Fair Work Ombudsman v Foot & Thai Massage Pty Ltd

KATZMANN J: 1 In this proceeding the Fair Work Ombudsman seeks various forms of relief for alleged contraventions of the Fair Work Act 2009 (Cth). That relief includes pecuniary penalties. The first respondent is a corporation, currently in liquidation. Leave was granted to the Ombudsman to proceed against the corporation (FTM) in September 2019. Until that time FTM was represented by lawyers. Since then it has been unrepresented. The second respondent, Colin Kenneth Elvin, was the sole director of the corporation at all relevant times. He and the third respondent, Jun Millard Puerto, an employee of FTM, are said to have been knowingly concerned in the contraventions by FTM. Neither of them is legally represented. 2 The hearing began in October 2019. At that time only the Ombudsman's evidence was taken since Mr Elvin and Mr Puerto had filed defences raising the penalty privilege. At the conclusion of the Ombudsman's case on 25 October 2019, orders were made to enable them to file amended defences and evidence and the hearing was fixed to resume on 1 April 2020. Mr Puerto did not amend his defence and filed no evidence. The orders were later varied to enable Mr Elvin to file an amended defence well outside the time fixed by those orders. With the onset of the COVID-19 pandemic, the trial dates were vacated and new dates appointed. Mr Elvin has filed and served affidavits containing the evidence upon which he intends to rely at the resumed hearing. The Ombudsman has filed evidence in reply. 3 On Thursday 15 October 2020, six weeks before the trial is due to resume, the Registry accepted for filing an interlocutory application lodged by Mr Elvin the previous Friday. By that interlocutory application, Mr Elvin sought an order requiring the Ombudsman to provide written answers to interrogatories. Those interrogatories are set out in annexure A to these reasons. Having regard to its timing alone, this was an extraordinary application. In his affidavit Mr Elvin merely deposed that "[t]he interrogatory questions all relate to factual matters in dispute between the [Ombudsman] and myself arising out of the proceeding". 4 The application is opposed and should be refused. It is misconceived. Indeed, it amounts to an abuse of process. 5 Rule 21.01 of the Federal Court Rules 2011 (Cth) entitles a party to apply to the Court for an order that another party provide written answers to interrogatories. The Court's power to make such an order is conferred by r 1.41. 6 Rule 21.02 provides that no application for an order of this kind can be made until after the pleadings have closed: The reason that is so is obvious. The scope of the dispute is determined by the pleadings. Consequently, as r 21.03 expressly states, interrogatories which do not relate to an issue raised on the pleadings are objectionable. Rule 21.03 imposes other limitations, too, by providing that interrogatories which are vexatious or oppressive or call for privileged information are also objectionable. 7 Administering interrogatories is a pre-trial procedure. Their fundamental purpose, as Brereton J explained in Kalgeracos v Bomba [2009] NSWSC 1271 at [1], is to obtain admissions or particulars about material facts in the proceeding. A material fact is a fact which is essential to the cause of action. The expression refers to the fact or combination of facts that give rise to a right to sue. See, for example, Do Carmo v Ford Excavations Proprietary Limited (1984) 154 CLR 234 at 245 (Wilson J). Interrogatories can also be deployed to obtain admissions which will destroy or damage the case of the party who is interrogated, to acquire further and better particulars of the pleaded claim; or to seek to obtain accounts from a party in a fiduciary position: W A Pines Pty Ltd v Bannerman (1981) 41 FLR 175 (FC) at 190; 30 ALR 559 (FC) at 572 (Lockhart J). 8 It is not a purpose of interrogatories to elicit evidence or to serve as a means of cross-examination: Kalgeracos at [1]. Nor can interrogatories be used to "fish" for information in order to see if there is a case which is not raised on the pleading: Bannerman at 41 FLR 175 at 190; 30 ALR 559 at 572. 9 Yet the interrogatories Mr Elvin wishes to administer fall foul of these basic principles. They can fairly be described as vexatious. Several of them are directed to exploring the Ombudsman's reasons for not taking certain courses of action either before or after the proceeding was commenced or for bringing the proceeding in the first place (2, 3, 4, 5, 6, 7, 8, 11, 12, 14, 16, 17, 20, 21, 22, 23). They amount to fishing. They all relate to matters which do not arise on the pleadings. One of the proposed interrogatories is directed to matters only the witnesses could answer and on a subject which could only go to their credit (15). Others merely seek that the Ombudsman identify the evidence upon which she relies to prove certain matters (1, 9, 10, 13, and 24). Those matters will be covered in submissions. Interrogatories 18 and 19 similarly invite submissions to support certain claims. Interrogatory 25 is both vexatious and oppressive. None of the matters the subject of the application is a proper matter for interrogatories. 10 In any event, like any power conferred by the Rules in relation to a civil proceeding in the Court, the power to order interrogatories must be exercised in the way that best promotes the overarching purpose of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and Rules, which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: FCA Act, s 37M. The exercise of the Court's power in this case, particularly at this point in the proceeding, would certainly not be the best way to promote this purpose. To the contrary, it would tend to undermine it by imposing an excessive burden on the Ombudsman for no good reason at a time when she is no doubt busy preparing for the hearing. 11 Further, no satisfactory explanation has been given for the delay in making the application. Mr Elvin's explanation was that he had raised the penalty privilege in his defence. But his amended defence, waiving the privilege, was filed on 17 March 2020 - about seven months before he made this application. It is true that a late order for interrogatories is not unprecedented. The Ombudsman referred to Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (No 9) [2015] FCA 623 in which Besanko J was prepared to make an order where the application had been made six weeks before the trial was due to start. His Honour described the timing of the application as "very late" but was persuaded to make the order because the interrogatories were "targeted, clearly relate[d] to an important issue and [were] not burdensome or oppressive …" (at [17]). That is plainly not the case here. Besides, as I have already observed, the trial in the present matter started a year ago and is well under way. 12 It follows that Mr Elvin's interlocutory application should be dismissed. I will reserve the question of costs for determination at the conclusion of the substantive proceeding. There will be orders accordingly. I certify that the preceding 12 numbered paragraphs is a true copy of the Reasons for Judgment of the Honourable Justice Katzmann.

Associate: Dated: 6 November 2020 Annexure A INTERROGATORIES TO APPLICANT The Second Respondent requires you to answer interrogatory questions, as follows:

1. State and describe in detail the evidence that the Applicant relies upon to prove that the Health Professionals Support Services Award or the Hair and Beauty Award 2010 cover the First Respondent and massage therapists employed by the First Respondent.
2. State and describe in detail the reasons why the Applicant is not estopped from claiming that the Health Professionals Support Services Award or the Hair and Beauty Award 2010 cover the First Respondent and massage therapists employed by the First Respondent.
3. State and describe in detail the reasons why the Applicant did not put into evidence the Australian Federal Police investigation Case Summary 5944911 and associated Case Notes and Diary entries completed 10 April 2016 that were produced to George Raptis 31 May 2018.
4. State and describe in detail the reasons why the Applicant disregarded the findings of the Australian Federal Police investigations in 2012, 2015 and, 2016 and in particular Detective Sergeant Giles advice to Lara Hurrell 1 June 2016 that there was no evidence to support the allegations made by Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan.
5. State and describe in detail the reasons why the Applicant did not obtain and or disregarded the Supreme Court decision by Murrell CJ 31 May 2016 concerning the Second Respondent's application for an injunction against ABC to stop them running a television story on the program 7.30, the existence of which was communicated to Lara Hurrell 1 June 2016 by Detective Sergeant Giles, and Lara Hurrell knew that decision addressed allegations against the Second Respondent by former employees, including one or more of Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan of having money taken from them, being confined and being forbidden to leave the work and residential premises and, being threatened and or their family members being threatened.
6. State and describe in detail the reasons why the Applicant did not obtain and or disregarded the ABC television story, the existence of which was communicated to Lara Hurrell 1 June 2016 by Detective Sergeant Giles.
7. Bearing in mind that the proceeding was initiated 22 June 2018 and the first hearing day was 21 October 2019, and the Applicant's Further Amended Statement of Claim was filed 21 November 2019, state and describe in detail the reasons why the Applicant did not call as witnesses in the proceeding former employees of the First Respondent Charlen Centillas, Geraline Dadula, Judith Bugtai, Jurylyn Polinar, Veronica Paquibot, and Charis Borbajo and pursue claims for statutory breaches in relation to the allegations contained in their identical written Requests' for assistance received by the Applicant on 26 July 2019, when those Requests' contain allegations that are identical to those made by Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan.
8. Bearing in mind that the Applicant made an interlocutory application seeking leave to continue the proceeding against the First Respondent on or about 4 September 2019 and on or about 9 September 2019 the Applicant filed affidavit evidence from Charlen Centillas, Charis Borbajo and, Veronica Caballero Paquibot in support of that application, state and describe in detail the reasons why the Applicant did not include in that affidavit evidence any of the allegations from Charlen Centillas, Charis Borbajo and, Veronica Caballero Paquibot contained in their written Requests' for assistance received by the Applicant on 26 July 2019, and state and describe in detail why no affidavit evidence was filed from Geraline Dadula, Judith Bugtai, and Jurylyn Polinar.
9. State and describe in detail what the evidence is that the Applicant relies upon to prove that Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan did not receive Christmas holiday pay.
10. State and describe in detail what the evidence is that the Applicant relies upon to prove that Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan paid for airline tickets for flights to and from the Philippines in the Christmas holiday period in every year that they were employed by the First Respondent.
11. State and describe in detail the reasons why the Applicant has not reconciled the St George Bank and or the National Australia Bank statements with the Ria Financial and WorldRemit production schedules annexed to the First Affidavit of Luke Thomas with the monthly discretionary expenditure for Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan for the first 9 months they were employed by the First Respondent.
12. State and describe in detail the reasons why the Applicant has not asked, and has refused to ask Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan whether or not in addition to St George Bank accounts and or National Bank of Australia Bank accounts they used other bank accounts during the first 9 months they were employed by the First Respondent.
13. Bearing in mind that the bank statements of Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan annexed to the First Affidavit of Luke Thomas record numerous EFTPOS and ATM transactions at random times of the day and night state and explain in detail the evidence that the Applicant relies upon to prove the allegations that Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan were confined to the work and residential premises.
14. State and describe in detail the reasons why during the period 15 December 2015 and 17 October 2017, being the period in which the First Respondent was under administration , did the Applicant not raise with the Administrators the allegations by administration, did the Applicant not raise with the Administrators the allegations by Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan about pay backs of $800 a fortnight for the first 9 months they were employed by the First Respondent and, staff loan deductions from their salary payments.
15. State and describe in detail the reasons why during the period 15 December 2015 and 17 October 2017, being the period in which the First Respondent was under administration, did Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan not file a Proof of Debt with the Administrators in relation to the alleged pay backs of $800 a fortnight for the first 9 months they were employed by the First Respondent and, staff loan deductions from their salary payments.
16. State and describe in detail the reasons why the Applicant did not advise Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan to file a Proof of Debt with the Administrators in relation to the alleged pay backs of $800 a fortnight for the first 9 months they were employed by the First Respondent and, staff loan deductions from their salary payments, and state and explain in detail why the Applicant subsequently included these allegations in affidavit evidence from Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan.
17. State and describe in detail the reasons why during the period 15 December 2015 and 17 October 2017, being the period in which the First Respondent was under administration, did the Applicant not intervene in the administration and stop Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan from accepting a final payment from the Administrators when the Applicant knew and or it was foreseeable that if they accepted a final payment they could not make any future claim for further payments and any entitlement to any further payment was legally extinguished.
18. State and describe in detail the reasons that the Applicant relies upon to prove that the Applicant is not estopped from claiming underpayments and or making payments for underpayments to Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan when the contract they entered into with the Administrators extinguished any legal or equitable right they had to receive any future payment over and above the final payment they received from the Administrators .
19. State in detail the reasons why and describe how a judgment creditor is not barred by the terms of the Deed of Company Arrangement from enforcing Court orders for underpayment claims against the First Respondent.
20. State and describe in detail the reasons that the Applicant relies upon for not obtaining and putting into evidence in the proceeding and disregarding the Administrators reports and the Liquidators reports concerning the First Respondent, when those reports address the First Respondent meeting its' obligations under the Corporations Act and the Fair Work Act.
21. State and describe in detail the reasons that the Applicant relies upon to prove that pursuing breaches of civil remedy provisions of the Fair Work Act after the First Respondent has been put through Voluntary Administration and, Liquidation is in the public interest and what if any deterrence value is created in the community by this action.
22. Bearing in mind the Applicant has a legal and ethical obligation as a model litigant to establish the truth of allegations relied upon by Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan and the allegations arise in a period of time between June 2012 and May 2016, the proceeding was initiated 22 June 2018, and the first affidavits by these witnesses were made 12 April 2019 and bearing in mind nearly 7 years had elapsed between June 2012 and April 2019 state and describe in detail the reasons why the Applicant initiated these proceedings without testing, verifying and establishing the truth of the allegations and state and explain why the Applicant did not obtain and put into evidence any independent material from third parties including the Commonwealth Bank of Australia, the Australian Federal Police, the Supreme Court, the Administrators, the Liquidators, AUSTRAC, and the Australian Border Force, and state and explain in detail why a period of 10 months elapsed between the time the proceeding was initiated and the first affidavits by Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan were filed, and state and describe in detail the legal grounds relied upon by the Applicant for posting on the Applicant's official website on 29 June 2018 details of the allegations by Delo Be Isugan, Bartolome Durado, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan when none of them had made an affidavit and the Applicant had no independent material that proved the truth of the allegations, and the Applicant had material from the Australian Federal Police that there was no evidence to prove the allegations.
23. State and describe in detail the reasons why the Applicant did not obtain and put into evidence and disregarded the Australian Border Force investigation reports concerning the First Respondent and the Second Respondent and Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan, when the Applicant was aware that the Australian Border Force had carried out investigations that included these witnesses and the First Respondent and the Second Respondent between 2012 and 2016, and state and describe in detail the reasons that the Applicant relied upon for disregarding Detective Sergeant Giles advice to Lara Hurrell 1 June 2016 that it was plausible the allegations being raised were an attempt to manipulate the Immigration system and secure an outcome in relation to their visa status and avoid removal from the country, and the Australian Federal Police intended to inform the Australian Border Force.
24. State and describe in detail the evidence that the Applicant relies upon to prove and justify the Applicant's claim that the First Respondent discriminated against Delo Be Isugan, Mayet Ortega, Janice Casteneda, Cyrene Sarto, Irene Amacio, Ruben Benting and, Crisanta Bantilan on the grounds of National extraction and or race and or social origin.
25. State and describe in detail the number of people, including their names, position and the location of the offices they work in that work for or are otherwise employed by the Applicant who have worked on the proceeding in any way however trivial or substantive, and the budget allocation for the proceeding, and how much time and money has been expended on the proceeding to date, and state and describe in detail the reasons relied upon and the legal grounds to justify the Applicant threatening to claim costs against the Second Respondent in relation to notices to produce served on the Applicant and challenging the Applicant's claim to Legal Professional Privilege.