Australian Liquor, Hospitality & Miscellaneous Workers Union v Home Care Transport Pty Ltd

REASONS FOR JUDGMENT 1 The present case concerns whether the Australian Industrial Relations Commission ("the AIRC") is a "court" for the purposes of s 471B of the Corporations Act 2001 (Cth) ("the CA"). Section 471B provides: "While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property; except with the leave of the Court and in accordance with such terms (if any) as the Court imposes." 2 The plaintiff ("the Union") has applied to the Federal Court, which is "the Court" for the purposes of s 471B, for leave to begin or proceed with a proceeding against the respondent in the AIRC seeking orders under s 170FA of the Workplace Relations Act 1996 (Cth) ("the WRA") to give effect to Article 12 or Article 13 of the Termination of Employment Convention in relation to the termination of employment of certain employees of Home Care Transport Pty Ltd ("the company"). The orders sought would confer an entitlement upon the employees to greater retrenchment entitlements than were conferred under their individual contracts with the company. 3 The Union made its application to the AIRC under s 170FA of the WRA on 16 January 2002. However, prior to the application being made the company had been placed under administration under Pt 5.3A of the CA. The Union's application came on for hearing in the AIRC before Commissioner Smith on 16 January 2002 but was adjourned sine die after the Commissioner raised the question of whether the Union was required to obtain leave to continue the proceeding: see s 440D of the CA. On 15 January 2002 the creditors of the company voted that it be placed in liquidation. The administrator, Andrew Leonard Dunnard, was duly appointed as the liquidator of the company 4 The Union wishes to amend its application to the AIRC and then to proceed to obtain orders under s 170FA. The Union alleges that if the orders it seeks are made the relevant former employees of the company will receive priority in respect of their retrenchment entitlements under s 556(1)(h) of the CA and, in the event that there are insufficient funds to pay those entitlements, those employees will be eligible to apply to make up the deficiency under an employee entitlement scheme of the Commonwealth Government ("the Commonwealth employee entitlements scheme"). 5 Although the Union has applied for leave to proceed under s 471B of the CA its primary contention is that, as the AIRC is not a court, it is not obliged to apply for leave to proceed in order to continue its proceeding in the AIRC. However, as the AIRC has taken the view that leave is necessary, the Union has sought a declaration that no leave is required for it to begin or proceed with a proceeding under s 170FA in the AIRC. The liquidator, who did not appear on the Union's application, consents to leave being granted. 6 A "court" is defined for the purposes of the CA in s 9, which provides that, unless the contrary intention appears, a "court" and a "Court" have the meanings given by s 58AA. Section 58AA provides: "(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 9.7, be brought in any court." 7 Clearly, the words "any court" are intended to have the same meaning in ss 58AA(1) and (2). Under s 58AA(2) the federal legislature has enabled jurisdiction to be exercised in certain matters under the CA by "any court" and has thereby reposed the exercise of federal judicial power in a matter under the CA in courts other than those defined as a "Court" in s 58AA(1). The conferral of jurisdiction in that regard is similar to that provided for by s 58AA of the Corporations Law which provided that "court" means "any court when exercising the jurisdiction of this jurisdiction". It was held that "jurisdiction" where it first appears in the old Corporations Law definition refers to the curial jurisdiction conferred by the corporations legislation on courts with respect to the geographical jurisdiction of the relevant State or the Australian Capital Territory: see Helm v Hansley Holdings Pty Ltd (In liq) [1999] WASCA 71 ("Helm") at [5] and Brian Rochford Ltd (administrator appointed) v Textile Clothing and Footwear Union of New South Wales (1998) 47 NSWLR 47 ("Rochford") at 56-57. The Explanatory Memorandum to the Corporations Legislation Amendment Bill 1994 (which introduced s 58AA) states that, in the absence of any clear expression to the contrary, the amendment provides for certain civil proceedings under the Corporations Law to be brought in lower, as well as superior, courts (see paras 65-66 and 104-108). 8 Plainly, in conformity with Ch III of the Constitution the AIRC was not intended to be a federal curial tribunal in which the judicial power of the Commonwealth was to be reposed in respect of matters arising under the CA. The primary function of the AIRC is to exercise the non-judicial powers of conciliation and arbitration and to make awards settling industrial disputes by creating legal rights and obligations. The AIRC cannot have reposed in it the judicial power of entertaining disputes that require the determination of the existence or enforcement of legal rights and obligations as that is a function of a Ch III court: see R v Kirby; Ex parte Boilermaker's Society of Australia (1957) 95 CLR 529 and Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 at 663-666. Accordingly, the legislature could not be taken to have intended that a tribunal such as the AIRC, which is not a Ch III court, be a "court" for the purposes of s 58AA. Rather, the implicit legislative intent in s 58AA(2), which is mandated by Ch III of the Constitution, is that federal judicial power in respect of matters arising under the CA be exercised only by State and Federal courts in whom such a power may be vested in accordance with Ch III of the Constitution. Under Ch III federal judicial power may only be vested in Federal and State courts. As federal jurisdiction can be vested only in State tribunals that are "courts" for the purposes of s 71 of the Constitution those tribunals, which are to be taken as they are found, must be courts in the Ch III sense in that they are tribunals suitable for the exercise of federal judicial power: see for example Kable v Director of Public Prosecutions (1996) 189 CLR 51 at 102-103 per Gaudron J. The constitutional and legislative history of the AIRC makes it quite clear that it is not a court in the Ch III sense and therefore it is not a court as defined in s 58AA. 9 It follows that if the AIRC is to be a court for the purpose of s 471B there must be a "contrary" legislative intention that the definition of a "court" in s 58AA is not to apply to s 471B and the AIRC must be found to be a "court" in a general, if not in the Ch III, sense. 10 In Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497 ("Dao") the New South Wales Court of Appeal held that the Equal Opportunity Tribunal was "a court" for the purposes of an indemnity certificate under the Suitors' Fund Act 1951 (NSW). Kirby P (with whom Samuels JA agreed) concluded (at 514) that given the history and purpose of the Suitors' Fund Act 1951 (NSW), the increase in the number and kind of statutory tribunals since that Act was enacted, and the appellate relationship between the Equal Opportunity Tribunal and the Supreme Court, it was unlikely that the protection of the Act was not intended to be available. 11 In adopting a similar approach McHugh J observed (at 515): "The meaning of a statutory word or phrase is best ascertained when considered in its context and with the author's purpose in using it in mind. In ordinary usage the word 'court' has many meanings: they range from the group who form the retinue of a sovereign to an area used to play certain ball games. Legal usage also gives the word several meanings. Thus a 'court' may refer to a body exercising judicial power as in the Constitution, Ch III, or to a body exercising non-judicial power such as the Coroners Court or to a court of petty sessions hearing committal proceedings. It may even refer to a body exercising judicial and arbitral powers such as the former Commonwealth Court of Conciliation and Arbitration or the Queensland Industrial Court. There is no a priori reason which prevents a body which determines rights and is presided over by a District Court judge from being a 'court' even though it is not called a court and has lay members. Function and purpose, not labels, should be our guides." 12 McHugh J concluded (at 516): "The word 'court' should…be given a liberal and beneficial construction to accord with the purpose and policy of the Act. The correct approach is for the Court to ask itself whether, bearing in mind the general purpose of the Suitors' Fund Act, Parliament must be taken to have intended that the Tribunal should qualify as a court? I think that that question should be answered in the affirmative." 13 Adopting a similar approach to statutory construction the Full Court of the Western Australian Supreme Court in Helm held that the Western Australian Industrial Relations Commission was a court for the purposes of the leave provision in s 471B of the Corporations Law and the New South Wales Supreme Court in Rochford held that the New South Wales Industrial Relations Commission was a court for the purposes of the leave provision in s 440D of the Corporations Law. 14 Although there are significant differences between the State tribunals considered in Helm and Rochford, which unlike the AIRC exercise judicial and arbitral powers, in both Helm and Rochford reliance was placed on the purpose of the relevant statutory provisions. In Helm, Kennedy J (with whom Anderson and Parker JJ agreed) observed at [17]: "The purpose underlying s 471B is the same as that underlying the former s 218 of the Companies Act 1936 (NSW), of which McClelland CJ in Equity said in Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646, at 649-650, the purpose was 'to ensure that the assets of the company in liquidation will be administered in accordance with the provisions of the Companies Act and that no person will get an advantage to which, under those provisions, he is not properly entitled, and to enable the Court effectively to supervise all claims brought against the company which is being wound up'. The process provided by the Corporations Law is for creditors to lodge proofs of debt with the liquidator. If they are dissatisfied with a decision of the liquidator, their remedy is to appeal to the Supreme Court from that decision under s 1321 of the Corporations Law. If the claim is admitted, then and only then, s 556, which deals with priority debts and claims, will operate…" 15 In Rochford, Austin J observed at 58: "When one reflects on the legislative intention underlying s 440D, it is evident that the purpose of the section would be frustrated if the definition of 'court' in s 58AA were applied, because the general moratorium on legal proceedings which is necessary to enable the administrator to discharge the statutory function imposed by Pt 5.3A would then largely evaporate." 16 While Austin J was referring to a wide range of curial proceedings that would fall outside s 440D if the s 58AA definition were adopted, the same point may be made about state and the federal industrial relations tribunals, which may not be courts in the Ch III sense (as defined in s 58AA), but whose awards and orders can nonetheless have significant consequences for the property and affairs of a company in administration or in liquidation. If the s 58AA definition of a "court" were adopted for the purpose of ss 440D and 471B the proceedings of those tribunals would fall outside the purview of the leave provisions and, to that extent, defeat or undermine the purpose of those provisions. 17 Thus, for substantially similar reasons to those given in Helm and Rochford I have concluded that a "court" in s 471B (and it would follow s 440D) is not intended to be a court in its defined meaning in s 58AA and, accordingly, there is a contrary legislative intention in respect of those provisions. 18 But is the AIRC a court for the purposes of s 471B? In Rochford (at 62) Austin J, who carefully reviewed the authorities that have considered whether a particular tribunal is or is not a court for a particular legislative purpose, concluded: "…nothing more concrete emerges than that: (i) there are no conclusive, generally-applicable criteria for classifying the body as a court; (ii) the answer in each case depends on the particular statutory question to be decided; and (iii) the answer is to be supplied in light of a close consideration of the statutory constitution and functions of the body in question." 19 Under the WRA the AIRC is a Commission consisting of a President, 2 Vice-Presidents, Senior Deputy Presidents, Deputy Presidents and Commissioners (s 8). Each Presidential member has the same rank, status and precedence as a Judge of the Federal Court (s 9(2)). Although a number of senior members of the AIRC, including the President, are judges, that is not a pre-requisite and legal practitioners of at least 5 years standing may be appointed by the Governor-General as members of the AIRC (s 10). Presidential members, like federal judges, can only be removed from office by an address presented to the Governor-General by both Houses of Parliament on the grounds of proved misbehaviour or incapacity (s 24). 20 The AIRC may refer a question of law arising in a matter before it for the opinion of the Federal Court (s 46(1)). A primary function of the AIRC is to prevent and settle industrial disputes by conciliation and arbitration (s 89(a)). The AIRC is required to "carefully and quickly inquire into and investigate the industrial dispute" (s 110(1)). The AIRC has a wide discretion as to its procedure and is not bound by any rules of evidence (s 110(2)). The AIRC also has wide discretionary powers under s 111, including taking evidence on oath or affirmation, conducting its proceedings in public or in private and generally giving directions for a speedy and just hearing and determination of an industrial dispute. Awards made by the AIRC create legally enforceable rights and obligations. Subject to an appeal to a Full Bench, awards of the AIRC are final and binding and cannot be called in question in any court (s 150(1)). Awards of the AIRC prevail over State laws which are invalid to the extent of any inconsistency. The AIRC has no power to enforce its awards, which are primarily enforced by the Federal Court or other courts of competent jurisdiction (Pt VIII). The AIRC is bound to act judicially, one aspect of which is the duty to hear a party and allow that party a reasonable opportunity to present that party's case: see Re The Australian Bank Employees Union; Ex parte Citicorp Australia Ltd (1989) 167 CLR 513 at 519. The above features are consistent with the accepted view that the AIRC is an administrative, rather than a curial, tribunal. 21 Given the constitutional and legislative history of the AIRC, and the exclusion of the exercise of judicial power from its jurisdiction, there is little in the framework or trappings set out above that would suggest that it is appropriately described as a court. However, the AIRC has power to take evidence on oath or affirmation; its proceedings involve parties who are usually represented; its awards are final and binding and affect the rights of subjects; it has a duty to act judicially; the President and a number of its members are judges; all presidential members have the rank, status and security of tenure of judges and; aspects of the procedures and powers of the AIRC are features that may be found in a court. Without more, however, these features would not be sufficient to warrant the conclusion that the AIRC is a court. 22 There are, however, two further matters. The first is that the legislature can be taken to have assumed that State industrial tribunals of the kind found to be courts in Rochford and Helm would be courts for the purposes of s 440D and 471B of the CA. There is nothing to indicate that the legislature, in enacting s 58AA of the CA, intended to change the law in that regard. In those circumstances it is most unlikely that the legislature would intend to treat the AIRC, which has a broader power and capacity to make awards affecting the property and affairs of a corporation than its State counterparts, in any different manner. 23 The second matter is that it is difficult to discern any reason for excluding an industrial tribunal, such as the AIRC, from the ambit of ss 440D and 471B. Indeed, given the capacity of awards to be made in respect of employees' entitlements, which may prejudice the rights of other unsecured creditors, I would expect a positive legislative intent to include the AIRC and similar industrial tribunals within the purview of the s 471B. 24 In Dao (at 516) McHugh J stated that the question to be asked is whether, bearing in mind the general purpose of the relevant legislative provision, Parliament must be taken to have intended that the tribunal in question should qualify as a court. The two matters set out above have led me to conclude, although not without doubt, that that question is to be answered in the affirmative in the present case. As was observed by Lord Diplock in "The Courts as Legislators" in The Lawyer and Justice (Sweet and Maxwell) at 274: "if…the Courts can identify the target of Parliamentary legislation their proper function is see that it is hit; not merely to record that it has been missed." See also McHugh JA in Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 424. 25 Having concluded that the AIRC is a court for the purposes of s 471B there can be little doubt that the present application by the Union before the AIRC is "a proceeding in a court". In that regard a proceeding has been held to include an arbitration: see Re Vassal Pty Ltd (1983) 2 ACLC 53 at 55. 26 In Silvarich v Rathner [2000] VSC 314 Master Evans concluded that the AIRC was not a court for the purposes of s 440D of the Corporations Law. Master Evans arrived at that conclusion because he found that the AIRC is not a "court" upon which the Commonwealth can confer judicial power under Ch III of the Constitution and that, in any event, it is not a court as defined in s 58AA of the Corporations Law. For the reasons set out above neither of those matters is determinative of the question of whether the AIRC is a court for the purposes of ss 440D or 471B. 27 Finally, I turn to consider the question of whether leave should be granted to the Union under s 471B. It is clear the Court has a very broad discretion under provisions requiring leave to bring or continue proceedings during winding up or liquidation, and that it is impossible to state in an exhaustive manner all the circumstances in which leave to proceed may be appropriate: see Ogilvie-Grant v East (1983) 1 ACLC 742 at 744-745. 28 The present case is unusual. The Union is seeking an award which would create rights after the date on which the company was liquidated. If such orders were made they have the potential, depending on whether they are operative against the liquidator, to give priority to former employees to the disadvantage of other unsecured creditors. On the other hand the rights sought to be created are founded on facts and circumstances in existence prior to the liquidation of the company. Further, the Union is also seeking to create employee retrenchment rights for an alternative purpose of entitling the employees to make claims on the Commonwealth government's employee entitlement scheme. In that regard the orders sought, even if they were not operative against the liquidator (a matter upon which I express no view), may afford rights to the employees which a Court should not impede under s 471B. 29 While it may be appropriate in an application under s 471B to consider whether the award sought can create an entitlement in the employees as against the liquidator it is inappropriate that I do so in the circumstances of the present case as the liquidator has consented to the grant of leave and, even if the claims might not be operative against the liquidator, the Union, acting on behalf of the employees, is seeking to make available to those employees the alternative avenue of pursuing the claims under the Commonwealth government's employee entitlement scheme. 30 For the above reasons I have concluded that it is appropriate to grant the leave sought by the Union although that leave should be subject to a condition that the Union undertake that it will not, without the leave of the Court, seek to enforce against the defendant any order or award obtained by it from the AIRC under s 170FA of the WRA. Given the unusual features of the present case it seems to me that it is desirable that the undertaking be required