Elvin v Fair Work Ombudsman

1. Orders 1, 2, 4(b) and 5 of the Orders of Justice Katzmann made on 10 May 2024 be stayed to the extent that they affect Mr Colin Kenneth Elvin. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLLIER J: 1 On 10 May 2024 Katzmann J gave final judgment in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483. The respondents were found to have contravened the Fair Work Act 2009 (Cth) in multiple respects referable to, inter alia, minimum rates of pay for employees and record keeping. Mr Elvin was the second respondent in that case, being the director of the first respondent Foot & Thai Massage Pty Ltd ACN 147 134 272, a company now in liquidation (the company). Her Honour appointed a referee to calculate the extent of underpayment of employees' entitlements, and adopted the referee's report (to which Mr Elvin unsuccessfully objected). Her Honour made orders including the payment of compensation, interest and pecuniary penalties by the company and Mr Elvin. 2 By Amended Notice of Appeal filed on 6 July 2024, Mr Elvin appealed the judgment of Katzmann J given on 14 October 2021 (Liability Decision) and the final judgment given on 10 May 2024 (Penalty Decision). 3 Further, by Amended Notice of Cross-Appeal filed on 19 July 2024, the Fair Work Ombudsman appealed part of the Liability Decision and Penalty Decision, materially referable to the finding of Katzmann J that the Hair and Beauty Award did not cover and apply to relevant employees of the company. 4 On 12 July 2024 Mr Elvin filed an interlocutory application in which he sought the following order: 1. An order staying execution of the judgment of Justice Katzmann dated 14 October 2021 (Liability judgment) and 10 May 2024 (Penalty judgment). 5 Both Mr Elvin and the Fair Work Ombudsman have filed written submissions. Both parties also rely on affidavit material filed in the proceeding. 6 In summary, Mr Elvin submitted: Justice Katzmann erred in her Honour's reasons in relying on the Health Professionals and Support Services Award 2010 (HP Award); He would be disadvantaged if a stay were not granted because the Fair Work Ombudsman indicated steps may be taken to enforce the Penalty Decision, and he would be compelled to answer enforcement proceedings while also pursuing his appeal; He has very limited resources compared with those available to the Fair Work Ombudsman, and could not answer both proceedings simultaneously; He was the active respondent in the proceedings at first instance; Any prejudice to Mr Elvin should the orders of her Honour not be stayed would outweigh any prejudice to the Fair Work Ombudsman if the stay were granted; and Mr Elvin initiated proceedings in the Supreme Court against the external administrators of the company seeking orders that those administrators for orders that they be held liable for the orders made in Katzmann J's judgments, and is currently awaiting judgment by the Supreme Court. This is a compelling reason why a stay should be granted. 7 Mr Elvin's affidavit filed 12 July 2024 gave evidence essentially reiterating his submissions. 8 The Fair Work Ombudsman submitted, in summary: Mr Elvin's grounds of appeal lack substantial merit, in that they primarily concern procedural fairness points which misunderstand the role of the court when dealing with unrepresented litigants, and a claim of apprehended bias in respect of actions which were open to Katzmann J; The balance of convenience does not favour the grant of a stay, because it weighs heavily in favour of ensuring that relevant employees of the company, who were found to be vulnerable employees, receive their entitlements as soon as possible; The Fair Work Ombudsman has cross-appealed the judgment of Katzmann J, only in the event that Mr Elvin's appeal is successful; Mr Elvin's affidavit filed on 12 July 2024 in support of the interlocutory application did not provide adequate evidence regarding his financial circumstances nor address evidence that between 2020 and 2022, Mr Elvin sold three properties for a total of $2,165,000, and that it therefore appears that he has sufficient funds to pay the outstanding amounts due under the orders of Katzmann J; There is a risk that Mr Elvin may dispose of or dissipate any assets he holds during the course of the appeal proceedings; The penalties imposed against Mr Elvin served to act as an appropriate deterrent to both Mr Elvin and more generally to wrongdoers in similar circumstances. Stay of the orders of Katzmann J would nullify or impair the deterrent effect of the penalties imposed; If granted, the orders sought in the interlocutory application would also prevent the Fair Work Ombudsman from enforcing the orders of Katzmann J against the other parties to the proceedings, including the payment plan which has already been agreed with one of the respondents to the primary proceedings, which would further amplify the prejudice occasioned to the Fair Work Ombudsman and the relevant employees; Refusal of a stay to Mr Elvin would not render his appeal rights nugatory, as any amounts recovered could be returned to Mr Elvin in the event his appeal was successful; and Mr Elvin's submission that an external administrator of the company could be ordered by the Supreme Court to pay compensation and penalties is misconceived because those orders were directed at Mr Elvin personally.

CONSIDERATION 9 The Court has power under s 29 of the Federal Court of Australia Act 1976 (Cth) and r 36.08 of the Federal Court Rules 2011 (Cth) to order a stay of proceedings under a judgment the subject of appeal. Relevant principles to guide the Court in the exercise of its discretion are settled, and include: The onus rests on the party seeking the stay. An order granting a stay is an interlocutory order at the discretion of the Court, and such discretion must be exercised judicially. The power of the Court to order a stay ought not be exercised lightly. A decision at first instance should not be treated as merely provisional - rather a successful party at trial is generally entitled to the fruits of its judgment, and courts should not be disposed to delay the enforcement of orders. On the other hand, a significant factor in any discretionary consideration is whether there is a real risk or probability that the appeal would be rendered nugatory if a stay is not granted The balance of convenience plays an important role in determining whether an order ought be made. The Court may be minded to refuse a stay where it is satisfied that there are no serious questions for determination in the appeal or review. Conversely, the Court may be minded to grant a stay where, on a preliminary assessment of the case, the Court is satisfied that grounds of appeal or review have merit. A key question is whether there is an arguable point on the proposed appeal, or some rational prospect of success in relation to any of the grounds of appeal. The Court will consider whether a stay is warranted in the interests of justice. (see for example National Retail Association v Fair Work Commission (No 2) [2014] FCA 664, Viagogo AG v Australian Competition and Consumer Commission [2021] FCA 175, De Pyle v Commonwealth of Australia (No 2) [2023] FCA 751) 10 Turning now to the case before me, I make the following findings. 11 First, I note the submissions and evidence of Mr Elvin concerning the prejudice he would suffer should a stay not be granted. In particular, Mr Elvin contends that, because he is a litigant in person without legal qualifications, he would be unable to effectively prosecute his appeal while simultaneously engaging in legal proceedings to resist enforcement by the Fair Work Ombudsman of orders of the primary Judge. I accept that the resources available to the Fair Work Ombudsman are significantly greater than those available to Mr Elvin, and that Mr Elvin would almost certainly have difficulty managing both cases. 12 Second, the compensation and penalties ordered to be paid by the primary Judge were significant amounts for an individual. While it is true that Mr Elvin could pay the amounts ordered, in advance, it is likely that payment of such sums would be financially crippling to an individual, notwithstanding the prospect of recovery of the monies in the event that the appeal was successful. On balance, I am satisfied that the balance of convenience as to whether a stay should be ordered favours Mr Elvin. 13 Third, I have difficulty accepting the submission of the Fair Work Ombudsman that an effect of a stay of the orders of Katzmann J would be to free Mr Elvin to dispose of his assets, thus potentially eliminating a source of funds for Mr Elvin to satisfy the orders against him for compensation and pecuniary penalties. Insofar as I am aware no application for orders in the way of freezing of assets have been sought by the Fair Work Ombudsman, notwithstanding that the orders of the primary Judge were made in May this year. It may be that Mr Elvin will dispose of assets in the manner in which the Fair Work Ombudsman submits, however at this time such a prospect is merely hypothetical. 14 Fourth, while I note that the purpose of the proceedings ultimately decided by Katzmann J was to secure claimed entitlements of vulnerable employees of the company, to the extent that there is ongoing litigation between Mr Elvin and the Fair Work Ombudsman I consider the nature of the enforcement proceedings taken by the Fair Work Ombudsman against Mr Elvin to be of neutral weight in determining whether a stay should be ordered. If Mr Elvin is successful in his appeal against her Honour's orders, the nature of the primary litigation would be irrelevant. 15 Fifth, as matters presently stand, Mr Elvin's lengthy Amended Notice of Appeal contains thirteen grounds of appeal, with approximately 35 pages of particularisation of those grounds in a form effectively constituting submissions. While the Fair Work Ombudsman submits that Mr Elvin's appeal grounds lack substantial merit, no application for summary dismissal or strike out has been made by the Fair Work Ombudsman. Further, the Fair Work Ombudsman herself has sought to cross-appeal findings of the primary Judge. In the circumstances it would be premature for me to find that Mr Elvin's Amended Notice of Appeal had no arguable grounds. 16 Sixth, I am not satisfied that the interests of justice favour refusal of a stay, because the stay would "nullify or impair the deterrent effect of the penalties imposed" as alleged in submissions by the Fair Work Ombudsman. 17 Finally, while Mr Elvin refers in submissions to related Supreme Court proceedings concerning himself and the company, I am not persuaded at this point that the existence of those proceedings is a relevant consideration in determination of the present interlocutory proceedings, particularly noting the point made in submissions by the Fair Work Ombudsman that the orders of Katzmann J were personally directed at Mr Elvin.

CONCLUSION 18 I am satisfied that a stay of orders affecting Mr Elvin should be ordered pending hearing and determination of the appeal and cross-appeal against the primary Judge's decision. I note however the submission of the Fair Work Ombudsman that a general stay on her Honour's orders would affect other respondents at first instance, who are not appealing her Honour's orders. In the circumstances, I consider it appropriate that an order be made staying, with respect to Mr Elvin only, orders 1, 2, 4(b) and 5 of the Orders of the primary Judge made on 10 May 2024. I do not consider it appropriate, for reasons of prejudice I have already described, that a stay be ordered on terms advanced by the Fair Work Ombudsman in her submissions referable to the payment into Court of $1,783,308.50 by Mr Elvin pending determination of the appeal. 19 Mr Elvin has been successful in respect of this interlocutory application. In circumstances where he is a litigant in person, no costs orders should be made: Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 at 409, Minister for Immigration and Border Protection v CZBP [2014] FCAFC 105 at [110]. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Collier.