Creative Smiles Pty Ltd & Anor v Ekera Dental Pty Ltd & Anor [2023] VCC 1181 | Case summary

County Court of Victoria|2023-07-12

On 16 December 2022 I delivered my reasons for judgment in the principal proceeding between the parties ("the principal reasons"). Then on 12 May 2023 I delivered my judgment on the question of what civil penalties, if any, should be ordered against the defendants in relation to the contraventions of the Fair Work Act 2009 (Cth) ("FWA") identified in the principal reasons ("the penalty reasons"). On 28 June 2023 I delivered my judgment on the issue of the costs of the litigation ("the costs reasons"). This judgment addresses the final orders to be made in the proceeding. It assumes familiarity with the principal reasons, the penalty reasons and the costs reasons. For ease of reference, I use the same terminology as used in those judgments.
Before delivering my costs judgment, I asked the parties to confer so as to agree upon the figures (particularly interest calculations) as ordered in the principal reasons.
The parties have agreed upon the figures in the orders to be made on the commercial claims. Accordingly, the court will make the following orders:

There are four aspects of the orders to be made on the employment claims: unpaid wages, annual leave (and loading), public holiday pay and superannuation. The parties have agreed upon the figures in the order regarding unpaid wages.
At the penalty hearing, counsel for the defendants accepted the figures proposed by the plaintiffs regarding unpaid annual leave and loading.[1] The defendants now take issue with this concession. Ekera seeks to maintain its primary submission that Goodman has already been paid his annual leave entitlements because he took holidays.[2]
Ekera also seeks to contest Goodman's claim to unpaid public holiday pay.
As a result of these matters, although Ekera accepts it is liable to pay superannuation, the precise amount of superannuation payable to Goodman is not agreed.

The fundamental question to address is whether Ekera can now contest the entitlement claimed by Goodman to unpaid annual leave and public holidays. In my opinion, for the reasons set out, the answer is no.
In preparation for the penalty hearing in February this year, the parties filed written submissions setting out their respective positions.
The plaintiffs, in relation to the FWA claims, sought payment for unpaid wages, annual leave (and loading), public holidays and superannuation. The defendants agreed to the payment of wages and superannuation but not the annual leave or public holidays. The defendants contended that, because in the principal reasons, I found that Goodman should be paid for a 20 hour working week, Goodman was necessarily paid at that rate for each and every week of his employment between July 2016 and February 2018. This meant that public holidays were included in the calculation and to award Goodman, in addition, payment for public holidays constituted double dipping.[3]
The defendants contended that the position was the same in principle with annual leave. The argument ran that there was evidence of Goodman taking holidays during the time of his employment. The defendants relied upon an email from Goodman in December 2016 stating that he was about to go overseas and would return towards the end of January.[4] The defendants argued that Goodman could be paid extra for annual leave only if he did not take the holiday time to which he was entitled.[5]
At the penalty hearing on 27 February 2023, counsel for the plaintiffs explained the damages claimed and produced, as an aide memoire, a table which summarised the court's findings in the principal reasons and the contentions advanced by both parties on each component of the commercial and employment damages sought. Mr Rivette pointed out where the parties agreed in principle on figures which gave effect to the court's findings. He then moved to the topics of unpaid annual leave and unpaid holiday pay and surveyed the parties' arguments and figures.
In relation to the annual leave issue, Goodman sought $4,031 and noted that the defendants' calculation amounted to approximately $4,093. At this juncture, the defendants' counsel said that the defendants would just consent to the plaintiffs' figure.[6] So, this became another category which was agreed in principle between the parties.
Regarding the unpaid public holidays, Goodman argued that, even though it was held that he should be paid for 20 hours per week for each week between July 2016 and February 2018, he should also be paid for the relevant public holidays - even if that meant he was deemed in effect to work 27 or 28 hours (being an extra day) in the weeks when a public holiday fell.
Goodman made further submissions about his claimed entitlements as an employee and, recognising the contentions about double dipping and not awarding annual leave and public holidays, acknowledged that the parties were "probably not that far apart."[7]
In response to the claims by Goodman on his entitlements (except for the claim to penalty payments), counsel for the defendants at the beginning of his oral address said that in relation to the principal amounts, the parties were only a few hundred dollars apart here and there. He suggested that it would be simpler to seek instructions about agreeing to the plaintiffs' figures. He said that it was not a worthwhile use of the court's time given the relatively small differences between the parties. The cost of arguing about the payments was possibly greater than the value of the payments themselves. Thus, Mr Meagher reserved his position until after lunch and argument commenced on the topic of penalty payments.
When court resumed at 2.15pm, counsel for the plaintiffs advised the court that the parties had conferred over lunch and that the defendants now accepted the figures proposed by Goodman as outlined in the aide memoire.[8] Counsel for the defendants did not contradict or qualify that statement.
In my costs judgment,[9] I summarised the payments Ekera was obliged to pay Creative Smiles and Goodman as a result of my findings in the principal reasons and the penalty reasons.
Having regard to the circumstances addressed above, the defendants cannot now seek to resile from a concession made during the penalty hearing. I accept that the position reached during the hearing was different from that set out in the submissions which the defendants filed beforehand. However, it is not uncommon that, during a hearing, the boundaries of a dispute change and one or both parties make concessions. The reasons can include pragmatic matters such as reducing the scope of the conflict to focus on the critical issue or minimising disproportionate expense. Having agreed to the figures put forward by the plaintiffs, the defendants cannot now advance an inconsistent argument which, in effect, contests those figures.
The parties should assume that final orders will be made on 17 July 2023. The orders will be as follows:

(a) the first defendant breached section 45 of the Fair Work Act 2009 (Cth) by contravening the Health Professionals and Support Services Award 2020 (previously 2010) ("the Modern Award") in failing to:

(i) pay wages to the second plaintiff in the amount of $44,175.65 for the period from July 2016 to February 2018 at the prescribed rate pursuant to clause 14.3 of the Modern Award;

(ii) make superannuation contributions on behalf of the second plaintiff as prescribed by clause 22.2 of the Modern Award in the amount of $...

(b) the first defendant breached section 44 of the Fair Work Act 2009 (Cth) in:

(i) failing to pay public holiday pay in the amount of $3,454.43 as required by section 116 of the Fair Work Act 2009 (Cth) and the Modern Award; and

(ii) failing to pay the second plaintiff annual leave and loading in the amount of $4,031.17 pursuant to section 90(2) of the Fair Work Act 2009 (Cth) and clause 31.2 of the Modern Award.

(a) the first defendant pay the first plaintiff the sum of $136,687.84 within 30 days.

(b) the first defendant pay the first plaintiff interest on the sum of $136,687.84 from the date of issuing the writ to the date of this judgment at the rate prescribed under the Penalty Interest Rates Act 1983 (Vic), such interest totalling $...

(c) the first defendant pay to the second plaintiff the sum of $44,175.86 together with interest to the date of this judgment of $...

(d) the first defendant pay to the second plaintiff the sum of $3,454.43 together with interest to the date of this judgment of $...

(e) the first defendant pay to the second plaintiff the sum of $4,031.17 together with interest to the date of this judgment of $...

(f) the first defendant pay to the superannuation fund nominated by the second plaintiff the sum of $... together with interest to the date of this judgment of $...

(g) the plaintiffs' claims against the second defendant be dismissed.

I direct that by 4.00pm on 14 July 2023, the parties advise the court what the agreed amounts of interest and superannuation should be.

[2] This was outlined in an email to my chambers from the defendants' solicitors on 28 June 2023

[3] Defendants' submissions dated 16 January 2023 at [9]

[5] Defendants' submissions dated 16 January 2023 at [10]

[9] Creative Smiles Pty Ltd & Anor v Ekera Dental Pty Ltd & Anor (No 3) [2023] VCC 1083 at [4]

Creative Smiles Pty Ltd & Anor v Ekera Dental Pty Ltd & Anor

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