Sergio Houbron v Ofinac Acoustical Engineers Pty Ltd (In Liquidation)

[2024] FWC 2130

[2024] FWC 2130

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.365—General protections

Sergio Houbron
v

Ofinac Acoustical Engineers Pty Ltd (In Liquidation)

(C2024/3891)

DEPUTY PRESIDENT ROBERTS SYDNEY, 12 AUGUST 2024

Application to deal with contraventions involving dismissal – jurisdictional objection – Respondent in voluntary winding up

1. The issue raised in these proceedings is whether, in the absence of leave from a court, the operation of s.500(2) of the Corporations Act 2001 (Corporations Act) means that an applicant is unable to commence or proceed with an application under s.365 of the Fair Work Act 2009 (the Act) in circumstances where the respondent to the application is a company in respect of which there has been a resolution for a voluntary winding up.

Background

1. On 7 June 2024, Mr. Sergio Houbron (the Applicant) lodged an application under s 365 of the Act alleging contraventions of the general protections provisions of the Act by his former employer Ofinac Acoustical Engineers Pty Ltd (in liquidation) (OAE).

1. On 15 July 2024 the Commission received correspondence from an insolvency firm Dye & Co Pty Ltd, advising that OAE had been placed into liquidation and that Mr. Nicholas Giasoumi and Mr. Shane Deane (the liquidators) from that firm had been appointed, jointly and severally, as liquidators of OAE on and from 24 May 2024. Mr. Giasoumi contended that by operation of s.500(2) of the Corporations Act the Commission was unable to deal with the application in the absence of an order from a relevant court.

1. Section 500(2) provides as follows:

500 Execution and civil proceedings
(1) ...
(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) ...

1. The Applicant accepted that, on the basis of the information provided by liquidators, OAE was being voluntarily wound up by a “creditors voluntary winding up” as that term is defined in the Corporations Act.[1] The Applicant also accepted that there had been a resolution for a voluntary winding up within the meaning of s.500(2).

1. The Applicant provided written submissions in which he argued that s.500(2) did not apply to the present application because an application under s.365 of the Act was not an “action or other civil proceeding” within the meaning of that subsection. The Applicant said that applying the ordinary principles of statutory construction and having regard to the nature of an application under s.365, the limitation in s.500(2) did not apply to the present matter.

1. The Applicant argued that when properly construed, two “conditions” emerged from the expression “action or other civil proceedings”. First, it was said that the term applies to proceedings or legal steps brought before a court. Secondly, that the expression applies to matters in which an adjudication, legal remedy or determination of legal rights, obligations or responsibilities is sought. The applicant said an application under s.365 of the Act satisfied neither of these conditions and consequently, s.500(2) does not apply.

1. The Applicant submitted that s.365 permitted the Commission to deal with the dispute under s.368 but that this only permitted the Commission to deal with a matter by, for example, mediation or conciliation or by expressing an opinion[2] and not in a way that involved a determination of the legal rights of the parties or an adjudication of the dispute. They pointed out that ss.595(3) and 368(1) of the Act have the effect of preventing the Commission from arbitrating the dispute and that s.369(1) provides that the Commission may only arbitrate the dispute if the parties agree.

1. The Applicant referred to the decision in Woolley v. Glenjac t/as Aussie Farmers Direct[3] where then-Vice-President Hatcher said in relation to a proposed consent arbitration under s.369:

I do not consider that there can be any serious question that the consent arbitration proceeding before the Commission is a civil proceeding for the purposes of s.500(2) of the Corporations Act. The matter therefore cannot proceed absent Mr Woolley obtaining the leave of a relevant court.[4]

1. It was argued that the present matter was distinguishable because there is no question of the determination of legal rights in the present case and that to the extent his Honour’s views in Woolley support a conclusion that s.500(2) might apply here, it should be recalled that the Commission in Woolley was proposing to exercise powers in circumstances where the parties had agreed that it should do so as a private arbitrator and not as a court.

1. The Applicant also referred to the decision of her Honour Schmidt J in WorkCover Authority of New South Wales (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In liquidation) & Ors[5] (Maltby). In that case, her Honour considered the expression “action or other civil proceedings” and contrasted it with the limitation appearing in s.471B of the Corporations Act which applied to “a proceeding in a court” in circumstances of involuntary winding up under Part 5.4B of that Act. Her Honour there concluded that s.471B required leave of the court to begin or proceed with any proceeding in a court, whether civil or criminal but that s.500(2) only required leave to proceed with, or commence, civil proceedings and actions.

Consideration

1. I am not persuaded by the Applicant’s submissions. I see no reason for reading into s.500(2) a limitation that the subsection only applies so as to restrict it to an action or other civil proceeding commenced or proceeded with in a court. Maltby certainly does not stand for that proposition. As was noted in that case there are other sections of the Corporations Act that make express reference to, and limit, “proceedings in a court”, sections 471B and 440D amongst them. Had the legislature intended that s.500(2) be so limited, it is to be expected that it would have used the same words to achieve that result. The fact that it did not do so supports a conclusion that no such requirement is contained in the subsection. It is also well established that unfair dismissal proceedings in the Commission come within the scope of s.500(2).[6]

1. Nor do I consider that s.500(2) only has work to do in the case of an action or other civil proceeding that involves a determination or adjudication of legal rights as contended for by the applicant. To the extent the submission is referring to the exercise of judicial power, it may be readily accepted that the Commission does not and cannot exercise such power. But in conducting a conference under s.368 of the Act in response to an application under s.365, the Commission is discharging a statutory function in the course of a proceeding which is unarguably civil in nature. The Corporations Act does not define “civil proceedings” but as Schmidt J observed, it does define “civil matter” in s.9 as being a matter other than a criminal matter. In the exercise of its function under s.368, the Commission is required to form a view as to whether the requirements of s.368(3)(a) have been met and if so, to issue a certificate which will permit a court application to be made[7]. The broad term “action”, qualified by the words “or other civil proceeding” is apt to describe a matter of this kind, as is the expression “other civil proceeding” itself.

1. In my view, while the expression “action or other civil proceeding” may be confined in the sense of not encompassing matters which are criminal in nature, it is nonetheless clearly broad enough to cover a proceeding of this kind. It is simply not to the point that the Commission proceeding involves no final determination in respect of alleged contraventions of the Act.

1. The Applicant urged that in the event the arguments were not accepted, the matter should be stayed to permit an application to be made to seek the leave of the court to allow the matter to proceed. I propose to adjourn the proceeding under s.589 for a period of eight weeks for that purpose.

1. The Applicant is directed to advise the Commission and the liquidators as to the status of any proposed application by no later than 4pm 7 October 2024.

DEPUTY PRESIDENT

[1] See s.9.

[2] See s.595(2).

[3] [2014] FWC 7833.

[4] Ibid at [17].

[5] [2002] NSWIRComm 226 (9 June 2022). See also Orr v LakeCoal Pty Limited [2019] NSWDC 178and Cowie v G D Pork Pty Ltd (in liquidation) [2022] WASC 301.

[6] Grujevski v. Queens Wharf Brewery[2014] FWC 3725. See also ABC Developmental Learning Centres Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2010] FWA 7679

[7] Section 370(a)(i).

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