Buckingham v Pan Laboratories (Australia) Pty Limited (in liquidation)

The case of Buckingham v Pan Laboratories (Australia) Pty Limited (in liquidation) involved former officers of the company who sought declarations and compensation from the company for liabilities incurred on corporate credit cards. The applicants argued that the contract between the directors and the company was unfair as it did not provide for an indemnity against such liabilities. They sought leave to proceed in the Industrial Relations Commission under section 106 of the Industrial Relations Act. The case progressed through the Federal Court, where the primary issue was whether an order for compensation under section 106 of the IR Act constituted a provable debt in a winding-up.

The court reviewed relevant authorities and the nature of claims that could be proved in a liquidation under section 553 of the Corporations Act. The decision in Silbermann v One.Tel Ltd set a precedent that orders for compensation under section 106 of the IR Act were not provable debts. This was further supported by the observations in Fisher v Madden, which clarified that the right to invoke the jurisdiction of the Commission under section 106 of the IR Act was not an existing claim at the commencement of the winding up. The court concluded that such an order would not be a future claim under section 553 of the Act as it would only arise if and when the Commission made an order.

The court found that the applicants' claims did not constitute provable debts in the winding up of the company. It rejected the applications for leave to continue the proceedings in the Industrial Relations Commission and ordered the applicants to pay the costs of the proceedings in the Federal Court. The reasoning was grounded in the interpretation of the Corporations Act and the understanding that obligations under the IR Act do not automatically create provable debts in a liquidation.