Bartolome Durado and Delo Be Isugan v Foot and Thai Massage Pty Ltd

[2016] FWC 3759

[2016] FWC 3759

The attached document replaces the document previously issued with the code [2016] FWC 3760 on 10 June 2016 to correct the document code to [2016] FWC 3759.

Relief Associate to Deputy President Kovacic

Dated: 4 August 2016.

[2016] FWC 3759

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Bartolome Durado and Delo Be Isugan
v
Foot & Thai Massage Pty Ltd
(U2015/15119 and U2015/15122)

DEPUTY PRESIDENT KOVACIC CANBERRA, 10 JUNE 2016

Application for relief from unfair dismissal.

[1] Mr Bartolome Durado and Ms Delo Be Isugan (the Applicants) each made an application under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of their employment by Foot and Thai Massage Pty Ltd (the Respondent – also referred to as the Company) on 26 October 2015 was unfair. The applications were received by the Fair Work Commission (the Commission) on 16 November 2015.

[2] The applications were the subject of separate and unsuccessful conciliations convened by one of the Commission’s conciliators on 17 December 2015. The Commission subsequently wrote to the Applicants on 22 December 2015 foreshadowing the issuance of Directions by the Commission.

[3] On 18 January 2016 the Commission contacted each of the Applicants. The Applicants both advised that they wished to proceed with their respective applications and requested that the applications be heard together. Later that day, the Commission contacted the Respondent’s representative, Mr Colin Elvin, who advised that the Respondent did not consent to the matters being heard together and that the Respondent had gone into voluntary administration.

[4] On 25 January 2016 the Commission contacted Mr Aaron Brewin of Deloitte Touche Tohmatsu Limited (Deloitte) as Deloitte had been appointed as Administrator. On 28 January 2016 Mr Brewin emailed the Commission advising, inter alia, that “…the Administrators will not proceed with any further action regarding the claims against the company.”

[5] In subsequent developments:

• on 5 February 2016 the Commission issued Directions requiring the parties to file an outline of submissions and any evidentiary material they intended to rely on regarding the applications, with the applications listed for hearing on 4 April 2016;



• meetings of the Company’s creditors were held on 1 and 26 February and 10 and 18 March 2016, with Deloitte advising the Commission on 18 March 2016 that creditors had resolved at their meeting of 18 March 2016 that: “…the Company execute a Deed of Company Arrangement (“DOCA”). and that: “The Company has 15 business days from today to execute the DOCA”; and



• on 1 March 2016 Mr Stefan Russell-Uren of United Voice (UV) sent an email to the Commission advising that the Applicants had joined UV and had requested that it represent them.

[6] The Commission hearing of 4 April 2016 canvassed the implications of a DOCA being executed for its capacity to hear and determine the applications and concluded with an agreed timetable for the provisions of any submissions on that issue by UV and Deloitte (as the Administrator).

[7] On 5 April 2016 Mr Russell-Uren wrote to the Commission submitting, among other things, that:

“Once a deed of company arrangement is executed section 444E will apply to those people who are covered by the Deed. There is little doubt the applicants fall within that class. That provision imposes the same limitation on a litigant’s capacity to continue the proceeding as each other relevant provision and is couched in the same language. In our submission Smith is as applicable to each provision as it is to section 500.”

[8] By way of background, the references to ss.444E and 500 are references to the relevant provisions of the Corporations Act 2001 (the Corps Act), while the reference to Smith is a reference to Smith & Ors v Trollop Silverwood and Beck Pty Ltd 1. In short, Mr Russell-Uren contended that the Commission could not proceed to deal with the applications absent leave being granted by a Court as defined in s.58AA of the Corps Act, with the Commission not being a Court for the purposes of s.58AA.

[9] On 12 April 2016, Mr Brewin forwarded the Commission a copy of the DOCA which had been executed on 11 April 2016.

[10] On 13 April 2016 Deloitte forwarded to the Commission a copy of a letter from the Deed Administrator, Mr Ezio Senatore, to the Company’s creditors. Both Applicants were listed among those creditors.

[11] Beyond the abovementioned letters of 12 and 13 April 2016, Deloitte made no submissions regarding the issue of whether or not the Commission could hear and determine the applications with the DOCA in place.

Consideration of the issues

[12] The relevant provisions of the Corps Act are set out below:

CORPORATIONS ACT 2001 - SECT 58AA

Meaning of court and Court

(1) Subject to subsection (2), in this Act:

“court”means any court.

“Court”means any of the following courts:

(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2) Except where there is a clear expression of a contrary intention (for example, by use of the expression “the Court”), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.

Note: The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts.

CORPORATIONS ACT 2001 - SECT 444E

Protection of company’s property from persons bound by deed

(1) Until a deed of company arrangement terminates, this section applies to a person bound by the deed.

(2) The person cannot:

(a) make an application for an order to wind up the company; or
(b) proceed with such an application made before the deed became binding on the person.

(3) The person cannot:

(a) begin or proceed with a proceeding against the company or in relation to any of its property; or
(b) begin or proceed with enforcement process in relation to property of the company; except:
(c) with the leave of the Court; and
(d) in accordance with such terms (if any) as the Court imposes.

(3) In subsection (3):

“property”of a company includes:
(a) any PPSA retention of title property of the company; and
(b) any other property used or occupied by, or in the possession of, the company.

Note: See sections 9 (definition of property) and 51F (PPSA retention of title property).” (Underlining added)

[13] The DOCA forwarded to the Commission provides at Recital C that “This Deed binds all Creditors of the Company pursuant to section 444D of the Act and the Company’s officers and members in accordance with section 444G of the Act.” Again, the reference to the Act is a reference to the Corps Act. Section 444D of the Corps Act provides, inter alia, that the DOCA “…binds all creditors of the company, so far as concerns claims arising on or before the day specified in the deed under paragraph 444A(4)(i)”, with the DOCA defining claims as “…all and existing, or contingent claims, including Historical Employee Claims, an or causes of action, debts, or liability of whatever nature which exist as at the Appointment Date.” The DOCA specifies 15 December 2015 as the Appointment Date and defines Historical Employee Claims as: “…all current or contingent claims by current or former employees of the Company arising out of or in connection with the employee’s employment relationship with the Company, including, but not limited to, outstanding employee entitlements, superannuation claims, unpaid overtime and unfair dismissal claims” (Underlining added).

[14] The material before the Commission indicates that:

• both Applicants are creditors of the Company;



• the DOCA binds all creditors of the Company;



• the applications were made prior to the Appointment Date, i.e. 15 December 2015, and were therefore claims for the purposes of the DOCA;



• s.444E of the Corps Act applies to the Applicants as they are persons bound by the DOCA [s.444E(1)]; and



• s.444E(3) precludes the Applicants beginning or proceeding with a proceeding against the Company except with the leave of the Court as defined in s.58AA of the Corps Act.

[15] Against that background, it is clear that the Commission cannot deal with the applications until such time as the Applicants obtain leave from a Court or alternatively the DOCA terminates.

Appearances:

S. Russell-Uren for the Applicants.

A. Brewin for the Administrator.

Hearing details:

2016.

Canberra:

April 4.

 1 (2003) 142 IR 137

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