Mr Trent Butler v Sovereign Energy Pty Ltd T/A ATF Sovereign Energy Trust

[2015] FWC 1304

[2015] FWC 1304

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Trent Butler
v
Sovereign Energy Pty Ltd T/A ATF Sovereign Energy Trust
(U2014/12173)

DEPUTY PRESIDENT ASBURY BRISBANE, 10 MARCH 2015

Application for relief from unfair dismissal - identity of Respondent - named Respondent insolvent - Corporations Act s.500 - no prior leave of the Court - application adjourned.

Background

[1] Mr Trent Butler (the Applicant) applies for an unfair dismissal remedy. The application was initially filed by telephone and after being completed by the Applicant was served on the Respondent on 2 September 2014. The Respondent was initially named as “The Trustee for Sovereign Energy Trust T/A The Sovereign Energy Trust”. The contact person for The Trustee for Sovereign Energy Trust T/A The Sovereign Energy Trust was said to be Mr Simon Lush.

[2] The Applicant subsequently sought to amend the application so that the Respondent was Sovereign Energy Pty Ltd. There was correspondence between the parties and the Chambers of Senior Deputy President Richards, which resulted in agreement by the parties that the application would be amended so that the Respondent was named as Sovereign Energy Pty Ltd as Trustee for the Sovereign Energy Trust.

[3] The matter was allocated to the Commission as presently constituted and was listed for hearing on 10 December 2014. On 26 November 2014 correspondence was received from FTI Consulting, advising that it had been appointed as Liquidator of Sovereign Energy Pty Ltd and attaching a “Form 505 - Appointment of external administration” that had been electronically lodged with the Australian Securities and Investments Commission (ASIC). That form indicated that the Respondent had been placed into voluntary liquidation and the date of appointment was 10 November 2014.

[4] I corresponded with the Applicant and advised that by virtue of s. 500(2) of the Corporations Act 2001, his application for an unfair dismissal remedy could not proceed without leave of the Supreme Court. The Applicant - represented by his father Mr Peter Butler - responded with a series of correspondence which I will comment on later, wherein he appeared to query whether Sovereign Energy Pty Ltd as Trustee for the Sovereign Energy Trust was the true employer.
[5] Attempts to deal with the questions raised by the Applicant were frustrated by the conduct of the Respondent’s Managing Director Mr Simon Lush and FTI Consulting. Mr Lush adopted an attitude of selectively ignoring correspondence and Directions issued by the Commission and his conduct included: failing to file a Response to the Application; failing without excuse to attend a conciliation conference; failing to respond to a range of correspondence and telephone messages seeking an explanation of the matters raised by Mr Peter Butler on behalf of the Applicant; and failing to attend a hearing held for that purpose.

[6] FTI Consulting also resisted attempts to have a representative of the Liquidator attend a hearing to explain its position with respect to the matters raised by Mr Peter Butler on behalf of the Applicant. It was necessary for me to direct the Liquidator to contact Mr Lush and provide him with Directions in relation to a hearing and to inform the Liquidator that if its representative did not attend a hearing I would issue an Order requiring attendance.

[7] Mr Peter Butler, on behalf of the Applicant, did not assist with the issues in dispute. Even making allowances for his obvious frustration with the conduct of Mr Lush and the Liquidator, and his desire to advance the interests of his son, Mr Butler directed correspondence to me and my Associate which was at best unhelpful and at worst, rude.

Consideration

[8] It is necessary to set out some history of the application. As previously noted, the Respondent was initially named in the Application as the Trustee for Sovereign Energy Trust T/A The Sovereign Energy Trust. On 10 September 2014, the Application and a Notice of Listing for a Conciliation Conference to be held on 30 September 2014 was served on Mr Lush at the address notified in the Application. Mr Lush failed to file a Response to the Application and did not attend the Conciliation Conference on 30 September 2014.

[9] The Applicant filed a further application on 30 September 2014 seeking to amend the name of the Respondent to “Sovereign Energy Pty Ltd”. The material on the file indicates that on 9 October 2014, after confirming with the Applicant’s representative that the amended application had not been served upon the Respondent, staff of the Commission sent a copy of the amended application to Mr Lush, by email. On 8 and 9 October 2014 Commission staff attempted to telephone Mr Lush to ascertain his views in relation to the amended application. Mr Lush did not answer the phone and did not return these phone calls.

[10] The file was allocated to Senior Deputy President Richards for consideration of the Applicant’s request to amend the identity of the Respondent. On 27 October 2014, email correspondence was forwarded by the Senior Deputy President’s Associate requesting that the Respondent provide its view in relation to the amended application.

[11] Within 10 minutes of that email being sent, Mr Lush responded advising that “we” did not consent to the application sought by the Applicant. Mr Lush’s email was signed off by Mr Lush as “Managing Director”. After receipt of Mr Lush’s response the Senior Deputy President’s Associate emailed Mr Lush requesting reasons for the Respondent’s objection to the amendment. Within 20 minutes Mr Lush responded stating that “[T]he trustee is Sovereign Energy pty ltd (sic) acting on behalf of the sovereign Energy Trust and as such this is how it should be represented”.

[12] On the basis of this email the Senior Deputy President’s Associate again emailed Mr Lush to enquire whether the Respondent proposed that its identity be amended as advised by Mr Lush. Mr Lush responded advising that “as sovereign energy pty ltd (sic) is indemnified as the trustee, I would not think it necessary”.

[13] Mr Peter Butler on behalf of the Applicant corresponded with the Senior Deputy President’s Associate stating that he found himself “unconvinced” that the “’true’ respondent in the above matter does not remain Sovereign Energy Pty Ltd”. Mr Peter Butler further stated:

“In all documentation provided by the company to my son it nominated itself either as Sovereign Energy Pty Ltd or simply as Sovereign Energy. Further to that your own records show that on or about 23 October 2012 a decision was made by your Commissioner Booth approving an EBA entitled ‘SOVEREIGN ENERGY ENTERPRISE AGREEMENT 2012-2015’ in which the company referred to itself as Sovereign Energy Pty Ltd no more no less. It was under the terms and conditions as set out in that agreement that my son was employed by the Respondent.

I can find no indication that any trustee has any legitimate linkage to the respondent as amended. Thus, unless a strong legal case can be made for some trustee or another having dominion over the respondent company and by extension Trent, I can not (sic) see how it does not stand alone as a separate legal entity registered in Australia capable of suing and being sued in its own right.”

[14] Mr Peter Butler’s correspondence concluded with the statement that he would leave the issue in the hands of Senior Deputy President Richards. On 28 October 2014 Senior Deputy President Richards’ Associate sent the following correspondence to the parties:

“Senior Deputy President Richards notes as follows:

The Applicant appears to have been covered by the SOVEREIGN ENERGY ENTERPRISE AGREEMENT 2012-2015 (AG2012/7385) (“the Agreement”), which was approved (by the decision in 2012 FWAA 9032) on 23 October 2012, and commenced operation on 30 October 2012. The nominal expiry date of the Agreement is 22 October 2014.

At clause 2 of the Agreement the term “company” is defined as follows:

company means Sovereign Energy Pty Ltd (ABN 81 478 606 752) ATF Sovereign Energy Trust.

Because the Applicant was covered by the Agreement (and this does not appear to be in dispute), the application should refer to the definition of the company given at clause 2 of the Agreement.

Does either party dispute this approach to resolving the matter that has been in dispute as to the proper identity of the company\employer?”

[15] On 28 October 2014 the Applicant’s representative Mr Peter Butler responded as follows:

“Being as good as my word, the Senior Deputy President's decision rests well with me.

The fact that my son was covered by "the Agreement" at all times relevant to his claim ..."appearing not to be in dispute" is comforting to him as it is the very entitlements guaranteed him under that Agreement which form the basis for his action and readily facilitates the calculation of the final quantum of damages sought.”

[16] On 25 November 2014 the application was allocated to me for determination. The application was at that stage listed for Arbitration on 10 December 2014 although to this point the Respondent had not complied with Directions in relation to the filing of material. On 26 November 2014, an email was received from Mr Stuart Clancy of FTI Consulting, advising that Liquidators had been appointed with respect to Sovereign Energy Pty Ltd by resolution of the members of the Company.

[17] On 1 December 2014 I caused correspondence to be sent to the Applicant attaching the Form 505 provided by the Liquidator. That correspondence relevantly stated:

“Correspondence has been received from [the Liquidator] to advise that Sovereign Energy Pty Ltd has been placed into voluntary liquidation and that liquidators were appointed on 10 November 2014. The Documentation attached to the correspondence indicates that the creditors of the Company have applied a voluntary winding up of the Company...

In these circumstances, s.500(2) of the Corporations Act 2001 applies, and provides as follows:

(2) After the passing of the resolution for voluntary winding up, no action or other civil proceedings 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.

Section 58AA of the Corporations Act provides the following definition in relation to the meaning of “court” and “Court”:

“58AA Meaning of court and Court

(1)  Subject to subsection (2), in this Act:

"court" means any court.

"Court" means any of the following courts:

(a)  the Federal Court;

(b)  the Supreme Court of a State or Territory;

(c)  the Family Court of Australia;

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2)  Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court.

Note:          The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts.”

On this basis, I have formed a preliminary view that your application for an unfair dismissal remedy cannot proceed without leave of the Court.

If you have a different view, you are required to inform me of this in writing...”

[18] The Applicant’s representative responded on 9 December 2014 and stated as follows:

“Initially this action was launched by my son against Sovereign Energy Pty Ltd. The Managing Director of that company objected to this, drawing a Senior Deputy President's attention to the SOVEREIGN ENERGY ENTERPRISE AGREEMENT 2012 - 2015 (The Agreement) approved by Commissioner Booth at Brisbane on October 23 2012. It was originally Mr. Lush's contention that the correct respondent should be 'Simon Lush as trustee for the Sovereign Energy Trust'.

However the Senior Deputy President, after examining the relevant EBA and checking the dictionary therein determined that my son's true employer was Sovereign Energy Pty Ltd (ABN 81 478 606 752) ATF the Sovereign Energy Trust. I accepted this without quibble. To me the important issue was to determine that Trent was employed by the Sovereign Energy Trust, no matter the named trustee, and under the terms and conditions as set out in the registered agreement cited above.

A check of the historical record of the ABN noted above will disclose that on October 24 2012, one day after the sealing of The Agreement by Commissioner Booth the words "Sovereign Energy Pty Ltd" were removed from the trust as its trustee. The registered name of the owner of ABN (81 478 606 752) from that date and remains so today is The Trustee for Sovereign Energy Trust. No association with Sovereign Energy Pty Ltd whatsoever at all. The trust holds no shares, the trustee holds no shares on behalf of the trust nor is the trustee a director or an office bearer of any kind.

On the basis of all of this and the prior determination made by a Senior Deputy President as to who Trent's real employer was, I humbly submit to you that it matters naught to my son's action against the trustee and or the trust whether or not Sovereign Energy Pty Ltd has been placed into voluntary liquidation. In my view, but obviously subject to your determination, my son's action remains on foot.”

[19] From the background recounted above it is seen that the Applicant’s response is factually incorrect in some respects. The “action” identified by the Applicant’s representative was not “launched” against Sovereign Energy Pty Ltd. The original application, filed on 2 September 2014 and completed by the Applicant on 9 September 2014, named the Respondent as “The Trustee for Sovereign Energy Trust T/A The Sovereign Energy Trust”. Mr Lush also did not object to the application being brought against the company Sovereign Energy Pty Ltd. Mr Lush objected to the application being amended to name Sovereign Energy Pty Ltd as the Respondent following the Applicant’s filing of the amended application.

[20] Further, Mr Lush, the Managing Director of Sovereign Energy Pty Ltd, did not draw the Senior Deputy President’s attention to the Agreement named by the Applicant’s representative. The Senior Deputy President became aware of that Agreement by the correspondence of the Applicant’s representative on 28 November 2014 in which the Applicant’s representative stated that “[I]t was under the terms and conditions as set out in that agreement that [the Applicant] was employed by the Respondent”.

[21] Also, the Senior Deputy President did not “determine” that any entity was the employer of the Applicant. The email correspondence was not a formal Decision of the Commission. The Senior Deputy President advised the parties that the Applicant “appears” to have been covered by the terms of the Agreement and that the Agreement defined “company” to mean Sovereign Energy Pty Ltd (ABN 81 478 606 752) ATF Sovereign Energy Trust. The Senior Deputy President provided the parties with the opportunity to object to the course of adopting this entity as the Respondent on the basis that it did not appear to be in dispute that the Applicant was covered by the Agreement. The Applicant’s representative accepted this approach. The Respondent did not respond to object to this approach.

[22] The correspondence from Mr Peter Butler of 9 December 2014 and subsequently, appeared to call into question the identity of the Trustee of the Sovereign Energy Trust and to assert that the Trust itself was the employer. Various attempts were made by my Associate to seek clarification from Mr Peter Butler about his assertions and the basis for them. Mr Peter Butler’s responses continued to assert that Senior Deputy President Richards had made a “decision” about the identity of the Applicant’s employer and to demand that the Commission require the production of various documents relating to the Trust and the identity of the Trustee.

[23] Mr Butler also provided a running commentary via email, in which he questioned the competence, honesty and integrity of me and my Associate. Mr Butler continued this conduct to the point where I took the unusual step of corresponding with him directly and informing him that he should desist from making such comments via email and raise any issues with respect to the manner in which his case had been dealt with in a hearing, which I convened for the purpose of receiving clarification from Mr Butler about his contradictory assertions about the identity of the Applicant’s employer.

[24] The matter was listed for hearing on 6 February 2015. The notice of listing, sent to the Respondent at the address that had previously been used by the Commission, was returned, marked “unknown”. Mr Lush did not attend the Hearing of 6 February 2015. A representative of the Liquidator attended the Hearing after being informed that if there was no attendance I would issue an order requiring it.

[25] At this Hearing, Mr Peter Butler on behalf of the Applicant handed up a printout from the Australian Business Register’s “ABN Lookup”. This document, which sets out the “Historical details for ABN 81 478 606 752” recorded details for this ABN the entity name as “THE TRUSTEE (SOVEREIGN ENERGY PTY LTD) FOR SOVEREIGN ENERGY TRUST” for the period of 9 December 2009 to 24 October 2012. The record identified the entity name as “The Trustee for SOVEREIGN ENERGY TRUST” for the period of 24 October 2012 to the current day.

[26] The Applicant was unable to provide any further evidence in relation to the identity of the Trustee or the basis for the apparent assertion that Sovereign Energy Pty Ltd was not the trustee at the point the Applicant was dismissed. The representative of the Liquidator likewise was also not able to clarify this matter. At the conclusion of the Hearing the Commission indicated that it would direct the Liquidator and/or Mr Lush to provide further evidence, in appropriate form, as to the identity of the Trustee for the period of the Applicant’s employment and that the matter would be further listed.

[27] Directions were issued by email and by express post to Mr Lush on 9 February 2015. The Commission sent the Directions to Mr Lush to his registered address on the ASIC records in relation to his position as Director. Australia Post records that this was delivered on 10 February 2015. The Liquidator purported to comply with these directions on 11 February 2015. Mr Lush did not file any material.

[28] On 16 February 2015 the Commission issued further directions to Mr Lush and the Liquidator as the material filed by the Liquidator was not sufficient to clarify the matter any further. The matter was listed for hearing on 20 February 2015. The Commission also issued a formal Order requiring Mr Lush to attend that hearing and drew Mr Lush’s attention to s.677 of the Act as relates to offences in relation to attending before the Commission. Further, the Commission directed the Liquidator to bring the Directions and the Order requiring attendance to the attention of Mr Lush.

[29] Within 30 minutes of the Commissions Directions and Order to attend, and for the first time since 27 October 2014, Mr Lush corresponded with the Commission. Mr Lush provided the ABN lookup document handed up by the Applicant upon which he had placed an asterisk. My Associate responded to advise Mr Lush that that was insufficient and that he was further requested to file an affidavit “clearly setting out the identity of the Trustee for the Sovereign Energy Trust, including the Trust Deed, and any submissions the Respondent wishes to make about the true identity of the Applicant’s employer for the [period of the Applicant’s employment]”. Mr Lush sought and was granted leave to appear at the Hearing by telephone.

[30] On 18 February 2015 a lawyer filed an affidavit of Mr Lush but did not otherwise file an appearance in the matter. Mr Lush’s affidavit in full stated:

“I am a Director of Sovereign Energy Pty Ltd (Sovereign Energy) which is the Company Trustee of the Sovereign Energy Trust ABN 81 478 606 752.

Attached and annexed to this affidavit and marked SPL-1 is a copy of the Sovereign Energy Trust Deed and Deed of Amendment outlining the structure identifying the Trustee.

Attached and annexed to this affidavit and marked SPL-2 is a copy of the ABN current details outlining that the entity is a Fixed Unit Trust.

During the dates of 22 April 2013 to 25 August 2014, the entity operated out of the Fixed Unit Trust with the ABN 81 478 606 752.” 1

[31] The Hearing on 20 February 2015 coincided with the period during which Brisbane was expecting some effect from Cyclone Marcia. On that basis the Commission offered the Applicant and his representative the opportunity to also appear by telephone and the Applicant’s representative Mr Peter Butler consented to this course.

Conclusion

[32] The application subject of these proceedings is an application for an unfair dismissal remedy made under Part 3-2 of the Act. By virtue of s. 397 of the Act the Commission is required to hold a hearing in relation to a matter arising under Part 3-2 to the extent that the matter involves disputed facts.

[33] This matter involved disputed facts. That there was no basis for the dispute as articulated by Mr Peter Butler or that it was based on a misunderstanding about the nature of trusts and trustees, is not relevant. Mr Peter Butler on behalf of the Applicant put in issue the identity of the Trustee of the Sovereign Energy Trust. The Commission sought to efficiently resolve this issue between the parties and when the facts remained in dispute, to conduct a hearing in accordance with the requirements of the Act.

[34] Mr Peter Butler’s queries on behalf of the Applicant could have been addressed with very little inconvenience had the Respondent afforded the Commission the common courtesy of answering telephone calls and correspondence. The Respondent has not assisted the Commission in any way until compelled to do so by an Order of the Commission. This should not have been necessary.

[35] The Liquidator has also not assisted the efficient conduct of this matter. Much time was wasted in explaining to the Liquidator why the Commission sought information or seeking participation by the Liquidator, when the reasons this information was required were obvious. I consider it is incumbent upon a Liquidator, as Administrator of the affairs of a company, to assist the Commission by the provision of relevant information. Had relevant information been provided when requested, the matter would most likely have been resolved a long time ago. I do note however that eventually the Liquidator did assist the Commission and appeared before the Commission as requested without the need for the Commission to issue formal orders.

[36] I accept that Mr Peter Butler was attempting to assist his son, in difficult circumstances. I also accept that much of his frustration stemmed from a lack of understanding of the process and procedure relating to matters before the Commission and legal issues associated with Trusts. However, these difficulties did not justify the rudeness of his correspondence and the entirely inappropriate manner in which he articulated his issues.

[37] The issue for determination is: Was Sovereign Energy Pty Ltd the employer of the Applicant? If it was, then the application cannot proceed except by leave of the Court.

[38] The material before the Commission identifies that the Applicant does not necessarily dispute that Sovereign Energy Pty Ltd was, at least at one point, the corporate trustee of the Sovereign Energy Trust. As I understand it the Applicant was attempting to submit either that the Trust itself was the employer of the Applicant or that the Trustee was replaced prior to the Applicant’s employment commencing and therefore it was the new Trustee that was in fact the Applicant’s employer.

[39] It is convenient that the second matter is dealt with first. The Applicant’s representative has maintained that “[I]n all documentation provided by the company to [the Applicant] it nominated itself either as Sovereign Energy Pty Ltd or simply as Sovereign Energy”. During the course of Hearings in this matter the Applicant was unable to point to any other legal entity that he contended was the actual employer of the Applicant; other than the Trust itself. On the basis of the material eventually provided by the Respondent, any other legal entity capable of having employed the Applicant was not identifiable by either the Commission or the Applicant.

[40] It is also the case that if the Applicant entered into a contract of employment with Sovereign Energy Pty Ltd - as appears to be the case - this contract of employment could not have transferred to another employing entity without the Applicant’s agreement. This means that even if Sovereign Energy Pty Ltd ceased to be the trustee and was replaced by another entity, the Applicant’s employment with Sovereign Energy Pty Ltd did not transfer to that new entity. The Applicant has not contended that a new contract of employment was entered into and there was no evidence that even raised the possibility that this was the case.

[41] However, on the basis of the material now filed by Mr Lush I am satisfied that Sovereign Energy Pty Ltd was at all times relevant to this matter the corporate trustee of the Sovereign Energy Trust. The Trust Deed is in evidence in this matter and I rely upon it. It is also apparent that there has been no change to the identity of the Trustee. At all relevant times, Sovereign Energy Pty Ltd has been the Trustee for the Sovereign Energy Trust. The only change has been a change in the shareholders of Sovereign Energy Pty Ltd. This does not affect its role as Trustee.

[42] The first question is more complicated. Halsbury’s Laws of Australia defines ‘trust’ as follows:

“A person who, either alone or jointly with another or others, has property which he or she holds, or rights which he or she is bound to exercise, for or on behalf of a person or persons or for the accomplishment of some particular purpose or purposes, holds the property or rights in trust for that person or those persons or that purpose or those purposes and is called a trustee.” 2

[43] And further:

“In that description a trust is treated as a ‘relationship’” 3

[44] A trust is not a separate legal entity capable of employing a person. It is a legal construct defining a relationship between separate entities. Ordinarily, it is the trustee - either a corporate trustee or a person - who has the power under the trust Deed to employ. The fact that a Trust may have an ABN (as in the present case) for taxation purposes and associated reporting does not alter the fact that it is the Trustee and not the Trust that is the employer.

[45] The employer of the Applicant was Sovereign Energy Pty Ltd as Trustee for the Sovereign Energy Trust. The Applicant’s claim for unfair dismissal remedy should be against Sovereign Energy Pty Ltd and that entity is in liquidation. The Corporations Act2001 operates to prevent this application being proceeded with without leave of the Court.

[46] There is no evidence before me that leave of the Court has been obtained or is being sought. The application cannot proceed and is stayed. The Applicant is to notify the Commission within 28 days of the date of this decision as to whether leave of the Court has been sought or is intended to be sought. Absent such notification the application will be dismissed.

DEPUTY PRESIDENT

 1   Affidavit of Mr Simon Paul Lush dated 18 February 2015.

 2  LexisNexis, Halsbury's Laws of Australia, (at 20 April 2012) 430 Trusts, 'I Nature and Creation of Trusts [430-1].

 3   Ibid.

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