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.
