FEDERAL COURT OF AUSTRALIA

Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146

THE COURT ORDERS THAT:

1.    For its breaches of the commission agreement which it made with the applicant on 29 May 2009, the first respondent –

(a)    pay the applicant damages in the sum of $106,776.95;

(b)    pay the applicant interest in the sum of $27,816.46;

(c)    pay to the account of the applicant with the MTAA Superannuation Fund the sum of $12,113.41.

2.    For its breaches of the commission agreement which it made with the applicant on 14 June 2010, the second respondent –

(a)    pay the applicant damages in the sum of $170,224.17;

(b)    pay the applicant interest in the sum of $39,084.27;

(c)    pay to the account of the applicant with the MTAA Superannuation Fund the sum of $18,837.76.

3.    For its contravention of s 340 of the Fair Work Act 2009 (Cth) constituted by its suspension of the applicant from her employment in late October 2011 and its failure thereafter to pay the applicant her remuneration, the second respondent pay the applicant compensation in the sum of $37,557.76.

4.    The first respondent pay pecuniary penalties in respect of its contraventions of the Fair Work Act 2009 (Cth) as follows:

(a)    for the contravention of s 323 constituted by the failure to pay to the applicant the monthly commissions due to her under the said commission agreement made on 29 May 2009, the sum of $22,000;

(b)    for the contravention of s 323 constituted by the failure to pay to the applicant the full amount of her normal salary over the period 2 July 2009 to 23 December 2010, the sum of $25,000;

(c)    for the contravention of s 536 constituted by the failure to give the applicant pay slips reflecting the payments made to her in relation to the performance of work by her while employed by the first respondent, the sum of $5,000.

5.    Of the penalties referred to in Order 4 above –

(a)    the sum of $36,925 be paid to the applicant; and

(b)    the balance be paid to the Commonwealth.

6.    The second respondent pay pecuniary penalties in respect of its contraventions of the Fair Work Act 2009 (Cth) as follows:

(a)    for the contravention of s 323 constituted by the failure to pay to the applicant the monthly commissions due to her under the said commission agreement made on 14 June 2010, the sum of $22,000;

(b)    for the contravention of s 323 constituted by the failure to pay to the applicant the bonuses due to her under her contract of employment, the sum of $7,500;

(c)    for the contravention of s 536 constituted by the failure to give the applicant pay slips reflecting the payments made to her in relation to the performance of work by her while employed by the second respondent, the sum of $5,000.

(d)    for its contravention of s 340 constituted by the threat to dismiss the applicant from her employment made on 20 September 2011, the sum of $20,000;

(e)    for its contravention of s 340 constituted by discontinuing the applicant’s access to the second respondent’s computer system and the suspension of her from her employment in late October 2011, and by the failure thereafter to pay the applicant her remuneration, the sum of $20,000.

7.    Of the penalties referred to in Order 6 above –

(a)    the sum of $60,250 be paid to the applicant; and

(b)    the balance be paid to the Commonwealth.

8.    The second respondent pay a pecuniary penalty in the sum of $1,500 in respect of its contravention of reg 3.43 of the Fair Work Regulations 2009 (Cth) constituted by its failure to tell the applicant, on request by her, where the employee records in relation to her were kept.

9.    Of the penalty referred to in Order 8 above –

(a)    the sum of $1,125 be paid to the applicant; and

(b)    the balance be paid to the Commonwealth.

10.    The respondents pay the applicant’s costs as follows –

(a)    costs incurred after 16 March 2012 in connection with her claims (including claims for compensation and/or penalties) in relation to unpaid normal salary, bonuses, pay slips and access to employee records;

(b)    36% of the costs (not being costs covered by (a)) incurred in connection with the quantification of the amount of the commissions to which she was entitled, and which she was not paid, under the said commission agreements of 29 May 2009 and 14 June 2010; and

(c)    one-half of the costs (not being costs covered by (a) or (b)) incurred in connection with her Interlocutory Application filed on 17 April 2013.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    Reasons for judgment were given in this proceeding on 10 September 2013: Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908. In a number of areas, the parties are agreed as to the terms of the orders that should be made to give effect to those reasons. Orders 1 – 3 accompanying these reasons are made pursuant to that agreement. There are five areas of contention under which further determinations need to be made. They relate to the circumstances of the respondents’ arrangements with the Brisbane Football Club, to the correct value of a “penalty unit”, to penalties as such, to costs, and to the destination of penalty payments pursuant to s 546(3) of the Fair Work Act 2009 (Cth) (“the FW Act”).

Brisbane Football Club

2    Dealing with the first area, as noted in para 97 of my reasons of 10 September 2013, the Brisbane Football Club was referred to in the schedules to both the 2009 commission agreement and the 2010 commission agreement. However, in para 105 of those reasons, I said:

105    The only other organisation in this category which requires specific mention is the Brisbane Football Club. That organisation was mentioned in the schedules to the 2009 commission agreement and the 2010 commission agreement, but did not have its own white label website in the sense I have explained. Rather, the respondents had a more conventional kind of sponsorship agreement with the organisation. It seems that one of the characteristics of that agreement (which was not in evidence) was that there would be a Betezy promotional panel or link on the organisation’s website, whence the punter would be directed to the respondents’ own website. On the applicant’s evidence, the respondents maintained records of bets placed through this mechanism, but neither those records, nor the agreement with the organisation, were or was discovered. Mr Kay accepted that “tens of thousands of dollars” had been placed in bets in this way. However, Mr Hood’s calculations did not include this organisation, and the submissions made on behalf of the applicant, while proposing that the organisation’s betting record should be included in the base from which her commissions were calculated, did not contain any actual figures or estimates in that regard. In the circumstances, I cannot take account of this organisation in my assessment of the applicant’s damages.

It now appears that Mr Hood’s calculations did deal with the Brisbane Football Club, by way of an addendum to his second report, albeit that it was referred to neither in the applicant’s outline of final submissions nor in those submissions as made in court. Final orders not having been made, there is no inhibition upon the court making the correction now sought by the applicant, and taking account of Mr Hood’s calculations.

3    Counsel for the respondents accepted that I might do so, but submitted that I had, in the passage set out in the previous paragraph, decided the point against the applicant on another basis also, namely, that the arrangement which the respondents had with the Brisbane Football Club was “a more conventional kind of sponsorship agreement” and was not, therefore, a “Betezy Sponsorship Arrangement” within the meaning of the commission agreements. Although I noted that the club did not have its own white label website, and there was a more conventional kind of sponsorship agreement, I did not determine the question whether the arrangement which existed between the Club and the respondents fell within the definition of “Betezy Sponsorship Arrangement” in the commission agreement. However that matter would have been decided, in the view which I mistakenly took, the evidence did not permit the calculation of the commission to which the applicant would be entitled. As it happens, the evidence would permit the making of such a calculation, and I must now rule upon the respondents’ submission that the arrangement in question did not fall within the relevant definition in the commission agreements.

4    Given the terms of para 41 of my reasons of 10 September 2013, that submission must be rejected. Whatever the detailed content of the agreement which existed between the respondents and the Brisbane Football Club (no such agreement having been discovered by the respondents) there was, on any view, an arrangement with a sporting club set out in the schedules to the commission agreements. That is enough to activate the applicant’s entitlement to commission under those agreements.

5    The parties are in agreement as to the applicant’s entitlement to commissions, on the assumption that I would include the Brisbane Football Club within the organisations by reference to which the commissions would be calculated. In the orders which accompany these reasons, I have adopted the figure thus agreed between the parties.

Penalty Units

6    A question has arisen as to the correct penalty units to be used in the calculation of the maximum penalties for which the FW Act provides. The starting point is s 546(1), which provides that the court may “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”. Each of the sections which the respondents have been found to have contravened was, and is, a “civil remedy provision”. By s 546(2), the maximum pecuniary penalty must not be more than “5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” in the case of a corporation. The FW Act does, therefore, fix maximum penalties by reference to “penalty units”.

7    By s 12 of the FW Act, the term “penalty unit” has the meaning given by section 4AA of the Crimes Act 1914 (Cth) (“the Crimes Act”). At the time of the contraventions with which the present proceeding is concerned, and until the amendment next referred to, s 4AA gave the meaning “$110” to that term. However, that section was amended by the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth) (“the amendment Act”), to substitute “$170” for “$110”. This amendment commenced on 28 December 2012. In the amending Act, it was provided, by item 9(1) of Sch 3, that the amendment “applies in relation to an offence committed after the commencement” of that item, namely, 28 December 2012. Item 9(1), however, has no application to a contravention of a civil remedy provision under the FW Act, since such a contravention is not an offence: FW Act, s 549.

8    The question, therefore, is whether the increase in the monetary value of a penalty unit legislated by the amendment Act applies in the case of a civil contravention of the FW Act which occurred before the commencement of the amendment Act but for which the penalty will be imposed after that commencement. In answering this question, the respondents accepted that no assistance was to be derived from item 9(1) of Sch 3.

9    There are some statutory provisions which deal with the general problem which now confronts the court, but they have no application because the contraventions in the present case are not offences: see s 4F of the Crimes Act and s 7(2)(d) of the Acts Interpretation Act 1901 (Cth) (“the Interpretation Act”).

10    In contending that the increased monetary value of a penalty unit did not apply to civil contraventions which had occurred before the commencement of the amendment Act, counsel for the respondents relied on two very recent judgments of single Judges of the court. The first was Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 4) [2013] FCA 930, in which Murphy J imposed penalties for contraventions of s 340 of the FW Act. In the course of his reasons, his Honour said ([2013] FCA at [13]):

Section 4AA of the Crimes Act 1914 (Cth), at the relevant time, attributed a value to a penalty unit of $110. That amount has since been increased to $170 by Schedule 3, Part 2, item 7 of the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 …. However, by operation of item 9 the increase only applies in relation to an offence committed after the commencement of item 7, being 28 December 2012. The contraventions in this matter took place in August 2011.

Nothing else was said about the subject, from which I infer that the parties did not regard the matter as controversial. As counsel for the applicant in the present case noted, there is no suggestion that Murphy J's attention had been drawn to s 549 of the FW Act.

11    The other judgment was Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 1014, in which penalties were imposed for contraventions of ss 38 and 43 of the Building and Construction Industry Improvement Act 2005 (Cth) which had occurred in 2010. Gordon J applied ([2013] FCA at [34]) the legislative provisions which predated the amendment Act, but without further comment. The parties, who had filed an agreed statement of facts and agreed a schedule of appropriate penalties, clearly had not placed into issue the question which must now be resolved.

12    In Maxwell v Murphy (1957) 96 CLR 261, 267, Dixon CJ said:

The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.

Likewise, in Fisher v Hebburn Ltd (1960) 105 CLR 188, 194, Fullagar J said:

There can be no doubt that the general rule is that an amending enactment – or, for that matter, any enactment – is prima facie to be construed as having a prospective operation only. That is to say, it is prima facie to be construed as not attaching new legal consequences to facts or events which occurred before its commencement.

13    These statements of general principle favour the position for which the respondents contend. However, counsel for the applicant referred me to two English wartime cases which were said to provide support for a contrary view. The first was DPP v Lamb [1941] 2 KB 89. There an amendment had been made to the relevant regulations to introduce a provision in the following form: “Where any person is convicted of an offence against any of these Regulations in relation to [various things], the maximum fine which may be imposed on him shall be such fine as is authorized by [named other regulations] or a fine equal to [a sum calculated in a specified way], whichever is the larger.” The respondents to the appeal in the Divisional Court had all committed offences against the regulations before the date of the amendment, but had been convicted after that date. The court recognised the existence of the general principle that, to quote from the reasons of Humphreys J ([1941] 2 KB at 100), “where a statute alters the rights of persons, or creates fresh liabilities with regards to persons or imposes obligations on persons, it ought not to be held to be retroactive in its operation unless the words are clear, precise and quite free from ambiguity.” However, their Lordships held that the words of the amended regulation were clear and free from ambiguity: they referred to the point at which the conviction was recorded, not to the point at which the offences in question had been committed.

14    The other wartime case was Buckman v Button [1943] KB 405, in which the Divisional Court found the terminology of the relevant regulation to be indistinguishable from that of the regulation considered in Lamb, and came to a similar conclusion.

15    At the time of these decisions, there was in England, so far as I can see, no provision the equivalent of what became s 7(2)(d) of the Interpretation Act or s 4F of the Crimes Act.

16    Counsel for the applicant relied also on Arnold v Nielsen (1976) 9 ALR 191, in which a motorist had committed an offence before the commencement of an amending Ordinance which introduced the penalty of licence suspension in relation to that offence, but in which the conviction was recorded after that commencement. The terms of the provision introduced by the amending Ordinance were: “[W]here a person is convicted [of the offence in question] … the Court may suspend that person’s licence ….” Forster J held that the situation was governed by the judgment in Lamb. His Honour’s attention appears not to have been drawn to s 8(d) of the Interpretation Act (which was in effectively the same terms as the present s 7(2)(d) of that Act), which was applicable by reason of s 4 of the Interpretation Ordinance 1931 (NT).

17    As I would understand the position for which the applicant contends in the present case, use by the legislature of the statutory formula “where a person is convicted …” was critical in these three cases. It had the effect that the legislation in question spoke as at the point of the conviction, and did so with sufficient clarity to exclude the common law principle to which I have referred. The only difference between the provisions considered in these cases and s 546(1) of the FW Act is mere grammatical arrangement: what the latter effectively provides may be stated as “where the court is satisfied that a person has contravened a civil remedy provision, it may order the person to pay a pecuniary penalty ….” That is to say, s 546(1) – and thus s 4AA of the Crimes Act – speaks as at the point where the court reaches the state of satisfaction referred to. In the present case, that was 10 September 2013, after the commencement of the amendment Act. So the applicant contends.

18    There are two broad lines of consideration that make this a problematic submission. The first relates to the history of the legislation. For many years, the formula used in the provision of the Conciliation and Arbitration Act 1904 (Cth) (“the 1904 Act”) which empowered the court (or before it the Commonwealth Court of Conciliation and Arbitration and, from 1956, the Australian Industrial Court) to impose civil penalties was (and here I quote from s 59 of the 1904 Act as amended by No 10 of 1947), “[w]here any … person bound by an order or award has committed any breach or non-observance of any term of the order or award a penalty … may be imposed by the Court ….” At the time of the repeal of the 1904 Act in 1989, the corresponding provision, s 119, provided that “[w]here any … person bound by an order or award has committed a breach or non-observance of a term of the order or award, a penalty may be imposed by the Court ….” Section 178(1) of the Industrial Relations Act 1988 (Cth) provided, relevantly, that “where [a] … person bound by an award or order … breaches a term of the award or order, a penalty may be imposed by the Court ….” Subject only to presently immaterial amendments, this was the form of the relevant provision until the amendments made to the Act of 1988 (by then known as the Workplace Relations Act 1996 (Cth) (“the WR Act”) by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). As so amended, the provision became s 719(1) and was in the following terms:

An eligible court may impose a penalty … on a person if:

(a)    the person is bound by an applicable provision; and

(b)    the person breaches the provision.

The introduction of the “applicable provision” aspect was made necessary by the wider range of sources of substantive law for the breach of which a penalty might have been imposed. This provision was repealed with the remainder of the WR Act with the enactment of the FW Act in 2009.

19    Under the FW Act, the “applicable provisions” became “civil remedy provisions”. The expression “order a person to pay” replaced the traditional “impose” apropos the penalty referred to. Those changes are presently neither here nor there, but there was a further change made at the time which, although possibly intended as no more than one of style, has given some encouragement to the applicant. The expression “if the court is satisfied that the person” replaced “if the person”. The new formula strikes me as more apt to the circumstances of an administrative decision-maker exercising a statutory power than to those of a Chapter III court, but that question need not detain us further here. What is significant about this change is that it provides some semantic justification for the submission made on behalf of the applicant that s 546(1) is enlivened upon the court reaching the state of satisfaction referred to, rather than, as previously (and as since 1904), by reference to the commission of the breach or the occurrence of the contravention. It would be helpful to be able to find assistance in s 15AC of the Interpretation Act with respect to the change but, try as I might, I cannot reach the conclusion that the new provision introduced in 2009 was so introduced “for the purpose of using a clearer style”. With respect to those involved, I consider it to be less clear than its predecessor.

20    The case for regarding the new formula in s 546(1) as not having been intended to change the existing state of the law is, however, strengthened to a degree by the terms of the Explanatory Memorandum to the FW Act. It was there stated that s 546(1) provided that the court “may, on application, order a person to pay a pecuniary penalty in relation to the contravention of a civil remedy provision”. There was no reference to the state of satisfaction referred to in the subsection itself, which makes it the more likely that the matter was a purely stylistic preference of a particular draftsman, rather than a matter of policy. Neither in the FW Act nor in the parliamentary materials is there any indication of an intention to make a change of substance. I take the view, therefore, that s 546(1) of the FW Act is to be read as empowering the court to impose a penalty by reference to the contravention referred to, and that it does not differ in presently relevant respects from the corresponding provisions which had existed in industrial relations legislation for many years.

21    The second line of consideration is presented by the judgment of the South Australian Full Court in Samuels v Songaila (1977) 16 SASR 397. In the facts which came to the court on a special case, the defendant had pleaded guilty to two traffic offences. The offences occurred about three weeks before the commencement of amendments to the relevant legislation which increased the penalties that could be imposed in the circumstances. The plea of guilty was received (seemingly as a matter of coincidence) on the very day on which the amendments came into force. Counsel for both sides accepted that the new penalties did not apply to the offence, but the magistrate was concerned that the English wartime cases referred to above might require the taking of a contrary view. All three members of the Full Court held that the wartime cases should not be followed.

22    Bray CJ held (16 SASR at 401) that, in the legislation before the court, “the relevant language is not only in the future tense, but the liability is semantically attached to the offence rather than to the conviction.” His Honour said that that point may be a sufficient ground for distinguishing the wartime cases, and that another may be “that some general implication rebutting the common law principle is to be drawn from the legislation in question and its connection with the safety of the State in time of war” (16 SASR at 401). However, his Honour added that, if the wartime cases could not be distinguished, he did not agree with them and would not follow them. The thinking that led to this conclusion is sufficiently disclosed in the following passage from his Honour's reasons (16 SASR at 399-400):

Counsel for both parties were agreed that the new penalties created by the Act of 1976 did not apply to offences committed before that Act came into operation. It is to my mind obviously inconsistent with elementary principles of justice that they should. Penalties are imposed in order to deter the forbidden conduct and we have to assume that they have some deterrent effect. A man cannot be deterred from committing a forbidden act by fear of a sanction which is not in existence at the time he commits the act.

23    Zelling J commenced with the common law presumption against retrospectivity, in the course of which his Honour set out (16 SASR at 408) the following from the third edition of Halsbury, Laws of England, 36.425:

The presumption against retrospection applies in general to legislation of a penal character, and it is to be presumed that a statute creating a new offence, or extending an existing one, is not intended to render criminal an act which was innocent when it was committed, and that a statute increasing the penalties for existing offences is not intended to apply in relation to offences committed before its commencement.

His Honour then considered the terms of the legislation under which penalties could be imposed for the offences in question and the applicable interpretation provisions. Turning to the wartime cases, his Honour provided grounds upon which Lamb might be distinguished, concluding (16 SASR at 415) that, even if that case had been correctly decided, it did not govern the case before the Full Court. But his Honour added (16 SASR at 415):

Speaking for myself I would in any event doubt whether the Court in Lamb’s case really addressed its mind to the true question for decision, which was not whether the later Order in Council on its true construction struck at the time of conviction and not at the time of the commission of the offences, but rather did the words “where any person is convicted of an offence” refer to an offence committed at any time or distributively in the case of the first set of regulations to an offence committed after they came into force, and in the case of the second set of regulations, to an offence committed after the date of the amending Order in Council.

Zelling J held that Buckman, and the similar case of R v Oliver (1943) 29 Cr App R 137, involved decisions which were “clearly wrong and ought not to be followed in this jurisdiction” (16 SASR at 416).

24    The third member of the Full Court, King J, took the view that the wartime cases could not be distinguished on the basis of differences in the language used as between the English and the South Australian legislation. However, his Honour said (16 SASR at 420):

I think, however, that these decisions must be explained by a greater readiness to impute an intention to impose penalties retrospectively in time of war in relation to offences of a type which are likely to impair the war effort, than would be shown in relation to penalties unconnected with emergency wartime legislation. Because of the special considerations which existed in relation to the emergency legislation in wartime, I do not think that these cases can be regarded as authorities for the construction of the Act under consideration in this case.

25    There may be a question whether the reasons of the members of the Full Court in Samuels were expressed in terms sufficiently categorical to compel the conclusion that the wartime cases now relied on by the applicant should not be followed, even in a case in which the statutory language was relevantly indistinguishable. If I had to, I would answer that question in the affirmative, but, for reasons already explained, and to adopt, and to modify, the words of Bray CJ, I take the view that the FW Act attaches liability to the contravention rather than to the fact of the court coming to the requisite state of satisfaction.

26    Samuels was distinguished by the Full Court of the Federal Court in Traill v McRae (2002) 122 FCR 349 on the basis that it dealt with retrospective penal liability, whereas the case before the Full Court involved the imposition of sanctions (reprimand, disqualification from practice, etc) on a medical practitioner in the event of inappropriate practice by him or her under the Medicare arrangements. In the case itself, an increase in the maximum period of disqualification permitted had been enacted after the occurrences to which the sanction related but before the imposition of the sanction. The Full Court held that this was a case not of retrospective penal liability, but of legislation, having a protective rather than a punitive purpose, which gave prospective consequences to past events. Their Honours said (122 FCR at 394 [204]):

The reasoning in Samuels v Songaila does not apply because a direction made by a Determining Officer under s 106U, that the person under review be reprimanded, repay benefits or be disqualified, is not imposed as a punishment.

Their Honours also relied (122 FCR at 394-396 [205]-[209]) on the reasoning in La Macchia v Minister for Primary Industry (1986) 72 ALR 23, in which, in analogous circumstances, it was held that the Minister “was not exercising a penal power” (72 ALR at 26 per Toohey J, Bowen CJ agreeing).

27    While I recognise that the distinction between a prosecution for an offence and a civil proceeding to recover a penalty was not relevant to the circumstances facing the Full Court in Traill, it is of some interest in the present case that the basis upon which Samuels was distinguished was that the sanction to be imposed on the practitioner was not in the nature of a punishment. Likewise, in La Macchia, the counterfactual against which their Honours contrasted the case before them was one in which “penal power” was being exercised. The point of the common law’s strong inclination against giving legislation a retrospective operation was not that the past conduct in question amounted to an offence for which a conviction could be recorded, but that the conduct was the point of reference for the imposition of a punishment.

28    Sitting as a single Judge, I think I should apply Samuels to the facts now before the court. The words of Bray CJ, quoted at para 22 above, resonate just as strongly in a proceeding for a civil penalty as they would do in a prosecution. On any view, punishment is involved in the exercise of the court's jurisdiction under s 546 of the FW Act. It follows that I must decide the present case by reference to the value of a penalty unit before the commencement of the amendment Act.

Penalties

29    Betezy.com.au Pty Ltd (“Betezy.com”) has contravened the FW Act in the following respects:

(a)    by not paying monthly commissions due under the 2009 commission agreement, in contravention of s 323(1);

(b)    by failing to give the applicant a pay slip within one working day of paying an amount to her in relation to the performance of her work, in contravention of s 536(1); and

(c)    by underpayment of the applicant’s normal salary, in contravention of s 323(1);

30    Betezy Pty Ltd (“Betezy”) has contravened the FW Act and, in one respect, the Fair Work Regulations 2009 (Cth) (“the regulations”) in the following respects:

(a)    by threatening to fire the applicant, in contravention of s 340(1)(a)(iii);

(b)    by discontinuing the applicant's access to its computer system and by suspending her from her employment (by withholding payments of remuneration), in contravention of s 340(1)(a)(ii);

(c)    by not paying monthly commissions due under the 2010 commission agreement, in contravention of s 323(1);

(d)    by failing to give the applicant a pay slip within one working day of paying an amount to her in relation to the performance of her work, in contravention of s 536(1);

(e)    by failing to tell the applicant where her employment records were kept in contravention of reg 3.43(1) of the regulations; and

(f)    by failing to pay bonuses due to the applicant under her contract of employment, in contravention of s 323(1).

31    Before considering what are the appropriate penalties to be imposed for these contraventions, it is necessary to determine whether any two or more of them constitute a single contravention pursuant to the provisions of s 557(1) of the FW Act, which provides as follows:

(1)    For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

(a)    the contraventions are committed by the same person; and

(b)    the contraventions arose out of a course of conduct by the person.

Subsection (2) contains a list of the provisions upon which subs (1) operates, including ss 323(1) and 536(1) but not s 340(1).

32    From the terms of s 557(1)(a), it is apparent that each of Betezy.com and Betezy must be considered separately when determining what constitutes a course of conduct. From that starting point, the applicant accepts that the contraventions mentioned above and lettered (a) and (b) in the case of Betezy.com, and that those lettered (c), (d) and (f) in the case of Betezy, amount to courses of conduct according to those groupings. The contravention lettered (e) in the case of Betezy was only a single contravention, and is thus not subject to s 557. The remaining group of contraventions – lettered (c) in the case of Betezy.com – is the subject of a different approach by the applicant, and I shall return to it.

33    The respondents’ approach differs from that of the applicant. They press for all of the contraventions to be considered as a single course of conduct by Betezy.com and Betezy respectively; that is to say, they submit that s 557 produces the result that there was only one contravention by each of Betezy.com and Betezy (aside from the contraventions of s 340 and reg 3.43). I do not accept that submission. Section 557(1) refers to “2 or more contraventions of a civil remedy provision” [emphasis added]. This is in my view, an instance where a statutory intention to the contrary of the primary operation of s 23 of the Interpretation Act appears, whether by the terms of that section itself with respect to the period before 27 December 2011 or by s 2(2) of that Act with respect to the period since that date: see items 2 and 49 of Sched 1 to the Acts Interpretation Amendment Act 2011 (Cth). The contrary intention appears from the subject-matter of s 557, namely, the circumstances under which multiple contraventions are collapsed into a single contravention. In this context, I take the view that the reference to a civil remedy provision in the singular was a conscious, specific, one. The section should not, in my view, be given a broader operation than that for which the legislature expressly provided. The outer limits, therefore, of the operation of s 557 in the present case are set by the statutory provisions under which the various contraventions arose. Subject only to the reservation expressed at the end of the previous paragraph, I propose to consider the matter of penalties within that framework.

34    I deal first with the respondents’ failure to pay commissions. Under both the 2009 commission agreement and the 2010 commission agreement, commissions were payable at the end of each month. Section 323 commenced on 1 July 2009, after which there were 40 months down to the end of the period with respect to which the applicant conducted her case, 31 October 2012. At the end of each of those months, there was a contravention by each of the respondents – linked to the 2009 commission agreement in the case of Betezy.com and to the 2010 commission agreement in the case of Betezy. The applicant accepted that there was, for each respondent, a course of conduct by which 40 contraventions were collapsed into one.

35    Notwithstanding that there was only a single contravention of s 323 in the case of each the respondents’ failure to comply with the applicable commission agreement, the gravity of that contravention is properly, in my view, to be measured against the fact that it endured over more than three years and held the applicant out of her entitlement to what became, in time, a very considerable sum. This was not a case of an employer, for example, overlooking a wage increment which had been the subject of an award variation or similar instrument. The commissions which were not paid had been specifically agreed between the parties and, on any view, constituted a very substantial component of what ought to have been the applicant’s remuneration. It was submitted on behalf of the respondents that I should view their shortcomings in these respects as the result of “bad management”. Although undeniable so far as it goes, that description would, in my view, present an unduly limited assessment of the gravity of the respondents’ omissions.

36    The applicant’s evidence is replete with references to the occasions upon which she raised with the respondents – or with whichever of them was her employer at the time – their non-payment of commissions. She ought not to have been obliged to do so. Unsurprisingly, these complaints were more numerous towards the end of her active working time in the employ of Betezy, and ultimately led to the contraventions by Betezy of s 340 of the FW Act in the respects to which I referred in my reasons of 10 September 2013. The making of the complaints by the applicant removes any justification for the suggestion that the respondents were not fully aware of their failures to pay the commissions as they fell due, and no such suggestion was in fact made. Their response to the applicant’s complaints was, largely, to fob her off by reference to business or trading circumstances which, she was expected to take on trust, would soon permit them to make the necessary payments. That she had the patience and forbearance to continue serving the respondents despite their procrastinations is one of the more remarkable aspects of the present case.

37    Another remarkable aspect is that the persons with whom the applicant dealt were in the senior management of the respondents. One sense in which the term “bad management” is sometimes used is that which invokes a failure by management to supervise or to control the compliance by subordinate staff with obligations imposed on them. But the present case is more than simply a case of a failure of management considered as a process: it is a case of a failure by management as such. At relevant times, the applicant was dealing with the chief executive of the respondent concerned – originally Mr McDonald and more recently Mr Kay. In these circumstances, the respondents could hardly expect the court to take a lenient view of their transgressions.

38    The respondents’ procrastinations also have to be viewed in the light of their failure to maintain the records which would have made the calculation of the applicant’s entitlements a simple matter. They entered into agreements of their own drafting with the applicant, and then omitted to put in place any systematic means by which they, or she, would know what those entitlements were. In the result, the applicant has been able to achieve a measure of success in this case only by a very cumbersome and, I would infer, expensive process. Yet another of the remarkable features of this case has been that, ultimately, it was the applicant who joined the dots in a way that made possible a calculation of her own entitlements. That the respondents had never done this – and made no serious attempt to do it even once the case came to court – represents a serious shortcoming in the performance of their obligations as employers.

39    At trial, the respondents advanced an ultimately unsuccessful argument that the commission agreements were both, in relevant respects, void for uncertainty. I make no criticism of their legal representatives for having proceeded in this way, even though it was not, apparently, until very late in the piece that it occurred to someone that such an argument might be open. However, it is worth mentioning that, for the whole of the period during which the applicant was providing active consideration for her entitlement to commission, no such suggestion was made. It could never be said that this was a case in which the respondents found out only as the result of court proceedings that they were under a legal obligation of a certain kind. The respondents knew that they were obliged to the applicant, and knew that they were doing nothing to comply with that obligation.

40    Is there anything that might be said in defence of the respondents on the matter of their failure to abide by the commission agreements? A number of matters were put forward on their behalves. First, it was pointed out that this was the first occasion on which either of them had been found to have contravened any workplace laws. That is a valid consideration, the result of which is that the penalties to be imposed must be appropriately responsive to the gravity of the conduct to which they relate, in its own right.

41    Secondly, there was evidence that, since the events to which this case relates, Betezy has appointed a new chief executive officer, Robert Michael Parker, in place of Mr Kay (the appointment having been made on an acting basis on 14 April 2013 and on a substantive basis on 2 October 2013). Betezy’s financial, human resources and payroll department has grown from one staff member to three full-time staff members and one part-timer. There are no commission agreements of the kind entered into with the applicant. Commissions are still paid, but under arrangements similar to those under which the applicant became entitled to bonuses, and are thus, according to Mr Parker (who gave evidence on the penalties hearing), “easier to calculate and more reliable”.

42    It is not apparent how these measures on behalf of Betezy might make any meaningful contribution to a plea by way of mitigation in relation to the contraventions of s 323 constituted by the respondents’ failure to pay the applicant her entitlements under the commission agreements. Mr Parker’s evidence went no further (in this respect) than to describe organisational changes which Betezy had made. Under cross-examination and re-examination, it became clear that Mr Parker had brought his company no closer to a position of being able to comply with obligations of the kind that arose under those agreements.

43    The applicant remains an employee of Betezy, and her solicitors’ letter of 13 September 2013, enquiring of Betezy what was the amount to which she was entitled under the commission agreements in respect of the period 1 November 2012 to 31 August 2013, remained, as at the hearing on penalties on 7 October 2013, unanswered. In a submission made at the conclusion of the hearing on that day, counsel for the respondents justified that omission on two grounds, first, that Betezy had been busy trying to work out its liability up to 31 October 2013 (one aspect of which was whether the Brisbane Football Club was to be included), and secondly, and more importantly, that the respondents did not want to do anything that would prejudice their rights on appeal in respect of their liability under the commission agreements. As to the first justification, Mr Parker said nothing about it in his affidavit read at the penalties hearing. Under cross-examination, he answered in the affirmative a question whether he had taken any steps to calculate the commission that was payable to the applicant for the period referred to in the letter, but there was no evidence as to what those steps were, and it became clear that Mr Parker was unaware whether Betezy was able to make calculations based on when betting sessions ended. As to the second justification, that is the choice of the respondents, but they cannot, at the same time, expect the court to take into account, as a matter of mitigation, their having given prompt attention to the applicant’s claims with respect to the period covered by her solicitors’ letter of 13 September 2013.

44    In relation to the commission agreements, the respondents have neither apologised to the applicant nor expressed any remorse. Senior counsel for the respondents indicated in submissions that this omission was deliberate (in a setting in which apologies for other contraventions had been made to the applicant), with a view to avoiding the compromise of any appeal against the findings I have made in relation to those agreements. Again, that is the respondents’ choice, but they cannot expect that I will determine the penalties proper to be imposed as though there had been such an apology, or expression of remorse.

45    Thirdly, it was submitted that “there was considerable uncertainty about the meaning of critical provisions of the commission agreements and thus it was difficult for [the respondents] to assess realistically their liabilities”. For reasons which I have already expressed, it should be clear that I think very little of this submission. The respondents’ inability “to assess realistically their liabilities” was never, at the time, the reason why the applicant was not paid her entitlements. There was no suggestion in the evidence that they ever made an attempt at such a realistic assessment.

46    Fourthly, it was submitted that the applicant, “as the employee who best understood this part of the business, also bears some responsibility” for the uncertainties referred to in the previous paragraph. In the circumstances, the only thing that need be said about this unworthy submission is that it is conspicuously without merit.

47    Fifthly, both parties referred to communications which had passed between them in the interlocutory period, which were without prejudice at the time, for the positions which they advanced with respect either to penalties or to costs. In the case of the respondents, it was submitted that these communications demonstrated that, for most of the time, “the applicant maintained exorbitant claims well beyond any realistic assessment of the respondents’ liabilities”, that “it was extremely difficult to ‘pin down’ the applicant to particular figures”, and that the respondents were, therefore, “hostage to the applicant’s exorbitant claims”, and were unable “to avoid findings of contraventions except by the payment of an exorbitant sum to the applicant”.

48    I shall have to consider submissions along these lines below when I come to the matter of costs. On the matter of penalties, however, I cannot see that the pre-trial communications which passed between the parties can have anything more than a marginal impact on the outcome. The proceeding was commenced on 19 January 2012, meaning that there was a period of about nine months’ overlap when the parties were in communication about possible settlement of the commission claims and the applicant’s entitlements, to the extent that they were taken into account in my reasons of 10 September 2013, were continuing to accrue. In relation to that period, it is sufficient to say that none of the evidence to which I have been exposed comes close to justifying the contention that, but for the applicant’s “exorbitant” claims, the respondents might have come to terms with her which would have led to the payment of her legitimate entitlements.

49    In short, save for the absence of a previous relevant contravention (and subject to the matter dealt with in the next paragraph), there is little or nothing that can be said by way of mitigation on behalf of the respondents.

50    The respondents also made a global submission which sought to invoke a particular application of the totality principle. They pointed out that the change in the applicant’s employer from Betezy.com to Betezy, and the corresponding introduction of the latter as a party to the 2010 commission agreement, were uncontroversial and benign adjustments of business arrangements which had no impact on the substance of the parties’ relationship. The existence of two employers, and therefore of two “course of conduct” contraventions, differed from a situation in which there was one contravener only in respects which do not bear upon the gravity of the conduct of either employer. The court should, accordingly, make some adjustment to the penalties that would otherwise be imposed in recognition of the “totality” of the contravening conduct which has been proven in the case.

51    There is some force in this submission, but it should not be taken too far. The 2010 commission agreement, drafted as it was by the respondents, differed from the 2009 commission agreement in respects other than the identity of the employer party. It effected a substantial modification to the definition of “Betezy Sponsorship Arrangements” which was to the applicant’s detriment, and retroactively so. In so providing, the 2010 commission agreement brought with it a quite different basis of entitlement for the applicant. The two agreements thus differed not only in respect of the employer party to them, but also in respect of the substantive terms of the applicant’s entitlements. While I accept that the totality principle does have a role to play here, it should also be recognised that there were two quite discrete civil wrongs done to the applicant by two different corporate entities.

52    The maximum penalty which may be imposed for a single contravention of s 323 of the FW Act – and thus for a “course of conduct” contravention arising from the operation of s 557 – is $33,000 (in the case of a corporation). Viewed separately, and given the gravity of the contraventions involved, I would regard each as requiring a penalty of $25,000. Taking into account the considerations referred to in the previous paragraph, I propose to impose a penalty of $22,000 upon each of the respondents.

53    I propose to deal next with the other two areas involving contraventions of s 323, commencing with Betezy.com’s failure to pay the applicant her normal salary. In para 161 of my reasons of 10 September 2013, I said:

The difficulty is that the applicant was paid her remuneration in what were on any view unusual ways. Because of the settlement, it is necessary to say no more than that, although it may be accepted that there were underpayments, the occasion for each presumptive contravention of s 323 was not readily apparent from the material with which the court was presented. For example, written submissions filed on behalf of the applicant demonstrated with precision what was said to be a total underpayment of $786 in respect to the period from 15 December 2008 to 20 May 2010. However, the evidence was not presented in a way that would justify the conclusion that there was an underpayment at the end of every pay week over that period.

In response to the invitation which I extended in para 162, the applicant prepared, and relied on, a schedule of the payments which she had received by way of normal salary in each of the weeks from 2 July 2009 to 23 December 2010.

54    That schedule demonstrated that the applicant had been underpaid –

(a)    by an amount of $900 in each of the weeks from 2 July to 23 July 2009 (4 weeks);

(b)    by an amount of $900 in each of the weeks from 6 August to 17 December 2009 (20 weeks);

(c)    by an amount of $500 in each of the weeks from 31 December 2009 to 4 February 2010 (6 weeks);

(d)    by an amount of $500 in each of the weeks from 18 February to 22 April 2010 (10 weeks);

(e)    by an amount of $500 in each of the weeks from 27 May to 1 July 2010 (6 weeks); and

(f)    by an amount of $496 in each of the weeks from 8 July to 23 December 2010 (25 weeks).

In each instance, these underpayments were expressed in after-tax terms (because of the provisions of the applicant’s contract of employment). Since the applicant was entitled to be paid by the week, there were 71 contraventions in what I have listed above.

55    Additionally, the applicant was paid –

(a)    the sum of $2,910 on 30 July 2009 (ie after period (a) in the table above), being $910 more than was her entitlement for that week, and leaving a net underpayment of $2,690 since 2 July 2009;

(b)    the sum of $11,500 on 24 December 2009 (ie after period (b) in the table above), being $9,500 more than was her entitlement for that week, and leaving a net underpayment of $11,190 since 2 July 2009;

(c)    the sum of $4,751 on 11 February 2010 (ie after period (c) in the table above) being $2,751 more than was her entitlement for that week, and leaving a net underpayment of $11,439 since 2 July 2009; and

(d)    the sums of $3,500, $3,500, $7,500 and $6,500 on 29 April and 6, 13 and 20 May 2010 respectively (ie after period (d) in the table above) being $13,000 more than was her entitlement for those weeks, and leaving a net underpayment of $3,439 since 2 July 2009.

There followed the underpayments referred to in periods (e) and (f) in the table above, the net result of which was that, by 23 December 2010, the applicant had been underpaid by $18,839, after tax, since 2 July 2009.

56    That underpayments occurred in each of the weeks referred to in para 54 above is clear. However, the pattern of the payments made by Betezy.com to the applicant, and in particular the large but occasional sums paid between the periods referred to above, have become relevant to a submission made on behalf of the applicant, namely, that those large payments should be used to mark off five “course of conduct” contraventions. Once Betezy.com made a payment that satisfied its contractual obligations in a particular week, it was submitted, the previous “course of conduct” came to an end, and a new one commenced when Betezy.com next fell short in satisfaction of those obligations.

57    It was submitted on behalf of Betezy.com that all of the underpayments referred to above constituted a single course of conduct. Had there been no interruption to the pattern of underpayments, this would have been a single course of conduct on any view. Betezy.com should not be worse off, it was submitted, for having made occasional large payments that satisfied the applicant’s entitlements in the week in question, and then some. Further, the interruptions to the pattern of underpayments disclosed nothing more than random, and frequently unsuccessful, attempts by a disorganised employer to remedy its past underpayments. The fact was, it was submitted, that Betezy.com underpaid the applicant consistently between July 2009 and December 2010, and there could not be discerned over this period any satisfactory point at which an existing course of conduct came to an end and a second or subsequent course of conduct commenced.

58    In this area, I would accept what is put by Betezy.com, substantially for the reasons set out in the previous paragraph. I consider that, in relation to underpayments of normal salary, Betezy.com’s contraventions of s 323 of the FW Act between July 2009 and December 2010 constituted a single course of conduct and, therefore, a single contravention pursuant to the provisions of s 557. However, although there was only a single contravention of s 323 in relation to underpayment of salary because of the operation of s 557, that perspective imports a negative, as well as a positive, consequence for Betezy.com: a contravention constituted by a course of conduct that endured for nearly 18 months must be viewed more seriously than an isolated contravention.

59    What should be the appropriate penalty for that contravention? What is striking about Betezy.com’s failings in this regard is that they constituted such a substantial underpayment and that they continued for so long. For an employee who was entitled to be paid $2,000 per week after tax to be short-paid by $900, or even by $500, demonstrates that we are not here dealing with underpayments at the margin. It was submitted on behalf of the applicant that these underpayments were deliberate, in the sense that senior management of Betezy.com knew they were occurring and chose not (at least fully) to rectify the situation. The respondents were not heard to contest that submission. Over the whole of the period which stands as a single contravention pursuant to s 557, the amount of after-tax income which was the applicant’s due, and which had been denied her, was $18,839. That a salary-earner should be deliberately denied her income on such a scale, without any satisfactory explanation, is, I would have to say, little short of breathtaking.

60    It was submitted on behalf of the applicant that general deterrence was a factor which should speak loudly in the circumstances of the present case. Counsel referred me to the words of Marshall J in Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2) [2012] FCA 557 at [29]:

It is important to ensure that the protections provided by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless they are respected.

His Honour was referring to the WR Act, but his observations are equally apposite in the case of contraventions of the FW Act. The present is, it seems, one of the first instances in which s 323 has been enforced in relation to obligations arising under a contract of employment. It would, in my view, be appropriate for employers generally to be given a firm message that any failure to comply with their contractual obligations to employees on a scale similar to that which has been the subject of evidence in the present case is, if the matter proceeds in court, unlikely to have a low-cost outcome.

61    Two further submissions were made on behalf of the applicant in this area of the case. It was submitted that I should take into account the fact that the applicant had frequently complained to Mr McDonald about her underpayments of salary, which complaints had been dismissed peremptorily. To the extent that such matters are proper to be taken into account, they are, in my view, rolled up in the considerations referred to in para 59 above.

62    The other submission related to the mechanism used by Betezy.com to make $10,000 of the $11,500 payment on 24 December 2009, $3,251 of the $4,751 payment on 11 February 2010, $2,000 of the $3,500 payment on 29 April 2010, $2,000 of the $3,500 payment on 6 May 2010, $6,000 of the $7,500 payment on 13 May 2010 and $5,000 of the $6,500 payment on 20 May 2010. Each of those payments was made not by Betezy.com directly but from a betting account in the name of “John Thomson”. There was no such person: the applicant had been directed to open a betting account, but not in her own name, which she did. In at least some instances, the means by which credits were made to this account were unconventional and, it seems, irregular, but I do not accept the submission made on behalf of the applicant that Mr McDonald “involved” her in such irregularities as there may have been. Otherwise, I do not consider the means by which the payments in question were made, as distinct from the fact of the payments as such, to be relevant to the assessment of the penalty proper to be imposed on Betezy.com for its contravention of s 323.

63    In favour of Betezy.com it can again be said that it has not previously been found to have contravened s 323 or an analogous provision, but the persuasiveness of this point is to an extent undermined by the circumstance that, in this very proceeding, another serious contravention of s 323 has been established. Betezy.com should also be given some slight credit for having settled the applicant’s salary claim during the course of the trial, but that happened only very late in the piece, by which stage the applicant had gone to the trouble and expense of preparing and leading her relevant evidence, and it must have been apparent to the respondents that there could be no defence to the claim. Finally, Betezy.com used the occasion of the penalty hearing to apologise to the applicant for its underpayments of her salary. I take that into account, but I am bound to treat the apology as a matter of little significance alongside the scale of the indifference which Betezy.com had shown to the applicant’s legitimate claims over such a long period. The apology was, in short, too little, too late.

64    For this contravention – for which the maximum penalty is $33,000 – I would impose upon Betezy.com a penalty of $25,000.

65    The other contravention of s 323 which has been established in the present case is that constituted by Betezy’s failure to pay bonuses in respect of nine months in the period from January to October 2011 (the subject of para 163 of my reasons of 10 September 2013). The applicant accepts that those failures amounted to a course of conduct within the meaning of s 557 of the FW Act and that there was, therefore, a single contravention. The total amount involved was $2,145 and was paid by Betezy on the first day of the trial. So far as I can see, there was never any defence to this claim.

66    At the penalty hearing, Betezy apologised to the applicant for its failure to pay her bonuses. To the extent that this was intended as an indication that Betezy well understood that it had fallen short of its obligations as an employer in relevant respects, I would have to say that it reflected a very late recognition of the situation which should have been apparent to it from the outset. As counsel for the applicant submitted, Betezy’s conduct, including the evidence which it prepared to lead at trial, simply ignored this aspect of the applicant’s case. The defence on which Betezy went to trial admitted that agents working under the control of the applicant had introduced clients who paid first deposits, but denied the applicant’s entitlement to bonuses as a result. Because the claim was settled, how Betezy might have contemplated making good on this denial never came to be revealed.

67    The maximum penalty for this contravention of s 323 is $33,000. In the circumstances, I consider that a penalty of $7,500 is appropriate.

68    I turn next to the matter of the respondents’ failure to provide the applicant with pay slips as required by s 536 of the FW Act. As mentioned in para 165 of my reasons of 10 September 2013, the applicant was never given a pay slip. She should have been given one on every occasion that she was paid an amount in relation to the performance of her work, that is, every week. There were, therefore, numerous contraventions of s 536, but the applicant accepts that, in relation to each of the respondents considered separately, there was a course of conduct which had the effect, under s 557, of collapsing the contraventions concerned into one.

69    I accept the submission made on behalf of the applicant that the unconventional means by which she was paid her remuneration – to the extent that she was so paid – made hers a case in which the provision of a regular pay slip was a matter of practical importance to her, and the respondents’ omissions were, correspondingly, a matter of real concern. In other words, this should not be regarded as no more than a matter of worrisome red tape. Here I do not refer only to the unconventional means employed by Betezy.com to pay the applicant’s salary which I have mentioned earlier in these reasons. In each of the weeks between 2 July and 3 December 2009, $500 of the applicant’s after-tax remuneration was paid by a company called Casa Dell’Oro Australia Pty Ltd (or Casa Dell’Oro Pty Ltd or CDO Pty Ltd) which Mr Kay described as “effectively a payment company”. This remuneration was, according to Mr Kay, related to the fact that the applicant, while employed by Betezy.com, had done some work for an entity described as “Dialabet”. Further, in the weeks of 10 and 17 December 2009, $500 of the applicant’s after-tax remuneration, and in each of the following weeks until that of 23 December 2010, $900 of the applicant’s after-tax remuneration, was paid through a business, presumably owned by the respondents or one of them, described as “Ezy Call Centre”. Again, Mr Kay explained the circumstance which led to the applicant being paid in part through this channel. There is no suggestion that the respondents were not entitled to source the funds from which the applicant would be paid in these ways, but the practice made it the more important for the applicant to have been furnished with a clear statement of the amount which she had been paid as salary each week. This was not done.

70    At the penalty hearing, the respondents apologised to the applicant for their failure to provide pay slips. Further, the changes which Betezy has made to its payroll administration are such that pay slips are now provided to employees as a matter of course.

71    The maximum penalty to be imposed for each of the contraventions of s 536 is $16,500. Taking the above considerations into account, I take the view that the appropriate penalty is $5,000 in the case of each respondent.

72    The next contravention to be considered is Betezy’s failure to make employee records available to the applicant as required by reg 3.43 of the regulations. The request was made by the applicant’s solicitors on 22 November 2011, by which time the battle lines were drawn. The fact of the refusal to provide the information in question to the applicant is admitted by the respondents, but they add, in their Defence, that, at the time, “the applicant was suspended indefinitely from her position due to inappropriate use of the respondents’ cab charges and credit cards, which the applicant was both aware of and refused to explain to the respondents”. That was, of course, no defence to the applicant’s case, and it was not suggested otherwise at trial. The maximum penalty to be imposed for a contravention of reg 3.43 is $11,000. In the circumstances, I intend to impose a penalty of $1,500.

73    That leaves the contraventions by Betezy of s 340 of the FW Act, commencing with Mr Kay’s threat to dismiss the applicant on 20 September 2011. It was submitted on behalf of the applicant that protections of the kind for which s 340 provides are “fundamental to the scheme” of the FW Act. That very high-level submission was not developed, in which circumstances it would be wrong for me to attempt to place these protections in some kind of rank order apropos the scheme of that Act, which involved a number of initiatives when it was enacted in 2009. I accept, of course, that the purpose of s 340(1)(a)(iii) is to protect an employee from, amongst other things, being threatened with dismissal for proposing to exercise a workplace right. From that, it is apparent that it is likewise intended that employees should be free, without threat of such reprisals, to make proposals of this kind. But the inherent seriousness which the legislature has assigned to conduct in contravention of s 340 is to be seen in the level of penalty that may be imposed on a contravener, namely, a maximum of $33,000.

74    In their submissions on penalty, it was not put on behalf of the respondents that Mr Kay’s threat was a spur-of-the-moment thing which he came to regret. Indeed, because he went to trial on a denial of the applicant’s version of the relevant conversation, Mr Kay effectively excluded himself, and thus also excluded Betezy, from offering any benign explanation for the threat he made to the applicant. I am, in the circumstances, obliged to take the threat at face value, which is as a statement consciously and deliberately made in the expectation that the applicant would take it seriously and would feel sufficiently intimidated to think no further about contacting her solicitor. Had that been the result of this conversation, it is likely that the substantial contraventions of the FW Act that have been brought to light in this case would forever have been concealed from view.

75    I do, therefore, regard this as a serious contravention of s 340. Before proceeding further, however, and because of a submission made on behalf of the respondents to which I shall refer, I propose to turn to the other compartment of the case in which a contravention of that section was proved.

76    Although s 340 is not subject to s 557, it was accepted by the applicant that the termination of her access to the computer system, the cessation of the payment of her remuneration and the suspension of her employment, all done in late October or early November 2011, should be treated as a single act covered by paras (b) and/or (c) of item 1 in the table in s 342(1). The respondents did not resist that approach, and I shall take it. It is not unreasonable to treat those three things as manifestations of Betezy’s suspension of the applicant’s employment.

77    That conduct on the part of Betezy was, in effect, by way of punishing the applicant for having procured her solicitors to write a letter of complaint on her behalf. As this case has demonstrated, the applicant had every reason so to proceed. There were some allegations contained in the letter which did not become part of this proceeding, but there were a number of important ones that did. It was no part of the respondents’ case to contend that the applicant’s having caused this letter to be written and sent compromised her ability to remain actively in the employ of Betezy. Indeed, Mr Kay’s defence of his decision to treat the applicant as suspended had nothing to do with the letter: it related to the Cabcharge matters to which I referred in para 157 of my reasons of 10 September 2013. While those reasons do not exclude those matters as having made some contribution to Mr Kay’s decision, in the light of my finding in para 158 I am bound to regard his explanations at trial as unsatisfactory.

78    I also consider it appropriate to take into account the fact that, at the time when her employment was suspended, the applicant was absent from work on sick leave. This was a difficult period for her. There is no evidence of any contemporaneous communication by Betezy to the applicant explaining what was being done, and why. Her access to her computer was terminated without explanation. The first she knew that she had been taken off pay was when her normal remuneration, due on 31 October 2011, did not appear in her bank account. In her affidavit, she said that she understood from the terms of the Defence filed by the respondents that Betezy had suspended her from her employment: there was no evidence that she had previously been so advised.

79    It was submitted on behalf of the respondents that, although s 557 has no relevant application, the events of 20 September and 27 October 2011 should in effect be treated together for the purposes of the assessment of penalty. Although I would not be justified in treating these two separate contraventions as one contravention, I do think that this is an appropriate situation for the application of the totality principle. There was some factual relation between the two contraventions: there was a commonality in context and in the identity of the individuals who participated in the associated conversations. The proposed action on the part of the applicant that provoked Mr Kay’s threat in September later became a reality, and led to the contravention of late October or early November. What Betezy then actually did with respect to the applicant lay roughly along the continuum of what Mr Kay had threatened to do in September. The connection between the two contraventions is manifest.

80    As noted previously, there are no previous contraventions of these or analogous provisions which might be held against Betezy in the assessment of penalty. Further, at the penalty hearing, Betezy apologised to the applicant for its threat to dismiss her and for the suspension of her employment. I take these circumstances into account.

81    Having regard to the matters mentioned above, I propose to impose a penalty of $20,000 for each of these contraventions of s 340 of the FW Act.

Costs

82    Under s 570 of the FW Act, a costs order is generally unavailable in relation to a matter arising under that Act. There are, however, certain exceptions to this rule, one of which arises where the court is satisfied that a party’s “unreasonable act or omission” caused the other party to incur the costs in question: s 570(2)(b). The applicant seeks to invoke this exception in a number of respects.

83    The applicant first relies on s 570(2)(b) in the area of her allegations that she was not paid her bonuses, that she was not paid the full salary to which she was entitled, that she was not given pay slips and that she was not given access to Betezy’s relevant employee records. Her case is that the respondents’ defences to these claims were always baseless, and she seeks her costs incurred after the filing of the Defence. I accept that case. The applicant’s Statement of Claim was filed on 19 January 2012, and contained clear and detailed allegations about these issues. Considered as a means of seriously engaging with those allegations, the respondents’ Defence, filed on 16 March 2012, was hopelessly inadequate. Relevantly, it amounted to no more than a series of denials and (to a very limited extent) non-admissions. The court now has, of course, the wisdom of hindsight, but the respondents knew, or ought to have known, that there was no defence to these allegations. Yet they put the applicant to her proof. Indeed, as I have said, they foreshadowed the running of an active case by way of denial. That case never eventuated.

84    At the penalty hearing, the only thing said by counsel for the respondents about this aspect of the applicant’s case under s 570(2)(b) was that the pay slips and record inspection claims were conceded at the start of the trial and that the applicant may not have incurred much in the way of relevant costs. If that reflected a perception on the respondents’ part that there was nothing that could be said in opposition to that case, I would share in that perception. I take the view that the respondents’ defences to these claims, from the moment they were articulated on 16 March 2012, were unreasonable and that the applicant should have her costs of the claims, incurred after that date.

85    The applicant next relies on s 570(2)(b) in relation to her claim for unpaid commissions. Her first submission is that her solicitors’ letter of 25 October 2011, to which I referred in my reasons of 10 September 2013, amounted to an offer to settle the commissions claim for the sum of $58,915 plus interest, being much less than the applicant ultimately secured after having been obliged to conduct her case in court. Her costs since the end of the 10-day period for compliance specified in the letter should, it was submitted, be paid by the respondents since it was unreasonable of them not to have paid the sum demanded.

86    In order to resolve this issue, it will be necessary to go to the letter of 25 October 2011 in some detail. The letter identified the following “breaches” on the part of Betezy:

1.    Pursuant to the Commission Agreement, Betezy has unlawfully withheld payments to our client in the amount of $58,918.05 and interest at the current penalty interest rate (“the Fees”). We note that this figure is an amount calculated from 17 October 2011 and continues to accrue.

2.    Pursuant to the Employment Contract, Betezy has unlawfully withheld payments to our client in the amount of $27,600 (“the Wages”).

3.    Betezy has unlawfully paid our client as a contractor in breach of s 357 and 359 of the Act which exposes Betezy to civil penalties of up to $33,000. By misrepresenting the nature of our client’s employment, Betezy remains liable for unremitted taxes and may fall foul of the tax avoidance provisions of the Income Assessment and Tax Act 1953 (Cth) [sic].

4.    In breach of s 343(1)(a) of the Act Betezy has made coercive statements which expose Betezy to civil penalties of up to $33,000.

5.    In breach of s 62(2) of the Act, Betezy has requested our client to work unreasonable additional hours.

Having developed those allegations at some length, the letter concluded as follows (where A, B etc correspond with the five areas of complaint referred to above):

In respect of paragraph A and B above, our client demands immediate payment of $86,501 comprising of $58,918.05 under the Commission Agreement and $27,600 under the Employment Agreement. In regards to the unpaid bonuses referred to in B (5) to B (6), our client is currently calculating the amounts due and will advise you in due course. In the event you fail to pay the amount owing to our client pursuant to the Commission Agreement within 10 days of receiving this letter, this letter will serve as the appropriate notification pursuant to the Commission Agreement and the parties will be required to proceed to mediation. In terms of paragraph C, we request that Betezy seek legal/accounting advice to immediately rectify the unlawful service payments made to our client as well as remit the appropriate superannuation guarantee entitlements. In respect of paragraph D and E, our client reserves all its [sic] rights.

87    There are several things which may be said about the letter of 25 October 2011. First, the claims made in it included some that were not persevered with by the applicant, at least in this proceeding: those numbered as 3, 4 and 5 in the list. Secondly, there was no suggestion that all of the applicant’s claims would be settled by the payment of the sum of $58,915 with respect to commissions, or that the commission claim as such was susceptible to separate settlement. And thirdly, the demands set out in the letter included one which related to unpaid salary in the sum of $27,600, which was, as now appears, somewhat more than the applicant’s due on that account. In the circumstances, it cannot be said that it was unreasonable for the respondents not to have made an immediate payment of $58,915 in settlement of the applicant’s commission claims.

88    In the first alternative in relation to costs incurred on the commission claims, the applicant says that, from the filing of the respondents’ Defence, they had no sound reason for failing to pay, or failing to concede, those claims to the extent that they related to the sponsorship arrangements set out in the schedules to the two commission agreements, save for the arrangements which, as alleged in the Defence, were never concluded. This submission relates to the identification of the arrangements by reference to which the applicant’s commissions ought to have been calculated and paid. It is true that, with the exceptions specified in the Defence (and possibly subject also to their uncertainty argument), the respondents never had any basis upon which seriously to deny the applicant’s underlying entitlement with respect to these scheduled arrangements. But the problem of calculation remained. Thus it was not the respondents’ refusal to concede that entitlements arose in relation to the arrangements in question that caused the applicant (in the words of her written outline) “to have her expert trawl through millions of transactions”. That was always going to be part of her case.

89    In the second alternative in relation to costs incurred on the commission claims, the applicant says that it was an unreasonable omission for the respondents “to refrain from preparing [advice] and audits in accordance with the [c]ommission [a]greements”. This is a reference to cl 3(a) and (c) of the 2009 commission agreement, set out in para 22 of my reasons of 10 September 2013, and to the corresponding provisions in the 2010 commission agreement. For reasons which should need no elaboration beyond what I have already written above on the question of penalties, I accept that it was an unreasonable omission for the respondents not to have complied with the commission agreements in these respects. That omission did cause the applicant to incur the costs of establishing the quantum of at least some of the commissions to which she was entitled under the agreements. So long as the costs were incurred in connection with the proceeding, the “act or omission” referred to in s 570(2)(b) need not be an aspect of the respondents’ conduct of the proceeding: Sydney Ferries Corporation v Australian Maritime Officers Union (2008) 178 IR 450, 456 at [32].

90    I would not, however, hold that it was unreasonable of the respondents not to have provided the advices and audits referred to above beyond the sponsorship arrangements which were, on any view, covered by the agreements, that is to say, the arrangements set out in the schedules, minus those which never operated, plus those which were admitted on the pleadings. In this group I would not include the Brisbane Football Club: in the position which they took in relation to that arrangement, I have (in these reasons only) held that the respondents were wrong, but, because of the ambiguity which existed as to the nature of that arrangement, I would not hold it to have been unreasonable of the respondents not to have regarded it as self-evident that it was covered by the agreements. With that exception, I would include all the arrangements referred to in paras 97, 107, 112 and 115 of my reasons of 10 September 2013, a total of 24 arrangements. There was a total of 67 arrangements the subject of Mr Hood’s reports (including Brisbane but not including the arrangements in relation to which he provided no figures at all). In the circumstances, the applicant should have 36% of her costs incurred in quantifying the amount of commission to which she was entitled under the commission agreements.

91    The applicant had a third alternative argument in this area of the case, but it has effectively been overtaken by my upholding of her second alternative argument above.

92    The applicant next seeks the costs of her Interlocutory Application filed on 21 February 2013. She asserts that that application was made necessary because the respondents were deficient in complying with a discovery order made by the court on 12 December 2012. One of the orders which I made on 27 February 2013, when the applicant’s application was before the court, was that, subject to ss 570(1) and (2)(a) of the FW Act, the costs of that application be in the cause. There was no reservation to the applicant of an opportunity to argue the unreasonableness of the respondents’ conduct for the purposes of para (b) of subs (2) of s 570. Paragraph (a) would be irrelevant to an application by the applicant for the costs of her own Interlocutory Application, although it may have been relevant to an application by the respondents for their costs of resisting that application, an application which was in fact made on 27 February, and disposed of by the order referred to. Although I do not understand the respondents now to press for an order in their favour in relation to the costs of the Interlocutory Application, I do make it clear that I am not satisfied that that application was a proceeding instituted vexatiously or without reasonable cause.

93    For these reasons, the position is that s 570(1) stands in the way of the making of any further order as to the applicant’s costs of her Interlocutory Application of 21 February 2013.

94    The applicant also seeks the costs of her Interlocutory Application filed on 17 April 2013. In that application, the applicant sought leave to make an amendment to her Statement of Claim, leave to file particulars of the Statement of Claim, orders requiring the respondents to comply with a discovery order made on 27 February 2013 in relation to 15 sponsorship arrangements, leave to file further evidence in the case in relation to 11 sponsorship arrangements, and an extension of time for the filing and service of a further expert’s report. The applicant now says that, in relation to the orders sought which would have required the respondents to comply with the discovery order of 27 February 2013, she should have her costs of the Interlocutory Application because an application in those terms would never have been necessary if the respondents had fully complied with the earlier orders. On 26 April 2013, when the Interlocutory Application came before the court, no order was made in the terms sought (although a number of other orders were made), and costs were reserved.

95    It is submitted on behalf of the applicant that the respondents’ omission fully to comply with the discovery order of 27 February 2013 was unreasonable within the meaning of s 570(2)(b) of the FW Act. From the court record and the affidavits filed on the occasion of the Interlocutory Application of 17 April 2013 the following appears. On 27 February 2013, the court ordered the respondents to make discovery, by 6 March 2013, of documents identified by a general description employed in a previous discovery order, including specifically documents constituting sponsorship arrangements through which 32 named web sites were established. In relation to 15 of those sites, the respondents did not comply with that order. Their reasons for not having done so were explained to the applicant in correspondence sent at about that time. They included relevance objections based on the proposition that no Betezy sponsorship arrangement existed in relation to a particular site. In his affidavit sworn on 19 April 2013 (two days after the institution of the Interlocutory Application), the respondents’ solicitor said that, in 11 of these 15 cases, there were “[n]o documents to discover”. In two cases there were “[n]o show reports to discover”. In one case the relevant agreement had been discovered but it was said to be impossible “to run show reports as clients’ identifications … have been removed from the system”. In the final case it was said that the relevant documents had already been discovered. Notwithstanding those justifications, the respondents’ solicitor said that the respondents would give discovery, within 3 days, in relation to 10 of the sites “on a without prejudice basis as to their relevance to the proceedings”. They were all within the 11 sites first referred to above. That satisfied the applicant at the time, and no discovery order was in fact made on 26 April 2013.

96    It is apparent that the respondents’ proposition, made in their solicitor’s affidavit, that there were “no documents to discover”, was based not on the absence of documents meeting the description set out in the order of 27 February 2013 but on the respondents’ own assessment as to the relevance that documents would have in the proceeding. That assessment, in turn, was based on a particular reading of the term defined in the commission agreements: “Betezy Sponsorship Arrangements”. That reading was controversial. It does not matter how that controversy was resolved. Neither does it matter that it might, ultimately, have been held that the applicant was not entitled to commission in relation to a particular arrangement or site. What matters is that documents which related to the sites mentioned were the subject of the orders made on 27 February 2013. They should have been discovered. It was, in my view, unreasonable of the respondents not to have done so, either by the date specified in the order or at any time before the applicant was obliged to commence the interlocutory proceeding that came before the court on 26 April 2013.

97    As mentioned above, the respondents’ shortcomings in the matter of discovery were not the only matters covered by the applicant’s Interlocutory Application of 17 April 2013. Taking a robust approach, I am satisfied that one half of the applicant’s costs of that application related to the unreasonable omission to which I have referred. The applicant will have her costs to that extent.

98    The next matter for consideration relates to the applicant’s costs of obtaining a second expert’s report from Mr Hood. His first report dealt with arrangements in relation to which the respondents had given discovery before the orders made on 27 February 2013. His second report, requested on 24 and 29 April 2013 and supplied on 8 May 2013, was based on documents discovered by the respondents in two further “tranches”, namely, first, documents discovered directly pursuant to the orders made on 27 February 2013 and, secondly, documents discovered pursuant to the respondents’ solicitor’s undertaking in his affidavit of 19 April 2013. The applicant says that, if all of these documents had been supplied in a timely way – no later than pursuant to the court’s orders made on 12 December 2012 – all of the relevant sites and arrangements could have been the subject of Mr Hood’s first report. She seeks the costs associated with the preparation and provision of the second report.

99    That raises the question whether the respondents’ failure to comply with the discovery orders made on 12 December 2012 was an unreasonable omission within the meaning of s 570(2)(b). Those orders provided as follows:

1.    On or by 11 January 2013, the respondents serve on the applicant a further and better list, in accordance with rule 20.16, of the documents falling within any of the classes specified in the categories 4, 5, 11, 12, 14 and 16 of Schedule A of the orders made on 3 February 2012.

2.    On or by 11 January 2013, the respondents make discovery of the show reports for each bet for each client who placed a bet with or through any White Label or Betezy Sponsorship Agreement during the period 1 September 2008 to 1 November 2012 in the following form:

(a)    The documents will be discovered electronically, in Excel or CSV provided on a USB;

(b)    The documents will be in a separate document for each month;

(c)    The documents will identify:

(i)    the name of each of the clients;

(ii)    the name of the Betezy Sponsorship Agreement or White label account with or through which the transaction was placed;

(iii)    the PIN of each of the clients;

(iv)    the date and time of the transaction;

(v)    the nature and details of the transaction, such as whether it was placed on the outcome of a particular sporting event or race (identifying that race or event);

(vi)    the type of bet that was made, such as race or sports;

(vii)    whether the bet was placed over the internet or by telephone;

(viii)    where the bet was placed over the internet, when the betting session commenced and when the betting session ended;

(ix)    the amount of the bet;

(x)    the amount the client won as the result of the bet (if any); and

(xi)    the amount the client lost as the result of the bet (if any).

3.    On or by 1 March 2013, the applicant file and serve the affidavits and, if relevant, the expert reports upon which she proposes to rely at the trial of this proceeding;

4.    On or by 28 March 2013, the respondents file and serve the affidavits and, if relevant, the expert reports upon which they propose to rely at the trial of this proceeding;

5.    On or by 10 April 2013, the applicant file and serve any such evidence in reply as she may be advised;

6.    The proceeding be listed for further directions at 9.30 am on 5 April 2013.

7.    The costs of the applicant’s Interlocutory Application filed on 5 December 2012 be reserved.

Relevantly to the present controversy, the categories specified in the schedule to the orders of 3 February 2012 were the following:

…

4.    The Betezy Sponsorship Arrangements existing as at 29 May 2009, being the sponsorship arrangements identified in the schedule to the 2009 Commission Agreement.

5.    The Betezy Sponsorship Arrangements formed between 29 May 2009 and 18 January 2012.

…

11.    The Betezy Sponsorship Arrangements existing as at 1 July 2009, being the sponsorship arrangements identified in the schedule to the 2010 Commission Agreement.

12.    The Betezy Sponsorship Arrangements formed between 1 July 2009 and 18 January 2012.

100    The respondents made ostensible compliance with the discovery orders of 12 December 2012 on 14 January 2013. On 13 February 2013, the applicant’s solicitors wrote to the respondents’ solicitors pointing out what were said to be deficiencies in this discovery. To the extent presently relevant, those deficiencies included the omission of documents which related to arrangements and sites which the applicant contended were covered by the commission agreements. In a reply dated 20 February 2013, the respondents’ solicitors said that their client (presumably Mr Kay) returned from leave only on 18 February 2013, and that they would write further once they had had the opportunity to obtain instructions as to the matters about which the applicant complained. They said: “[S]hould your client press for a further application this will be opposed until our client has had sufficient time to investigate his records to enable us to reply.” When the applicant’s Interlocutory Application of 21 February 2013 (which contained a list of the specific sites in relation to which the applicant sought discovery) came before the court on 27 February 2013, the respondents offered no objection to the making of an order in the terms proposed, but contended that the application was premature in the sense that the applicant had not given them the opportunity to take instructions on the deficiencies of which her solicitors had complained. The present question, however, relates not to the appropriateness of the applicant’s Interlocutory Application but to the reasonableness of the respondents’ (seemingly admitted) deficiencies.

101    The difficulty facing the applicant in this compartment of her case is that the practical scope of the discovery orders made on 12 December 2012 was never tested. The court was never asked to find that those orders had not been complied with. As counsel for the respondents pointed out on the present occasion, save with respect to arrangements listed in the schedules to the agreements, the parties were not ad idem as to the content of the term “Betezy Sponsorship Arrangements”. With the wisdom of hindsight, it may now be said that, in relation to the 2009 commission agreement, the applicant had somewhat the better of the argument but, in relation to the 2010 commission agreement, the addition of the words “agreed between Betezy and AM” made a significant difference in favour of the respondents. However, those factors were not to be known at the time. The fact that the respondents were prepared to accede to the making of orders in the terms sought by the applicant on 21 February 2013 (while conventionally providing a good basis for the applicant to have her costs) does not, in my view, carry the necessary corollary that it was unreasonable of them not to have had a corresponding understanding as to the scope of the orders of 12 December 2012.

102    With respect to sites and arrangements that were mentioned in the schedules to the agreements, a somewhat different view must be taken. In her affidavit of 20 February 2013, the applicant’s solicitor identified eight of these, including the Brisbane Football Club. Her list also included “Goldcoastsports.com.au”, which was never operational and, for that reason, was not included in the list of arrangements set out in para 97 of my reasons of 10 September 2013. That leaves seven arrangements that were within the definition of “Betezy Sponsorship Arrangements” on any view and in relation to which the respondents had not given discovery as required by the orders of 12 December 2012. Indeed, discovery in relation to them had been ordered on 3 February 2012. I am satisfied that the respondents’ failure to comply with their discovery obligations in these respects was unreasonable within the meaning of s 570(2)(b) of the FW Act.

103    However, not all of these sites and arrangements were covered by Mr Hood’s second report. Only two (Pubbet.com.au and Platinumbet.com.au) were covered by the report as such, and the Brisbane Football Club was covered by an addendum to the report. Altogether, there were 24 sites and arrangements covered by the report (including Brisbane). It seems clear, therefore, that Mr Hood’s second report would have been necessary – and necessary in relation to the substantial bulk of its contents – without the unreasonable omission to which I referred in the previous paragraph.

104    I am, therefore, faced with a situation in which Mr Hood had produced his first report and was in any event going to be obliged to produce a second report. Data and conclusions which, absent the respondents’ unreasonable omission to which I have referred, would have been included in the first report were, as things transpired, included in the second report. There is no evidence, and no apparent basis otherwise, upon which I could be satisfied that the way things were done required the applicant to incur more costs than she would have incurred had the respondents met their discovery obligations in a timely way.

105    In the circumstances, in relation to the costs associated with Mr Hood’s second report, I am not satisfied within the terms of s 570(2)(b) of the FW Act.

106    The only other matter on costs relates to the time occupied while the respondents first attempted to resist the applicant’s objections to the affidavit of Mr Aggarwal which was proposed to be read, then unsuccessfully applied for an order that Mr Aggarwal and Mr Hood confer, and finally successfully applied for the taking of Mr Aggarwal’s evidence – based on a replacement affidavit as it would be – to be deferred until the final day of the trial when submissions were going to be received. As it seems to me, here the applicant is doing nothing more than relying on time spent debating and resolving evidentiary issues on which the respondents’ arguments failed to carry the day. She seeks her costs “thrown away” as a result of Mr Aggarwal’s evidence, in its initial form, being rejected and having to be taken on a later occasion. This may be a legitimate conventional basis for claiming such costs, to the extent that there were any, but to conclude that the respondents’ conduct in relevant respects was unreasonable would, in my view, be a very different matter. Essentially, what happened here is that the respondents were wrong in their assumption that the court would receive evidence in a particular form. Being wrong is not the same thing as acting unreasonably. I am not satisfied that the threshold under s 570(2)(b) has been crossed by the applicant on this occasion.

107    For the sake of completeness, I mention that, after I had reserved, the respondents filed an Interlocutory Application, which was heard on 24 October 2013. The order for costs which I made on that occasion is not dealt with in these reasons.

To whom should the penalties be paid?

108    The remaining issue relates to the applicant’s submission that the penalties now to be imposed on the respondents should be paid to her pursuant to s 546(3)(c) of the FW Act. In a submission made on her behalf, it was said that this would be the “usual order” in a case such as the present, where it is the affected employee herself who prosecutes the claim for penalties: Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241, 245-246; Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216, 223-224. However, while recognising that their interests in the subject were limited, the respondents drew my attention to a number of judgments that were said to qualify any general practice in this area. They advanced three reasons why the applicant should not be the recipient of the penalties imposed in this case, namely, (1) she will be fully compensated for such injury as she suffered by other orders to be made by the court, (2) the discretion under s 546(3)(c) should not be exercised to provide a “windfall” to the applicant, and (3) the respondents had been “held hostage to exorbitant claims” made by the applicant in the period leading to the trial of the action, thereby effectively removing the prospect of the proceeding being settled on reasonable terms.

109    It is convenient to commence with the authorities in this area of the law. In Gibbs, Gray J stated the traditional approach in the following terms (37 FCR at 223-224):

A question also arose as to what order should be made as to the recipient of the penalties. Section 356 of the Act empowers the court to order payment into the Consolidated Revenue Fund or to a particular organisation or person. The usual order, when the proceeding is not brought by an inspector appointed under the Act, is for payment to the person or organisation applying for the penalty. The reasons for this are canvassed in Vehicle Builders’ Employees’ Federation of Australia v General Motors Holdens Pty Ltd (1977) 32 FLR 100 at 111-114 and Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 245-246 in the judgment of Northrop J. In the present case, the applicant has brought the proceeding on behalf of the Union, to enforce the Award for the benefit of the Union and its members. Had the applicant brought the proceeding in his personal capacity, and at his own expense, it would have been appropriate to order that the penalties be paid to him. It is unlikely that the applicant has become responsible personally for the costs of the proceeding and more likely that those costs will be met by the Union. In the circumstances, it is appropriate that the Union should be the recipient of the penalties.

In that case the applicant, Mr Gibbs, was an officer of the union concerned.

110    In CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228, Finkelstein J referred to Gibbs and to common informer actions, and continued (108 IR at 233):

It cannot be doubted that employer and employee organisations play a legitimate and important role in seeing that there is compliance with the provisions of the Workplace Relations Act. For example, an individual employee will rarely have the ability to fund a proceeding for a contravention. If unions do not bring such proceedings, contraventions will go unpunished.

Perhaps the “usual” order is to be explained on the basis that often an industrial organisation brings proceedings for a contravention of the Workplace Relations Act to protect the legitimate interests of its individual members. In such a case it is appropriate for the organisation to receive the penalty, to defray its actual costs and to provide some compensation for the time lost by its staff. In this regard it should be noted that, apart from exceptional cases, a party to a proceeding in a matter arising under the Workplace Relations Act is not entitled to recover costs: see s 347.

However, there is no reason to make “the usual order”, if that will result in a windfall to an organisation. Proceedings for pecuniary penalties are not to be used for profit: cf Municipal Officers Association of Australia v City of Bayswater (1987) 22 IR 45, 51; Seymour v Stawell Timber Industries Pty Ltd (1985) 13 IR 289 at 311.

An appropriate order (if there be enough funds) would allow the unions a sufficient sum to meet their costs and expenses, including the expense of staff time. The balance (if any) should be paid into the Consolidated Revenue Fund. I will hear argument on the proper amount to be paid to the unions.

For my own part, I am unable to see any reference in Municipal Officers or in Seymour to the avoidance of “profit”, but what his Honour had in mind by that term and by the other term used in association with it – “windfall” – related to a situation in which a case had been brought by a registered organisation, as distinct from the individual employee affected by the established contraventions. Not itself having suffered the consequences of the contraventions, his Honour seemingly considered that it would be inappropriate for such an organisation to come out of the litigation in a position of “profit”. But what he meant by that is to be seen in his observation that it would be appropriate to allow a sum for the organisation’s costs and expenses, including “the expense of staff time”, an item which would not be allowable to a litigant on a taxation of costs in the conventional way.

111    Counsel for the respondents referred me next to Municipal Officers, to which Finkelstein J had adverted, as mentioned above. That was a case in which the applicant organisation successfully established that the respondent council had not complied with procedural obligations imposed by an award made under the 1904 Act in a situation of impending redundancy. French J said (22 IR at 51):

I have not been persuaded that there is any reason that this penalty ought to be paid to the applicants. The applicants’ interests in respect of these particular redundancies have not been seriously affected. There is no suggestion that the employees concerned have been in any way under compensated for the redundancies to which they have been subjected.

His Honour referred to no authority in this regard, and it may be doubted whether the judgment of Northrop J in Seymour had been drawn to his attention. In my respectful view, the observation that the organisation’s interests had not been “seriously affected” gave insufficient recognition to the considerations to which Northrop J referred, and which were, at the time, conventional ones in the exercise of the discretion arising under s 120 of the Act of 1904.

112    In McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181, Greenwood J made findings of contraventions of s 298K of the WR Act, and imposed penalties under s 298U of that Act. The applicant in the case, the Employment Advocate, asked for penalties to be paid to the individuals who had been affected by the contraventions of s 298K. His Honour declined to do this. He referred to a number of the cases in which the applicant had been a registered organisation, and to the circumstances which apparently supported the making of a direction that the penalty be paid to it. However, his Honour continued (158 IR at 218):

The qualification upon the exercise of the power is that such an order ought not to be made if it will result in a windfall gain. Such a windfall might arise in circumstances where the party receiving the benefit of the order has already received compensation pursuant to s 298U both as to any economic loss in respect of the contravention and any non-economic loss in the nature of general damages.

There was then some discussion as to whether, if the Employment Advocate were the direct beneficiary of an order under s 356, it would be either open or proper for him to on-forward the relevant payments to those who had been affected by the contraventions. His Honour continued (158 IR at 219):

The difficulty with the submission is that the imposition of a penalty under the Act is designed fundamentally to serve the public interest in acting as a deterrent to the particular Respondents and others generally from engaging in conduct of the kind the subject of the findings. In circumstances where an order has been made for compensation for both economic loss and a non-economic component concerning the disturbance, dislocation and loss of secure employment suffered by the individuals, there seems to be no good policy reason why the individuals should additionally have the benefit of an order for the payment to them of the penalty.

His Honour ordered that the penalties be paid to the Employment Advocate.

113    I would say three things about McIlwain. First, included in the compensatory orders which his Honour made was a component for non-economic, or general, damages: 158 IR at 209-215. That circumstance is reflected in the extracts from his Honour’s reasons as to penalty set out above. It is not relevant in the present case. Secondly, none of the individuals who benefitted from those compensatory orders was the applicant, or an applicant, in the case. And thirdly, the order which his Honour in fact made under s 356 was that the penalties be paid to the Employment Advocate, who was the applicant in the case.

114    Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357 was an appeal from orders made by an industrial magistrate of the Industrial Relations Court of South Australia imposing penalties for breaches of an industrial award. A total of $19,000 was imposed, with $2,000 to be paid to the worker, $4,000 to be paid to the union which had brought the proceeding (the respondent to the appeal) and the balance, $13,000 to be paid to Consolidated Revenue. Because the appeal succeeded, the question of the allocation of the overall penalties to these destinations became moot. However, Branson and Lander JJ gave comprehensive consideration to the established jurisprudence with respect to a question such as that. Their Honours set out (171 FCR at 377 [64]) the passage from the judgment of Gray J in Gibbs to which I have referred above, emphasising particularly what his Honour had said about the “usual order”. They mentioned (171 FCR at 377 [65]) a number of cases in which his Honour’s approach had been followed. They noted that the reasoning of Finkelstein J in CPSU had been doubted (my word) by Wilcox J in Finance Sector Union of Australia v Australia and New Zealand Banking Group Ltd [2002] FCA 1035 at [16], and that Wilcox J’s concern had received the support of Logan J in National Tertiary Education Industry Union v Central Queensland University [2008] FCA 481 at [50]. On the other hand, they noted that Finkelstein J had the support of Greenwood J in McIlwain.

115    Branson and Lander JJ continued (171 FCR at 379 [69]):

In our view, neither the total penalty actually imposed in this case, nor the amount of the penalty likely to be imposed on reconsideration of that penalty, is sufficient to give rise to concerns about a “windfall”. We understand a “windfall” in this context to involve an unexpected and relatively large financial benefit. Within an organisation such as the respondent, the true cost of bringing a legal proceeding is likely to prove substantial if the time of all staff involved is appropriately accounted for and other costs, possibly including overheads, identified. Before a penalty could constitute a “windfall” in the relevant sense it would need to exceed the total amount of that cost by a significant margin. For this reason, and because we did not hear full argument on the appropriateness of the observation of Finkelstein J in the CPSU … case, we do not consider that we should express a concluded view on whether, in a case in which it would otherwise be appropriate for “the usual order” to be made, such an order should not be made if it would be likely to result in a windfall to the applicant.

Their Honours concluded (171 FCR at 379 [70]) by endorsing the remarks of Greenwood J in McIlwain in the passage set out above (that extracted from 158 IR at 219), but that endorsement related to “the issue of the appropriateness of ordering that all, or part, of any penalty be paid to the individual affected by the conduct so penalised when that individual is not the applicant”.

116    Returning to the facts of the present case, I consider that the starting point must be that s 546(3) invests the court with a discretion, and it would be wrong to set the exercise of that discretion about with rules or guidelines. But some things can be said. First, the case does not call for a consideration of the situation in which a registered organisation is the applicant. Secondly, in the words of Branson and Lander JJ in Plancor, the applicant in the present case is “the individual affected by the conduct so penalised”, so the circumstance that she may, in some instances, have been compensated for some of the loss which she has sustained will not necessarily stand in the way of her receiving all or some of the penalties to be imposed. Thirdly, their Honours’ treatment of the “windfall” point is consistent with it being appropriate to take into account the costs and expenses to which the applicant, as applicant, has obviously been exposed in the assertion of her contractual and statutory rights in the proceeding. That is not to suggest that the s 546(3) discretion should be exercised in a way that provides a substitute for costs which are unavailable under s 570, but, where there have clearly been such costs and expenses, it may serve to counter any suggestion that the applicant would walk away from the case with a “windfall” or “profit”. And fourthly, provisions of the kind now found in s 546(3)(b) and (c) – in the case of (c), to the extent that it refers to an applicant – have a considerable history in federal industrial legislation, and have for many years been recognised as setting up a presumptive entitlement in the nature of that of a common informer. As Wilcox J said in Finance Sector Union ([2002] FCA 1035 at [16]) –

… the rationale of the practice is that it tends to encourage a “common informer” to police the relevant legislation: see Vehicle Builders’ Employees’ Federation of Australia v General Motors-Holden Pty Ltd (1977) 32 FLR 100 at 113. That rationale is likely to be defeated if the common informer is not to be allowed to make a profit.

This is, in my reading of it, the basis for what has been described as “the usual order”. It is a consideration which should be given its appropriate weight in the discretionary exercise which arises under s 546(3)(c).

117    What I have said to date covers the second of the two reasons relied on by the respondents in opposition to the applicant receiving the penalties that will be imposed in this proceeding. To an extent, it also covers the first, but it will be necessary to say something on the matter of compensation in relation to the individual penalties when I turn to them below. The third reason – that the respondents had been held hostage to exorbitant claims by the applicant – is a submission which I could not uphold. In the hearing which led to these reasons, I have been exposed to a deal of the communications which passed between the parties in the period before the proceeding came to trial. In some of those communications, the applicant proposed that she would ultimately be held to be entitled to a sum far in excess of that which will, as the result of my determinations of 10 September 2013, become her due under the commission agreements. It will be recalled, for example, that her submission was that she was entitled to commission calculated under both agreements in relation to any sponsorship arrangement that fell within the relevant definitions in both, even where there was only one betting session. However, the respondents likewise went to trial on a case that would have left the applicant with no remedy at all under the agreements. When attention is turned away from these book-ends of the parties’ cases to the reality of the proposals which they made for settlement in the interlocutory period, the position is that the applicant offered to settle for a sum which was somewhat greater than that for which she will ultimately secure judgment, and the respondents offered to settle for a sum which was somewhat less than that for which the applicant will secure judgment. I find nothing in the conduct of the case by the applicant which would compromise her ability to press for the favourable exercise of the court’s discretion under s 546(3)(c) of the FW Act.

118    Before turning to the individual penalties which are to be imposed on the respondents, I should make some general observations as to how I propose to exercise that discretion. First, there are some areas of the case in which the applicant will receive compensation (or damages). There are, however, areas in which she will not. Secondly, this is not a case in which non-economic loss has been either alleged or proven. But that is not to say that the applicant should not be regarded as a victim of the respondents’ contraventions whose position was affected for the worse by their conduct. The threat to dismiss is probably the most conspicuous instance of this, but even the failure to provide pay slips, in its own small but important way, is another instance. Thirdly, I have upheld the applicant’s claims for costs in some areas. While a payment under s 546(3)(c) should not be regarded as a back-door method of securing costs, nonetheless the recovery of costs to some extent has the potential to bear upon any consideration of whether such a payment would deliver a “windfall” to the applicant.

119    Fourthly, the “common informer” policy considerations which are ingrained into s 546(3)(c) and its statutory predecessors speak loudly in the circumstances of the present case. For the applicant – an individual employee in a responsible position in a non-industrialised workplace – to have advanced, and persisted with, claims which the court has held to be legitimate, and to have done so in the face of the deferrals and procrastinations of the respondents in ways to which I have referred elsewhere, can only have constituted a substantial, continuing, burden for her. In a forensic and evidentiary environment which would have tested the most seasoned of litigators, the applicant maintained her focus and, ultimately, achieved the success which was always her due. I consider it to be four-square within the policy of s 546(3)(c) that an employee in the position of the applicant should be encouraged to proceed as she has done, thereby making it the more likely that the applicable provisions of the FW Act will be more than mere words on the statute book.

120    With respect to the two contraventions of s 323 which relate to the respondents’ failure to pay moneys due under the commission agreements, the applicant will receive compensation, or damages, for her economic loss, and some of her relevant costs. Having regard to the considerations referred to above, I propose to order that three-quarters of the penalty in each case be paid to the applicant.

121    With respect to the contraventions of s 323 which related to Betezy.com’s failure to pay ordinary salary and Betezy’s failure to pay bonuses, the applicant will receive compensation and costs. Having regard to the considerations referred to above, I propose to order that two-thirds of the penalty in each case be paid to the applicant.

122    With respect to the contraventions of s 536 and reg 3.43, the applicant will receive her costs. There will be no compensation in these areas, but the applicant was the employee affected by the respondents’ conduct, and detrimentally so. Having regard to the considerations referred to above, I propose to order that three-quarters of the penalty in each case be paid to the applicant.

123    With respect to Betezy’s two contraventions of s 340, no costs will be ordered. There will be no compensation for the threat to dismiss made on 20 September 2011, and the compensation for the suspension events of late October 2011 will relate only to the salary which the applicant lost as a result of those events. Having regard to the considerations referred to above, I propose to order that the whole of the penalty for the threat, and that three-quarters of the penalty for the suspension, be paid to the applicant.

Associate:

Dated:    8 November 2013