Kylie Bruce v Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen)

[2013] FWC 2704

[2013] FWC 2704

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kylie Bruce
v
Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen)
(U2013/221)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 2 MAY 2013

Application for unfair dismissal remedy - respondent in liquidation - distinction between voluntary winding up of a company and other winding up arrangements.

[1] On 29 January 2013 Ms Bruce lodged an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (the FW Act), relative to the termination of her employment with the Trustee for the Adelaide Riviera Trust T/A Adelaide Riviera.

[2] The Employer’s Response (Form F3) asserted that the correct name for the respondent was Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera (Fingal Glen). There is no suggestion that the name listed on the application is anything other than an error of an administrative nature or that it was intended to refer to a different entity. Accordingly, I have allowed a correction to the application so as to identify the correct name of the respondent. The Commission’s file in this matter has been amended to reflect this.

[3] Conciliation with respect to this application did not occur. The application was referred to me for determination. The respondent did not participate in a Directions Conference on 7 March 2013. The application was subsequently listed for hearing.

[4] On 12 March 2013 Mr Dean, of United Voice, representing the applicant advised the Commission that he understood that the respondent had been wound up by Order of the Federal Court and that a Mr White had been appointed as liquidator. The following correspondence was subsequently received from Mr White.

“....

I confirm I was appointed Official Liquidator of the above company, by Order of the Federal Court of Australia, on 8 March 2013. A copy of the Court Order is enclosed for your attention.

Further, I was unaware that an application was before the Fair Work Commission.

...”

[5] Attached to this advice was the winding up order of 8 March 2013.

[6] The application was listed for a further directions conference but the liquidator did not participate. On 14 March 2013 I issued further directions in the following terms:

“[1] Ms Bruce’s unfair dismissal application has been the subject of a further telephone directions conference with me on 13 March 2013. Mr Dean of United Voice represented Ms Bruce. Written advice from Mr CP White, the Liquidator of Fingal Glen Pty Ltd t/as Adelaide Riviera Comfort Hotel, was provided to Mr Dean prior to this conference.

[2] The listing of this matter for 28 March 2013 has been cancelled and a Notice to this effect is attached.

[3] Any further listing of this matter will depend on advice provided to me by Mr Dean, or possibly, Mr White. Mr Dean has undertaken to provide written submissions to both the Commission and to Mr White which address whether or not the matter should proceed and, if so, who should be considered to be the respondent. This material is to be provided by 27 March 2013.

[4] Leave is reserved for Mr Dean, or, for that matter, Mr White, to request a further Directions Conference.

[5] Depending on the material provided to me, the parties will be advised of any further proceedings relative to this application.”

[7] Mr Dean provided written submissions on 18 March 2013 to the effect that the application could and should proceed to arbitration.

[8] A further opportunity for submissions was provided by way of directions issued on 2 April 2013. The parties were advised that, absent any further submissions, I would consider the matter on the material before me. Nothing further was received.

[9] Ms Bruce refers to three provisions of the Corporations Act 2001 and asserts that none of these provisions prevent the application from proceeding. I have considered each of these provisions and the Corporations Act generally.

Section 440D of the Corporations Act

[10] This section states:

“Stay of proceedings

(1) 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.

(2) Subsection (1) does not apply to:

(a) a criminal proceeding; or

(b) a prescribed proceeding.”

[11] The respondent is not in administration and has been wound up with a liquidator appointed. I have concluded that this section of the Corporations Act does not apply in these circumstances.

Section 471B of the Corporations Act

[12] This section states:

“Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a) a proceeding in a court against the company or in relation to property of the company; or

(b) enforcement process in relation to such property;

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

[13] This section governs general arrangements relative to companies in liquidation.

[14] In Smith and others v Trolloppe Silverwood & Beck Pty Ltd (In liquidation) 1(Smith)a Full Bench of the Australian Industrial Relations Commission (AIRC) concluded that the AIRC was not a court for the purposes of s.473B and, as such, this section did not represent an impediment to the exercise of the unfair dismissal jurisdiction.

Section 500 of the Corporations Act

[15] This section states:

“Execution and civil proceedings

(1) Any attachment, sequestration, distress or execution put in force against the property of the company after the passing of the resolution for voluntary winding up is void.

(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.

(3) The Court may require any contributory, trustee, receiver, banker, agent, officer or employee of the company to pay, deliver, convey, surrender or transfer forthwith or within such time as the Court directs to the liquidator any money, property of the company or books in his, her or its hands to which the company is prima facie entitled.”

[16] This section deals with circumstances described in Part 5.5 of the Corporations Act relative to voluntary winding up of companies. The Corporations Act establishes voluntary winding up as an alternative process to an action pursued under s.459, by a creditor. Part 5.5 sets out arrangements applicable to these particular circumstances.

[17] The operation and effect of this section was not addressed by the Bench in Smith. Indeed, it appears that section was not relevant to the circumstances which required consideration in Smith. However, McKenna C considered this section at some length in Lawler v ABC Developmental Learning Centres Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed). 2 In that decision, the Commissioner dealt with a matter where a respondent had passed a resolution for voluntary winding up. She concluded that:

“[22] This application comprises, pursuant to s.500(2) of the Act, an action or other civil proceeding which may not be proceeded with or commenced against the respondent except by leave of the Court and subject to such terms as the Court imposes. Thus, leave of the relevant Court needs to be obtained if the applicant wishes to proceed with this application before Fair Work Australia. Such leave may not, despite the applicant’s submissions, be granted by Fair Work Australia as the Tribunal is not a “Court”, as defined.”

[18] I think that conclusion is correct. However because the Australian Securities Investment Commission records indicate that Fingal Glen was wound up by the Court following an application made under s.465 of the Corporations Act. Part 5.6 has no effect.

[19] Part 5.4 and 5.6 of the Corporations Act deal with winding up generally. These Parts set out the powers and obligations of liquidators in specified circumstances. Those powers of a liquidator are generally directed at concluding the affairs of the company. There is nothing in Part 5.6 of the Corporations Act which overrides the general provisions set out in s.471.

[20] Accordingly, in this particular situation, I am required to follow the Full Bench position in Smith and allow the application to proceed. In that matter the Full Bench rejected the application of a purposive approach. I am concerned however that this conclusion raises significant practical difficulties. It is conceivable that the liquidator may need to allocate resources to defending the action in a manner which is difficult to reconcile with the specified liquidator functions. Further, it is difficult to see how the respondent will have the capacity to provide evidence in support of its position, given both its standing and that of its management. It seems to me curious that under this approach an appeal may be made to a Full Bench of the Commission but any further appeal rights must be limited by s.471B. Finally, it is difficult, but not impossible to conceive how reinstatement could be ordered and how any amount that might be awarded in lieu of reinstatement would become anything other than simply another liability for consideration by the liquidator.

[21] Those practical difficulties may mean that Ms Bruce decides against pursuing the matter further.

[22] However, until or unless I receive advice to this effect, the matter will proceed. It will be listed for a directions hearing on 10 May 2013. In the event that the respondent is not represented at this hearing, the parties should expect that I will issue directions requiring the provision of written submissions and material.

SENIOR DEPUTY PRESIDENT

 1   PR940508

 2   [2010] FWA 7679

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