Fair Work Ombudsman v Drew and Schofer Real Estate Pty Ltd [2026] FedCFamC2G 550

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301

Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080

Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170

Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4

Trade Practices Commission v CSR Limited (1991) ATPR 41-076

Transport Workers' Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

1. Upon admissions made by the First and Second Respondents:

(a) The First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice given to the First Respondent on 19 December 2022 (Compliance Notice).

(b) The Second Respondent was involved, within the meaning of s 550(2) of the FW Act, in the First Respondent's contravention of s 716(5) of the FW Act, and by reason of s 550(1) of the FW Act, is taken to have contravened s 716(5).

1. Pursuant to s 545(1) of the FW Act, within 28 days of the date of this order, the First Respondent is to take the steps required by the Compliance Notice, being:

(a) to pay the Applicant the remaining amount of $3,440.64 (Remaining Amount);

(b) to calculate any relevant superannuation contributions payable on the Remaining Amount and the amount of $1,000 paid to Dylan Foreman (employee), in accordance with the steps set out in the Compliance Notice and pay such contributions into the employee's nominated superannuation fund; and

(c) provide the Applicant with evidence of payments referred to in Order 1(a) and Order 1(b).

1. Pursuant to s 547(2) of the FW Act, within 28 days of the date of this order, the First and Second Respondents pay the Applicant interest on the Remaining Amount calculated at $873.71.
2. Within 60 days of the date of this order, the Applicant distribute to the employee the amounts paid to the Applicant pursuant to Order 1(a) and Order 2.
3. Pursuant to s 546(1) of the FW Act, the First Respondent pay pecuniary penalty in the amount of $12,375.
4. Pursuant to s 546(1) of the FW Act, the Second Respondent pay pecuniary penalty in the amount of $2,475.
5. Within 28 days of the date of this order, the First Respondent pay the Consolidated Revenue Fund of the Commonwealth pursuant to s 546(3)(a) of the FW Act the amount of the pecuniary penalty in the amount of $12,375 referred to in Order 4.
6. Within 28 days of the date of this order, the Second Respondent pay the Consolidated Revenue Fund of the Commonwealth pursuant to s 546(3)(a) of the FW Act the amount of the pecuniary penalty in the amount of $2,475 referred to in Order 5.
7. The Applicant have liberty to apply on seven (7) days' notice in the event that any of the above orders are not complied with.
8. There be no order as to costs.

Note: The form of the order is subject to the entry in the Court's records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. In this matter, the applicant is the Fair Work Ombudsman (FWO) and the first respondent is a company that operates a real estate business, which company has a sole director, being the second respondent. By application filed on 3 March 2025, the FWO seeks declarations in relation to a failure by the first respondent to comply with a compliance notice given by a Fair Work Inspector pursuant to s 716(2) of the Fair Work Act 2009 (Cth) (FW Act), orders for compliance by the first respondent with the compliance notice, compensation and penalties under the provisions.

1. The matter came before me at 10:30am on 17 February 2026 for hearing. Mr Alex Giordano (Mr Giordano), solicitor at the Office of the FWO, appeared for the FWO. The second respondent, Mr Graeme Drew, appeared on behalf of the first and second respondents.
2. The evidence before the Court comprised of the following documents tendered by the FWO:

(a) Equifax Company Extract Current & Historical report for the second respondent dated 16 February 2026, with company status for the first respondent noted as "Strike-Off Action In Progress", marked "Exhibit A1".

(b) Statement of Agreed Facts between the parties filed on 1 August 2025 (Statement of Agreed Facts), marked "Exhibit A2".

(c) Affidavit of Nicole Andrea Harland affirmed on 4 September 2025.

1. The parties prepared and filed the Statement of Agreed Facts for the purpose of s 191 of the Evidence Act 1995 (Cth). The agreed facts are summarised as follows.
2. The FWO's claims arose following an investigation conducted on or around October 2022 by the FWO into the first respondent's compliance with the FW Act in respect of an employee of the first respondent, Mr Dylan Foreman (employee), who was employed by the first respondent as a junior real estate employee between 12 July 2022 and 19 September 2022 (employment period). The FWO was investigating an allegation by the employee that the first respondent had failed to pay the employee his salary and failed to pay his accrued annual leave on the cessation of his employment in the total amount of $4,440.64 (initial amount). Following the investigation, Fair Work Inspector Nicole Harland (FWI Harland), appointed by the FWO pursuant to s 700 of the FW Act, formed a reasonable belief within the meaning of s 716(1) of the FW Act that the first respondent had contravened cl 14.4 of the Real Estate Industry Award 2020 (Award), in that it failed to pay the employee for ordinary hours worked, and s 90(2) of the FW Act by failing to pay the employee accrued annual leave (contraventions).
3. On 19 December 2022, FWI Harland gave the first respondent a compliance notice pursuant to s 716(2) of the FW Act in respect of the contraventions outlined in the preceding paragraph (Compliance Notice), which Compliance Notice required the first respondent to take specified actions to remedy the direct effects of the contraventions, including to pay the employee the initial amount owed to him, and produce reasonable evidence to the FWO of the first respondent's compliance with the Compliance Notice. The first respondent contravened s 716(5) of the FW Act in failing to comply with the Compliance Notice, as it failed to take the specified actions by the required date, being 30 January 2023, and failed to produce to the FWO evidence of compliance by the required date, being 7 February 2023. The second respondent, on behalf of the first respondent, made one payment of $1,000 towards the initial amount owed to the employee, reducing the initial amount owed to the employee to $3,440.64 remaining owing to the employee (outstanding amount). The first respondent admitted that it contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice given to the first respondent. The second respondent admitted that he was involved, within the meaning of s 550(2)(c) of the FW Act, in the first respondent's contravention of s 716(5) of the FW Act, and was therefore taken to have contravened s 716(5) of the FW Act.

1. By the Statement of Agreed Facts, the parties sought declarations that:

(d) the first respondent contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice given to the first respondent on 19 December 2022; and

(e) the second respondent was involved, within the meaning of s 550(2) of the FW Act, in the first respondent's contravention of s 716(5) of the FW Act, and by reason of s 550(1) of the FW Act, is taken to have contravened s 716(5).

1. In the application filed on 3 March 2025, the FWO sought an order pursuant to s 545(1) of the FW Act that the first respondent within 28 days take the steps that were required by the Compliance Notice given on 22 December 2022, being:

(a) pay the FWO the outstanding amount owed to the employee in relation to his unpaid salary and accrued annual leave, being $3,440.64;

(b) calculate any relevant superannuation contributions payable on the outstanding amount, in accordance with the steps set out in the Compliance Notice and pay such contributions into the employee's nominated superannuation fund; and

(c) provide the FWO with evidence of payments referred to in the preceding subparagraphs.

1. Given the Compliance Notice was given to the first respondent pursuant to s 716(2) of the FW Act, the first respondent failed to comply with the Compliance Notice, thereby contravening s 716(5) of the FW Act, and the second respondent was the sole director and controlling mind of the first respondent at all relevant times, I make the declarations and orders set out at the commencement of this judgment.
2. I will now turn to consider the claim for penalty and interest.

1. This Court has power to order the payment of pecuniary penalties in respect of contraventions pursuant to s 546(1) of the FW Act which provides:

...the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

1. Section 539(1) of the FW Act provides that a "civil remedy provision" is a provision referred to in column 1 of an item in the table in s 539(2) of the FW Act. Relevantly in this case a contravention of s 716(5) of the FW Act is a civil remedy provision within the meaning of s 539(1) of the FW Act, in that the said provision is referred to in item 33 of column 1 in the table in s 539(2).

Relevant legal principles to the assessment of pecuniary penalties

1. In Transport Workers' Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971 (Qantas), his Honour Justice Lee at [26] summarised the well-settled legal principles applicable to the approach to determining an appropriate civil penalty, which I summarise as follows:

(a) The primary (if not sole) purpose of a civil penalty is the promotion of public interest in compliance with the provisions of the FW Act by deterrence, both general and specific. The Court emphasised that this purpose is protective, not punitive, and is directed to securing future compliance through deterrence. The question is whether the penalty is "appropriate" in the circumstances of the case.

(b) The power to order a person to pay a pecuniary penalty is a discretionary one, which must be exercised judicially, congruently with the aims and purposes of the Act.

(c) In Trade Practices Commission v CSR Limited (1991) ATPR 41-076 (at 52, 152 and 153) (CSR Ltd), French J (as his Honour then was) set out the following non-exhaustive list of relevant factors for assessing a pecuniary penalty of appropriate deterrent value:

(1) The nature and extent of the contravening conduct.

(2) The amount of loss or damage caused.

(3) The circumstances in which the conduct took place.

(4) The size of the contravening company.

(5) The degree of power it has, as evidenced by its market share and ease of entry into the market.

(6) The deliberateness of the contraventions and the period over which it extended.

(7) Whether the contravention arose out of the conduct of senior management or at a lower level.

(8) Whether the company has a corporate culture conducive to compliance with the [Act in question], as evidenced by educational program[me]s or other corrective measures in response to an acknowledged contravention.

(9) Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the [Act in question] in relation to the contravention.

(d) The Court must arrive at a figure to ensure that the penalty is not such as to be regarded as "an acceptable cost of doing business".

(e) It has been said that even if a company is in liquidation, it may still be appropriate to order that it pay penalties as a measure of the Court's disapproval of the contraventions, and the seriousness of the contraventions. The justification of any such order is not because of retribution but because a penalty in such circumstances can further the aim of general deterrence.

1. In Markarian v R (2005) 228 CLR 357 (Markarian) at 372, Gleeson CJ, Gummow, Hayne and Callinan JJ observed that:

[C]areful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.

1. As noted by Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [391], it is beyond doubt that the observations in Markarian apply equally to the imposition of civil penalties.
2. In Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301, Bromwich J at [36] accepted that the process of determining the appropriate penalty involved the following five steps:

(a) identify the separate contraventions involved, with each breach of obligation being a separate contravention, and each breach of a term of the Award being a separate contravention;

(b) consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person;

(c) consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did (that is, 'common law course of conduct');

(d) consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation; and

(e) consider the overall penalties arrived at, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct which led to the contraventions when viewed as a whole, making such adjustments as are necessary (that is, the 'totality principle'): see Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [30] per Tracey J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) FCAFC 8 at [23] per Gray J, [71] per Graham J, and [102] per Buchanan J.

1. I will now turn to consider the factors relevant in this matter as identified in CSR Ltd.

1. The first respondent was at all relevant times a company incorporated under the Corporations Act 2001 (Cth), a constitutional corporation within the meaning of s 12 of the FW Act, and a national system employer with the meaning of s 14 of the FW Act. The second respondent was at all relevant times the director, secretary and shareholder of the first respondent, a person responsible for ensuring that the first respondent complied with its legal obligations under fair work legislation, the person who communicated with the FWO on behalf of the first respondent and a person whose conduct, engaged in on behalf of the first respondent and within the scope of his actual or apparent authority, is taken to be that of the first respondent: s 793(1) of the FW Act.
2. The employee was employed by the first respondent on a full-time basis as a Junior Real Estate Employee Level 1 for a short time from 12 July 2022 to 19 September 2022, when the employee was 18 years of age. During the employee's employment, the Award applied to his employment.
3. Between 1 August 2022 and 19 September 2022, the first respondent failed to pay the employee for ordinary hours worked, pursuant to the Award, and following the cessation of the employee's employment on 19 September 2022, the first respondent failed to pay the employee for accrued but untaken annual leave.
4. On 19 December 2022, the FWO gave the first respondent a Compliance Notice in respect of the contraventions outlined in the preceding paragraph, which Compliance Notice required the first respondent to take specified actions to remedy the direct effects of the contraventions, including to pay outstanding amounts and superannuation to the employee, and to provide the FWO with evidence of compliance with the Compliance Notice by 7 February 2023. The second respondent was the primary point of contact for communicating with the FWO in relation to the Compliance Notice.
5. The second respondent informed the FWO on 3 February 2023 that a payment would be made to the employee, which payment did not occur. On 6 May 2024 and 18 October 2024, the FWO wrote to the first and second respondents providing further opportunities to comply with the Compliance Notice or to provide a reasonable excuse for non-compliance. On 29 November 2024, the second respondent on behalf of the first respondent entered into a payment plan proposed by the first and second respondents, which involved making five payments to the employee and applicable superannuation contributions to the employee's nominated superannuation fund by 15 April 2025.
6. On 17 December 2024, the second respondent on behalf of the first respondent made a payment of $1,000 to the employee, however no further payments were made to the employee nor contributions to his nominated superannuation fund. The second payment under the payment plan proposed by the first and second respondents was due on 15 January 2025. The second respondent on 17 January 2025, 20 January 2025, 30 January 2025 and 10 February 2025 indicated to the FWO that the first respondent would make a further payment to the employee but did not do so. No other steps have been taken by the first and second respondents towards rectifying the non-compliance with the Compliance Notice.
7. I find that the first respondent and the second respondent, as the sole director of the first respondent at the time of the contravention, were aware of the Compliance Notice. I find the non-compliance with the Compliance Notice was deliberate in so far as the first and second respondents chose not to rectify the non-compliance with the Compliance Notice by making further payments to the employee as agreed or indicated and disregarded their obligations under the fair work legislation for an extended period of over three years. The second respondent continued to advise the FWO that payments were to be made but did not do so, albeit one late payment of $1,000 was made to the employee. As at the date of this judgment, more than three years have passed since the Compliance Notice was required to be complied with.

1. The total amount of loss to the employee was in the total sum of $4,440.64 as set out at [5] of this judgment which comprised of the unpaid salary and unpaid accrued annual leave, noting the remaining amount after the late payment of $1,000 to the employee was in the total sum of $3,440.64 as set out at [6] of this judgment.

1. The second respondent is the sole director and employee of the first respondent. There is no evidence before me as to the financial standing of the first respondent.

Whether the contravention arose out of the conduct of senior management or a lower level

1. The contraventions arose out of the conduct of senior management, being the second respondent, who was the sole director and directing mind of the first respondent at the time of the contravention.

Whether the company has a corporate culture conducive to compliance with the FW Act

1. There is no evidence before me as to whether the first respondent had a corporate culture conducive to compliance with the FW Act, as there is no evidence before me as to any educational programs or other measures to ensure compliance with the FW Act.

Whether the respondents have exhibited contrition, taken corrective action and co-operated with the enforcement authorities

1. The first and second respondents made full admissions of liability in the statement of agreed facts, and in doing so have reduced the cost and complexity of the proceedings. Further, on 17 December 2024, the second respondent on behalf of the first respondent made one payment of $1,000 to the employee, noting the said payment was made more than one year and 10 months after the date for compliance with the Compliance Notice. No further payments have been made and an amount of $3,440.64 remains owing to the employee.
2. I will now turn to the contravention to determine the appropriate penalty, addressing the five steps identified at [16] of this judgment.

Step 1: Identify the separate contraventions and maximum penalty

Contravention of s 716(5) of the FW Act - failure to comply with the Compliance Notice

1. There is only one contravention, being that the first and second respondents failed to comply with the Compliance Notice given by the FWO on 19 December 2022, thereby contravening s 716(5) of the FW Act.

1. At the time of the contravention, being 7 February 2023, the penalty unit was:

(a) 30 units for an individual: s 546(2)(a) and item 33, column 4 of s 539(2) of the FW Act; and

(b) 150 units for a body corporate: s 546(2)(b) and item 33, column 4 of s 539(2) of the FW Act.

1. Mr Giordano did not submit that the contravention was a serious contravention. "Penalty unit" has the meaning given by s 4AA(1) of the Crimes Act 1914 (Cth) (Crimes Act). Pursuant to s 4AA(3) of the Crimes Act, one penalty unit was $275 at the time of the contravention. Accordingly, the maximum penalties that could be sought by the FWO are for the first respondent's contravention of s 716(5), $275 x 150 units = $41,250, and for the second respondent's contravention of s 716(5), $275 x 30 units = $8,250.

1. Given the first and second respondents' failure to comply with the Compliance Notice is a single contravention of s 716(5) of the FW Act, it is not necessary to consider steps two and three of the five steps identified at [16] of this judgment.

Step 3: Consider whether further adjustment needs to be made to ensure no double penalty imposed as a result of overlap

1. As outlined in the preceding paragraph, it is not necessary to consider step three of the five steps identified at [16] of this judgment.

Step 4: Consider the appropriate penalty in respect of each final individual group of contraventions

1. The first and second respondents have failed to comply with the Compliance Notice, but for a late payment of $1,000 to the employee in relation to unpaid salary, for a period of over three years. The second respondent had on several occasions told the FWO that payment would be made, however it did not make the said payment. Nevertheless, the first and second respondents have appeared before this Court and sought to assist the finalisation of the matter. Further, the first and second respondents have co-operated in the proceedings in agreeing to the Statement of Agreed Facts. The second respondent also submitted, which I accept, that he had been attempting to run the real estate business but there had been difficulty with income flow which had meant the first respondent could not pay the employee the monies required under the Compliance Notice. Given these matters and in the circumstances set out at [18] to [29] of this judgment, I find the appropriate penalty for the contravention, to reflect the need for both general and specific deterrence is $12,375 (being 30% of the maximum penalty) for the first respondent and $2,475 (being 30% of the maximum penalty) for the second respondent.

Step 5: Consider the overall penalties arrived at to ensure the penalties are appropriate and proportionate to the conduct

1. The overall penalty for the first respondent is $12,375 and for the second respondent is $2,475. In the circumstances and applying the totality principle to ensure the penalties are appropriate and proportionate to the contravening conduct, I do not think the penalties require an adjustment.

(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a) the Commonwealth; or

(b) a particular organisation; or

(c) a particular person.

(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

1. In Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4, Tracey, Barker and Katzmann JJ said at [101]:

Given the legislative history of ss 539(2) and 546(3) of the FW Act, since the enactment of ss 44 and 45 in the pioneering 1904 Act, and the manner in which the "usual order" was articulated in such early cases as the Ve_hicle Builders' Employees' Federation_ case and Seymour, which is reflected in the Explanatory Memorandum, we consider that the power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. We accept that there may be cases (of which this is not one) where the penalty, or a part of the penalty, should be paid to another person in the circumstances described by Gray J in Plancor at [44] (as set out at [96] above).

1. His Honour Gray J in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170 at [44] said:

The correct view is that the initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons (now specified in s 718 of the WR Act) in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the Gibbs exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted.

1. Given the FWO in this case initiated the proceedings, incurred filing costs and I have made provision for the employee to receive the amount to compensate his loss and interest on that amount, I find that the amount of the penalty be paid to the Consolidated Revenue Fund of the Commonwealth.

1. Section 547 of the FW Act makes provision for pre-judgment interest as follows:

(1) This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument.

(2) In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.

(3) Without limiting subsection (2), in determining the amount of interest, the court must take into account the period between the day the relevant cause of action arose and the day the order is made.

1. Annexure "A" of this judgment sets out the pre-judgment interest in accordance with the rate identified in the "Interest on Judgments Practice Note (GPN-INT)" from the date the relevant cause of action arose to the date of the compensation orders, being the date of this judgment.
2. I am satisfied that the calculation of pre-judgment interest is in the sum of $873.71.

1. Costs are not sought by the FWO in this matter.

1. Accordingly, I make the orders set out at the commencement of this judgment.

I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kaur-Bains.