Workers Compensation Nominal Insurer v De Souza Interiors Pty Limited
[2012] FCA 331
•28 February 2012
FEDERAL COURT OF AUSTRALIA
Workers Compensation Nominal Insurer v De Souza Interiors Pty Limited [2012] FCA 331
Citation: Workers Compensation Nominal Insurer v De Souza Interiors Pty Limited [2012] FCA 331 Parties: WORKERS COMPENSATION NOMINAL INSURER ABN 83 564 379 108 v DE SOUZA INTERIORS PTY LIMITED ACN 137 431 157 File number(s): NSD 2184 of 2011 Judge: EMMETT J Date of judgment: 28 February 2012 Legislation: Federal Court of Australia Act 1976 (Cth) s 35A Date of hearing: 28 February 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 11 Counsel for the plaintiff: K Metlej Solicitor for the plaintiff: Craddock Murray Neumann
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2184 of 2011
BETWEEN: WORKERS COMPENSATION NOMINAL INSURER ABN 83 564 379 108
PlaintiffAND: DE SOUZA INTERIORS PTY LIMITED ACN 137 431 157
Defendant
JUDGE:
EMMETT J
DATE OF ORDER:
28 FEBRUARY 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The Registrar’s orders made on 1 February 2012 be set aside.
2.In lieu thereof, the hearing of the originating process of 6 December 2011 be adjourned for further hearing before the Registrar on Friday, 9 March 2012.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2184 of 2011
BETWEEN: WORKERS COMPENSATION NOMINAL INSURER ABN 83 564 379 108
PlaintiffAND: DE SOUZA INTERIORS PTY LIMITED ACN 137 431 157
Defendant
JUDGE:
EMMETT J
DATE:
28 FEBRUARY 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The plaintiff is a workers compensation insurer. The defendant was a party to a workers compensation policy of insurance issued by the plaintiff (the Policy). By creditor’s statutory demand of 5 October 2011, the plaintiff required payment of the sum of $16,262.81, representing a workers compensation insurance premium said to be due and owing by the defendant to the plaintiff, under the Policy and the Workers Compensation Act 1987 (NSW) (the Workers Compensation Act). The demand was not complied with, and the plaintiff commenced a proceeding in the Court, by way of originating process, seeking an order that the defendant be wound up in insolvency, under the provisions of the Corporations Act 2001 (Cth). The proceeding was duly advertised on 24 January 2012, in accordance with the Federal Court (Corporations) Rules 2000.
The originating process was served on the defendant. After service, which was effected on 13 December 2011, the defendant’s accountants forwarded a wages declaration to the plaintiff’s solicitors. The wages declaration indicated that the amount claimed should be significantly reduced. The plaintiff’s solicitors acknowledged receipt, but indicated that the plaintiff would be unable to process the declaration, as the policy number had been omitted from the forms. An amended wages declaration was received on 23 January 2012.
By reason of some oversight in the office of the plaintiff’s solicitors, the plaintiff was not informed of receipt of the wages declaration. Under the terms of the Policy and the Workers Compensation Act, a debt is still due and owing by an insured until such time as a wages declaration is processed.
The originating process came before the District Registrar on 1 February 2012. However, the defendant assumed that, by reason of receipt of the amended wages declaration, the winding up application would not proceed on 1 February 2012. There was therefore no appearance for the defendant on that day.
On 6 February 2012, it became apparent to the plaintiff’s solicitors that the amended wages declaration had not been forwarded to the plaintiff. On 7 February 2012, the amended wages declaration was forwarded, and a letter was sent to the defendant company advising it of the outcome of the processing of the wages declaration. On 8 February 2012, the defendant’s accountant informed the solicitors for the plaintiff that the defendant had ceased trading on 30 June 2011. The statutory demand had been made on the assumption that the company was continuing to trade.
Had the plaintiff been notified of receipt of the amended wages declaration on 23 January 2012, it is unlikely that it would have instructed its solicitors to proceed with the winding up application on 1 February 2012. In the event, of course, the plaintiff’s solicitors were not instructed to seek an adjournment of the proceeding on 1 February 2012. On that day, the District Registrar ordered that the defendant be wound up, that Mr Geoffrey Granger be appointed liquidator, and that the plaintiff’s costs be fixed in an amount of $6,277.56.
Since discovery of the oversight, steps have been taken by the plaintiff, through its solicitors, to inform the Court of all of the above circumstances. That was done by filing of an interlocutory process on 23 February 2012, seeking orders either under rule 39.05 of the Federal Court Rules 2011 or s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act). When the matter was called on for hearing today, the plaintiff indicated that its preference was to move under s 35A of the Federal Court Act. Section 35A(1) provides that certain powers of the Court may, if the Court or a judge so directs, be exercised by a registrar. However, under s 35A(5), a party to a proceeding in which a registrar has exercised any of the powers of the Court under s 35A(1) may apply to the Court to review that exercise of power. Under s 35A(6), the Court may, on an application under s 35A(5), or of its own motion, review an exercise of power by a registrar pursuant to s 35A, and may make such orders as it thinks fit with respect to the matter with respect to which the power was exercised. The making of a winding up order is one of the powers that the Court has directed under s 35A may be exercised by a registrar.
Sections 35A(5) and (6) are a recognition of the fact that registrars are not appointed under Chapter III of the Constitution, and, therefore, that there is a limit to which they may exercise the judicial power of the Commonwealth. Nevertheless, so long as there is a right of review and a power to review by a judge of the Court, an exercise of power by a registrar is otherwise effective.
Clearly enough, matters have miscarried in the present circumstances. The plaintiff’s solicitors have, in effect, made this application of their own motion. The solicitors have informed the Court that they themselves will accept responsibility for any fees to which the liquidator is entitled, and which the liquidator claims for payment. Otherwise, the liquidator had indicated he does not either object or consent to the making of an order now sought in the interlocutory process, he having been served with the interlocutory process and the affidavits in support. The defendant has also indicated, through its accountants, that it wishes the winding up order to be set aside. In all of the circumstances, I consider that it is appropriate that the order of the District Registrar be reviewed.
There is still a question as to what should happen with the winding up application, if the winding up order is set aside. As I have said, the plaintiff would have instructed its solicitors to adjourn the hearing of the matter on 1 February 2012, had it been fully informed of the circumstances.
There were no other creditors supporting the winding up application. However, there is still a debt owing by the defendant to the plaintiff, although its quantum is significantly lower than that upon which the winding up application was founded. I consider that it is appropriate, upon review of the decision of the District Registrar, to order that the hearing of the winding up application be adjourned, rather than that a winding up order be made. I propose to order that the orders made on 1 February 2012 be set aside, and that in lieu thereof, the originating process of 6 December 2011 be adjourned for further hearing before a registrar on 9 March 2012.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 5 April 2012
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