Dejai Scott v Digital Eagles Pty Ltd

[2021] FWC 5462

[2021] FWC 5462

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Dejai Scott
v
Digital Eagles Pty Ltd
(U2021/6527)

COMMISSIONER LEE MELBOURNE, 2 SEPTEMBER 2021

Application for an unfair dismissal remedy – Respondent placed in liquidation by creditors’ voluntary winding up – having regard to s.500(2) of the Corporations Act 2001 application cannot proceed in Commission without leave of the Court – application stayed until leave of the Court is granted.

Introduction

[1] On 23 July 2021, Mr Dejai Scott (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Digital Eagles Pty Ltd (Respondent).

Background

[2] The matter was programmed for conference/mention on 17 August 2021. On 11 August 2021 Mr Fitzgerald of William Buck (Vic) Pty Ltd wrote to my chambers stating that on Friday, 6 August 2021 the Respondent was “placed into Liquidation at a meeting of creditors.” The email further stated that:

“The Company is no longer trading having sold its business and undertakings to a third party. Mr Scott has a claim in the Liquidation for his entitlements and I am in correspondence with him with respect to same.”

As a consequence of the Liquidation I suggest there is no utility in the FWC hearing continuing. Mr Scott has a claim which will be dealt with under the Corporations Act in the Liquidation. With respect to any rights or claim to reinstatement same is not possible given the Company has no ongoing business and no continuing employees.”

[3] A mention hearing took place on 17 August 2021. Mr Fitzgerald, who has been appointed as the Administrator of the Respondent, attended on behalf of the Respondent. Prior to the mention hearing, my chambers forwarded for the benefit of the parties the relevant sections of the Fair Work Commission Unfair Dismissals Benchbook dealing with insolvency for their information.

[4] During the mention hearing on 17 August 2021, the Applicant agreed that on 6 August 2021, the creditors voted to wind up the company. 1

[5] In order to provide the Applicant with more time to consider the matters discussed during the mention hearing, including whether he desired to seek legal advice, the matter was adjourned for a period of one week and relisted for a further mention hearing at 10:00 am on 23 August 2021.

[6] The Applicant did not attend, nor indicate his unavailability prior the 23 August 2021 mention hearing. The mention hearing took place in his absence. The Applicant emailed my chambers at 10:45 am apologising for missing the hearing as a result of the personal illness of a child in his care.

[7] At the mention hearing, Mr Fitzgerald confirmed that given the Respondent had been liquidated by way of a creditors’ voluntary winding up, the Respondent’s submission is that the matter cannot proceed any further in the Commission except by leave of the Court. 2

[8] On 24 August 2021, I issued a Statement 3 where I set out the background to the matter and indicated that I had formed a provisional view as follows:

“Provisional view

It is not in contest that the Respondent has been placed into liquidation by way of a creditors’ voluntary winding up at a meeting of creditors on 6 August 2021. 4

In the circumstances, I have formed the provisional view that, taking into account the provisions set out in s.500(2) of the Corporations Act 2001 (Cth), the application cannot proceed any further in the Commission except by leave of the Court and subject to such terms as the Court imposes. Therefore, the application should be stayed until leave of the Court has been granted.

Next steps

The parties are to advise if they contest the provisional view expressed in paragraph 9 by not later than 5:00 pm on Tuesday, 31 August 2021.

If either party contests the provisional view, the matter will be listed for hearing on a date to be fixed.

If there is agreement with the provisional view, or in the absence of a response from the parties, a decision will be issued confirming the provisional view expressed above.” 5

[9] There has been no response from the parties by the date nominated in the Statement.

Decision

[10] Consistent with the provisional view expressed in the Statement, I have determined as follows.

[11] It is not in contest that the Respondent has been placed into liquidation by way of a creditors’ voluntary winding up at a meeting of creditors on 6 August 2021. 6

[12] Section 500(2) of the Corporations Act 2001 (Corporations Act) provides as follows:

(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

[13] Section 58AA of the Corporations Act provides the definition in relation to the meaning of “court” and “Court”. Having regard to the decision of the Full Bench decision in Smith v Trollope Silverwood & Beck Pty Ltd 7, I am satisfied that the Commission is not a “Court” and is therefore unable to grant leave as prescribed in s.500(2) of the Corporations Act.

[14] In Silalahi v CMI Industrial (Forge) 8 Commissioner Jones considered relevant authorities and found that an application pursuant to s.394 of the FW Act falls within the meaning of “civil proceedings” in s.500(2) of the Corporations Act.

[15] In these circumstances, the winding up has enlivened s.500(2) of Corporations Act. 9 Taking into account the provisions set out in s.500(2) of the Corporations Act, I am satisfied that the application cannot proceed any further in the Commission except by leave of the Court and subject to such terms as the Court imposes.

[16] Therefore, Mr Scott’s application under s.394 of the FW Act is stayed until leave of the Court is granted.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR733464>

 1   Transcript at PN39 – PN41.

 2   Transcript at PN123 – PN124.

 3   PR733160.

 4   Transcript at PN39 – PN41.

 5   PR733160 at [8] – [12].

 6   Transcript at PN39 – PN41.

 7 (2003) 142 IR 137.

 8    [2012] FWA 7275 at [11] - [16].

 9   David Klemm v Penrice Soda Products Pty Ltd (in liquidation)[2016] FWC 3170 at [44].