Robinson v BMF Pty Ltd (in liq)

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FEDERAL COURT OF AUSTRALIA

Robinson v BMF Pty Ltd (in liq) [2021] FCA 1064

File number: VID 798 of 2020
Judgment of: MORTIMER J
Date of judgment: 3 September 2021
Catchwords:

CORPORATIONS – application for leave to proceed against company in liquidation under s 500(2) of the Corporations Act 2001 (Cth) – consideration of factors relevant to application for leave to proceed – application refused

INDUSTRIAL LAW – where relief sought in substantive proceeding arises from claimed employment entitlements and alleged contraventions of the Fair Work Act 2009 (Cth)
Legislation:

Corporations Act 2001 (Cth)

Fair Work Act 2009 (Cth)
Cases cited:

BBY Ltd (Recs and Mgrs Apptd) (in liq); Re BBY Holdings Pty Ltd (Recs and Mgrs Apptd) (in liq) [2019] NSWSC 352; 135 ACSR 36

Commonwealth v Davis Samuel Pty Ltd (No 5) [2008] ACTSC 124; 68 ACSR 336

Eopply New Energy Technology Co ltd v EP Solar Pty Ltd [2013] FCA 356

Fair Work Ombudsman v Blue Sky Kids Land Pty Ltd (in liq) [2020] FCA 718

Gothard v Davey [2010] FCA 1163; 80 ACSR 56

Oceanic Life Ltd v Insurance and Retirement Services Pty Ltd (in liq) (1993) 11 ACSR 516

Palace v RCR O’Donnell Griffin Pty Ltd (in liq) [2021] QCA 137

Re Branded Media Holdings Pty Ltd (in liq); Re Brand New Media Pty Ltd (Subject to A Deed of Co Arrangement) [2020] NSWSC 557

Re DSHE Holdings Ltd (Recs and Mgrs Apptd) (in liq) [2018] NSWSC 82

Seeley International Pty Ltd v Millennium Electronics Pty Ltd (in liq) (No 2) [2020] SASC 211

Seymour Whyte Constructions Pty Ltd v Ostwalk Bros Pty Ltd (in liq) [2018] NSWCA 139
Registry: Victoria
Division: Fair Work Division
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 46
Date of last submissions: 4 August 2021
Date of hearing: Determined on the papers
Solicitor for the Applicant: Bartlett Workplace Lawyers
Counsel for the First Respondent: Mr J Evans
Solicitor for the First Respondent: Madgwicks Lawyers
Counsel for the Second Respondent: Mr R A Millar
Solicitor for the Second Respondent: HWL Ebsworth

ORDERS

VID 798 of 2020
BETWEEN:

JEFFREY ROBINSON

Applicant
AND:

B.M.F. PTY LTD (ACN 005 112 103)

First Respondent

IAN WRIGHT

Second Respondent

ORDER MADE BY:

MORTIMER J

DATE OF ORDER:

3 SEPTEMBER 2021

THE COURT ORDERS THAT:

1.The application pursuant to s 500(2) of the Corporations Act 2001 (Cth) for leave to proceed against the first respondent be refused.

2.Any submissions relating to the costs of the application for leave to proceed are to be filed and served on or before 4pm on 16 September 2021, such submissions to be no longer than 3 pages.

3.In the absence of any submissions being filed pursuant to order 2, there be no order as to the costs of the application for leave to proceed.

4.If submissions are filed pursuant to order 2, the question of costs will be determined by the Court on the papers.

5.The proceeding be referred to further mediation before a Judicial…

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Details
Case
[2021] FCA 1064
Decision Date

CaseChat Overview and Summary

In Robinson v BMF Pty Ltd (in liq), Mr Robinson applied for leave to proceed against BMF Pty Ltd, a company in liquidation, under section 500(2) of the Corporations Act 2001 (Cth). The application was made in the context of a substantive proceeding concerning employment entitlements and alleged contraventions of the Fair Work Act 2009 (Cth). The primary legal issue before the court was whether leave should be granted for Mr Robinson to continue the action against the company in liquidation, considering the company’s financial status and the potential implications of allowing the proceedings to proceed.

The court examined various factors relevant to the application for leave, including the importance of the subject matter to Mr Robinson, the potential for waste of resources, and the stage of the proceeding. The court concluded that, while the proceeding was still at an early stage, there was no significant prejudice to Mr Robinson if leave were not granted. Additionally, the court noted that the liquidator had not engaged in substantial conduct of the proceeding to a point where resources would be wasted if leave were not granted. Given these considerations, the court decided to refuse the application for leave, stating that all relevant matters could be explored at trial.

The court also addressed the question of costs, indicating that Mr Robinson’s conduct may have been somewhat over-zealous and misguided but did not warrant an order for costs at that juncture. The court allowed the parties an opportunity to be heard on the question of costs if they wished, with any submissions to be filed by a specified date. Furthermore, the court ordered that the proceeding be referred to further mediation between Mr Robinson and the second respondent, Mr Wright, reflecting the court's decision that the mediation should proceed between these parties alone.

The final orders included the refusal of leave to proceed against BMF Pty Ltd, a deadline for submissions on the costs of the application, a conditional order for the determination of costs if submissions were filed, and a referral to further mediation between the applicant and the second respondent. These orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The application pursuant to s 500(2) of the Corporations Act 2001 (Cth) for leave to proceed against the first respondent be refused.

2. Any submissions relating to the costs of the application for leave to proceed are to be filed and served on or before 4pm on 16 September 2021, such submissions to be no longer than 3 pages.

3. In the absence of any submissions being filed pursuant to order 2, there be no order as to the costs of the application for leave to proceed.

4. If submissions are filed pursuant to order 2, the question of costs will be determined by the Court on the papers.

5. The proceeding be referred to further mediation before a Judicial Registrar, between the applicant and the second respondent.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The proceeding is still at an early stage, and in that sense there is no prejudice to Mr Robinson in relation to the conduct of the proceeding to this point if leave is not granted – in the sense that it is not as if BMF has engaged in substantial conduct of the proceeding to a point where resources would be wasted if leave were not granted.CONCLUSION For these reasons, leave to proceed against BMF will be refused. The liquidator sought in his written submissions to be heard on the question of costs. A substantial part of this proceeding is covered by the terms of s 570 of the Fair Work Act. I would not at present be inclined to see that Mr Robinson’s conduct to this point falls within the terms of s 570(2), but the liquidator may wish to be heard on that matter. As I have observed, the subject matter of this proceeding is of great importance to Mr Robinson and his concern at the corporate contortions which appear to have occurred, at least to some extent at the instigation of or with the involvement of Mr Wright, is understandable. It may turn out to be the case that there is nothing impermissible or unlawful in anything that has occurred – all these matters may be explored at trial (or may not). However, Mr Robinson’s concern is understandable. While he and his legal representatives may have been over-zealous, and sometimes somewhat misguided, in how various issues have been pursued, I would not at present be inclined to see that sounding in any order for costs. However, the parties will be given an opportunity to be heard on this question if they so wish, and their submissions will be fully considered. The Court’s conclusion means the mediation in the proceeding – now between Mr Robinson and Mr Wright, should proceed. The present mediation referral has been extended several times at the request of the parties, and it is now more appropriate for a new referral to be made, reflecting the Court’s decision, so that the mediation will occur only between the applicant and the second respondent.

Ratio Decidendi

Legal Principle Established

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