Blue Diamond Sales and Marketing v Liveris

Blue Diamond Sales and Marketing Pty Ltd (the applicant) sought a review of a sequestration order made against it in favour of Mr. Liveris (the respondent). The application for review was heard in the Supreme Court of Western Australia.

The primary legal issues before the Court were whether the formal requirements for bankruptcy had been made out, whether the respondent had a valid cross-demand for employee entitlements, and whether issue estoppel and *Anshun* estoppel arose from prior litigation between the parties. Relatedly, the Court considered whether the review applicant was an employee, whether there was evidence of sham contracting, whether the applicant could have made a prior claim in the District Court, whether the applicant was solvent, and whether an appeal against a District Court Registrar’s decision in prior litigation was relevant. The Court also considered the appropriateness of summary dismissal of an application for review of a sequestration order in bankruptcy.

The Court determined that the application for review was not appropriate for summary dismissal. It found that the respondent’s claim for employee entitlements was not a valid cross-demand that would prevent the making of a sequestration order, as the applicant’s solvency was not established. The Court also found that issue estoppel did not apply because the question of whether the applicant was an employee had not been determined in earlier proceedings. However, *Anshun* estoppel was found to apply, as the applicant could and should have raised the issue of employee entitlements in the prior District Court proceedings. The Court concluded that the applicant had failed to demonstrate that the sequestration order should be set aside.

The Court ordered that the application for review of the sequestration order be dismissed.