the Fair Work Act 2009, the Respondent pay pecuniary penalties for breaching the provisions and civil remedy provisions in order 1;
· Pursuant to section 841(b) of the Workplace Relations Act 1996 and section 546(3) of the Fair Work Act 2009 that all pecuniary penalties payable by the Respondent be apportioned and paid to Ng and Lie within 28 days of the date ordered by the Industrial Magistrates Court;
· The hearing on 18 September be vacated;
· That this matter be adjourned to a date to be fixed for further hearing with respect to the Applicant's claim for penalties to be imposed on the Respondent;
· The Applicant file and serve any submissions on which it relies in relation to penalty on a date to be fixed by the Court;
· The Respondent file and serve any submissions and evidence on which it relies in relation to penalties seven days following the service of the Applicant's submissions, such evidence being limited to the Respondent’s present circumstances; and
· The parties have leave to apply.



D. SCADDAN
INDUSTRIAL MAGISTRATE