FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Moulder v Jeffreys [2024] FedCFamC2G 1026
File number(s): SYG 1545 of 2023 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 11 October 2024 Catchwords: INDUSTRIAL LAW – where employee of deregistered company alleges that sole director of the company was involved in the company’s failure to make payments in accordance with an award – whether award covered the employee’s employment – whether company failed to make payments it was required to make under the award – whether sole director of the company was a person involved in company’s failure to pay amounts it was required to pay under the award – employee establishes that he was covered by the award and the company had failed to make payments to the employee it was required to make under the award but employee fails to establish that the sole director was involved in the company’s failure to comply with the award – application dismissed. Legislation: Corporations Act 2001 (Cth), ss 588G(1), 588M(2), 588R
Fair Work Act 2009 (Cth), ss 45, 550(1), (2)
Educational Services (Post-Secondary Education) Award 2020, cl 4.1, 4.2, 15.1, 16.1, 18.2, 19.2, 20.2, 21.2, 22.3, 23.3, Schedule C
Cases cited: Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamC2G 934
Fair Work Ombudsman v Chatime Australia Pty Ltd (No 2) [2023] FedCFamC2G 712
Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833
Giorgianni v R (1985) 58 ALR 641
Richardson and Wrench (Holdings) Pty Ltd and Richardson and Wrench Limited v Ligon [1994] FCA 1222
Division: Fair Work Number of paragraphs: 36 Date of hearing: 1 October 2024 Place: Sydney The Applicant: Appeared in person, by video Counsel for the Respondent: Mr S Reidy, by video Solicitor for the Respondent: Blossom Lawyers ORDERS
SYG 1545 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CHRISTOPHER MOULDER
Applicant
AND: BRUCE MICHAEL JEFFREYS
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
11 OCTOBER 2024
THE COURT ORDERS THAT:
1.The application is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
From 30 August 2021 to 13 February 2023 the applicant, Mr Moulder, was employed by a company called Makerspace & Company Pty Ltd (MCPL) as a “Facilities Manager”.[1] The respondent, Mr Jeffreys, was initially one of three directors of MCPL but, during Mr Moulder’s employment, was the sole director of MCPL. On 14 February 2023 MCPL went into voluntary liquidation.
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Details
- AGLC
- Moulder v Jeffreys [2024] FedCFamC2G 1026
- Case
- [2024] FedCFamC2G 1026
- Decision Date
CaseChat Overview and Summary
In Moulder v Jeffreys, the applicant, Mr Moulder, alleged that Mr Jeffreys, the sole director of a deregistered company, was involved in the company’s failure to make payments in accordance with an award. The case concerned the determination of whether the award covered Mr Moulder’s employment, whether the company failed to make required payments under the award, and whether Mr Jeffreys was involved in the company’s failure to comply with the award. The court examined the applicability of the Fair Work Act and the Corporations Act to the claims presented.
The legal issues in the case involved the interpretation of employment awards, the responsibilities of directors in ensuring compliance with award obligations, and the jurisdiction of the court to hear claims under the Corporations Act. The court had to determine if Mr Moulder was covered by the award, if the company had failed to make required payments, and if Mr Jeffreys was involved in the non-compliance. Additionally, the court assessed whether it had jurisdiction to hear claims under the Corporations Act related to breaches of s 588G.
The court found that Mr Moulder was covered by the award and that the company had indeed failed to make the required payments under the award. However, it could not be established that Mr Jeffreys was involved in the company’s failure to comply with the award. Mr Jeffreys' role as a director was limited to governance-level decision-making without involvement in day-to-day operations or employment matters. The court also concluded that it did not have jurisdiction to entertain claims under s 588M or s 588R of the Corporations Act in relation to debts incurred in breach of s 588G. Consequently, the application was dismissed due to insufficient evidence linking Mr Jeffreys to the company’s non-compliance with the award.
The court ordered that the application be dismissed, acknowledging Mr Moulder’s success in proving the company’s contravention of the award but denying the involvement of Mr Jeffreys. The dismissal was based on the lack of jurisdiction and insufficient evidence to connect Mr Jeffreys to the non-compliance issues.
The legal issues in the case involved the interpretation of employment awards, the responsibilities of directors in ensuring compliance with award obligations, and the jurisdiction of the court to hear claims under the Corporations Act. The court had to determine if Mr Moulder was covered by the award, if the company had failed to make required payments, and if Mr Jeffreys was involved in the non-compliance. Additionally, the court assessed whether it had jurisdiction to hear claims under the Corporations Act related to breaches of s 588G.
The court found that Mr Moulder was covered by the award and that the company had indeed failed to make the required payments under the award. However, it could not be established that Mr Jeffreys was involved in the company’s failure to comply with the award. Mr Jeffreys' role as a director was limited to governance-level decision-making without involvement in day-to-day operations or employment matters. The court also concluded that it did not have jurisdiction to entertain claims under s 588M or s 588R of the Corporations Act in relation to debts incurred in breach of s 588G. Consequently, the application was dismissed due to insufficient evidence linking Mr Jeffreys to the company’s non-compliance with the award.
The court ordered that the application be dismissed, acknowledging Mr Moulder’s success in proving the company’s contravention of the award but denying the involvement of Mr Jeffreys. The dismissal was based on the lack of jurisdiction and insufficient evidence to connect Mr Jeffreys to the non-compliance issues.
Orders
Orders of the court
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Background
Background to the litigation
In these reasons for judgment, therefore, I consider whether Mr Moulder is entitled to succeed on any of the claims he makes against Mr Jeffreys under the FW Act. I also consider whether this Court has jurisdiction to determine Mr Moulder’s claim under s 588G(1) of the Corporations Act.BACKGROUNDMCPL’s business According to the report MCPL’s liquidator prepared on 28 February 2023,[2] MCPL had traded as a multi-disciplinary workshop facility and education provider from leased premises situated in Marrickville, New South Wales. MCPL also subleased part of the premises it leased to individual and businesses. MCPL was originally funded through a related company, Makerspace & Company Foundation Limited (MCFL), which held deductible gift recipient status, and obtained donations which it provided to MCPL. [2] MFI1- Exhibit A. According to Mr Jeffreys, MCPL was a not-for-profit organisation with a “Charitable DGR status” (that is, a “deductible gift recipient”), which was established to provide public access to maker space facilities, and provide a comprehensive creative education program and studios for makers of all types.[3] This statement is not entirely correct, because it was MCFL, not MCPL, that held the “Charitable DGR” status.[3] Affidavit of B M Jeffreys, 27.04.2024, [2]. In the report he prepared on 28 February 2023, MCPL’s liquidator recorded his preliminary view that MCPL may have traded whilst insolvent since 30 June 2019. The liquidator based his view on MCPL’s balance sheet showing net liabilities from 2019 onwards; ongoing trading losses; a “[c]urrent ratio less than 1 from June 2019 and onwards”; the loss of related party funding; and accruing GST, PAYG, and superannuation liabilities. The liquidator estimated that MCPL incurred debts totalling $285,096 “since the estimated date of insolvency”. [4][4] MFI1- Exhibit A, p.11MCPL’s management structure and Mr Jeffrey’s role Mr Jeffreys was appointed a director of MCPL on 26 October 2018. At that time there were two other directors, these being Ms Anna Lise De Lorenzo, and Mr Kris Spann. Those two directors resigned in April 2019, and Mr Jeffreys remained the sole director of MCPL until 14 August 2023, when MCPL was deregistered. Although Mr Jeffreys was the sole director, the business of MCPL was managed by a general manager. Ms De Lorenzo was the general manager until April 2019, when she was replaced by Mr Spann. Some time before 28 August 2021 Ms Sharp replaced Mr Spann as general manager; and Ms Sharp was the general manager while Mr Moulder was employed by MCPL. In his affidavit Mr Jeffreys describes his role in the management of MCPL’s business. Mr Jeffreys deposed that:[5][5] Affidavit of B M Jeffreys, 27.04.2024, [3]-[13]. (a)he was not a member of MCPL’s staff; he received no payment for his role as director; and he donated over $300,000 to MCPL over a 10 year period;(b)he had no official duties, responsibilities, or role in the day to day running or operations of MCPL;(c)he did not work at MCPL’s premises, and was not based there, his usual occupation being a managing director of a manufacturer, wholesaler, and retailer of prescription optical glasses, and a director of a car sharing business;(d)his role as a director was to support the concept of MCPL’s business by performing decision making at “the governance level”, which included providing input on business strategy, and advice and guidance as sought;(e)he was involved in MCPL because of his business experience;(f)he met with MCPL’s staff approximately six times a year to listen to what they had to say, and to provide his views on the long term strategy for MCPL; (g)he did not provide advice on operational matters;(h)he was not involved in recruiting employees, the writing of job descriptions, calculating wages, setting terms of employment, interviewing persons applying for positions, processing or paying wages, transferring funds from MCPL’s bank account for wages, calculating superannuation payments, or MCPL’s payroll system; and Mr Jeffreys was not a signatory to any offers of employment to employees including Mr Moulder;(i)he had no knowledge of what Mr Moulder was being paid, or the basis of the calculation of the amounts he was being paid; and(j)he does not have and never had access to employment documents, files, employee payroll systems, or any management platform.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
This Court does not have jurisdiction to entertain claims under s 588M or s 588R of the Corporations Act in relation to debts a company has incurred in breach of s 588G. Even if the Court did have jurisdiction, Mr Moulder would have no standing to bring such action because he is not the liquidator of MCPL, or a creditor who has obtained the consent of the liquidator of MCPL to commence the proceeding. CONCLUSION AND DETERMINATION Although Mr Moulder has established that MCPL contravened s 45 of the FW Act, he has not proved that Mr Jeffreys is a person who was involved in MCPL’s contraventions of that section. I propose, therefore, to order that the application be dismissed.
Ratio Decidendi
Legal Principle Established
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