Irving, John v Construction Industry Long Service Leave Board - [1996] FCA 1030

CATCHWORDS

CORPORATIONS - Deed of Company Arrangement - money due pursuant to statutory levy relating to employees' long service leave entitlements - whether priority over other unsecured creditors - whether amount due was to, or in respect of, employees in respect of leave of absence

Construction Industry Long Service Leave Act 1987 (SA)
Long Service Leave (Building Industry) Act 1975 (SA)
Companies Act 1962 (SA)
Corporations Law

Re E & L Constructions Pty Ltd (in liq) (1981) 5 ACLR 778
Nowegijick v The Queen (1983) 144 DLR (3d) 193
The Queen v Savage (1983) 83 DTC 5409
Smith v Federal Commissioner of Taxation (1987) 164 CLR 513 Ting v Blanche (1993) 118 ALR 543
State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412
Attril v Richmond River Shire Council (1966) Aust Torts Report 81-371
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485

No SG 3023 of 1996

JOHN IRVING AS ADMINISTRATOR OF BETTAFORM CONSTRUCTIONS (SA) PTY LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) ACN 060 173 766 Applicant

- and -

CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD
Respondent

O'Loughlin J
Adelaide
20 November 1996

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )    No SG 3023 of 1996
  )
GENERAL DIVISION                 )

B E T W E E N:

JOHN IRVING AS ADMINISTRATOR OF BETTAFORM CONSTRUCTIONS (SA) PTY LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)

ACN 060 173 766
Applicant

- and -

CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD
Respondent

MINUTES OF ORDER

Coram:    O'Loughlin J
Place:    Adelaide
Date:     20 November 1996

THE COURT ORDERS THAT:

The applicant bring in short Minutes of Order reflecting these reasons.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )    No SG 3023 of 1996
  )
GENERAL DIVISION                 )

B E T W E E N:

JOHN IRVING AS ADMINISTRATOR OF BETTAFORM CONSTRUCTIONS (SA) PTY LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)

ACN 060 173 766
Applicant

- and -

CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD
Respondent

REASONS FOR JUDGMENT

Coram:    O'Loughlin J
Place:    Adelaide
Date:     20 November 1996

The question for determination in these proceedings is whether the respondent, the Construction Industry Long Service Leave Board ("the Board") should be admitted to proof as an unsecured creditor enjoying priority over other unsecured creditors in the administration of Bettaform Constructions (SA) Pty Ltd (Subject to a Deed of Company Arrangement) ("the company"). The company entered into voluntary administration on 18 April 1995 and executed a Deed of Company Arrangement on

19 June 1995. Mr John Irving, the applicant and a chartered accountant, was appointed the administrator of the company.

The Board is established by s 6 of the Construction Industry Long Service Leave Act 1987 (SA) ("the 1987 Act"). The 1987 Act, which came…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Irving, John v Construction Industry Long Service Leave Boar...

Details

AGLC: Irving, John v Construction Industry Long Service Leave Board [1996] FCA 1030
Case: [1996] FCA 1030
Decision Date: 20 NOVEMBER 1996

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Irving, John v Construction Industry Long Service Leave Board was heard and determined by O'Loughlin J on 20 November 1996. The central issue was whether the Construction Industry Long Service Leave Board (the Board) should be granted priority over other unsecured creditors in the administration of Bettaform Constructions (SA) Pty Ltd, a company in voluntary administration. The Board claimed priority based on unpaid levies owed to it by the company under the Construction Industry Long Service Leave Act 1987 (SA). The company's administrator, John Irving, contested the Board's claim, arguing that the levies were not due to or in respect of employees, nor were they in respect of leave of absence.

The court examined the statutory framework and relevant case law, including the decision in Re E & L Constructions Pty Ltd (in liq) (1981) 5 ACLR 778, which held that levies paid to the Board were not due to or in respect of employees under the Long Service Leave (Building Industry) Act 1975 (SA). O'Loughlin J concluded that the levies were not due to employees but rather to the Board as a statutory levy for funding the Long Service Leave entitlements. The court held that the language of the priority provision in the Corporations Law, which referred to amounts due to or in respect of employees by virtue of an industrial instrument in respect of leave of absence, did not extend to the levies owed by the company. Consequently, the Board was not entitled to priority as an unsecured creditor. The court ordered the Board to pay the applicant's costs.

Orders