Friday 18 May 2018

Federal Circuit Court on Thursday sentenced Trek North Tours owner operator to 12 months' prison and fined him $67,000


Leigh Alan Jorgensen, Financial Review, 13 May 2018

In the continuing matter of A.C.N. 156 455 828 Pty Ltd & Anor.

Fair Work Ombudsman, media release, 14 May 2018:


Jail term imposed in Fair Work Ombudsman’s first contempt of court case

A Northern Queensland business operator has been jailed – and then released pending the outcome of his appeal – as a result of the Fair Work Ombudsman’s first contempt-of-court action.

On Thursday May 10, the Federal Circuit Court sentenced Leigh Alan Jorgensen - the owner-operator of a Cairns company trading as Trek North Tours – to a 12-month jail term and fined him $84,956 for committing contempt of court by contravening a freezing order that applied to funds in his company’s accounts.

The Court ordered that Jorgensen’s jail term be suspended after he had spent 10 days in jail on the condition of payment of the fine.

Jorgensen sought an urgent stay of the orders in the Federal Court and lodged an appeal against his conviction and sentence. In accordance with her model litigant obligations, the Fair Work Ombudsman agreed to the stay on conditions. On May 11, the Federal Court ordered that his sentence be stayed and Jorgensen be released from jail on conditions, pending the outcome of his appeal.

A Court date has not yet been set for the appeal hearing but an order has been made that it be expedited.

The matter is the first time the Fair Work Ombudsman has commenced a contempt of court action and the first time a jail term has been imposed as a result of the Agency’s actions.

Judge Salvatore Vasta imposed the jail term after finding Jorgensen had committed contempt of court when he contravened a freezing order the Fair Work Ombudsman secured against his company in 2015. 

Freezing orders were imposed in the Federal Circuit Court in 2015 preventing any dispersion of Jorgensen’s and his company’s assets until such time as they complied with penalty and back-payment orders resulting from the Fair Work Ombudsman taking legal action against them for underpaying five back-packers on 417 working holiday visas in 2013 and 2014.

The relevant orders from that legal action, imposed by the Federal Circuit Court in June 2015, were for Jorgensen to pay a $12,000 penalty and his company to pay a $55,000 penalty and back-pay the backpackers in full, all by 17 July, 2015.

The Fair Work Ombudsman took the step of securing freezing orders against both Jorgensen and his company after both failed to pay the amounts owed by the due date and receiving information that gave rise to concerns that Jorgensen would divert company assets to avoid payment of the penalties and back-pay.

At the time, Jorgensen’s communications with the Fair Work Ombudsman suggested he was prepared to ‘bankrupt’ his company to avoid paying the penalties and back-pay order.

Jorgensen had also previously told Fair Work inspectors investigating the underpayments that the backpackers ‘would not get a cent’ in back-pay.

After the freezing orders were imposed, Jorgensen paid the penalty imposed on him personally into Court, resulting in the freezing order against him being lifted.
However, Jorgensen’s company failed to pay its penalty and failed to back-pay the workers, resulting in the freezing order against his company remaining in place.

The Fair Work Ombudsman commenced legal action against Jorgensen for contempt of Court last year, alleging that Jorgensen committed the offence of contempt of court in August 2015 when he contravened the freezing order against his company by transferring a total of $41,035 from two frozen accounts into his family trust account.
Judge Vasta found that the Fair Work Ombudsman had presented evidence to prove, beyond a reasonable doubt, that Jorgensen committed the offence.

Pending the outcome of his appeal, the Federal Court has released Jorgensen on conditions including that he surrender his passport, remain in Queensland and report to Police twice a week.

Fair Work Ombudsman Natalie James says that the commencement of these proceedings demonstrates that her Agency is prepared to use every tool at its disposal to ensure justice is served.

“We will use every lever open to us to ensure the integrity of the administration of justice and compliance with court orders imposed under the Fair Work Act 2009.
“This includes taking unprecedented new actions available to us across the legal framework such as this one.”

BACKGROUND

Australian Securities and Investments Commission (ASIC), media release, 6 February 2017:

17-023MR Former company director charged with making false or misleading statements

Former company director Leigh Alan Jorgensen, of Cairns, Queensland, has been charged with making a false or misleading statement to ASIC.

In February 2016, Mr Jorgensen lodged with ASIC a Form 6010 to voluntarily deregister A.C.N 156 455 828 Pty Ltd (ACN 156 455 828), in which ASIC alleges that Mr Jorgensen falsely and misleadingly claimed the company had no outstanding liabilities. At the time, ACN 156 455 828 had an outstanding liability owing to the Commonwealth and Mr Jorgensen was the sole director.

The charge was brought against Mr Jorgensen following an ASIC investigation into his conduct as a director of the company.

Mr Jorgensen is due to appear at the Cairns Magistrates Court on 21 March 2017.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.

Background

The matter was brought to ASIC's attention by the Fair Work Ombudsman (FWO), who initiated legal proceedings against Mr Jorgensen and ACN 156 455 828 for unpaid employee entitlements. The FWO obtained judgement against ACN 156 455 828 which, in part, required the company to pay the Commonwealth a pecuniary penalty of $55,000. The order was obtained by the FWO before Mr Jorgensen lodged the Form 6010 to deregister ACN 156 455 828.

As a result of ASIC's investigation, Mr Jorgensen has been charged with contravening section 1308(2) of the Corporations Act 2001 (Cth).

Mr Jorgensen ceased as a director of ACN 156 455 828 on 1 March 2016. A Liquidator was appointed to ACN 156 455 828 on 29 July 2016.

Editor's note 1:
Following a hearing at the Cairns Magistrates' Court on 21 March 2017, the matter was adjourned for further mention until 16 May 2017.
Editor's note 2:
Following a hearing at the Cairns Magistrates Court on 16 May 2017, the matter was adjourned for further mention on 27 June 2017.
Editor's note 3:
Following a hearing at the Cairns Magistrates Court on  27 June 2017, the matter was adjourned for further mention on 25 July 2017.
Editor's note 4:
Following a hearing at the Cairns Magistrates Court on  25 July 2017, the matter was adjourned for further mention on 22 August 2017.
Editor's note 5:
Following a hearing at the Cairns Magistrates Court on  22 August 2017, the matter was adjourned to 5 September 2017.
Editor's note 6:
Following a hearing at the Cairns Magistrates Court on  7 September 2017, the matter was adjourned for further mention on 19 September 2017. 
Editor's note 7:  
A warrant was issued for Mr Jorgensen following his failure to attend the Cairns Magistrates Court on 19 September 2017.
Editor's note 8:
Following a hearing at the Cairns Magistrates Court on  27 September 2017, the matter was adjourned to 3 October 2017.
Editor's note 9:
Following a hearing at the Cairns Magistrates Court on 3 October 2017, the matter was set down for a committal hearing on 24 November 2017.
Editor's note 10:
Following a hearing at the Cairns Magistrates Court on 24 November 2017, the matter was adjourned to 13 February 2018.

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