BE Australia WD Pty Ltd v Sutton - [2011] NSWCA 414

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton [2011] NSWCA 414
Hearing dates: 23 May 2011
Decision date: 20 December 2011
Before: McColl JA at [1]
Campbell JA at [2]
Young JA at [216]
Decision:
(1) Extend to 25 May 2011 the time in which to seek leave to cross-appeal.
(2) Grant leave to appeal.
(3) Grant leave to cross-appeal.
(4) Dismiss the cross-appeal.
(5) Allow the appeal.
(6) Set aside the orders in the court below, and in lieu thereof order that the summons be dismissed with costs.
(7) Respondent to pay costs of the Appellants of the application for leave to appeal, application for leave to cross-appeal, the appeal, and the cross-appeal.
(8) Respondent to have a certificate under the Suitors Fund Act in relation to the costs in order (7) if qualified.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
CORPORATIONS - voluntary administration - whether person having unadjudicated claim under s 106 Industrial Relations Act 1996 is a "creditor" bound by a Deed of Company Arrangement - whether Court has power under s 447A(1) Corporations Act 2001 (Cth) to vary operation of Pt 5.3A to allow admission of such claim

CORPORATIONS - voluntary administration - definition of "creditor" in Pt 5.3A - whether term has same meaning as defined in s 553 - Brash Holdings v Katile Pty Ltd [1996] 1 VR 24 - whether scheme, purpose and scope of Pt 5.3A require class of claims broader than that of claims under s 553

CORPORATIONS - voluntary administration - definition of "claim" in Pt 5.3A - contingent claim - Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 - requirement of existing obligation

INDUSTRIAL LAW - unfair contracts - status of unadjudicated claim under s 106 Industrial Relations Act - whether "claim" within meaning of s 553 - Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 - Fisher v Madden [2002] NSWCA 28 - Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223 - whether basis, founded on existing legal right, for asserting a right to participate in the division of the assets of the company - whether legally enforceable right to have Industrial Relations Commission determine application according to law is sufficient - analogy with claim for costs

CORPORATIONS - voluntary administration - power of Court - s 447A - whether Court has power under s 447A(1) Corporations Act 2001 (Cth) to vary operation of Pt 5.3A to deem to be a creditor someone who is not a creditor - Re Motor Group Australia Pty Ltd [2005] FCA 985

CORPORATIONS - voluntary administration - power of Court - s 447A - whether limitations imposed by the subject matter, scope and purpose of the statute - whether order falls within objectives within s 435A or other purpose within Pt 5.3A

CORPORATIONS - voluntary administration - power of Court - s 447A - where broad power conferred on court, requirement to exercise judicially - requirement to exercise power to achieve purposes for which it was conferred

CORPORATIONS - voluntary administration - power of Court - s 447A - whether nexus with how Pt 5.3A is to operate

CORPORATIONS - voluntary administration - power of Court - s 447A - Standing - person with unadjudicated claim under s 106 Industrial Relations Act seeking order deeming them to be creditor - whether "any other interested person" - Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293

APPEAL - right of appeal - jurisdiction of the Court of Appeal - s 101(2)(r)(ii) Supreme Court Act 1970 - whether leave to appeal required - whether appeal involves a matter at issue amounting to $100,000 or more
COSTS - general rule - costs follow the event - whether departure from general rule - where proceedings relate to fund being administered subject to control of court - whether costs should be treated as costs in administration - no reason to depart from general rule
Legislation Cited: Acts Interpretation Act 1901 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
Australian Constitution
Australian Securities and Investments Commission Act 2001 (Cth)
Bankruptcy Act 1966 (Cth)
Child Welfare Act 1939
Civil Procedure Act 2005
Companies Act 1961-1964 (Qld)
Corporations Act 2001 (Cth)
Corporations Law
Corporations Regulations
Industrial Arbitration Act 1940
Industrial Relations Act 1996
Interpretation Act 1987
Petroleum Retail Marketing Franchise Act 1980 (Cth)
Supreme Court Act 1970
Trade Practices Act 1974 (Cth)
Cases Cited: Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293; (2002) 41 ACSR 587
Aloridge Pty Ltd v Christianos (1994) 13 ACSR 99
Ansett Australia Ground Staff Superannuation Fund Pty Ltd v Ansett Australia Ltd [2003] VSCA 117; (2003) 176 FLR 393
Aroona Developments Pty Ltd (in liq) v Killen [2004] NSWCA 363; (2004) 50 ACSR 668
Australasian Memory Pty Ltd v Brien (1998) 45 NSWLR 111
Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270
Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24
Buckingham v Pan Laboratories (Australia) Pty Ltd [2004] FCA 597; (2004) 136 FCR 102
Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607
Chief Commissioner of State Revenue v Rafferty's Resort Management Pty Ltd (in liq) [2008] NSWSC 542; (2008) 66 ACSR 199
City of Swan v Lehman Brothers Australia Ltd [2009] FCAFC 130; (2009) 179 FCR 243
Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223; (2005) 63 NSWLR 291
Commonwealth v Bank of New South Wales (1949) 79 CLR 497
Commonwealth of Australia v Rocklea Spinning Mills Pty Ltd [2005] FCA 902; (2005) 145 FCR 220
Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Edwards v Attorney General [2004] NSWCA 272; (2004) 60 NSWLR 667
Environmental & Earth Sciences Pty Ltd v Vouris [2006] FCA 679; (2006) 230 ALR 119
Ex Parte James Re James (1874) 9 Ch App 609
Expile Pty Ltd v Jabb's Excavations Pty Ltd [2004] NSWSC 284
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268
FAI Insurances Ltd v Winneke (1982) 151 CLR 342
FAI Workers Compensation (NSW) Ltd v Philkor Builders Pty Ltd (1996) 20 ACSR 592
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Farrow Finance v ANZ (1997) 23 ACSR 521
Fisher v Madden [2002] NSWCA 28; (2002) 54 NSWLR 179
Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52
Gibbons v LibertyOne (in liq) [2002] NSWSC 274; (2002) 41 ACSR 442
GM and AM Pearce & Co Pty Ltd v RGM Australia Pty Ltd [1998] 4 VR 888
Harrison v Melhem [2008] NSWCA 67; (2008) 72 NSWLR 280
Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 201 FLR 456
House v The King (1936) 55 CLR 499
In re Buckton; Buckton v Buckton [1907] 2 Ch 406
In re Cunningham; Sproule v Quested (1914) 31 WN (NSW) 44
In re Halston; Ewen v Halston [1912] 1 Ch 435
International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151
Joseph Khoury & Sons v Zambena Pty Ltd [1999] NSWCA 402; (1999) 217 ALR 527
Knight v FP Special Assets Ltd (1992) 174 CLR 178
Lam Soon Australia Pty Ltd v Molit (No 55) Pty Ltd (1996) 70 FCR 34
Leaway v Newcastle City Council (No 2) [2005] NSWSC 826; (2005) 220 ALR 757
Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443
McCluskey v Pasminco Ltd [2002] FCA 231; (2002) 120 FCR 326
McDonald v Commissioner of Taxation [2005] NSWSC 2; (2005) 187 FLR 461
McGrath v Capena Contracting Pty Ltd [2009] FCA 665
Milankov Nominees Pty Ltd v Roycol (1994) 52 FCR 378
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273
Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543
Moller v Roy (1975) 132 CLR 622
Murdocca v Murdocca (No 2) [2002] NSWSC 505
MYT Engineering Pty Ltd v Mulcon Pty Ltd (1997) 140 FLR 247
National Bank of Australasia Ltd v Mason (1975) 133 CLR 191
O'Brien v Ritchie (1931) 48 WN (NSW) 85
Owners of 'Shin Kobe Maru' v Empire Shipping Co Inc (1994) 181 CLR 404
Pawlowska v Zajglic [2011] NSWCA 118
PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301
Preston v Commissioner for Fair Trading [2011] NSWCA 40
Pyramid Building Society (in liq) v Terry (1997) 189 CLR 176
Quinn v Leathem [1901] AC 495
R v Beserick (1993) 30 NSWLR 510
R v The Australian Broadcasting Tribunal; Ex parte 2HD Proprietary Limited (1979) 144 CLR 45
Re AFG Insurances Ltd [2002] NSWSC 735; (2002) 20 ACLC 1588
Re Ansett Australia Ltd [2002] VSC 114; (2002) 41 ACSR 598
Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74
Re GPI Leisure Corp Ltd (in liq) (1994) 53 FCR 365; 130 ALR 256; 15 ACSR 282
Re Jay-O-Bees Pty Ltd [2004] NSWSC 818; (2004) 50 ACSR 565
Re Motor Group Australia Pty Ltd [2005] FCA 985; (2005) 54 ACSR 389
Re New Tel Ltd [2004] FCA 1154; (2004) 210 ALR 270
Re Octaviar Ltd (No 8) [2010] QCA 45; (2010) 237 FLR 315
Re Switch Telecommunications Pty Ltd (in liq); Ex parte Sherman [2000] NSWSC 794; (2000) 35 ACSR 172
Re Timeshare Resort Club Ltd [2010] FCA 673; (2010) 187 FCR 13
Silbermann v One.Tel Ltd [2002] NSWSC 295; (2002) 167 FLR 274
Something Better Pty Ltd & Terry v Pyramid Building Society (in liq) [1996] 2 VR 352
Sons of Gwalia Ltd (subject to deed of company arrangement) v Margaretic [2007] HCA 1; (2007) 231 CLR 160
State of New South Wales v Commonwealth of Australia (1983) 151 CLR 302
Surber v Lean [2000] WASCA 380; (2000) 23 WAR 445
Sutton v BE Australia WD Pty Ltd (admin apptd) [2010] NSWSC 772
Swan Hill Corporation v Bradbury (1937) 56 CLR 746
UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (SC(Vic), Hansen J, 19 July 1996, unreported)
Vero v Kassem [2011] NSWCA 381
Water Conservation and Irrigation Commission (New South Wales) v Browning (1947) 74 CLR 492
Category: Principal judgment
Parties: BE Australia WD Pty Ltd (subject to a deed of company arrangement) (First Appellant)
Alan John Hayes (Second Appellant)
Anthony Milton Sims (Third Appellant)
Mary Sutton (Respondent)
Representation: Counsel
C R Newlinds SC; D Sulan (Appellants)
D L Williams SC; J Little (Respondent)
Solicitors
Clayton Utz (Appellants)
PCC Lawyers + Consultants (Respondent)

File Number(s): 2009/291532
Decision under appeal

Citation:

Sutton v BE Australia WD Pty Ltd (admin apptd) [2010] NSWSC 772

Date of Decision:

2010-03-26 00:00:00

Before:

Palmer J

File Number(s):

2009/291532

Judgment

McCOLL JA : I agree with Campbell JA and the orders his Honour proposes.

CAMPBELL JA :

Nature of the Proceedings

Between 3 August 2004 and 7 October 2005 Ms Mary Sutton performed work as a taxation consultant for the benefit of BE Australia WD Pty Ltd (" BEA "). She had no direct contractual relationship with BEA. Rather, her services were provided to BEA through labour hire companies. The arrangements under which she worked were terminated on 7 October 2005, without prior notice or payment in lieu of notice.

On 1 November 2005 Ms Sutton commenced proceedings in the Industrial Relations Commission (" IRC ") against BEA. She alleged that the arrangements with BEA were unfair within the meaning of s 106 Industrial Relations Act 1996 (" IR Act ") in various respects. She sought to have the relevant contract or arrangement varied so that her services could not be dispensed with except upon reasonable notice, and a monetary payment for breach of the contract or arrangement as so varied.

On 1 October 2009, shortly before the proceedings in the IRC were due to be heard, BEA was placed in voluntary administration.

A Deed of Company Arrangement (" DOCA ") was subsequently approved by BEA's creditors. Section 444E Corporations Act 2001 (Cth) prevents any person bound by the DOCA from proceeding with a proceeding against the company except with leave of the Court.

Ms Sutton lodged a Proof of Debt in respect of her claim under s 106 IR Act . Ultimately, the Deed Administrators rejected that Proof.

Ms Sutton then began proceedings in the Equity Division of the Supreme Court of New South Wales seeking either an order under s 1321 reversing the decision of the Deed Administrators to reject her proof of debt, or an order under s 447A Corporations Act the effect of which would justify the Deed Administrators in admitting Ms Sutton's proof under the DOCA. The primary judge held that the Deed Administrators had correctly rejected the Proof of Debt. However, the judge also held that an order under s 447A should be made, the effect of which was that Ms Sutton was treated as though she was a creditor for the purpose of the DOCA. Finally, the judge ordered under s 447A that the Deed Administrators should adjudicate her Proof of Debt: Sutton v BE Australia WD Pty Ltd (admin apptd) [2010] NSWSC 772.

In the present proceedings BEA and the Deed Administrators seek leave to appeal against this decision. Their application for leave to appeal has been heard as a concurrent hearing, so that all arguments that the applicants would wish to put if leave were granted have been placed before the Court. The applicants challenge both the primary judge's finding that there was power under s 447A to make an order of the type he made, and his decision that it was an appropriate exercise of discretion to make such an order.

On the present application Mr C R Newlinds SC appeared with Mr D Sulan for the Applicant. Mr D L Williams SC appeared with Ms J Little for the Respondents.

In the course of the argument, Mr Williams sought an extension of time in which to seek leave to cross-appeal against the primary judge's decision upholding the rejection by the Deed Administrators of Ms Sutton's Proof of Debt. In accordance with directions given at the hearing of the application for leave to appeal, both parties filed written submissions directed to Ms Sutton's application for extension of time and application for leave to cross-appeal, and the merits of her application to cross-appeal. While Ms Sutton's legal representatives were content to have those questions decided on the papers, the legal representatives of BEA and the Administrators sought a further oral hearing concerning the foreshadowed cross-appeal.

In my view, no further oral hearing is necessary. The written submissions that have been filed are thorough, and in any event the issues raised in them were debated to some extent at the hearing.

I have reached the conclusion that the judge was right to conclude that Ms Sutton was not a "creditor" , but that it was an error to seek to use s 447A to enable Ms Sutton to be treated as if she were a creditor.

Factual Background

By some time in 2009 the financial accounts of BEA showed Ms Sutton as a contingent creditor in the sum of $330,000.

On 1 October 2009 BEA was placed into voluntary administration. By that date Ms Sutton's proceedings in the IRC had been listed for hearing, to commence on 23 November 2009.

Section 440D(1) Corporations Act provides:

"During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:

(a) with the administrator's written consent; or

(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes."

When hearing an application under s 106 IR Act the IRC sits as the Industrial Court of New South Wales: ss 151, 151A and 153 IR Act . The present proceedings have been conducted on the basis that the Industrial Court is a "court" within the meaning of s 440D and thus that the appointment of the administrators stayed the proceedings in the IRC.

On 3 November 2009 the Administrators advised the IRC that they did not consent to the continuation of Ms Sutton's proceedings. They continue to withhold that consent. To date the Supreme Court has not given leave for the IRC proceedings to continue, though the judgment appealed from envisaged that in some circumstances such leave might be given. Thus, the IRC proceedings are treated in this litigation as having been stayed pursuant to s 440D(1) Corporations Act while the voluntary administration was under way.

On 6 October 2009 a representative of the Administrators sent to Ms Sutton's solicitor a copy of the First Report to Creditors, saying that they understood that Ms Sutton was a creditor of BEA and/or a related company of BEA. The enclosed report gave advice about the date and place of the first meeting of creditors, and requested submission of Proofs of Debt. The first meeting of creditors was held on 14 October 2009.

Ms Sutton submitted a Proof of Debt on 13 October 2009.

A Report to Creditors dated 29 October 2009 (which related to the affairs of both BEA and a related company, BE Australia WD 2 Pty Ltd (administrator appointed) (" BEWD2 ") was distributed. It reported that BEA "was sold through a Management Buy Out on 6 August 2009" for $1,000. Presumably this refers the assets of BEA having been sold, as the Administrators report that the book value of the assets sold was approximately $5.4m and that liabilities of $5.8m were assumed. A Balance Sheet as at 31 December 2008 showed a capital deficiency of more than $112m. The report included the statement:

"The contingent liabilities comprise:

...

Mary Sutton for $330,000 being a potential contractor claim for personal grievance."

A second Supplementary Report to Creditors dated 5 January 2010 put forward a proposal for a DOCA. It estimated that creditors of BEA would receive eighty-four cents in the dollar under the DOCA, and would receive 0.43 cents in the dollar on a liquidation.

Ms Sutton was invited to attend creditors' meetings in October, November and December 2009 and in January 2010. The judge found that Ms Sutton was admitted to vote at those meetings as a contingent creditor, with the value of her claim being assessed at $330,000.

At a creditors' meeting on 13 January 2010 creditors that were related entities of the First Applicant, owed debts of nearly $122 m, voted in favour of the DOCA. Broadly, the terms of the DOCA were that the inter-company indebtedness would not be paid until all of the creditors had been paid, and any funds remaining after distribution to admitted creditors were to be paid to the United States parent of BEA.

On 9 February 2010 Ms Sutton submitted a Proof of Debt under the DOCA, for a total of $535,048.30. A schedule showed that the claim was made up as follows:

Legal costs incurred in the Industrial Court (at particular itemised dates, from 26 October 2005 to 29 January 2010)

$282,564.30

Interest

$92,115.00

Industrial Court claim - 12 months' notice

$140,369.00

Industrial Court claim - compensation for distress

$20,000.00

TOTAL

$535,048.30

On 17 February 2010 a letter from the solicitors for the Administrators rejected Ms Sutton's Proof of Debt in its entirety. The judge summarised the ground of rejection as being:

"that no part of the claim was provable under the DOCA as a matter of law because, as at the Appointment Date under the Deed, 1 October 2009, Ms Sutton had no more than a bare right to make an application invoking the jurisdiction of the Commission under s 106 IRA ". ([13])

That letter also said that, if that view was wrong, the Proof would be admitted only to the extent of allowing $11,697.42 concerning her claim for payment in lieu of notice, with all the other heads of her Proof of Debt not being allowed. That figure was arrived at because it was the amount she would receive if she were entitled to one month's payment in lieu of notice.

At the hearing the primary judge had before him a letter written by the solicitors for the Administrators on the previous day, that set out the then current position concerning the estimated dividend to creditors:

"1. The deed administrators are still in the position of collecting in the deed fund and adjudicating on the proofs which have been received. It follows that, at present, the final outcome with respect to payment of dividends to creditors is unknown and there are a number of different permutations.

2. However, on the present estimates prepared by the deed administrators, if Ms Sutton is admitted to prove in the deed fund for $330,000:

(a) there are [sic] is a scenario where creditors may still receive 100 cents in the dollar;

(b) there are other scenarios where creditors may receive slightly less, namely 94 cents or 96 cents in the dollar; and

(c) on each of the scenarios, the deed administrators estimate that creditors may receive greater than 84 cents in the dollar (which was the estimate provided to creditors in the administrators' report of 5 January 2010).

3. On the estimates prepared by the deed administrators, if Ms Sutton is admitted for the full amount of her proof ($535,048) in each of the scenarios the creditors may receive less than 84 cents in the dollar, namely, around 70 to 79 cents in the dollar.

4. Any surplus after distribution to admitted creditors would be returned to the deed proponent, BearingPoint Inc. If Ms Sutton's claim is admitted for any amount (whether it be $535,048; $330,000 or $11,697) it will adversely affect the amount of surplus which would otherwise be returned to BearingPoint Inc."

The Judgment Below

The primary judge rejected the appeal against the adjudication of the proof of debt. He accepted at [15] that whatever the definition of "creditor" might be in any particular DOCA, a DOCA has binding force only by virtue of s 444D(1) Corporations Act . That section provides:

"A Deed of Company Arrangement 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)".

Section 444A(4)(i) states that a DOCA must specify:

"The day (not later than the day when the administration began) on or before which the claims must have arisen if they are to be admissible under the deed."

The DOCA in the present case in clause 1.1 defined "Claims" as meaning:

"all actions, claims, suits, causes of action, arbitrations, debts, costs, demands, verdicts and judgments at law or in equity under any statute whether certain or contingent, present or future, ascertained or sounding only in damages, the circumstances giving rise to which occurred on or before the Appointment Date."

It defined "Creditor" as meaning "a person who has a Claim against the Company." It defined "Appointment Date" as meaning "1 October 2009" . That was the date on which the voluntary administrators had been appointed.

The judge accepted that a claim under s 106 IR Act which is unadjudicated as at the "relevant date" was not provable. This was because that claim did not seek to enforce any existing right obligation or liability, but merely to invoke the Commission's jurisdiction under s 106 IR Act to create a new right as from the date of the Commission's order and to give a remedy for breach of that newly created right. Thus, the judge concluded that the liquidators had been correct in rejecting the proof of debt.

The judge held that the Court had power to make an order under s 447A of the type for which the Respondent contended. In particular, the judge held at [27] that 447A(1) conferred power:

"... to vary the operation of s 444D(1) and s 444A(4)(i) so that the Deed Administrators are able to admit to proof under the DOCA Ms Suttons' claim under s 106 IRA , notwithstanding that that claim was not, as at the Appointment Date, specified in the DOCA, a claim or debt of the nature that could have been proved in the winding up of the company."

He further held that it was appropriate, in the exercise of the Court's discretion, for that power to be exercised.

The amended originating process had sought an order that the Respondent be admitted as a creditor in the sum of $330,000. However, by the time of the hearing that claim had evidently been modified. The judge recorded, at [36]:

"... the parties have not, in this application, sought the Court's determination of the proper amount to be admitted, if any."

At [35] the primary judge explained the order that he proposed as one that:

"... while requiring the Deed Administrators to admit Ms Sutton's proof under the DOCA as an admissible claim, will not require them to admit that claim in any amount, or at all. The administrators will have to adjudicate on the proof. If they reject it as bound to fail or as excessive, a suitable means of determining any resulting dispute is available."

His Honour went on to say, at [37]-[38]:

"If the order under s 447A(1) which I propose is made, the Deed Administrators reject Ms Sutton's claim in the Proof of Debt, in whole or in part, then Ms Sutton can appeal to this Court under s 1321 Corporations Act for determination of the amount of the claim which should be admitted, if any. That would not, however, be a satisfactory course. This Court would have to stand in place of the Industrial Relations Commission in deciding whether Ms Sutton has made out a claim for relief under s 106 IRA and, if so, what compensation she should receive. It is far more appropriate that the Industrial Relations Commission, rather than this Court, exercise that specialised jurisdiction.

Accordingly, if it becomes necessary to adjudicate further upon the Deed Administrators' rejection of Ms Sutton's Proof of Debt in whole or in part, leave should be granted to Ms Sutton under s 440D(1)(b) to continue with the IRC proceedings."

His Honour did not, at the time of delivering judgment, make any orders. Rather, he stood the matter over to enable Short Minutes to be brought in.

The orders his Honour made on 8 September 2010 were:

"1. An order pursuant to s 4471(1) of the Corporations Act (the Act), Part 5.3A of the Act is to operate in relation to the first defendant and the Deed of Company Arrangement dated 1 February 2010 (the DOCA) so that a 'creditor' is deemed to include the plaintiff for the purposes of Part 5.3A and Ms Sutton's claim is deemed to have arisen no later than 1 October 2009.

2. An order that the defendants be required to admit proof of debt to be lodged by the plaintiff under the DOCA as an admissible claim, which is to be adjudicated by the second and third defendants.

3. An order that the first defendant pay one half of the plaintiff's application for an order under s 447A(1) Corporations Act , there being no order as to the costs of the other issues in the proceedings."

We have been informed, without objection, that after the decision in the court below Ms Sutton lodged a proof of debt. The administrators have not yet adjudicated on it, because they have obtained from ASIC an extension of the time within which they must adjudicate on that proof to within 29 days after the decision is given in this appeal.

Relevant Provisions of the Corporations Act

Various interacting provisions of the Corporations Act must be taken into account. Provisions specifically relating to voluntary administration and the entry of a DOCA are contained in Part 5.3A, which runs from s 435A to s 451D.

Section 435A provides:

"The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence-results in a better return for the company's creditors and members than would result from an immediate winding up of the company." (emphasis added)

Section 439A(1) requires a voluntary administrator to "convene a meeting of the company's creditors " . Section 439C provides that at that meeting the creditors may resolve, inter alia, that the company execute a DOCA.

Section 444A(4) identifies matters that a DOCA must specify. They include:

"(b) the property of the company (whether or not already owned by the company when it executes the deed) that is to be available to pay creditors' claims;

...

(d) to what extent the company is to be released from its debts ;

...

(h) the order in which proceeds of realising the property referred to in paragraph (b) are to be distributed among creditors bound by the deed;

(i) the day (not later than the day when the administration began) on or before which claims must have arisen if they are to be admissible under the deed." (emphasis added)

Section 444D(1) provides:

"A deed of company arrangement 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)." (emphasis added)

Notwithstanding this repeated use of "creditor" and "claim" , neither Part 5.3A of the Corporations Act , nor the interpretation provisions contained in Part 1.2 of that Act contains any definition of "creditor" or "claim" .

Two provisions appearing in Part 5.6 Corporations Act , which is entitled "winding up generally" , are also relevant.

Section 553(1) provides:

"Subject to this Division [Proof and ranking of claims] and Division 8 [Pooling], in every winding up, all debts payable by, and all claims against, the company (present or future, certain or contingent, ascertained or sounding only in damages), being debts or claims the circumstances giving rise to which occurred before the relevant date, are admissible to proof against the company." (emphasis added)

Section 553E provides:

"Subject to this Division and to section 279, in the winding up of an insolvent company the same rules are to prevail and be observed with regard to debts provable as are in force for the time being under the Bankruptcy Act 1966 in relation to the estates of bankrupt persons (except the rules in sections 82 to 94 (inclusive) and 96 of that Act), and all persons who in any such case would be entitled to prove for and receive dividends out of the property of the company may come in under the winding up and make such claims against the company as they respectively are entitled to because of this section." (emphasis added)

Leave to Cross-Appeal and Extension of Time?

The basis upon which Mr Williams sought leave to cross-appeal was to challenge the primary judge's decision that Ms Sutton was not a "creditor" within the meaning of s 444D(1) Corporations Act , or within the definition of "creditor" in the DOCA. Those questions are logically anterior to whether it was appropriate for the primary judge to make an order under s 447A requiring that Ms Sutton be treated as though she were a creditor. Indeed, if in truth Ms Sutton were a creditor, such an order under s 447A would not be necessary. Further, determining whether Ms Sutton was a "creditor" within the meaning of s 444D or the DOCA depends upon many of the same cases and statutory provisions as enter into a consideration of whether the order under s 447A should have been made. As will later appear, I have decided that it is appropriate to grant leave to appeal, to enable the question of whether the order under s 447A should have been made to be examined. That the cases and statutory provisions would need to be examined in any event for the purposes of the appeal itself supports granting leave to cross-appeal.

While the application for leave to cross-appeal, and for the necessary extension of time, was filed on 25 May 2011, many months out of time, it was obviously prompted by the course that argument on the appeal took. In my view, it is appropriate to grant the extension of time that is sought, and to grant leave to cross-appeal.

Dealing with the issues in a logical order requires that the cross-appeal be considered before the appeal.

Was Ms Sutton a "Creditor" With a "Claim"?

Mr Williams submits that Ms Sutton was a creditor entitled to prove under the DOCA. He submits that Ms Sutton's claim fits comfortably within the definition in the DOCA of "Claims" as including "... claims... under any statute, whether certain or contingent, present or future, ascertained or sounding only in damages, the circumstances giving rise to which occurred ... before the Appointment Date" . He submits that she has a claim under a statute (namely, the IR Act ), and all the facts upon which her claim to an order under s 106 IR Act depended had occurred well before the Appointment Date. He accepts that, had the DOCA not intervened, she would have received an order entitling her to the payment of money only upon the IRC determining that she should be given relief under s 106 IR Act , quantifying or otherwise identifying that relief, and making orders to give effect to those determinations. However, he submits that, notwithstanding that, her situation is no difference in substance to that of a person with a claim for damages against a company under a statutory provision such as the Trade Practices Act , concerning which liability and quantum are not foregone conclusions. Such a claim, he submits, is a "claim" within the meaning of the DOCA, and its value is capable of being assessed. The value of Ms Sutton's claim can likewise be assessed.

Mr Williams accepts that, whatever the definition of "creditor" might be in the DOCA, the DOCA has binding force on creditors only by virtue of s 444D(1) of the Act. Section 444D(1) depends on the notions of "creditors" and "claims" , neither of which words, as I have said, are defined for the purpose of Part 5.3A. He submits that the decision in Brash Holdings v Katile Pty Ltd [1996] 1 VR 24 makes clear that, for the purposes of Part 5.3A, the words "creditor" and "claim" have, at the least, the same meaning that they have in s 553.

In Brash Holdings v Katile Pty Ltd the Appeal Division of the Supreme Court of Victoria (Brooking, J D Phillips and Hanson JJ) held, at 34:

"The words of s 444D(1), 'arising on or before the day...', do not, with respect, support the conclusion ... that the subsection does not comprehend future or contingent debts or claims.

In short, we think that whatever the ambit of the words of s 553, the same will be so in relation to s 444D. It is true that s 553 uses two expressions, 'debts' and 'claims', while s 444D(1) speaks only of 'claims'. But Pt 5.3A as a whole, and especially s 444A(4), suggests that 'claims' is used as a single expression to cover what s 553 divides into 'debts' and 'claims' and that it is both 'debts' and 'claims' in the s 553 sense in respect of which creditors may be bound by the deed."

Their Honours also said, at 36:

"... we consider that a deed of company arrangement, if entered into by any of the appellants, will, by virtue of s 444D(1) of the Corporations Law bind, so far as concerns all debts and claims hereinafter mentioned, all those persons who on the day specified in the deed had debts or claims that would have been provable in the winding up of the company under s 553 if the 'relevant date' mentioned had been the day specified in the deed."

The legislation under consideration in Brash was the Corporations Law . However, in the form that the Corporations Law had at the date of the decision in June 1994 the provisions to which their Honours referred did not differ materially from the correspondingly numbered provisions of the present Corporations Act .

The Rival Submissions

It is common ground between Mr Williams and Mr Newlinds that the meaning of "claim" in s 553 also applies in s 444D. Mr Williams submits that claims under s 106 IR Act against a company fall within s 553(1) as "claims against the company (present or future, certain or contingent, ascertained or sounding only in damages) being ... claims the circumstances giving rise to which occurred before the relevant date" . Mr Newlinds disputes that undetermined litigation seeking an order under s 106 IR Act falls within s 553.

Mr Williams also submits that even if Ms Sutton's claim under s 106 does not fit within s 553, it nonetheless counts as a "claim" for the purposes of Part 5.3A. His argument on that topic is put in two ways. One is that he submits that Brash does not preclude an argument that creditors under Part 5.3A include, but are not limited, to those persons who have a relevant claim under s 553. Alternatively, he submits that Brash is either wrong or has been wrongly applied and a creditor for the purposes of s 444D should not be confined to those who meet the criteria in s 553.

Nature of the Rights of an Applicant under Section 106 IR Act

At 1 October 2009 (the date BEA was placed in voluntary administration), s 105 IR Act provided:

"(1) In [Part 9 - Unfair contracts]:

contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument.

unfair contract means a contract:

(a) that is unfair, harsh or unconscionable, or

(b) that is against the public interest, or

(c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or

(d) that is designed to, or does, avoid the provisions of an industrial instrument."

Section 106 IR Act is in Part 9 Division 2 of IR Act , which runs from s 106 to s 109A. At 1 October 2009 s 106 provided:

"(1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

...

(3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time.

...

(5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case.

(6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss."

Section 108 IR Act is a most unusual provision concerning standing, that bears upon the nature of the power that the Commission exercises under s 106. Section 108 is one of the indications that the power the IRC exercises under s 106 is an arbitral rather than a judicial power - see [66] below. At 1 October 2009 it provided:

"An order may be made under this Division on the application of:

(a) any party to the contract, or

(b) any person who, but for the making of such an order, would be a party to the contract, or

(c) an industrial organisation of employers whose members employ persons working in the industry to which the contract relates, or

(d) an industrial organisation of employees whose members are employed in the industry to which the contract relates, or

(e) an association registered under Chapter 6 of which a party to the contract is a member,

and not otherwise."

Section 88F Industrial Arbitration Act 1940 was a predecessor of s 106 IR Act , in terms not relevantly different to those of s 106 IR Act . This Court has considered the nature of a claim made under s 88F, or s 106, on several occasions.

Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 was an application by a franchisor for an order in the nature of prohibition to prevent the Industrial Commission from hearing an application under s 88F. The application under s 88F had been brought by certain petrol retailers who contended that the franchise agreements under which they operated were unfair. One basis on which the franchisor sought prohibition was that the operation of s 88F on these particular agreements was excluded under s 109 of the Australian Constitution because to that extent s 88F was inconsistent with the Petroleum Retail Marketing Franchise Act 1980 (Cth) (" the Federal Act "). Another basis was that the franchise agreements in question were not ones "whereby" the franchisees "perform work in any industry" , and thus the Commission did not have jurisdiction under s 88F to deal with them.

One of the reasons Mahoney JA gave for refusing prohibition, at least at that stage, because s 88F was inconsistent with the Federal Act, was, at 461-2:

"Section 88F does not, by its own operation, create any rights or obligations. Its function is to grant jurisdiction to the Industrial Commission. That jurisdiction involves, inter alia, two things: it may categorise, as I have described it, a particular arrangement as 'unfair', 'harsh or unconscionable', 'against the public interest' or otherwise as falling within the subpars (a) to subpar (e) of s 88F(1); and, secondly, it may declare void the whole or part of such an arrangement and make an order for payment of money or otherwise as set out in the section. It is only if and in so far as that power is exercised that rights or obligations arise by virtue of s 88F.

Therefore, essentially the claim made by Majik in this case is that the possibility of such an order being made creates an inconsistency under s 109 with the Federal Act. At the present stage of the Commission's proceedings, Majik cannot, of course, claim that an order made by it does in fact create a relevant conflict or inconsistency with the operation of the Federal Act: its claim is and must be that it is possible an order will be made which will create such an inconsistency with the Federal Act and that that possibility gives rise at this stage to an inconsistency which prevents s 88F operating to grant jurisdiction in the present matters to the Commission."

Part of the reasoning of Handley JA for concluding that s 88F was not shown at the time of the application for prohibition to be inconsistent with the Federal Act was, at 467:

"Section 88F confers jurisdiction on the Commission to avoid or vary contracts and to make consequential orders for the payment of money. The effect of legislation which in terms does no more than confer jurisdiction on a court to grant particular relief was considered in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141. Latham CJ said (at 155):

'... A right is created by the provision that a court may make an order, and such a provision also gives jurisdiction to the court to make the order. The fact that the court may not be bound to make an order, but may exercise a discretion, does not alter the effect of such a provision .... Such a provision gives a new jurisdiction to the court and ... if the court exercises its discretion in favour of the applicant, a new right to the applicant.'

Similarly Dixon J (at 165-166) said in reference to such a provision:

'... it must be taken to perform a double function, namely to deal with substantive liabilities or substantive legal relations and to give jurisdiction with reference to them. It is not unusual to find that statutes impose liabilities, create obligations or otherwise affect substantive rights, although they are expressed only to give jurisdiction or authority....'

Section 88F therefore creates substantive rights and since proceedings under the section comprise a suit or action (see Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 560) there is every reason for concluding that it gives rise to rights of action. But even if that is not so the section clearly confers another 'remedy' on these applicants which is within s 24(1)."

The other member of the Bench on that occasion, Kirby P, said nothing that bears upon the present topic. Mr Williams points out that at 447, Kirby P agreed with the reasons of Handley JA for why "no error [had] been shown in the finding by the Commission that it had jurisdiction to hear and determine the applications" , that would warrant relief "at this stage" . However, that remark relates to Handley JA's reasons why the claim made in the Industrial Commission was not outside the scope of the jurisdiction conferred by s 88F. It did not relate to the reasons why there was no inconsistency between s 88F and the Federal Act, a topic concerning which Kirby P gave his own reasons.

The Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 case to which Handley JA referred was one where two people who had acted as house-parents brought an action under s 88F against the Minister for Child Welfare. A provision of the Child Welfare Act1939 said that "no suit or action shall lie against the Minister" if the Minister has acted in good faith and with reasonable care. The Minister sought prohibition, contending that that section deprived the Industrial Commission (as it then was) of jurisdiction to hear the action against him. Prohibition was refused on the basis that the section could give the Minister a defence if its conditions were made out, but it did not operate to deprive the Commission of jurisdiction. Kirby P at 549 and McHugh JA at 560 both accepted that the proceedings in the Commission were a "suit or action" . However, McHugh JA at 559-560 made clear that it was a suit or action of an unusual kind:

"A further indication that the proceedings are not an ordinary suit or action is that the power conferred by s 88F is arbitral, not judicial power. Even before the amendments made in 1985 an industrial union of employees could invoke the jurisdiction of the Commission under s 88F: Federated Miscellaneous Workers' Union of Australia, New South Wales Branch v Wilson Parking (NSW) Pty Ltd [1978] 1 NSWLR 563. That a stranger to a contract can obtain an order that the contract is void is itself an indication that the Commission is not exercising judicial power in an ordinary suit or action. Moreover, I think that the Commission can exercise its power under s 88F in a case where, although the contract was not unfair or harsh or unconscionable or against the public interest at the time of its making, subsequent events have made it so. The jurisdiction of the Commission to void or vary a contract, independently of the circumstances which existed at the time of its making, indicates conclusively in my opinion that the power conferred by s 88F is not an exercise of judicial power: cf R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361. It is a further indication that the Commission does not hear a suit or action as those expressions are ordinarily understood.

But despite the nature of the proceedings under s 88F and the matters to which I have referred, it is difficult to resist the conclusion that the proceedings are an 'action'. 'Action' is a generic term and includes every sort of legal proceeding unless the context indicates a more restricted meaning: Re Carter Smith; Ex parte Commissioners of Taxation (1908) 8 SR (NSW) 246 at 248; 25 WN (NSW) 92."

Fisher v Madden [2002] NSWCA 28; (2002) 54 NSWLR 179 concerned a company to which a receiver had been appointed, and in relation to which a DOCA had been entered. The plaintiff, an employee of the company, was dismissed because she was redundant. The dismissal occurred after the appointment of the receiver, but before any voluntary administrator had been appointed, or before any DOCA entered. She brought proceedings under s 106 IR Act , seeking that her contract of employment be varied to entitle her to a payment of money by reason of being dismissed. Section 433(3) Corporations Law required a receiver to accord priority of payment to "any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1) ... (h)."

Section 443(9) Corporations Law provided:

"For the purposes of this section, the references in Division 6 of Pt 5.6 to the relevant date shall be read as references to the date of the appointment of the receiver, or of possession being taken or control being assumed, as the case may be."

Section 556(1)(h) referred to "retrenchment payments payable to employees of the company" . Unlike some of the other paragraphs in s 556(1), s 556(1)(h) set no temporal limit on when a retrenchment payment had to be payable, or on where in time fell the period of service in relation to which a provable employee benefit was calculated. The lack of temporal limitation was confirmed by s 556(2) which provided:

" retrenchment payment , in relation to an employee of a company, means an amount payable by the company to the employee, by virtue of an industrial instrument, in respect of the termination of the employee's employment by the company, whether the amount becomes payable before, on or after the relevant date."

Subject to a presently irrelevant exception, s 554 Corporations Law provided:

"(1) The amount of a debt or claim of a company (including a debt or claim that is for or includes interest) is to be computed for the purposes of the winding up as at the relevant date."

Before the Commission had determined her claim, the receiver made application to the Equity Division of the Supreme Court for directions under s 424 of the Corporations Law . The first instance judge made a declaration that any liability of the company to pay Ms Fisher any sum arising out of any orders made by the Commission

"... not being a liability which arose out of the terms of [Ms Fisher's] contract of employment as it existed, in respect of any liability for redundancy payments at the date of termination of employment, and in respect of other liabilities, at the date of appointment of the receiver, would not be a liability entitled to payment in priority under s433(3)(c) of the Corporations Law ."

Ms Fisher appealed to the Court of Appeal. Her appeal was dismissed. Meagher JA said, at [12]-[13]:

"There was a tendency in Mr Neil's submissions to treat Miss Fisher as if she already possessed a claim, or at least a right to an order. This is not the case. Section 106 does not of itself confer any rights or obligations on anyone. Not only does she not have a right to a quantifiable order, she does not have a right to an order at all. She has the right to apply for an order, nothing more. As Mahoney JA (at 461) said in Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443:

'Section 88F [the predecessor of s 106] does not, by its own operation, create any rights or obligations. Its function is to grant jurisdiction to the Industrial Commission.'

The narrowness of her right is further emphasized when one considers whether it is a 'contingent' debt or claim within s553. The word 'contingent' is a slippery word. In the field of real estate, Fearne's Contingent Remainders (a book which Baron Parke took with him on his honeymoon) describes a contingent remainder as a remainder limited so as to depend on an event or condition, which may never happen or be performed, or which may not happen or be performed until after the determination of the preceding estate. Even in the case of such a contingent remainder, one always knows the nature of the preceding estate and the nature of the contingent remainder, which might or might not come into existence. In cases other than real estate, life is more precarious still. In Federal Commissioner of Taxation v Gosstray [1986] VR 876 at 878 Tadgell J said:

'An attempt to formulate a universally applicable definition of a contingent debt or of a contingent creditor is difficult, and probably not very useful having regard to the variety of contingent claims that may properly be the subject of proof. A contingent creditor, like an elephant, is rather easier to recognize than to define. The following statement by Pennycuick J. In Re William Hockley Ltd [1962] 1 WLR 555, at 558; [1962] 2 All ER 111, is well known: 'The expression "contingent creditor" is not defined in the Companies Act , but must, I think, denote a person towards whom under an existing obligation, the company may or will become subject to a present liability upon the happening of some future event or at some future date.' In Re Gasbourne Pty Ltd [1984] VR 801 at 837, Nicholson J said that he did not regard that description as exhaustive, and with respect I would not disagree. In Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455, at 459 Kitto J, having observed that not much assistance is to be gained from observations to be found in reported cases as to the import of the word "contingent" in the context now being considered, regarded what Pennycuick J had said as being "perhaps rather a definition of a 'contingent or prospective creditor'". Kitto J did, however, consider that the importance of the words of Pennycuick J "for present purposes lies in their insistence that there must be an existing obligation and that out of that obligation a liability on the part of the company to pay a sum of money will arise in a future event, whether it be an event that must happen or only an event that may happen".'

It follows, I think, that even at today's date, one cannot accurately categorise Miss Fisher's rights (if any) as a 'contingent' debt or claim. She has the bare right to make a claim, nobody knowing whether it will succeed or not, or if so in what amount, or subject to what terms or conditions. And if that be her position today, it was so much the less substantial before the appointment of the receiver. Moreover, if that difficulty were overcome, one has to face the additional problem that just because a claim or debt is a contingent debt or claim for the purposes of s 553 in a winding up, it does not necessarily follow that it has priority under s 556, dealing with priority of debts in a receivership. None of the debts referred to in s 556 which does deal with receivers is in the last bit contingent."

Sheller JA (with whom Beazley JA agreed) regarded it as important that s 556(2) required a retrenchment payment to be an "amount payable". That involved, he held at [42] "an existing obligation, [in respect of which] the company may or will become subject to a present liability upon the happening of some future event or at some future date" .

At [44] Sheller JA said:

"In the present case at the relevant date [the company] was under no existing obligation to pay a sum of money by way of a retrenchment payment to Ms Fisher immediately or on a future event. Ms Fisher had only a right to take proceedings in the Industrial Relations Commission to vary the contract to that end."

He went on to quote the passages that I have quoted at [63] and [64] above from the judgments of Mahoney JA and Handley JA in Majik Markets , and concluded, at [46]:

"However Ms Fisher's right under s106 of the Industrial Relations Act be categorised, her right to invoke the jurisdiction of the Industrial Relations Commission did not until such time as an order was made create any obligation on Dataflow to make a retrenchment payment to her. Moreover, even if the Industrial Relations Commission declared the contract unfair, varied it ab initio and ordered Dataflow to make a retrenchment payment to Ms Fisher, it remains true that at the relevant date of Mr Madden's appointment no amount for retrenchment payment had become payable before, on or after the relevant date."

Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223; (2005) 63 NSWLR 291 arose when a new s 108A was introduced into Chapter 2 Part 9 Division 2 of the IR Act . It provided that an application could not be made under that Division if the application related to contract of employment under which a remuneration package that exceeded a particular sum of money was paid or received during the 12 months before the application was made, or (in the case of a contract that had been terminated) the 12 months before the contract was terminated. The question at issue was whether s 108A applied in relation to contracts of employment that had been entered before s 108A came into operation, but that were terminated after it came into operation. The dismissed employee had a remuneration package that exceeded that sum. However the employee contended that s 108A did not apply to the contract in question because of the provisions of s 30(1)(c) Interpretation Act 1987 . Under s 30(1)(c) the amendment of an Act does not "affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act" .

Handley JA (Giles JA agreeing) said at [13]:

"Section 106 does not confer defined rights on a party to an unfair contract of the relevant kind ( Fisher v Madden as Receiver and Manager of Dataflow Computer Services Pty Ltd (2002) 54 NSWLR 179 at 184, 193-194). In terms it does no more than confer jurisdiction on the Commission to grant particular relief. The effect of legislation in this form was considered in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141."

He then set out the same passages from the judgments of Latham CJ and Dixon J as he had set out in Majik Markets at 467 and that I have set out at [64] above. Handley JA continued, at [15]:

"Such legislation is a modern illustration of Sir Henry Maine's statement that substantive law may be secreted in the interstices of procedure. See also Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 at 461, 467; Fisher v Madden (at 193). As Meagher JA said in the last case (at 183 [12]):

'[12] ... Section 106 ... does not of itself confer any rights or obligations on anyone. Not only does [the appellant] not have a right to a quantifiable order, she does not have a right to an order at all. She has the right to apply for an order, nothing more.'"

Handley JA also said, at [30]-[33]:

"Given that the only right expressly conferred by s 106 is a right to apply to the Commission for specific relief, a would be applicant, as Meagher JA said in Fisher v Madden (at 183 [12]) 'has the right to apply for an order, nothing more'. Even if the contract is unfair and an experienced practitioner could give some estimate of the likely order, there is, as Meagher JA said (at 183 [12]), no 'right to a quantifiable order'. The claimant had no ascertainable right or entitlement defined by reference to past facts similar to the rights to compensation in Hamilton Gell v White [1922] 2 KB 422 and Resort Management Services Ltd v Noosa Shire Council [1997] 2 Qd R 291, the right to the hardship allowance in Chief Adjudication Officer v Maguire [1999] 1 WLR 1778, or the land rights claim in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 NSWLR 685.

The filing of an application under s 106 causes a right to accrue because the applicant acquires ( Esber v The Commonwealth (1992) 174 CLR 430; Gerrard v Mayne Nickless Ltd (1996) 135 ALR 494) a legally enforceable right to have the Commission hear and determine the application according to law. This is a new right, different from a mere right to take advantage of the section.

There is no other act or event which can convert the general right to take advantage of s 106 into an accrued or acquired right. This is not a case where a right or entitlement automatically accrues or is acquired on an event such as an unfair dismissal, the injurious affection of land ( Resort Management Services Ltd ), the giving of a notice to quit ( Hamilton Gell v White ), or an illness causing a special disability ( Chief Adjudication Officer v Maguire ).

Until an application under s 106 is made, the right under that section can fairly be characterised as a mere right to take advantage of the section, to use the language of Lord Herschell LC ( Abbott v Minister for Lands [1895] AC 425 at 431), and an abstract rather than a specific right to use the language of Atkin LJ ( Hamilton Gell v White at 431)."

In the result, the claimant was not protected by s 30(1)(c) from the limitation of the Commission's jurisdiction bought about by s 108A(1).

"Claims" Under Section 553(1)

The present form of s 553 Corporations Act derives from amendments made in 1992 to the Corporations Law , following some recommendations of the Harmer Report. In Environmental & Earth Sciences Pty Ltd v Vouris [2006] FCA 679; (2006) 230 ALR 119 Graham J set out at [43]-[53] details of how the law concerning the debts that were provable in a winding up had stood immediately before the 1992 amendments that gave effect to the Harmer Report, the changes made by those 1992 amendments, and the relevant provisions of the Harmer Report, the Explanatory Memorandum relating to the 1992 amendments, and the Second Reading Speech relating to those amendments. His Honour's thoroughness makes it unnecessary for me to repeat the task. Paras [43]-[53] of Vourisshould be regarded as notionally included in this judgment.

Several cases have considered what is a "claim" within the meaning of s 553(1). In this section of the judgment I will extract relevant parts of those cases, without further analysis.

Sons of Gwalia Ltd (subject to deed of company arrangement) v Margaretic [2007] HCA 1; (2007) 231 CLR 160 held that a shareholder who had purchased shares in the company as a result of misleading and deceptive conduct by the company had an action for damages that was provable in the winding up of the company. The company in question had entered a DOCA, one of the terms of which provided that the deed fund would be distributed in the same order of priority as would apply if the company were being wound up ([139]). Hayne J recorded at [142]-[143] that the applicant's claim had been made on the basis that there had been a contravention of s 52 of the Trade Practices Act 1974 (Cth), s 1041H of the Corporations Act 2001 , s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth), and "at common law or in equity, in respect of fraud, misrepresentation or other acts or omissions" . One issue in the case was whether this claim was provable in the DOCA. Another issue was whether, if the claim was provable, it was postponed under s 563A until all debts owed to or claims made by persons otherwise than as members of the company, had been satisfied.

The proceedings were brought to test the entitlement of shareholders in the position of the plaintiff to claim under the DOCA. The case was argued on the assumption that the plaintiff could show one or more of the alleged contraventions of statute, and the consequential damage asserted ([9]). Thus only the statutory causes of action were of any importance in the High Court. In the High Court the argument proceeded upon a basis that a liability for unliquidated damages was capable of being a debt within the meaning of s 563A ([10], [119]). It was not stated that there was any corresponding assumption concerning whether a claim for unliquidated damages fell within s 553. When such damages were the only remedy that Mr Margaretic claimed it was of central importance to the case whether his claim fell within s 553, so that appears to have been a matter that was implicitly decided.

Hayne J considered a specific problem about whether the claims were provable within the meaning of s 553(1). That problem concerned whether the circumstances giving rise to the claim had occurred before "the relevant date" . In that particular DOCA "the relevant date" was the day on which the administrators had been appointed. The problem arose because the misleading and deceptive conduct that was relied upon had occurred before the appointment of the administrators, but the loss or damage:

"... was not apparent to [Mr Margaretic] before the appointment of administrators. The extinction of value could be said to have arisen because of the administrators' appointment." ([170])

Hayne J continued, at [171]-[172]:

"What is meant, in s 553, by 'debts or claims the circumstances giving rise to which occurred before the relevant date'? How does that expression apply in the present matters? Those questions have not previously been considered by this Court, or by any Australian intermediate court. (But see McDonald v Federal Commissioner of Taxation (2005) 58 ATR 418; Environmental & Earth Sciences Pty Ltd v Vouris(2006) 152 FCR 510.)

In construing the temporal limit that is imposed by s 553, it is important to recognise the generality of other expressions used in s 553 in defining what debts and claims are to be admissible to proof. The section speaks of ' all debts payable by, and all claims against, the company'. It amplifies those expressions by the parenthetical reference: 'present or future, certain or contingent, ascertained or sounding only in damages'. If the words of the section were not wholly sufficient (as they are) to indicate an intention to define provable claims very widely, the Report of the Australian Law Reform Commission on the General Insolvency Inquiry (the Harmer Report), read with the Explanatory Memorandum for the Bill that became the 1992 Act, puts the point beyond any doubt. The Harmer Report (Australia, The Law Reform Commission, General Insolvency Inquiry , Report No 45 (1988), vol 1, p 315 [774]) identified a basic aim of insolvency laws as being 'to deal comprehensively with all of the debts and liabilities of the insolvent' and said that, '[i]n the case of a company, the aim is to deal with all the claims against a company so that its affairs can be fully wound up or so that it can resume trading' (emphasis added). The Harmer Report concluded (Report No 45 (1988), vol 1, p 315 [777]) that '[t]he categories of claims which are admissible should be as wide as possible so that the financial affairs of the insolvent are dealt with comprehensively'. Otherwise, as the Harmer Report pointed out (Report No 45 (1988), vol 1, p 315 [777]), 'if the creditors are unable to make their claims in the insolvency, they are unable to recover at all (unless they have a basis for action against either directors of the company or a guarantor of the company's debts or unless the winding up is stayed)'. The Explanatory Memorandum (Explanatory Memorandum, Corporate Law Reform Bill 1992 (Cth), para [849]) for the Bill that became the 1992 Act said that the reforms embodied in the new provisions of ss 553-553E 'reflect[ed] the recommendations of the Harmer Report'." (emphasis in original)

He went on to hold that the circumstances giving rise to Mr Margaretic's claim occurred before the administration began. The nature of the misleading and deceptive conduct of which the applicant complained was that the company had breached the continuous disclosure requirements of its stock exchange listing. The damage that Mr Margaretic asserted arose because he had thus purchased shares in ignorance of significant financial information, the effect of which was that the shares were worth less than the price at which he had purchased them.

At [174] Hayne J said:

"... Mr Margaretic's claim is not a future or contingent ( Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 at 459 per Kitto J; National Bank of Australasia Ltd v Mason (1975) 133 CLR 191 at 200 per Barwick CJ) claim or debt. It is a present and, he would say, a certain claim. If not ascertained, and the better view may well be that his claim is now ascertained, it is a claim sounding in damages."

Hayne J's application of principle to the facts of the case was, at [175]-[176]:

"... had Mr Margaretic known what he now says are the relevant facts before SOG appointed administrators (assuming for the purposes of argument that his allegations are true) he would have had complete causes of action against SOG for identical relief under the various statutory provisions upon which he now relies. And the claims he could then have made would not have been contingent or future claims; they would have been present claims for damages representing the difference between what he had outlaid in buying the shares and the true value of what he bought as determined by a properly informed market. The appointment of administrators so soon after Mr Margaretic bought his shares reveals that the shares he bought would have been judged by a properly informed market to be worthless when he bought them and accordingly, he suffered loss when he bought the shares ( HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 654-659 [28]-[40]). Contrary to the submissions of ING, renouncing his shareholding, whether by selling the shares to a third party or rescinding the contract with the vendor, was not a necessary step in his claiming that loss.

It follows that, although the agreed facts demonstrate that the appointment of administrators reduced the value of Mr Margaretic's shares to zero, his claim is one the circumstances giving rise to which occurred before the administrators' appointment. Had the facts upon which Mr Margaretic now relies been known then, they would have been known to the whole market, not just him, and he would have had the same claim he now makes ( HTW Valuers (2004) 217 CLR 640 at 657-658 [37]). His knowledge of the relevant facts bears only upon whether he makes a claim; his knowledge of those facts does not bear upon whether he has a claim. His claim is of a kind that is within s 553 of the 2001 Act." (emphasis in original)

Gummow J held that Mr Margaretic's claims were provable under s 553(1) and agreed generally with the reasons of Hayne J ([45]-[46]). Heydon J at [261] and Crennan J at [265], likewise agreed with Hayne J. Thus, his Honour's reasoning on this topic is supported by a majority in the High Court.

Hayne J's citation of Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 and National Bank of Australasia Ltd v Mason (1975) 133 CLR 191 shows that those cases remain relevant in the construction of s 553. Engwirda Construction concerned who was a "contingent creditor" within the meaning of s 221 of the Companies Act 1961-1964 (Qld). That section conferred standing to petition for a winding up order. The decision held that a builder was a "contingent creditor" concerning a claim to be paid an amount it asserted was due under a building contract, notwithstanding that its entitlement to be paid was dependent upon obtaining either an architect's certificate to that effect, or a decision to that effect in an arbitration that was required under a Scott v Avery clause. Kitto J (with whom Barwick CJ and Windeyer J both agreed) said, at 459:

"Not much assistance is to be gained, I think, from observations that are to be found in reported cases as to the import of the word 'contingent', and I shall refer to one only. In In re William Hockley Ltd , Pennycuick J suggested as a definition of 'a contingent creditor' what is perhaps rather a definition of 'a contingent or prospective creditor', saying that in his opinion it denoted 'a person towards whom, under an existing obligation, the company may or will become subject to a present liability upon the happening of some future event or at some future date'. The importance of these words for present purposes lies in their insistence that there must be an existing obligation and that out of that obligation a liability on the part of the company to pay a sum of money will arise in a future event, whether it be an event that must happen or only an event that may happen . A building contract creates, as soon as it is entered into, an obligation upon the building owner to pay the contract price, either as a whole upon a future event or, more usually, by progress and final payments each of which is to be made on a future event. The event or events may not happen, but if and when one of them does happen the building owner, by force of the contractual obligation, must pay the builder a sum of money. It is, I think, nothing to the point that the event may be complex, as where the payment is agreed to be made when the whole or some part of the work has been done to the satisfaction of an architect as expressed in a certificate or to the satisfaction of an arbitrator as expressed in an award: the building owner is bound from the time the contract is made to pay money to the builder upon a contingency; and that in my opinion makes the builder a contingent creditor of the owner." (emphasis added)

National Bank of Australasia Ltd v Mason considered a guarantee of "all monies which are now owing or which may from time to time hereafter be owing to the Bank ... whether contingently or otherwise" . The guarantor, the principal debtor and the Bank were sued. The contention of the plaintiff in that litigation was that the guarantor had deposited three cheques into the principal debtor's account, which the Bank had collected, and that that depositing and collection was a conversion of the cheques. Before that litigation had been decided, and at a time when the principal debtor owed no money to the Bank, the guarantor sought a discharge of a mortgage that he had given in support of the guarantee. The court held that the guarantor was entitled to a discharge of the mortgage. Barwick CJ said, at 200:

"In my opinion, the possibility that the company will have to pay to the appellant the amount paid by it to the payees of the cheques cannot be regarded as moneys 'owing contingently'. Nor, in my opinion, can that amount be properly described as a contingent liability of the company. That description is not satisfied by the fact that money may become owing upon the occurrence of some event. There must be some present obligation to pay out of which the money may become due. The stress is upon the word 'owing', which imports some existing obligation though it may be imperfect until an event within its purview occurs."

Edwards v Attorney General [2004] NSWCA 272; (2004) 60 NSWLR 667 concerned applications by the corporate trustee, and its directors, of a trust that had been established for the purpose of medical research into asbestos related diseases. The principal assets of the trustee were shares in two companies that had formerly been subsidiaries of a company in the James Hardie Group, and that had become subsidiaries of the trustee. The two subsidiaries had been involved in the supply of asbestos, and had been subject to numerous claims for injury and death caused by asbestos. They regularly paid out substantial sums to meet judgments and settlements of claims against them. Actuarial evidence suggested that claims would continue to be made, that there would be sufficient funds to pay all the judgments obtained in the next year or so, but that the assets of the subsidiaries would be exhausted well before many of the asbestos related claims were formulated or adjudicated upon ([43]). Mr David Jackson QC had recently been appointed to enquire into various matters including the adequacy of the funds available to the trustee. The trustee sought judicial advice about whether it was justified in refraining for applying for the appointment of a provisional liquidator to its subsidiaries until Mr Jackson's findings were known. The directors of the trustee sought an order under s 1318 Corporations Act , that they be relieved from any liability they might have, in their capacity as director of the trustee or the two subsidiaries, arising out of the payment by those companies of their debts as they fell due including debts arising in respect of claims made for asbestos related liabilities.

Young CJ in Eq (as his Honour then was), with whom Spigelman CJ and Mason P agreed generally said, at [58]-[60]:

"On current authority, persons injured through exposure to asbestos manufactured or supplied by Amaca or Amaba do not have a completed cause of action until damage is suffered and that usually involves manifestation of the disease: Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14; 13 ANZ Insurances Cases 61-596. Indeed, some of the future claimants could be in the more extreme category where the people concerned have not yet been exposed to the asbestos such as home renovators doing future renovations or may even be people not yet born who might be involved in demolishing an asbestos ridden building somewhere in 2030. No-one can currently know the identity of the future claimant.

This type of liability must be distinguished from the case of a contingent creditor. A contingent creditor is a person to whom a corporation owes an existing obligation out of which a liability on its part to pay a sum of money will arise in a future event, whether that event be one which must happen or only an event which may happen: Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455; [1970] ALR 173; Re International Harvester (Aust) Ltd (1983) 7 ACLR 415 at 416 ; 1 ACLC 700 at 703. Again, the liabilities in this case must be distinguished from the case of a prospective creditor, a prospective creditor being one who is owed a sum of money not immediately payable but which will certainly become due in the future either on some date which has already been determined, or on some date determinable by reference to future events: Stonegate Securities Ltd v Gregory [1980] Ch 576; [1980] 1 All ER 241; Re Simionato Holdings Pty Ltd; Cmr of Taxation v Simionato Holdings Pty Ltd (1997) 15 ACLC 477.

The distinction is vital because while contingent or prospective creditors are taken into account in assessing solvency, possible future claims that might crystallise are not. The great probabilities are that if Amaca and Amaba were to go into provisional liquidation now, then the only claims that would be paid by the liquidator would be those which have crystallised and, after paying the doubtless heavy expenses of liquidation, there would be a distribution of surplus funds to the shareholder [Medical Research and Compensation Foundation] which would be used for the purpose of the alleged charitable fund. The future creditors would get nothing and this may very well be the case even if the claim matured the day after the liquidation commenced."

Lam Soon Australia Pty Ltd v Molit (No 55) Pty Ltd (1996) 70 FCR 34 is a decision of the Full Court of the Federal Court of Australia (von Doussa, O'Loughlin and Lehane JJ). It arose when a company that operated a loss-making business in certain leased premises, and also operated certain other profitable businesses, entered a DOCA. The DOCA proposed that all non-associated creditors at the date of appointment be paid in full, but that the lessor be paid an amount equal to the amount it would receive as a dividend arising from its entitlement to be paid rent in the future if the company were to go into liquidation. The court rejected a contention that the lessor was not bound by the DOCA concerning the rent that would arise under the lease in the future. Their Honours at 41-42 considered whether the lessor's entitlement to be paid rent during the remainder of the lease term was a "claim arising on or before the day specified" with in the meaning of s 553:

"There can be no doubt that where a financier has, before a company becomes subject to administration under Pt 5.3A, lent money to it on the security of a mortgage of its property, the claim of the financier for the principal sum lent, and its claim for interest, are 'claims arising on or before the day specified' in the deed (assuming, of course, as seems to be customary, that the day so specified is the day on which an administrator was appointed). That is so even if the contract of loan provides that payments are to be made by instalments, over a substantial period. Equally, there can be no doubt that those claims would, if the company were wound up, be provable in its liquidation (the test which Brash v Katile held to be applicable); and certainly the claims to both principal and interest are to be regarded, at the day specified in the deed, as present rather than future property (see, eg McLeay v IRC (1963) 9 AITR 265; Shepherd v Commissioner of Taxation (Cth) (1965) 113 CLR 385) and it is no misuse of language to describe them as claims which have arisen on or before that day. Indeed, any other conclusion would apparently exempt from the restrictions in s 444E any creditor of the company whose debt was contractually payable later than the specified day: such a conclusion is hardly consistent with the statutory object. To return to the mortgage loan: if the terms of the contract provide that upon the appointment of an administrator, or if an instalment of principal or interest is not paid, the lender may require immediate payment of the total sum outstanding and if the lender, after an administrator is appointed or after a deed is entered into, actually does so, that does not eliminate the claim which arose on or before the specified day and cause a different claim to arise in its place. It simply quantifies the claim and brings forward the due date for its payment.

"Even if it be correct to characterise the claims of warranty creditors as 'mere expectancies', s 447A empowers the Court to make an order that Pt 5.3A is to operate in relation to MGA so as to include the warranty creditors as creditors whose claims arose no later than 26 April 2005.

One of the objects of Pt 5.3A, expressed in s 435A(b), is to achieve a better result for creditors 'than would result from an immediate winding up of the company'. The DOCA appears to achieve that objective, hence the s 447A(1) power should be exercised in the present case.

It is true that warranty creditors and trade creditors are treated differently under the proposed DOCA, but the funds to pay the trade creditors and warranty creditors are to be provided from a source external to MGA. Both trade creditors and warranty creditors are better off under the proposed DOCA than on a liquidation. If a warranty creditor considers that the DOCA is unfairly prejudicial or unfairly discriminatory, then an application may be made under s 445D to terminate the deed."

The relevant order that he made was:

"Pursuant to s 447A(1) of the Corporations Act 2001 (Cth) ('the Act'), Pt 5.3A of the Act is to operate in relation to the second applicant so that a 'creditor' is deemed to include those purchasers (and their successors in title) of new motor vehicles imported by the second applicant who had a vehicle warranty on 26 April 2005, as creditors of the second applicant for the purposes of Pt 5.3A of the Act, whose claims are deemed to have arisen no later than 26 April 2005."

In the present case, the primary judge did not accept a submission that had been put to him that Re Motor Group was distinguishable because the "warranty creditors" already had existing enforceable rights at the date of the administration. The primary judge noted, at [25]:

"Hely J did not attempt to decide whether the 'warranty creditors' had existing rights: his Honour was prepared to vary the meaning of 'creditor' in s 444D(1) so that, whether or not the 'warranty creditors' had a right to prove before the variation, they would unarguably have that right as a result of the variation."

The primary judge regarded Re Motor Group as providing "authoritative support" for the proposition that the definition of "creditor" for the purposes of the DOCA in this case can be extended under s 447A(1) to incorporate Ms Sutton's claim even though, at this stage, that claim might more properly be described as a "mere expectancy'" .

In my view it follows inexorably from the remarks of Kitto J in Engwirda Constructions , treated as still relevant to s 553 by the majority in Sons of Gwalia , that the warranty creditors in Re Motor Group would be contingent creditors of the company. There might be big problems in valuing their claims: unless there was a sound statistical basis for estimating the probability that a particular car would turn out to have a defect within the warranty period, and a sound statistical basis for quantifying the likely cost of remedying a defect, the claims might need to be valued at zero or merely a nominal amount. But that does not deny that, as a matter of analysis, they are contingent creditors. The position of the warranty creditors in Re Motor Group is distinguishable from that of Ms Sutton, who at the start of the administration had no legal rights against the company at all.

The Full Federal Court in Lam Soon at 44 made the obiter remark that a right to sue for damages for a particular future breach of a covenant to keep leased premises in repair was not even a contingent claim. To that extent, Lam Soon is, in my respectful opinion, contrary to the decisions in Engwirda and Sons of Gwalia that I am obliged to follow. There may be excellent reasons for concluding that the right to sue for damages for a particular future breach of a covenant to keep leased premises in repair could not be valued at anything other than zero or a nominal amount, but it still gives rise to a contingent claim.

Mr Williams submits that in Re Motor Group Hely J did not conclude that the creditors in question were "contingent creditors" . Rather, he submits that his Honour held that even if it were correct to characterise the claims of warranty creditors as "mere expectancies" , s 447A empowers the court to make an order to include such claims as arising prior to the relevant admissible claims date.

I doubt that that is the correct reading of Re Motor Group . The passage at [3] where Hely J said that the warranty creditors were contingent or prospective creditors of MGA as at 26 April 2005, seems to me to be a finding, not the recounting of a submission.

In support of his analysis of Re Motor Group , Mr Williams points out that the order that Hely J made not only included creditors with an existing legal right pursuant to a warranty, but also successors in title. That aspect of his Honour's order is something of a mystery - the justification for it does not appear in the reasons for judgment. Hely J's explanation of the meaning of "warranty creditors" at [3] refers to MGA as having "issued" motor vehicle warranties for a particular number of vehicles. That suggests that the warranty might be contractual. If it was solely as a contractual warranty that the "issued" warranty could be enforced, it would depend upon the terms of the contract as to whether the benefit of the warranty was assignable to a successor in title. It would be commercially most unusual for such a warranty to be assignable, and for the vendor of a car to assign the benefit of a warranty to a purchaser of the car. Alternatively, and I suspect this is the more likely explanation, at the time Re Motor Group was decided in 2005, Part V Division 2A Trade Practices Act (ss 74A-74L) imposed certain statutory liabilities on an importer of goods. That liability arose through s 74A(4) deeming a corporation that was not the manufacturer of goods, but who had imported them into Australia, to be the manufacturer, if the actual manufacturer did not have a place of business in Australia. Some of those statutory obligations could be enforced not only by a consumer, but also by a person who acquired the goods from or derived title to the goods through or under the consumer and who had suffered loss or damage through breach of the statutory standard: s 74B(1)(e) concerning unsuitable goods, s 74C(1)(d) concerning falsely described goods, s 74D(1)(d) concerning goods of unmerchantable quality, s 74(1)(e) concerning goods that did not comply with sample, s 74F(1)(e) concerning failure to provide facilities for repairs or parts, and s 74G(1)(d) concerning failure to comply with an express warranty. In particular, s 74G(1)(d) would enable a successor in title of a consumer to whom MGA had "issued" a warranty, to sue for breach of that warranty. If it was through s 74G(1)(d) that a successor in title could enforce the warranty, the class of "warranty creditors" would be determinate. It would be everyone who, on 26 April 2005, had the benefit of a warranty, either because it had originally been issued to them, or because on 26 April 2005 that class member was a successor in title of a person to whom a warranty had been issued. Each of those people would have had, on 26 April 2005, an existing legal right against MGA.

In my view, in Re Motor Group was correctly decided if Hely J is read as saying that:

he was satisfied that the "warranty creditors" were "creditors" within the meaning of Part 5.3A because they were contingent creditors;

because they were creditors, s 435A(b) made it possible, in deciding whether to exercise the power under s 447A, to take into account the interests of the warranty creditors, and

the DOCA was justified because both the trade creditors and the warranty creditors would be better off under the DOCA than on a liquidation.

If the intended meaning of the reasons for judgment in Re Motor Group was other than this, then in my respectful view it was mistaken. It is not possible to use s 447A to require someone who is not a creditor to be treated as though he or she is a creditor.

In my view, the order of the primary judge went beyond a proper exercise of the power conferred by s 447A. Whether this is seen as a limitation on the power in s 447A, or a fundamental requirement for the proper exercise of the power, the power should only be used to achieve one of the purposes for which it was conferred. When Ms Sutton is not a "creditor" , making the order could not fall within any of the objectives identified in s 435A. Nor is any wider objective that emerges from other parts of the Corporations Act able to be found to justify the order. I respectfully agree with the reasons that Jacobson J gave in Buckingham v Pan Laboratories at [83]-[86], that I have set out at [99] above. If it is a contravention of a deeply rooted principle of company law for a court to assist one creditor to improve its position vis-a-vis another creditor after it enters an insolvency regime, it is at least equally a contravention of such a principle for a court to assist a non-creditor to improve its position vis-a-vis actual creditors.

The appeal should be allowed, the order that was made under s 447A should be set aside, and the Respondent's application should be dismissed.

Costs

Mr Williams submits that Ms Sutton should have her costs of the application for leave to cross-appeal and the cross-appeal, regardless of the result. He reminds us that the administrators treated Ms Sutton as at least a contingent creditor until the day on which her proof was rejected. He submits that the administrators' challenge to the s 447A order is based upon the correctness of the judge's decision that she was not a creditor. The application to the court did not take the form of an application for directions. Nevertheless, Mr Williams submits that remarks that Warren J made in Re Ansett Australia Ltd should be applied in the present case. At [23], Warren J said:

"It seems that there is little authority in relation to the costs of an application in circumstances such as the present whether relating to an administrator or a liquidator. A review of such authorities as exist was conducted by Hansen J of this court in Farrow Finance Co Ltd (in liq) v ANZ Executives and Trustee Co Ltd (1997) 23 ACSR 521. As observed by Hansen J in Farrow , generally where the question is not complex and a position in opposition to the liquidator (in this case the administrator) is taken and the position of the liquidator or administrator is ultimately vindicated costs should follow the event: see Re Masureik & Allan Pty Ltd (1981) 6 ACLR 39; Farrow Finance v ANZ , above at 525-7. Hansen J observed in Farrow , on the other hand, generally where the issue is a complex one or one involving a relatively novel proposition in law the starting point is that the costs of all necessary parties are to be paid by the liquidator (in this case the administrator) and counted as costs in the liquidation: see Re GPI Leisure Corp Ltd (in liq) (1994) 53 FCR 365; 130 ALR 256; 15 ACSR 282, UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (unreported, SC(Vic), Hansen J, No 2034/95, 19 July 1996, BC9603954); Farrow Finance v ANZ , above, at 527-8."

Those remarks were dicta, because her Honour made an order whereby costs followed the event. Ansett was a particularly clear case concerning costs. That was because a particular creditor had adopted an untenable position at a creditors meeting (by contending that the court had no power at all to vary or amend a DOCA) and thereby brought about a situation where the administrators had no choice but to have the court decide (as it did) that such a power existed.

Mr Williams submits that this is a case where the issue is a complex one, or involves a relatively novel proposition in law, and thus that the costs should be treated as costs of administration of the DOCA.

In my view, there is no occasion to make a costs order by reference to any principle other than that costs follow the event. In form, the litigation in the court below was an application by Ms Sutton appealing against the rejection of her proof of debt, or alternatively seeking an order under s 447A. Even though she ultimately did not press the appeal against rejection of her proof of debt, the question of whether she was a creditor was an integral part of considering whether it was appropriate to make an order under s 447A.

The form of the proceedings, as inter partes litigation, is not decisive of how the costs of that litigation should be dealt with. Courts exercising equity jurisdiction encounter a variety of situations where a fund is being administered subject to the control of the court, and a question arises about the proper manner in which that fund should be administered. Such a situation can arise concerning administration of deceased estates, concerning administration of trusts, concerning company liquidations, concerning administration of the estates of incapable people, and concerning DOCAs. In those situations, whether the costs of the court deciding the question that has arisen should be treated as costs of administration of the fund is significantly influenced by whether the proceedings are in substance adversarial ones. While where the costs should fall in litigation is always a matter of discretion, very commonly costs are paid from the fund for non-adversarial proceedings, and by the loser for adversarial proceedings: In re Buckton; Buckton v Buckton [1907] 2 Ch 406 at 414-5; In re Halston; Ewen v Halston [1912] 1 Ch 435; In re Cunningham; Sproule v Quested (1914) 31 WN (NSW) 44 at 45; O'Brien v Ritchie (1931) 48 WN (NSW) 85 at 86; Murdocca v Murdocca (No 2) [2002] NSWSC 505 esp at [71]-[78]; Re Jay-O-Bees Pty Ltd [2004] NSWSC 818; (2004) 50 ACSR 565 at [106]-[107].

The principles that Hansen J stated in Farrow Finance v ANZ (1997) 23 ACSR 521, and that Warren J adopted in Re Ansett Australia are, with respect, very shallowly rooted in principle and authority. While it is true that in Re GPI Leisure Corp Ltd (in liq) (1994) 53 FCR 365; 130 ALR 256; 15 ACSR 282 Whitlam J made an order, on a liquidator's application for directions at which interested parties also appeared, for the costs of all parties to be paid out of the assets of the company, his Honour gave no reason for taking that course, and indeed it is not even clear from the judgment whether there was any contest about the appropriate order for costs. Hansen J's judgment in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (unreported, SC(Vic), 19 July 1996) stated no general principle, and made an order for costs by reference to detailed consideration of the facts relating to the conduct of the particular litigation he was deciding. I do not find in those cases a reason to depart from the guidance arising from Re Buckton and to other cases I have mentioned concerning the way the costs of the present application should fall. Both the hearing in the court below and the appeal and cross-appeal were in substance adversarial litigation. The costs should follow the event.

Orders

I propose the following orders:

(1) Extend to 25 May 2011 the time in which to seek leave to cross-appeal.

(2) Grant leave to appeal.

(3) Grant leave to cross-appeal.

(4) Dismiss the cross-appeal.

(5) Allow the appeal.

(6) Set aside the orders in the court below, and in lieu thereof order that the summons be dismissed with costs.

(7) Respondent to pay costs of the Appellant of the application for leave to appeal, application for leave to cross-appeal, the appeal, and the cross-appeal.

(8) Respondent to have a certificate under the Suitors Fund Act in relation to the costs in order (7) if qualified.

YOUNG JA : This is an appeal from a judgment of Palmer J in the Corporations List of the Equity Division.

The basal facts are that the respondent, Ms Mary Sutton had a claim pending under s 106 of the Industrial Relations Act 1996 at the time when the appellant company went under administration and later became operating under a Deed of Company Arrangement (DOCA). I am grateful to Campbell JA for setting out the necessary facts so that I am dispensed from repeating them.

Palmer J heard a claim by Ms Sutton who protested about her proof of debt covering her s 106 claim being rejected by the administrators of the DOCA.

Palmer J (see Sutton v BE Australia WD Pty Ltd [2010] NSWSC 772) ruled that those administrators had properly rejected the proof of debt, but made an order under s 447A of the Corporations Act 2001 (Cth) having the effect of requiring Ms Sutton to be treated as though she were a creditor and further ordered under that section that the administrators adjudicate on her proof of debt. The respondent company appeals against the orders made pursuant to these findings.

Belatedly, Ms Sutton sought leave to cross appeal.

The issues before this Court are:

1. Does the appellant require leave to appeal?

2. The fate of the cross appeal.

3. The fate of the appeal.

As to the first issue, I agree with Campbell JA that it has not been demonstrated that more than $100,000 is at issue and that leave is necessary. I also agree with his Honour for the reasons he gives that leave should be granted. I also agree that leave should be given for the cross appeal to be filed and argued.

As to the cross appeal, the authorities cited by Campbell JA, particularly Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24, clearly show that as Ms Sutton's claim had not progressed past the stage of her stating her allegations to the Industrial Court at the relevant dates, she was properly ruled not to be a creditor or have a claim against the DOCA.

I thus agree that the cross appeal must be dismissed.

However, I regret to say that I do not share Campbell JA's view as to the appeal.

The appeal turns on the ambit of the Court's power to make orders under s 447A(1) of the Corporations Act . That sub-section reads:

"The Court may make such order as it thinks appropriate about how this part is to operate in relation to a particular company."

Palmer J briefly expounded s 447A in [19] and following of his reasons as follows (omitting most citations):

19 The Court's power to make an order under s 447A(1) Corporations Act is not unlimited. The Court's order must affect, usually by way of alteration, the operation of a particular provision, or of particular provisions, within Part 5.3A on the affairs of a particular company.

20 The section is an integral part of the legislative scheme contained in Pt 5.3A; it is not subordinate to other provisions of the Part and should not be read down so as to inhibit variation of any other provision within the Part, if the Court sees that that variation promotes the overall objects of the Part.

21 Section 447A has been used in many different circumstances - most pertinently in Re Motor Group Australia Pty Ltd a decision of Hely J.

His Honour then considered Re Motor Group Australia Pty Ltd (2005) 54 ACSR 389 in depth. It is necessary to set out part of the decision of Hely J. His Honour said at [14]:

"Even if it were correct to characterise the claims of warranty creditors as 'mere expectancies", s 447A empowers the court to make an order under Pt 5.3A is to operate in relation to MGA so as to include the warranty creditors as creditors whose claims arose no later than 26 April 2005."

Palmer J said at [25] that in that case, Hely J was prepared to vary the meaning of "creditor" in s 444D(1) so that, whether or not the "warranty creditors" had a right to prove before the variation, they would unarguably have that right as a result of the variation. It seems to me quite clear that that is exactly what Hely J did say.

Although the judgment was given at first instance, it is a judgment of one of the most experienced Australian company lawyers of the 20 th century and is entitled to great respect.

The primary judge continued:

26 In my view, Re Motor Group Australia provides authoritative support for the proposition that the definition of "creditor" for the purposes of the DOCA in this case can be extended under s 447A(1) to incorporate Ms Sutton's claim even though, at this stage, that claim might more properly be described as a "mere expectancy". In this regard, it is of significance that at the time of commencement of the administration of BEA, at least two of the factors comprising Ms Sutton's "claim" were in existence: there had been a contract or arrangement for the performance of work and it had been terminated by BEA without notice or payment in lieu of notice. It is true that no wrong had been committed at that stage by BEA because there was no contractual provision then preventing it from doing what it did..."

The result reached by Hely J and Palmer J accords with the general principles of administration by the court of insolvent companies that the administration is to be done fairly and equitably even to the extent of the court directing liquidators as its officers to act honourably and equitably even though the legalities might point in another direction. The most extreme example of this principle is, of course, Ex Parte James Re James (1874) 9 Ch App 609.

I have carefully read what Campbell JA a has written on the fate of the appeal. With respect I do not find any assistance in considering the ambit of powers of administrative authorities given wide powers. I also consider that it is better to read Hely J in the Motor Group case as meaning to say what he did in fact say in [14] rather than reconstruct that decision.

I do not, with respect, agree with Campbell JA's statement in [206]: "It is not possible to use s 447A to require someone who is not a creditor to be treated as though he or she is a creditor". I agree with the primary judge on this aspect of the case.

It follows that I would dismiss the appeal with costs.

**********

Decision last updated: 20 December 2011

Medium Neutral Citation:	BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton [2011] NSWCA 414
Hearing dates:	23 May 2011
Decision date:	20 December 2011
Before:	McColl JA at [1] Campbell JA at [2] Young JA at [216]
Decision:	(1) Extend to 25 May 2011 the time in which to seek leave to cross-appeal. (2) Grant leave to appeal. (3) Grant leave to cross-appeal. (4) Dismiss the cross-appeal. (5) Allow the appeal. (6) Set aside the orders in the court below, and in lieu thereof order that the summons be dismissed with costs. (7) Respondent to pay costs of the Appellants of the application for leave to appeal, application for leave to cross-appeal, the appeal, and the cross-appeal. (8) Respondent to have a certificate under the Suitors Fund Act in relation to the costs in order (7) if qualified. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	CORPORATIONS - voluntary administration - whether person having unadjudicated claim under s 106 Industrial Relations Act 1996 is a "creditor" bound by a Deed of Company Arrangement - whether Court has power under s 447A(1) Corporations Act 2001 (Cth) to vary operation of Pt 5.3A to allow admission of such claim CORPORATIONS - voluntary administration - definition of "creditor" in Pt 5.3A - whether term has same meaning as defined in s 553 - Brash Holdings v Katile Pty Ltd [1996] 1 VR 24 - whether scheme, purpose and scope of Pt 5.3A require class of claims broader than that of claims under s 553 CORPORATIONS - voluntary administration - definition of "claim" in Pt 5.3A - contingent claim - Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 - requirement of existing obligation INDUSTRIAL LAW - unfair contracts - status of unadjudicated claim under s 106 Industrial Relations Act - whether "claim" within meaning of s 553 - Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 - Fisher v Madden [2002] NSWCA 28 - Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223 - whether basis, founded on existing legal right, for asserting a right to participate in the division of the assets of the company - whether legally enforceable right to have Industrial Relations Commission determine application according to law is sufficient - analogy with claim for costs CORPORATIONS - voluntary administration - power of Court - s 447A - whether Court has power under s 447A(1) Corporations Act 2001 (Cth) to vary operation of Pt 5.3A to deem to be a creditor someone who is not a creditor - Re Motor Group Australia Pty Ltd [2005] FCA 985 CORPORATIONS - voluntary administration - power of Court - s 447A - whether limitations imposed by the subject matter, scope and purpose of the statute - whether order falls within objectives within s 435A or other purpose within Pt 5.3A CORPORATIONS - voluntary administration - power of Court - s 447A - where broad power conferred on court, requirement to exercise judicially - requirement to exercise power to achieve purposes for which it was conferred CORPORATIONS - voluntary administration - power of Court - s 447A - whether nexus with how Pt 5.3A is to operate CORPORATIONS - voluntary administration - power of Court - s 447A - Standing - person with unadjudicated claim under s 106 Industrial Relations Act seeking order deeming them to be creditor - whether "any other interested person" - Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293 APPEAL - right of appeal - jurisdiction of the Court of Appeal - s 101(2)(r)(ii) Supreme Court Act 1970 - whether leave to appeal required - whether appeal involves a matter at issue amounting to $100,000 or more COSTS - general rule - costs follow the event - whether departure from general rule - where proceedings relate to fund being administered subject to control of court - whether costs should be treated as costs in administration - no reason to depart from general rule
Legislation Cited:	Acts Interpretation Act 1901 (Cth) Administrative Appeals Tribunal Act 1975 (Cth) Australian Constitution Australian Securities and Investments Commission Act 2001 (Cth) Bankruptcy Act 1966 (Cth) Child Welfare Act 1939 Civil Procedure Act 2005 Companies Act 1961-1964 (Qld) Corporations Act 2001 (Cth) Corporations Law Corporations Regulations Industrial Arbitration Act 1940 Industrial Relations Act 1996 Interpretation Act 1987 Petroleum Retail Marketing Franchise Act 1980 (Cth) Supreme Court Act 1970 Trade Practices Act 1974 (Cth)
Cases Cited:	Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293; (2002) 41 ACSR 587 Aloridge Pty Ltd v Christianos (1994) 13 ACSR 99 Ansett Australia Ground Staff Superannuation Fund Pty Ltd v Ansett Australia Ltd [2003] VSCA 117; (2003) 176 FLR 393 Aroona Developments Pty Ltd (in liq) v Killen [2004] NSWCA 363; (2004) 50 ACSR 668 Australasian Memory Pty Ltd v Brien (1998) 45 NSWLR 111 Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270 Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24 Buckingham v Pan Laboratories (Australia) Pty Ltd [2004] FCA 597; (2004) 136 FCR 102 Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607 Chief Commissioner of State Revenue v Rafferty's Resort Management Pty Ltd (in liq) [2008] NSWSC 542; (2008) 66 ACSR 199 City of Swan v Lehman Brothers Australia Ltd [2009] FCAFC 130; (2009) 179 FCR 243 Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223; (2005) 63 NSWLR 291 Commonwealth v Bank of New South Wales (1949) 79 CLR 497 Commonwealth of Australia v Rocklea Spinning Mills Pty Ltd [2005] FCA 902; (2005) 145 FCR 220 Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Edwards v Attorney General [2004] NSWCA 272; (2004) 60 NSWLR 667 Environmental & Earth Sciences Pty Ltd v Vouris [2006] FCA 679; (2006) 230 ALR 119 Ex Parte James Re James (1874) 9 Ch App 609 Expile Pty Ltd v Jabb's Excavations Pty Ltd [2004] NSWSC 284 FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 FAI Insurances Ltd v Winneke (1982) 151 CLR 342 FAI Workers Compensation (NSW) Ltd v Philkor Builders Pty Ltd (1996) 20 ACSR 592 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Farrow Finance v ANZ (1997) 23 ACSR 521 Fisher v Madden [2002] NSWCA 28; (2002) 54 NSWLR 179 Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 Gibbons v LibertyOne (in liq) [2002] NSWSC 274; (2002) 41 ACSR 442 GM and AM Pearce & Co Pty Ltd v RGM Australia Pty Ltd [1998] 4 VR 888 Harrison v Melhem [2008] NSWCA 67; (2008) 72 NSWLR 280 Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 201 FLR 456 House v The King (1936) 55 CLR 499 In re Buckton; Buckton v Buckton [1907] 2 Ch 406 In re Cunningham; Sproule v Quested (1914) 31 WN (NSW) 44 In re Halston; Ewen v Halston [1912] 1 Ch 435 International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 Joseph Khoury & Sons v Zambena Pty Ltd [1999] NSWCA 402; (1999) 217 ALR 527 Knight v FP Special Assets Ltd (1992) 174 CLR 178 Lam Soon Australia Pty Ltd v Molit (No 55) Pty Ltd (1996) 70 FCR 34 Leaway v Newcastle City Council (No 2) [2005] NSWSC 826; (2005) 220 ALR 757 Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 McCluskey v Pasminco Ltd [2002] FCA 231; (2002) 120 FCR 326 McDonald v Commissioner of Taxation [2005] NSWSC 2; (2005) 187 FLR 461 McGrath v Capena Contracting Pty Ltd [2009] FCA 665 Milankov Nominees Pty Ltd v Roycol (1994) 52 FCR 378 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 Moller v Roy (1975) 132 CLR 622 Murdocca v Murdocca (No 2) [2002] NSWSC 505 MYT Engineering Pty Ltd v Mulcon Pty Ltd (1997) 140 FLR 247 National Bank of Australasia Ltd v Mason (1975) 133 CLR 191 O'Brien v Ritchie (1931) 48 WN (NSW) 85 Owners of 'Shin Kobe Maru' v Empire Shipping Co Inc (1994) 181 CLR 404 Pawlowska v Zajglic [2011] NSWCA 118 PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 Preston v Commissioner for Fair Trading [2011] NSWCA 40 Pyramid Building Society (in liq) v Terry (1997) 189 CLR 176 Quinn v Leathem [1901] AC 495 R v Beserick (1993) 30 NSWLR 510 R v The Australian Broadcasting Tribunal; Ex parte 2HD Proprietary Limited (1979) 144 CLR 45 Re AFG Insurances Ltd [2002] NSWSC 735; (2002) 20 ACLC 1588 Re Ansett Australia Ltd [2002] VSC 114; (2002) 41 ACSR 598 Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 1) (1980) 3 ALD 74 Re GPI Leisure Corp Ltd (in liq) (1994) 53 FCR 365; 130 ALR 256; 15 ACSR 282 Re Jay-O-Bees Pty Ltd [2004] NSWSC 818; (2004) 50 ACSR 565 Re Motor Group Australia Pty Ltd [2005] FCA 985; (2005) 54 ACSR 389 Re New Tel Ltd [2004] FCA 1154; (2004) 210 ALR 270 Re Octaviar Ltd (No 8) [2010] QCA 45; (2010) 237 FLR 315 Re Switch Telecommunications Pty Ltd (in liq); Ex parte Sherman [2000] NSWSC 794; (2000) 35 ACSR 172 Re Timeshare Resort Club Ltd [2010] FCA 673; (2010) 187 FCR 13 Silbermann v One.Tel Ltd [2002] NSWSC 295; (2002) 167 FLR 274 Something Better Pty Ltd & Terry v Pyramid Building Society (in liq) [1996] 2 VR 352 Sons of Gwalia Ltd (subject to deed of company arrangement) v Margaretic [2007] HCA 1; (2007) 231 CLR 160 State of New South Wales v Commonwealth of Australia (1983) 151 CLR 302 Surber v Lean [2000] WASCA 380; (2000) 23 WAR 445 Sutton v BE Australia WD Pty Ltd (admin apptd) [2010] NSWSC 772 Swan Hill Corporation v Bradbury (1937) 56 CLR 746 UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (SC(Vic), Hansen J, 19 July 1996, unreported) Vero v Kassem [2011] NSWCA 381 Water Conservation and Irrigation Commission (New South Wales) v Browning (1947) 74 CLR 492
Category:	Principal judgment
Parties:	BE Australia WD Pty Ltd (subject to a deed of company arrangement) (First Appellant) Alan John Hayes (Second Appellant) Anthony Milton Sims (Third Appellant) Mary Sutton (Respondent)
Representation:	Counsel C R Newlinds SC; D Sulan (Appellants) D L Williams SC; J Little (Respondent) Solicitors Clayton Utz (Appellants) PCC Lawyers + Consultants (Respondent)
File Number(s):	2009/291532
Decision under appeal	Citation: Sutton v BE Australia WD Pty Ltd (admin apptd) [2010] NSWSC 772 Date of Decision: 2010-03-26 00:00:00 Before: Palmer J File Number(s): 2009/291532

Legal costs incurred in the Industrial Court (at particular itemised dates, from 26 October 2005 to 29 January 2010)	$282,564.30
Interest	$92,115.00
Industrial Court claim - 12 months' notice	$140,369.00
Industrial Court claim - compensation for distress	$20,000.00
TOTAL	$535,048.30