Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) (includes Corrigendum dated 22 February 2010) [2010] FCA 98 (18 February 2010)

Last Updated: 23 February 2010

FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) [2010] FCA 98

CORRIGENDUM

FAIR WORK OMBUDSMAN v KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) and JIAN YANG ZHANG
WAD 127 of 2009

MCKERRACHER J
18 FEBRUARY 2010 (CORRIGENDUM 22 FEBRUARY 2010)
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION	WAD 127 of 2009

BETWEEN:	FAIR WORK OMBUDSMAN Applicant
AND:	KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) First Respondent JIAN YANG ZHANG Second Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	18 FEBRUARY 2010
WHERE MADE:	PERTH

CORRIGENDUM

1. On the cover page and in para [5] reference to the ‘Workplace Relations Act 2006 (Cth)’ be deleted and replaced with ‘Workplace Relations Act 1996 (Cth)’.
   

I certify that the preceding one (1) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate:

Dated: 22 February 2010

FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) [2010] FCA 98

Citation:	Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) [2010] FCA 98
Parties:	FAIR WORK OMBUDSMAN v KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) and JIAN YANG ZHANG
File number:	WAD 127 of 2009
Judge:	MCKERRACHER J
Date of judgment:	18 February 2010
Catchwords:	PRACTICE AND PROCEDURE – application for further adjournment of trial dates – repetitive adjournment of trial dates generally undesirable – weighing of injustice between the parties – witnesses requiring visa extensions to remain in Australia – legal representation of company required – ill-health of respondent company director – penalties and damages may apply – short adjournment granted
Legislation:	Workplace Relations Act 2006 (Cth) s 728
Cases cited:	Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 CBFC Ltd v Charitopoulos [2008] SASC 86 Simpson v Milhem (1986) 130 LSJS 185 State of Queensland v JL Holdings [1997] HCA 1; (1997) 189 CLR 146 Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 Wilson v Hunt (1984) 116 LSJS 20
Date of directions hearing:	12 February 2010
Date of last submissions:	17 February 2010
Place:	Perth
Division:	FAIR WORK DIVISION
Category:	Catchwords
Number of paragraphs:	32
Counsel for the Applicant:	R Hooker with S Maddern
Solicitor for the Applicant:	Corrs Chambers Westgarth
The Second Respondent failed to appear due to ill-health

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION	WAD 127 of 2009

BETWEEN:

FAIR WORK OMBUDSMAN Applicant

AND:	KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) First Respondent JIAN YANG ZHANG Second Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	18 FEBRUARY 2010
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The trial dates of 22-26 February 2010 be vacated.
2. The matter be listed for a directions hearing on Monday, 22 February 2010 at 10.15 am for the fixing of early trial dates.
3. There be liberty to apply on short notice.
4. The costs of today and the costs thrown away will be reserved.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION	WAD 127 of 2009

BETWEEN:

FAIR WORK OMBUDSMAN Applicant

AND:	KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) First Respondent JIAN YANG ZHANG Second Respondent

JUDGE:	MCKERRACHER J
DATE:	18 FEBRUARY 2010
PLACE:	PERTH

REASONS FOR JUDGMENT

1. The respondents apply to adjourn the trial of this proceeding. The application is opposed.
2. Prior to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 it was observed in CBFC Ltd v Charitopoulos [2008] SASC 86 at [10] per White J (which followed State of Queensland v JL Holdings [1997] HCA 1; (1997) 189 CLR 146), that the paramount consideration is the doing of justice between the parties and if an adjournment is necessary to allow a party that opportunity it ordinarily should not be refused unless it would result in irremediable prejudice or injustice to the other party and an order for costs would not be sufficient compensation to that party. The Court must compare the potential injustice to the party seeking it if it is refused with any prejudice to the other party if it is granted: Simpson v Milhem (1986) 130 LSJS 185. In Aon, it was held, (at [30]):

It might be thought a truism that “case management principles” should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, JL Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.

3. The applicant contends that Kentwood Industries Pty Ltd (Kentwood) has engaged in a sustained course of unlawful underpayment to its employees.
4. The respondents take issue, at least with the following:

(a) the content in material terms of the applicable contracts of employment;

(b) the hours actually worked by each of the employees;

(c) the means of discharge by Kentwood of its obligations to pay the employees, particularly by payment of certain sums to employment agents.

5. The second respondent (Mr Zhang) denies he is a person involved in the contraventions of the applicable civil remedy provisions of s 728 of the Workplace Relations Act 2006 (Cth) (WR Act).
6. It is evident from the submissions that have been exchanged that a substantial amount of oral evidence is to be led, not only by the employees who are said to have been under paid but also by witnesses whom the respondents propose to call.
7. The respondents also have a positive case which at present they seek to prove. As I understand it, it is to the effect that Kentwood recruited twelve workers from China through ‘Beijing Sunshine’ which is a recruitment agent in China. Each of those workers signed an ‘Entrust Agreement’ with Beijing Sunshine and an ‘Employment Contract’ with Kentwood before leaving China. Kentwood says it remitted the workers’ salary to Beijing Sunshine at the request of the workers in accordance with their ‘Employment Contracts’. Kentwood’s case is that Beijing Sunshine then reimbursed the fees and services charges paid for the workers and remitted the salary to their respective Chinese bank accounts according to their ‘Entrust Agreements’.
8. Kentwood says that the real dispute is that the workers now do not want to pay for the services provided by Beijing Sunshine including visa application fees, translation fees, accommodation, food and living expenses. It says that the employees agreed to pay these expenses. It argues that there is in reality a dispute between the workers and Beijing Sunshine which should not be visited upon Kentwood.
9. Kentwood also says that the workers were paid in accordance with the working hours records provided by site managers who have now left the company and that the records provided by the workers are inconsistent with those retained in the company records as prepared by the site managers. Kentwood contends there are many errors in the working hours records in respect of work carried out in both Melbourne and Perth.
10. Those and other issues were to be ventilated at a trial to be conducted in late December 2009. It was necessary to adjourn that trial for a number of reasons, primarily because the respondents’ witnesses were unavailable and the respondents had no legal representation. An added complexity prevailing then and now is that Mr Zhang who is the sole director of Kentwood does not speak English at all fluently.
11. At several directions hearings where Mr Zhang has appeared by telephone, it has been stressed (through an interpreter) that it is necessary for the company to have legal representation. Initially there was legal representation which has at least allowed the proceeding to advance to the point of preparation of pleadings and the exchange of other interlocutory documents.
12. Notwithstanding this, since at least the directions of 18 November 2009 and despite assurances given as to the making of attempts, no legal representation has been secured by the company. I have made it clear that the company must, unless leave is sought and obtained, be represented by a solicitor. On the face of the matter, the complexity of the proceedings would not readily lend themselves to a lay person who speaks little English being given leave to represent the company.
13. Following the December 2009 adjournment, the matter was also set down for trial for five days commencing from 22 February 2010.
14. Two directions hearings were conducted on 8 and 12 February 2010. On each of those occasions Mr Zhang was apparently hospitalised in Beijing. He appeared by telephone, through an interpreter, at the first hearing, but not the second. Following the first of those hearings on 8 February 2010, a letter was received in the following terms from Mr Zhang. It was copied to the applicant:

9 February 2010

...

Dear Justice McKerracher

Your reference: WAD 127 of 2009

After the direction hearing on yesterday 8 February 2010, I sincerely ask the Justice to give extension on the future hearings due to the following reasons:

(1) I came back from Inner Mongolia yesterday morning and may be due to prolong travelling and tiredness, I suddenly fainted and was sent to hospital by my friend. After examined by doctor in P.L.A. The Military General Hospital of Beijing, I was diagnosed as intermittent whirling and was asked to stay in hospital for observation (please see the [translated and attached as Appendix A to these reasons] doctors diagnosed certification attached). I also did the Nuclear Magnetic Resonance (NMR) and cervical examination in hospital and I am now waiting for the examination results for further treatment.

(2) About the witnesses

There were about 18 staff working in the company in 2007, which include twelve 457 workers. There were 3 managers in the company and 2 managers- MA Yong Bo and HUANG Jin Rong were responsible for attendance and work progress assessment for these 457 workers. Nearly all the staff in Kentwood had been threatened by YUAN Zhao Lin before, especially Jian Sun and MA Yong Bo.

Workplace Ombudsman did interview MA Yong Bo and Jian Sun in 2007. As requested in the “Response to Applicant’s Index to Trial Bundle of Documents” on 14/12/09, I requested Workplace Ombudsman to provide the interview records of MA Yong Bo and Jian Sun in trial. As far as I understand, both witnesses told the Workplace Ombudsman in interview that they had been threatened by YUAN Zhao Lin. The worst case is even until 2nd May 2009 (Saturday morning). Yuan still had threatening behaviors (sic-behaviours) to Jian Sun. YUAN did not leave Jian Sun’s house until Jian Sun called police to come.

I have been to Inner Mongolia numerous times from mid 2009 to look for witness MA Yong Bo to present in trial. On December 2009, I prepared the 676 Australia visitors visa application for MA Yong Bo and MA agreed to appear in the February 2010 trial. However, until around later January 2010, MA suddenly changed his mind and was not willing to attend the trial. He received unknown phone call to ask him not to involve in the case so much. Indeed, I myself also received unknown phone call from a Chinese guy on December 2009 saying his “big brother” is short of money now and want me to give him $30,000. Also, I was told that HUANG Jin Rong also has received unknown phone call similar to MA and he is also reluctant to appear in court.

In the meantime, I have to take medical treatment in hospital and also tried to look for more witnesses. As all the witnesses are in China and they are working all over the country, it is hard to find and persuade them to appear in court. I need to have more time to look for more witnesses.

(3) About lawyer

I did not aware that it is a requirement for me to have a lawyer in court. Until present, I could not find a satisfactory lawyer who can speak good Mandarin and understand Workplace Law well. As all the previous employees have been threatened by YUAN Zhao Lin before, no one is willing to help to look for a lawyer for this case. Also, as there is no one understands the case as much as me, it is hard for other people to look for lawyer for me. In the meantime, I have to look for lawyer by internet or though recommendation.

Therefore, I sincerely ask the Justice to give extension on future hearings due to the above grounds.
...

15. At the directions hearing conducted on 12 February 2010, the applicant through counsel made it clear that it opposed any adjournment of the trial. Nevertheless, counsel properly accepted the difficulty of a fair trial proceeding with the absence of legal representation let alone witnesses for the respondent. As against that, he referred to the previous indulgences including the adjournment in December 2009 and the several occasions on which the need for legal representation had been stressed.
16. A further difficulty which on its face would appear to be of some significance is that witnesses to be called by the applicant are remaining in this country only by virtue of visas which will expire unless renewed.
17. This difficulty confronted the applicant in connection with the proposed December 2009 trial listing but, as I understand the position, it was possible to obtain temporary extensions of the visas in order to enable these witnesses to give evidence at the trial fixed for hearing on 22 February 2010.
18. The proposal advanced by the applicant was that its witnesses give evidence and be cross-examined and the trial be adjourned to permit the respondents to obtain legal representation if it has not been obtained and to call evidence in their own cases should they choose to do so.
19. Counsel quite rightly accepted that the difficulty with this proposal would lie in the question of whether the respondents could realistically advance beneficial cross-examination in the circumstance where the only spokesman for Kentwood would be Mr Zhang who, as I have said, is apparently unwell, speaks little English and is certainly not legally qualified. Given that the proceedings involved exposure to penalties, to permit that course to proceed seems to me to be a matter of last resort.
20. Were there affidavit evidence before me to indicate that a further brief extension of the visas would not be countenanced, that would be a factor that I would have to take into account. I suggested that the applicant make enquiries on that topic. It filed an affidavit yesterday, the substance of which was to indicate that the position was uncertain. No extension could be guaranteed. So much would have to be accepted. However, it seems reasonably probable to me that if the trial were adjourned for a very limited period (a month or so) to ensure that every final endeavour is pursued to obtain legal representation for Kentwood (and if he chooses it, for Mr Zhang), that a limited and brief extension of the visas may be possible. A letter received by the applicant today (18 February 2010) from the Department of Immigration and Citizenship observes:

A Bridging visa E (BVE) (subclass 050) allows people who no longer hold a substantive visa to remain temporarily in Australia while they await the outcome of an application for a substantive visa, pursue the review of a migration or citizenship decision or make arrangements to depart Australia.

BVEs are not granted for the purpose of attending court hearings that are unrelated to a migration or citizenship decision. However, a BVE holder may be engaged in matters unrelated to the purpose of the BVE while it is in effect. For example, a BVE granted on the basis that an applicant is making ‘acceptable arrangements to depart Australia’ may be granted for a period long enough to organise his or her travel during which time the client may also be attending court hearings, etc.
...
DIAC cannot provide any assurances that Mr Yuan [– a witness for the applicant] will be granted another BVE as this will depend on the BVE decision maker’s assessment of the applicant’s circumstances at the time of the application. However, if the decision maker is satisfied that Mr Yuan is making acceptable arrangements to depart Australia and that he will abide by any conditions that will be imposed on the visa, then it is likely that another BVE will be granted.

21. On the basis of this information, it seems that the risk of a sudden departure from the country of the applicant’s witnesses is not great. However, I would intend to provide for liberty to apply on short notice to facilitate consideration of taking evidence from those witnesses on a basis that is de bene esse.
22. At the directions hearing conducted on 12 February 2010, I also indicated that I would certainly not be prepared to permit a further adjournment of the trial simply on the basis of the letter provided. I indicated in the course of the directions hearing and subsequently (as Mr Zhang was not in attendance) by immediate communication with him, that the topics covered in that letter would have to be addressed in an affidavit to be received by no later than yesterday (17 February 2010). Although not in correct form and although not in substantial measure strictly admissible, a draft of that affidavit has been received together with an assurance that it will be sworn today.
23. I indicated that if the material was received yesterday, I would rule on the adjournment application today.

CONCLUSION

24. Although there is an obligation on a party to do everything possible to procure the attendance of his or her own witnesses (Wilson v Hunt (1984) 116 LSJS 20), I am unable to discern on the materials before me that there has been a failure on the part of the respondents to meet this obligation given the circumstances to which the correspondence and affidavit allude.
25. There is some, but not compelling, evidence to support the ill-health contention raised by Mr Zhang. I will accept that indication at face value for present purposes as it appears to come from a medical practitioner.
26. The greatest concern however is that the respondents, facing a language barrier and ill-health would be exposed without legal representation and without witnesses to a complex hearing which may give rise, if the applicant succeeds, to penalties as well as other relief, including damages and costs.
27. No application has been made for leave for Mr Zhang to represent Kentwood and on the basis of the material presently available, it is difficult to see that there would be a persuasive argument to permit that course. As has been observed in a number of decisions (such as Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241), the advantages of operating under a corporate banner also carry with them certain responsibilities and obligations including the requirement that the company in Court proceedings be represented by a solicitor unless leave of the Court is otherwise obtained. I have made it very clear to Mr Zhang that the company must be legally represented unless leave is otherwise given.
28. Although Mr Zhang has maintained that he has been anxious to find a solicitor familiar with industrial law who also speaks Mandarin, I have made it clear to him that as a large portion of the trial will have to be translated in any event (most of the applicant’s witnesses speak only Chinese and Mr Zhang fluently speaks only Chinese). None of the solicitors nor the Court will be able to proceed without translation. The more important requirement therefore is that he obtain a solicitor able to represent him in litigation of this nature. He appears to accept that this is so.
29. Constant adjournments of trials of any nature are highly undesirable. As against that, it is, in my view, (while applying the observations in Aon) even less desirable to proceed to trial in 6 business days time given the prejudice with which the respondents would inevitably be confronted in the absence of legal representation, illness and lack of witnesses. This would include a split trial where only the applicant’s evidence is called.
30. The applicant quite rightly suggests that the respondents may be tempted to treat this further adjournment as indicating that the matter can be deferred indefinitely. They should not do so. I wish to make it very clear that the trial will proceed within a short period of time and I have in mind, subject to the convenience of the parties, within as soon as reasonably possible after a period of four weeks, which should enable Kentwood to obtain legal representation and for that representation to be reasonably informed. Moreover, if my optimism as to the likely availability of the applicant’s witnesses for a modest period of time is misplaced, I would expect the applicant to apply to the Court urgently so that special arrangements to take their evidence may be considered.
31. I note that the applicant has helpfully undertaken to forward to the respondents a list of solicitors in Victoria who speak Mandarin and purport to have experience and capacity in industrial law or workplace law.
32. For the foregoing reasons, I will accede to the request of the respondents that the trial dates be vacated, but grant liberty to apply.
    1. The trial dates of 22-26 February 2010 will be vacated.
    2. The matter will be listed for a directions hearing on Monday, 22 February 2010 at 10.15 am for the fixing of early trial dates.
    3. There will be liberty to apply on short notice.
    4. The costs of today and the costs thrown away will be reserved.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate:

Dated: 18 February 2010

APPENDIX A