Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Beynon

Counsel for the respondents/cross-claimants: Mr DJ Williams SC and Mr D Luxton

Solicitor for the respondents/cross-claimants: Piper Alderman

Counsel for the cross-respondent: Mr JJ Gleeson SC and Mr SD Hay

Solicitor for the cross-respondent: Wotton & Kearney

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 466 of 2010

BETWEEN: AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

JUDGE: GRAY J DATE OF ORDER: 1 MAY 2013 WHERE MADE: MELBOURNE

1. The application be dismissed.
2. The cross-claim of the cross-claimant Ian Lloyd Beynon against the cross-respondent Stephen Robert Dixon be dismissed.
3. The cross-claim of the cross-claimant Ideal Pty Ltd (ACN 108 616 431) against the cross-respondent Stephen Robert Dixon be dismissed.
4. There be no order as to the costs of the proceeding, or of the cross-claims. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 466 of 2010

BETWEEN: AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

JUDGE: GRAY J DATE: 1 MAY 2013 PLACE: MELBOURNE

The nature and history of the proceeding 1 Forgecast Australia Pty Ltd ("Forgecast") was a corporation, manufacturing metal parts and fittings at premises in Mitcham. It employed a number of people, most of whom were members either of the first applicant, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the AMWU") or the second applicant, the Australian Workers Union ("the AWU"). Each of the AMWU and the AWU had entered into a collective agreement with Forgecast, in respect of the terms and conditions of employment of those employees whose industrial interests each was entitled to represent. Each of those collective agreements contain provisions entitling the employees to payments, calculated according to the respective agreements, if they should be dismissed by reason of redundancy. 2 The first respondent, Ian Lloyd Beynon, was the sole director and secretary of Forgecast. He controlled Forgecast. He also controlled the second respondent, Ideal Pty Ltd ("Ideal"), of which he was also the sole director and secretary. Ideal was the largest secured creditor of Forgecast. Pursuant to a charge over the assets of Forgecast, held by Ideal, Mr Beynon resolved that Ideal would appoint receivers and managers of Forgecast. Two persons were appointed as joint and several receivers and managers ("the receivers"). One of them was the cross-respondent, Stephen Robert Dixon, who exercised the powers of the receivers. 3 For several weeks, Mr Dixon continued to conduct the business of Forgecast. He then terminated the employment of all its employees by reason of redundancy. In contravention of each of the agreements with the AMWU and the AWU, Forgecast did not pay the employees any of their entitlements in respect of redundancy. Forgecast was later wound-up. 4 For the purposes of Pt 4-1 of the Fair Work Act 2009 (Cth) ("the Fair Work Act"), the contraventions by Forgecast of the agreements with the AMWU and the AWU were contraventions of a civil remedy provision. The principal question in this proceeding is whether each of Mr Beynon and Ideal was "[a] person who is involved" in those contraventions, within the meaning of s 550(1) of the Fair Work Act. The answer to that question depends upon an analysis of the actions and the state of mind (particularly the knowledge) of Mr Beynon, and the events that led to the contraventions. If either Mr Beynon or Ideal is a person who is involved, it is necessary to deal with a cross-claim brought by each of them against Mr Dixon, claiming contribution from him. 5 The proceeding took an inordinate amount of time to come on for trial. The application was filed originally on 15 June 2010. Following an unsuccessful mediation, I made orders on 25 October 2010, setting out a timetable for the filing of pleadings. Mr Beynon decided not to comply with the order that he file a defence by 29 November 2010. On 20 December 2010, his representative informed the Court that Ideal was in liquidation, and that Mr Beynon had made a decision to seek an order that Ideal be reinstated as a corporation, before he did anything to prepare for trial. On 20 December 2010, further orders were made, containing a timetable for the filing of pleadings and for discovery of documents. Mr Beynon did not make discovery of documents in accordance with the relevant order, with the result that the applicants sought judgment against him at a directions hearing on 15 February 2011. Pursuant to s 570(2)(b) of the Fair Work Act, I ordered Mr Beynon to pay the applicants' costs of that application, whilst making a further order that he make discovery. Also on 15 February 2011, I gave leave to Mr Beynon to issue subpoenas, including a subpoena directed to the liquidators of Forgecast, requiring production of documents, and made further directions for the preparation of the case for trial. 6 The subpoena to the liquidators of Forgecast to produce documents resulted in some disputation about privileged documents, and the production to the Court of some 119 boxes of documents, which the parties then desired to inspect. The issues associated with the subpoenas were dealt with by a registrar. 7 On 27 July 2011, I made further orders, containing yet another timetable for the taking of the steps necessary to prepare the matter for trial. 8 At a directions hearing on 17 January 2012, I dismissed an application by Mr Beynon for further and better discovery of documents and for directions for the filing of a report of an expert witness. I found it necessary to make a further order for costs against him, pursuant to s 570(2)(b) of the Fair Work Act, this time in respect of the directions hearing on 17 January 2012. It appeared to me that Mr Beynon was not only being uncooperative about the preparation of the matter for trial, but was actually being obstructive. 9 At a further directions hearing on 31 January 2012, Mr Beynon's representative sought, for the first time, an extension of the time within which Mr Beynon could file a cross-claim against Mr Dixon. I made that order, gave directions about the filing of such a cross-claim, including directions abridging times, and again ordered Mr Beynon to pay the applicants' costs of the application for those orders, and ordered that the applicants be at liberty to tax those costs forthwith. In the meantime, two things had occurred. The trial had been fixed for 13 March 2012. Mr Beynon had finally taken steps to reinstate Ideal as a corporation. On 10 February 2012, when the cross-claim of Mr Beynon against Mr Dixon was first returnable for directions, I vacated the trial date. I also gave leave for Ideal to file a cross-claim against Mr Dixon. I made further directions to prepare the matter for trial. In the end, the trial did not begin until 9 November 2012, well over two years after the filing of the original application.

The relevant legislative provisions 10 The agreement between the AWU and Forgecast is the Forgecast Australia Pty Ltd (Luke & Singer - Mitcham) Enterprise Bargaining Agreement 2005 ("the AWU Agreement"). The AWU Agreement was entered into by Forgecast and the AWU pursuant to s 170LJ, found in Div 2 of Pt VIB of the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act"). The AWU Agreement was certified by the Australian Industrial Relations Commission pursuant to s 170LT found in Div 4 of Pt VIB of the Workplace Relations Act. At the time, the provisions of the Workplace Relations Act were in the form that they took before the substantial amendments that were effected by the Workplace Relations (Work Choices) Act 2005 (Cth) ("the Work Choices Act"). Although the AWU Agreement was certified to remain in force until 30 June 2008, the effect of s 170LX(1) and (2) of the Workplace Relations Act was that it remained in operation after its nominal expiry date had passed, unless it was replaced by another certified agreement. 11 At the time of the certification of the AWU Agreement, s 178(1) of the Workplace Relations Act provided that the Court may impose a penalty if an organisation or person bound by a certified agreement breached a term of that agreement. Section 178(6) provided that, where an employee had not been paid an amount that his or her employer was required to pay under an agreement, the Court could order the employer to pay to the employee the amount of the underpayment. 12 Schedule 1 to the Work Choices Act commenced to operate on 27 March 2006. That date was the "reform commencement", as defined by s 4(1) of the Workplace Relations Act. The effect of reg 2.19 of the Workplace Relations Regulations 2006 (Cth), made pursuant to s 846 of the Workplace Relations Act, was that the amendments made by the Work Choices Act did not affect the enforcement in a court of rights and obligations that arose under the pre-reform Act (which was defined to mean the Workplace Relations Act as in force just before the reform commencement), whether or not proceedings had been commenced in a court before the reform commencement. It followed that, after 27 March 2006, a certified agreement made prior to that date could continue to be enforced pursuant to s 178 of the Workplace Relations Act as it stood before that date. 13 The agreement between Forgecast and the AMWU was entitled The Forgecast Australia Pty Ltd Union Collective Agreement 2006 ("the AMWU Agreement"). It was made pursuant to s 328 of the Workplace Relations Act (after the amendments effected by the Work Choices Act had come into operation). Pursuant to s 347(1) of the Workplace Relations Act, the AMWU Agreement came into operation on 6 August 2007. It had a nominal expiry date of 30 March 2009. The effect of s 347(5) of the Workplace Relations Act was that, unless replaced by another collective agreement in relation to each of the employees whose terms and conditions of employment it covered, the AMWU Agreement did not cease to be in operation after the nominal expiry date. 14 On 1 July 2009, the Workplace Relations Act was repealed by the Fair Work Act. The repeal was subject to transitional provisions contained in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) ("the Transitional Provisions Act"). Section 3 of the Transitional Provisions Act gives effect to the provisions in the schedules to the Transitional Provisions Act. Item 2.2 of Sch 16 to the Transitional Provisions Act provides, "A person must not contravene a term of an agreement-based transitional instrument that applies to the person." The phrase "agreement-based transitional instrument" is defined in item 2 of Sch 2, by reference to item 2(5) of Sch 3. Item 2(5)(b) provides that all kinds of transitional instruments, other than award-based transitional instruments, are agreement-based transitional instruments. By reference to item 2(5)(c)(i) and (iv), existing collective agreements and pre-reform certified agreements respectively are collective agreement-based transitional instruments, and therefore agreement-based transitional instruments. The effect of item 2(1) of Sch 3 to the Transitional Provisions Act, in conjunction with item 2(2)(c) and (g) and item 2(3)(a) is to make it clear that each of the AWU Agreement and the AMWU Agreement continues in existence after the repeal of the Workplace Relations Act as a transitional instrument. 15 Schedule 16 to the Transitional Provisions Act contains the scheme by which provisions of the Fair Work Act are made applicable to such transitional instruments. Item 16(1) of Sch 16 to the Transitional Provisions Act provides, so far as relevant to this proceeding: (1) Part 4-1 of the FW Act applies as if: ... (b) the table in subsection 539(2) included the table below (with the references in column 1 of the table below to be read as references to provisions of this Schedule...); and (c) a reference to a fair work instrument in that Part included a reference to a transitional instrument...; and (d) the reference in subsection 540(3) to items 4, 7 and 14 in the table in subsection 539(2) included a reference to items 40…in the table below 16 The table included in item 16(1) of Sch 16 to the Transitional Provisions Act has four columns. Column 1 is headed "Civil remedy provision"; Column 2 is headed "Persons"; Column 3 is headed "Courts"; and Column 4 is headed "Maximum penalty". In item 40 of the table, column 1 contains the words: 2(2) (in relation to a contravention or proposed contravention of a collective agreement-based transitional instrument other than a contravention or proposed contravention of a term that would be an outworker term if it were included in an award-based transitional instrument) Among the persons listed in column 2 is: (c) an employee organisation to which the collective agreement-based transitional instrument concerned applies Among the courts listed in column 3 for item 40 in the table is "(a) the Federal Court". The maximum penalty specified in column 4 for item 40 is 60 penalty units. 17 Part 4-1 of the Fair Work Act contains s 539(1), which provides that a provision referred to in column 1 of an item in the table in s 539(2) is a civil remedy provision. Section 539(2) provides: For each civil remedy provision, the persons referred to in column 2 of the item may, subject to sections 540 and 544 and Subdivision B, apply to the courts referred to in column 3 of the item for orders in relation to a contravention or proposed contravention of the provision, including the maximum penalty referred to in column 4 of the item. 18 Section 540 of the Fair Work Act provides, so far as relevant to this proceeding: (2) An employee organisation...may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision in relation to an employee, only if: (a) the employee is affected by the contravention, or will be affected by the proposed contravention; and (b) the organisation...is entitled to represent the industrial interests of the employee. (3) However, subsection (2) does not apply in relation to: (a) items 4, 7 and 14 in the table in subsection 539(2) Each of the AMWU and the AWU is an organisation, registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and is so registered for the purposes of representing the industrial interests of employees who fall within the provisions of its rules relating to eligibility for membership. Each is therefore an "organisation" and an "employee organisation" within the definition of those terms in s 12 of the Fair Work Act. 19 Section 545(1) of the Fair Work Act confers on this Court power to "make any order the court considers appropriate if the court is satisfied that a person has contravened...a civil remedy provision". Among the examples given in s 545(2) of orders that may be made is "(b) an order awarding compensation for loss that a person has suffered because of the contravention". Section 547(2) of the Fair Work Act requires the court to include an amount of interest in the sum ordered, unless good cause is shown to the contrary. Section 570 of the Fair Work Act imposes restrictions on the power of the court to order a party to proceedings exercising jurisdiction under the Fair Work Act to pay costs incurred by another party. By s 570(2)(a) and (b) a party may be ordered to pay costs only if the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or that the party's unreasonable act or omission caused the other party to incur the costs. 20 Section 550 of the Fair Work Act provides: (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. (2) A person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 21 Pursuant to these complex provisions, each of the AMWU and the AWU has standing to seek a penalty against Mr Beynon and Ideal as persons involved in the contraventions of the AMWU Agreement and the AWU Agreement respectively. Each of the AMWU and the AWU also has standing to seek orders that Mr Beynon and Ideal compensate the employees in respect of whom the proceeding is brought and pay interest on the amount of the compensation. 22 The cross-claims of Mr Beynon and Ideal against Mr Dixon are brought pursuant to s 23B of the Wrongs Act 1958 (Vic). Section 23B(1) provides that a person liable in respect of damage suffered by another person may recover contribution from any other person liable in respect of the same damage, whether liable jointly or otherwise.

The facts 23 Mr Beynon first became involved with Forgecast in about 1999. He was acting as a management consultant in relation to manufacturing businesses and was invited to advise Forgecast. As a consequence, he was then invited to become a director of Forgecast. In 2001, he became the managing director. At that time, Forgecast had a die-casting business in Springvale as well as the forging business at Mitcham. In 2001, there was what Mr Beynon described as a "management buyout". In 2003, the other owners of the business decided that they wanted to sell their interests. In the absence of any other willing purchaser, Mr Beynon decided to acquire control of the business. He did so through Ideal, which entered into a share sale agreement dated 19 April 2004. Under that agreement, Ideal paid $300,000 to acquire the shares in Forgecast and also to acquire a charge over the assets of Forgecast, which secured a substantial debt that had been owed to other secured creditors. 24 On 3 June 2004, Mr Beynon engaged Deloitte to conduct a review of Forgecast's financial position. On 1 July 2004, Forgecast went into voluntary administration. In due course, on 18 August 2004, a deed of company arrangement was executed, pursuant to which Forgecast was able to continue its operations. As part of the reconstruction, a number of Forgecast employees were made redundant. Forgecast paid only 50% of the redundancy entitlements of those employees. 25 Subsequently, there were negotiations between Mr Beynon and the AMWU. The AMWU was attempting to persuade Mr Beynon to put aside funds to ensure that, in the event of any future redundancies, the employees concerned would receive their full redundancy entitlements. The AMWU attempted to persuade Mr Beynon to execute a deed that would have this effect. Mr Beynon said he was willing to do so, until he discovered that it was not possible to pay redundant employees the difference between what they would recover under the Commonwealth's General Employee Entitlements and Redundancy Scheme ("GEERS") and their full entitlements. Payments under GEERS are limited. If money is paid to a redundant employee in respect of the redundancy, by or on behalf of the employer, GEERS will only pay the difference between what that employee has received and the GEERS limit. When he discovered that any payments he would make would not benefit future redundant employees above the GEERS limit, Mr Beynon declined to execute the deed. 26 By mid 2009, Forgecast was again in deep financial trouble. Its export business had been affected badly by the high value of the Australian dollar. It had fallen into arrears in payments it was required to make to the Australian Taxation Office in respect of tax deducted from wages and salaries paid to employees, as well as in relation to payments of superannuation contributions it was required to make on behalf of employees. 27 At the time, Forgecast had three secured creditors. Ideal was the largest of them. The original loan, taken over by Ideal in the 2004 share purchase deal (which was substantially larger than the $300,000 paid by Ideal for both the shares and the debt) had grown, because Mr Beynon used Ideal and its charge over the assets of Forgecast to advance funds from time to time to Forgecast. By November 2009, Forgecast owed Ideal $3,938,000. A financier called RMBL had also advanced funds to Forgecast, secured by a charge over the land on which the Mitcham factory was built. The third secured creditor was Bibby Financial Services ("Bibby"), which also had a charge over Forgecast's assets. Bibby provided finance by purchasing Forgecast's book debts and then collecting them. Until the debts were collected, the amounts paid in respect of them were treated as a loan. It was these loans that Bibby's charge secured. 28 Part of Mr Beynon's strategy to deal with Forgecast's financial difficulties was to try to reduce the working hours, and consequently the wages, of the employees. In order to achieve this, Mr Beynon had to reach agreement with the AMWU and the AWU. They were prepared to accommodate Mr Beynon's wishes, but not on an ongoing basis. The result was a series of agreements in 2008 and 2009, pursuant to which working hours and wages were reduced for specified periods. Negotiations over the shorter working hours question led to friction between Mr Beynon and the AMWU and the AWU. Mr Beynon saw himself as taking steps necessary to keep the Forgecast business alive and to preserve the jobs of its employees. He resented what he saw as the lack of cooperation of the AMWU and the AWU, who were reluctant to agree to anything that might lead to a permanent reduction of the entitlements of their members. In the course of 2009, there were moves to begin negotiations for agreements to replace the AMWU Agreement and the AWU Agreement. Mr Beynon saw the question of reduced hours and remuneration as being central to those negotiations. 29 Bibby had a practice of conducting half-yearly audits of Forgecast's financial circumstances. In June 2009, BDO Kendalls Business Recovery & Insolvency (NSW-Vic) Pty Ltd ("BDO Kendalls") conducted one such audit. Consequent upon that, Sonja Armstrong of Bibby sent Mr Beynon an email on 26 June 2009, referring to the audit and to the significant tax and superannuation arrears of Forgecast. Ms Armstrong suggested a meeting between herself and Mr Dixon (who was an insolvency practitioner with BDO Kendalls) "to discuss the future of the business." This was how Mr Beynon came to meet Mr Dixon. 30 Between August and 9 November 2009, Mr Beynon and Mr Dixon had a number of discussions about the financial state of Forgecast, including the fact that Forgecast had a surplus of labour in relation to the work required to complete available orders. 31 On 9 November 2009, as the sole director of Ideal, Mr Beynon resolved that Ideal would appoint Mr Dixon and Laurence Fitzgerald (also of BDO Kendalls) as joint and several receivers and managers of Forgecast, pursuant to its loan agreement. There may be some question about whether the resolution, as recorded in the minutes of the meeting of the board of Ideal on 9 November 2009, addresses adequately the terms of the power of appointment expressed in the deed of charge, but no party suggested that the appointment was invalid. 32 The receivers took up their responsibilities on 11 November 2009. Staff of BDO Kendalls moved into the Forgecast office at Mitcham, to take over the running of the Forgecast business. Mr Beynon agreed to stay on and assist them in the running of the business. 33 The receivers advertised for expressions of interest in the purchase of the business of Forgecast as a going concern. The closing date for such expressions of interest was 23 November 2009. Despite earlier expressions by Mr Dixon of optimism about the prospect of selling the business, responses to the advertisement were not encouraging. 34 On 25 November, there was a meeting at the office of the AMWU. The meeting was hosted by Steve Dargavel, the Victorian Branch Secretary of the AMWU. Paul Konaris, the AMWU organiser who was responsible for representing the employees at Forgecast was there. So was Rod Lineham, the organiser of the AWU responsible for representing its members at Forgecast. There is a possibility that there was also another person from the AWU present. Mr Beynon attended, along with Sue Bircham, who worked on a part-time basis for Forgecast and had some human resources responsibilities. Mr Dixon was there, together with Ahmed Bise, an employee of BDO Kendalls who was assisting in the receivership. Carlos Rendich, a toolmaker employed by Forgecast and the AWU shop steward was present. So was the AMWU shop steward, George Pavlov. 35 There is conflicting evidence about what took place at this meeting. It will be necessary to examine that evidence in some detail later in these reasons for judgment. There was discussion about the future of Forgecast, including discussion about how much money Mr Beynon would be prepared to put in to meet the redundancy entitlements of employees who were made redundant. Mr Beynon made an offer that did not meet with the approval of the AMWU and AWU. 36 On the following morning, Mr Dargavel was at the Mitcham premises of Forgecast. Again, the evidence is not very clear about what was said. A meeting of the employees (other than the office staff) was held. The offer that Mr Beynon had made at the meeting on the previous day was conveyed. The employees rejected it. The employees were given to understand that Forgecast would be ceasing its business in circumstances in which it was clear that there would be insufficient funds to pay redundancy entitlements. The employees decided to cease work immediately, by way of taking industrial action, to leave the premises and establish a picket line outside them. The employees collected their tools and personal belongings, left the premises and established a picket line. 37 Some days later, Mr Dixon decided that the employees should be treated as having had their employment terminated from 26 November 2009, and that the termination was on the ground that all of them were redundant. Although Mr Beynon and Ideal in their defences pleaded denials that the employment of the employees was terminated on the ground of redundancy, and alleged that the employees had abandoned their employment, this defence was itself abandoned in the course of the trial, and Mr Beynon and Ideal accepted that the employment of the employees had been terminated on 26 November 2009 on the ground of redundancy. 38 On 14 December 2009, Mr Beynon sent an email to Mr Dixon, containing a proposal that a new company of his would recommence the business of Forgecast in the same premises and re-employ approximately 30 of the previous employees of Forgecast. He proposed that he would liquidate Forgecast, so that employees who were not to be re-employed could apply for payments from GEERS. On 18 December 2009, Mr Beynon on behalf of Ideal made a formal offer to purchase from the receivers Forgecast's plant, equipment, tooling and intellectual property. On the same day, Forgecast received statutory demands from some of the former employees as creditors. 39 On 23 December 2009, Mr Beynon met Mr Dixon and subsequently emailed the receivers to the effect that he would make an offer of purchase on behalf of another legal entity. On 24 December 2009, Mr Beynon registered a company ("the new company"), of which he was the sole director and shareholder and the secretary. On 4 January 2010, the receivers accepted an offer from the new company to purchase the assets of Forgecast. A formal contract for the purchase of the assets was entered into on 21 January 2010, on which date the receivers also granted the new company a lease of the Mitcham premises. Mr Beynon provided the receiver with a personal guarantee of the obligations of the new company. The new company also granted a fixed and floating charge over all of its assets to the receivers. 40 Forgecast subsequently went into liquidation. So did Ideal, by order of the Supreme Court of Victoria on 12 October 2010. Ideal was brought back to life in February 2012, on the application of Beyco Pty Ltd, another company controlled by Mr Beynon. 41 Attached to the further amended statement of claim, there is a list of names of employees who were made redundant, together with the amounts of loss they are alleged to have suffered. The amounts were not disputed. The parties also reached agreement as to the names of five employees who resigned their membership of the AMWU or the AWU between 26 November 2009 and 15 June 2010, when the proceeding was commenced. There is also an agreed list of former employees who have resigned their membership of the AMWU and the AWU since the original application was filed.

The applicants' case 42 It is important to examine the way in which the AMWU and the AWU have pleaded their case against Mr Beynon and Ideal. They allege that, in August 2009, Mr Beynon and Mr Dixon began discussing the possible restructure of Forgecast's business, the reduction of Forgecast's workforce by making a number of employees redundant, and the casting onto GEERS of the obligation to pay redundant employees' entitlements. It is said that the discussions included both the necessity of accomplishing these things and the ways by which they could be accomplished. The discussions are alleged to have continued in September 2009 and to have involved the preparation of a spreadsheet, calculating the amounts of entitlements payable to Forgecast employees in accordance with the terms of the AMWU Agreement and the AWU Agreement, compared with payments that might be made under a deed of company arrangement similar to that entered into by Forgecast in 2004, and the amounts that would be received by employees under GEERS. The discussions are alleged to have continued into October and November 2009, when they resulted in the preparation of what was called a "proposal" for consideration of the creditors of Forgecast. The proposal involved placing Forgecast into receivership, reducing employee numbers by 30, accessing GEERS in respect of the entitlements of employees made redundant, putting the Forgecast business up for sale at a price higher than it would fetch if sold as part of a sale of Forgecast's assets after liquidation, and transferring the Mitcham premises from Forgecast to Ideal, in exchange for a reduction in Ideal's security. Reference was made to a slide presentation, using PowerPoint, prepared by or at the direction of Mr Beynon, setting out the proposal. 43 It is alleged that, shortly prior to the appointment of the receivers, Mr Beynon informed Mr Dixon that he wanted to restart the business of Forgecast by purchasing the plant and machinery. 44 It is alleged that, by reason of the matters summarised in [42] and [43] above, prior to the appointment of the receivers, Mr Beynon or (by reason of its directing mind being the mind of Mr Beynon) Ideal was aware that the appointment of the receivers would mean that Forgecast would not be able to pay redundancy entitlements to employees and would not pay such entitlements if and when employees were made redundant. 45 There is also an allegation, apparently intended to be relevant to Mr Beynon's intention, or state of mind, that maintenance of machinery that had broken down had been deferred or restricted severely. The necessary maintenance had been accelerated in the three or four weeks leading up to the appointment of the receivers. 46 Subsequent events were also alleged to demonstrate this state of mind on the part of Mr Beynon. They included: Mr Beynon, as director of Ideal, offering to purchase Forgecast's business from the receivers after they were appointed; an agreement between Mr Beynon and Mr Dixon on 23 December 2009 that Mr Beynon would set up a new company to be substituted for Ideal in relation to that offer; the establishment of such a new company on 24 December 2009; and the transactions of 21 January 2010, which involved a contract for the sale of Forgecast's assets, the grant of a lease of the Mitcham premises, the provision of a personal guarantee by Mr Beynon to the receivers and the grant to the receivers of a fixed and floating charge over all of the assets of the newly-created company. The state of mind of Mr Beynon was also alleged to have been revealed by what he said at the meeting of 25 November 2009. 47 In final addresses, counsel for the AMWU and the AWU put their case that Mr Beynon and Ideal were persons involved in Forgecast's contravention in a number of ways. It was said that, when he appointed the receivers, Mr Beynon knew that Forgecast had insufficient funds to pay the redundancy entitlements of its employees if they were made redundant. Mr Beynon and Ideal appointed the receivers with the aim that Forgecast employees would be made redundant as part of the plan for Mr Beynon to acquire the business or the assets of Forgecast from the receivers, without taking on liability for redundancy entitlements. The appointment of the receivers brought about the contravention, or made it more likely to occur. Mr Beynon and Ideal were linked in purpose with the contravener, in that they wanted the result that occurred. The contravention was induced or instigated by the appointment of the receivers in circumstances where there were redundancies to be made and Forgecast had insufficient funds to meet the entitlements to them. Mr Beynon and Ideal were directly or indirectly knowingly concerned in the contravention by having appointed the receivers with that outcome in mind. Mr Beynon and Ideal conspired to bring about the contravention or make it more likely by appointing the receivers. Further, counsel for the AMWU and the AWU argued that it was no defence that the failure to pay the redundancies was inevitable. They said that engaging in the conduct necessary to make someone a person involved, to bring about the contravention, because it was perceived as being advantageous for that person, was enough to establish liability.

A person involved in a contravention 48 The terms of s 550(2) of the Fair Work Act, concerning who is a person involved in a contravention, are familiar. They are the same as those formerly found in s 75B of the Trade Practices Act 1974 (Cth), now found in s 75B of the Competition and Consumer Act 2010 (Cth). It was established by Yorke v Lucas (1985) 158 CLR 661 at 667-670 per Mason ACJ, Wilson, Deane and Dawson JJ, that s 75B, the terms of which had been derived from the criminal law, required that a person involved be a person who participated with intent, based upon knowledge of the essential elements of the contravention. In relation to similar provisions in an industrial relations context, in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87 (2007) 164 IR 299 at [26], the Full Court said: Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct - the accessory should be linked in purpose with the perpetrators. 49 In the present case, the contravenor of the obligation imposed by item 2(2) of Sch 16 to the Transitional Provisions Act was Forgecast. The contravention was a failure to pay monies due by way of redundancy entitlements pursuant to the AMWU Agreement and the AWU Agreement after 26 November 2009, when the employees of Forgecast had been treated as having had their employment terminated by reason of redundancy. At that time, the directing mind and will of Forgecast was Mr Dixon, who was exercising the powers and functions of the receivers as one of the joint and several receivers and managers. For the AMWU and the AWU to succeed in this proceeding, they must show that Mr Beynon (in his personal capacity and as the directing mind and will of Ideal) participated in that contravention intentionally and with knowledge of the facts constituting the contravention. It is therefore necessary to determine what was the state of mind of Mr Beynon.

Mr Beynon's state of mind 50 Early in his evidence-in-chief, when Mr Beynon was recounting his working experience, he interpolated that some of this experience had given him "an understanding of the previous generation or two, who really set up businesses, manufacturing business in this country, names that probably are now not household names, but they were household names." He gave some examples of these names and continued: I understood the businesses that these people commenced and I understood that they either started them before the First World War or between the two World Wars. Now, I know it's a long, long time ago, but we talk about business conditions being difficult, when you just think about it for a short time, back in the − between the recession in '30s and the Second World War, a lot of these businesses were started, and you have to admire the people and the courage and the fortitude of those people and the way they started their businesses. 51 From this and Mr Beynon's other evidence (particularly his criticism of those he blamed for the demise of Forgecast), I gained the impression that Mr Beynon saw himself, and aspired to be seen, as one of those courageous people who had maintained businesses through difficult times. There is no doubt that he had a strong emotional attachment to Forgecast. Even in the face of its difficult financial situation, he wanted it to continue. He did not even consider the possibility of putting the Forgecast business up for sale as a going concern, without appointing a receiver, until that possibility was put to him in cross-examination by counsel for the AMWU and the AWU. 52 Late in his evidence-in-chief, Mr Beynon was asked the following question, to which he gave the following answer: Did you yourself ever have a plan that involved everybody being made redundant?---No, I didn't; that would be just absolutely ridiculous - in my opinion absolutely ridiculous; wouldn't even consider it. I would rather - it would be much more simple just to say, "Righto, let's liquidate everything and let's just move on." What I'm - what people don't seem to understand is there's nobody else, other than me, standing there with, look, all the stakeholders' interests at heart; not my stake - not me. I'm talking about the customers, the suppliers, and the employees. I accept we weren't able to handle and deliver every - provide jobs for every employee if they insisted upon 38 hours a week. I absolutely accept that, but nobody else right to the end - in the end both Dixon and the unions failed to deliver anything to the customer. They didn't even think about it, and I guess that's not their role, but anyway, that's the disappointing part to me. 53 Counsel for the AMWU and the AWU did not cross-examine Mr Beynon squarely on the basis that his intention at the time of the appointment of the receivers was that all of the employees of Forgecast would be made redundant, and none of them would receive from Forgecast any of their redundancy entitlements. The case of the AMWU and the AWU focused on the proposition that Mr Beynon intended to end up as the controller of a leaner Forgecast business, having shed some employees and having escaped from any obligation to pay redundancy entitlements for the employees shed, by casting that obligation onto GEERS. 54 In Mr Beynon's evidence-in-chief, the following exchange occurred: At the time of appointing him as the receiver, what did you expect would be the end game of the receivership?---That we would go to sell/restructure the business to ensure we would get through and be in the strongest possible condition going forward. Sell to whom; sell the business to whom?---Well, a third party was the - that was - Stephen was quite confident that it could - would occur, and I was quite happy about that. Were you a potential buyer?---Of course I'm a potential buyer, of course, but it's not what I wanted; it's not what I wanted. If there had been a sale to a third party, would there have been a role for you?---Maybe if the third party wanted me to support the business. Mr Beynon went on to say in what respects he felt that he could make a contribution if the business were to continue. 55 In cross-examination by counsel for Mr Dixon, Mr Beynon was pressed about this evidence. The exchange was as follows: Mr Dixon's recollection is that you said to him in substance that you did want to buy the business. You were very passionate about the business. You wanted to stay involved in the business and that you did want to buy it if that was able to be worked out. What do you say to that?---Only if it couldn't be sold and somebody else was not prepared to keep it going. Sure. So you gave evidence, as I understand it, to the effect that Mr Dixon told you there would need to be a market sale?---Correct. And you knew that?---Yes, I knew that. But, in that context, and given that, of course, you might be outbid by somebody, nonetheless, you did want to buy the business?---It was only if nobody else wanted to buy the business. 56 In cross-examination by counsel for the AMWU and the AWU, Mr Beynon tried consistently to resist suggestions that it was his intention to retain control of the business after any receivership or other process to deal with potential insolvency had taken place. The evidence of other witnesses, and of contemporaneous documents, suggests otherwise. Mr Dixon remembered Mr Beynon saying at early meetings between the two of them that he would like to buy the business. Mr Bise was in no doubt about Mr Beynon's intent to buy back the business. Mr Bise's view was that, if Mr Beynon had not been so insistent on wanting to purchase the business, the likelihood was that there would have been a voluntary administration or a liquidation, rather than a receivership. Mr Bise's understanding was that Mr Beynon's intent was to retain control of the business in some way. That was his key plan. In cross-examination by counsel for Mr Beynon and Ideal, Mr Bise resisted suggestions that his recollection was coloured by later events, including Mr Beynon's offer to purchase the assets of Forgecast. He said that Mr Beynon definitely held a desire to retain the business if he could. Mr Bise said that he had pointed out to Mr Beynon that he might not get what he desired. The fact that Mr Beynon had a desire to retain control of the business was the reason that Mr Bise felt the need to make it clear that he would not necessarily succeed. 57 Towards the end of October 2009, Mr Beynon prepared a set of slides, using PowerPoint software, for the purpose of making a presentation to RMBL, seeking its support for a strategy involving the appointment of a receiver. The presentation was entitled "Forging ahead - a new beginning". It contained predictions as to future sales expectations. In several of the slides, there were references to "the business going forward". There was a statement of a plan to appoint BDO Kendalls as receivers and "continue trading while the business is put up for sale above liquidation value." After a reference to reducing the number of employees (dealt with further below) came the statement: This reduced number of employees is sufficient to cope with the current order level and deliver a profitable business with an annual turnover of approximately $6 million that is worth continuing. 58 The allegation about maintenance being deferred, and then accelerated, came to nothing, so far as the evidence was concerned. Apart from one machine, the Rovetta press, the evidence did not support the suggestion that deferred maintenance had been accelerated. In relation to the Rovetta press, Robert Parkington, who had been the only maintenance fitter employed by Forgecast in 2009, gave some evidence. It appeared that the Rovetta press had a hydraulic cushion at its base, because some upward rebound was an essential part of the process it performed. The hydraulic cushion failed about three months before November 2009. It would have taken between four and six weeks to fix, and the machine was needed to fill orders. An attempt was made to keep the machine operating, by substituting heavy springs for the hydraulic cushion. The attempt worked, but not consistently. Eventually, a decision was made to proceed with the repair of the cushion. Any inference that this decision was part of an attempt by Mr Beynon to facilitate the repair before any proposed reconstruction, so that it would not be an expense once he acquired control of the reconstructed business, cannot be drawn. 59 Viewing the evidence as a whole, I am persuaded that it is highly probable that Mr Beynon's aim was to emerge from whatever process was necessary to deal with the financial plight of Forgecast still in control of the Forgecast business. His denials of this intent seemed to me to be the product of later reconstruction on his part. The evidence of Mr Dixon and Mr Bise as to Mr Beynon's strong desire to continue in the business is consistent with other evidence. In particular, Mr Beynon's own view of himself as a courageous and admirable industrialist and his obvious resentment of those he blamed for the demise of the business (see [50]-[51] above), as well as his preparation of the PowerPoint presentation dated 29 October 2009, make it clear that Mr Beynon was hoping not to have to relinquish control of the Forgecast business. 60 In conjunction with his desire to retain control of the business, Mr Beynon also wished to reduce the size of its workforce, and to cast onto GEERS the burden of any payments made to redundant employees, if he could possibly do so. In his evidence-in-chief, Mr Beynon was asked whether, on the appointment of the receivers, he had an expectation as to whether there would be any redundancies. His answer was to the effect that it depended upon who was the buyer and what they wanted. He adverted to the possibility that a buyer might have the ability to bring in extra work or to relocate Forgecast employees to other factories. The question was followed by the specific question about redundancies in the event of Mr Beynon being the buyer. His answer was to the effect that the number depended on the outcome of the dispute as to the length of the working week. In cross-examination, Mr Beynon conceded again that he had in mind redundancies. He tended to give relatively low estimates of the numbers that would be required, to deny that any precise number had ever been considered, and to link the number of likely redundancies with the outcome of negotiations with the AMWU and the AWU about working hours. 61 The contemporaneous documents tend to show quite a preoccupation on the part of Mr Beynon with employee entitlements, redundancies and the possibility of shifting responsibility for redundancy entitlements onto GEERS. As early as 18 August 2009, Mr Beynon's own notes of a meeting with Mr Dixon begin with a reference to "V.A.", which I take to be a reference to voluntary administration, followed by the statement "Geers [sic] - Not Applicable". Calculations in these notes refer to 58 people, which I understand to be the number of employees, excluding office employees, of Forgecast at the time. Attached to these notes is a typed document headed "Budget after Reconstruction". It contains various items with columns of figures, representing monthly and yearly costs for the various items. There are alternatives "A" and "B". There is a figure relating to "Employees 40 i.e. - 18", followed by figures for the month and year. Alternative B beside the same item has a number 47, with higher figures for the month and year. I take these figures to be estimates of the cost of employing those numbers of people. 62 An email from Mr Beynon to Mr Dixon of 25 August 2009 includes figures for employee entitlements, and the following passage: I have looked at the redundancy calculations we did in the 2004 VA. We paid out 100% of the entitlements including Sick Leave plus 50% of the redundancy entitlements. I thought we capped the redundancy at the max payable by GEERS at the time, but it seems that we paid a lot more than this. Can you recall whether GEERS in 2004 was limited to capped [sic]?. If so, i [sic] am sure we would have applied the cap. 63 In a further email of 3 September 2009, Mr Beynon said: I have attached the completed spreadsheet with details of the employee entitlements and their redundancies. There are three worksheets, the first one is as per the enterprise agreement, the second one (50% redundancy as per the VA in 2004 except no Sick leave) and the third one is as capped to the GEER level. 64 In the attached spreadsheet, which is described as "AS AT 23/08/2009" 17 employees (including one designated as "ADMIN") are listed separately, with the figures for those 17 employees in the column showing total redundancy payments adding up to $907,144. 65 Notes of a meeting between Mr Beynon and Mr Dixon on 10 September 2009 also include references to GEERS. The PowerPoint presentation dated 29 October 2009, to which I have referred in [57] above, referred to the proposed sale of the business by the receivers and said: During this process the employee numbers will be reduced to 30, the Superannuation arrears will be paid from the sale proceeds and employee entitlements will be paid from the balance of the sale proceeds and GEERS This was followed by the statement I have quoted in [57] above, referring to delivering a profitable business. Later in the same presentation, there is the proposition that a deed of company arrangement would require $800,000 for employee entitlements "and redundancy for 22 people", as well as $200,000 for administration. An "Estimate of the cost of restructuring if business is continued in the 'normal course'" includes the proposition that "Reducing employees by 22 in accordance with the Enterprise Agreement" would cost $1.6 million and the statement that it is "Not possible to obtain funding for this approach." 66 The discussions recorded in the notes and the PowerPoint presentation are all in the context of a process of deciding how the expertise of BDO Kendalls would be best utilised in the circumstances that Forgecast was in. The alternatives discussed were to place Forgecast in liquidation, to place Forgecast under voluntary administration with a view to restructuring it under a deed of company arrangement (as had been done in 2004), and to appoint receivers and managers to collect the debts owed to the secured creditors. The first alternative, liquidation, was rejected because of the fear that a liquidator would simply sell the assets of Forgecast by whatever means were considered to be likely to raise the most money. I am satisfied that a factor in rejecting this alternative was that, compared with receivership, liquidation reduced the prospect of Mr Beynon emerging from the process with the business intact and a reduced number of employees. The second alternative, voluntary administration with a deed of company arrangement, was rejected on the ground of expense. In part, this was a reference to the expense of the administration of the company. In part, it was a reference to the expense involved in paying the entitlements of any employees who were to be made redundant, because recourse to GEERS was more difficult, if not impossible, in the absence of a liquidation. The third alternative, receivership, was preferred in part because it was cheaper to administer than voluntary administration, because it did not involve calling meetings of all creditors to make decisions about the future of the company. In addition, receivership was preferred because it offered the best chance for Mr Beynon to emerge from the process still in control of the business, with a reduced number of employees. If this could be effected by Mr Beynon being the purchaser of the business, through Ideal or another corporate entity, and Forgecast could then be put into liquidation as a shell, GEERS would be available for those employees whose employment was not transferred to Mr Beynon's purchaser entity. 67 The pleaded allegation that, shortly prior to the appointment of the receivers, Mr Beynon informed Mr Dixon that he wanted to restart the Forgecast business by purchasing its plant and machinery is not borne out by the evidence. The conversation was alleged to have been inferred from the matters summarised in [42] and [43] above. The focus of the evidence was on an intention to purchase the business as a going concern. 68 For these reasons, I am satisfied that, at the date of appointment of the receivers, Mr Beynon's state of mind was as alleged by the AMWU and the AWU, namely that he hoped to emerge after the receivership with control over the business of Forgecast, and with a reduced number of employees, having cast onto GEERS the burden of the redundancy entitlements of the discarded employees. Of course, it was impossible for Mr Beynon to be sure that he would achieve this intention. He understood perfectly well that the receivers had an obligation to put up the business for sale and that it might be sold to somebody else. This does not mean that Mr Beynon lacked the intention to continue to control the business, only that he appreciated that the intention might not be fulfilled. It is unnecessary to have regard to statements of Mr Beynon, and events that occurred, after the appointment of the receivers and managers, in order to confirm this state of mind. The state of mind is apparent from the evidence of what took place prior to the appointment. 69 This finding is insufficient to enable the AMWU and the AWU to succeed in this case. There are two other major issues that must be dealt with. The first is the state of mind of Mr Dixon. It is necessary to determine the state of his mind, for the purpose of ascertaining whether he and Mr Beynon were "linked in purpose". If they had no common intention, it is difficult to see how Mr Beynon could have been a person involved in the contraventions the subject of this proceeding, which occurred while the directing mind and will of Forgecast was that of Mr Dixon. 70 The second issue arises because events after the appointment of the receivers and managers did not go according to Mr Beynon's intention. Instead of retaining control of the business, with a reduced number of employees, Mr Beynon found himself trying to purchase the assets of Forgecast with a view to restarting the business, which might have involved re-engagement of some employees, all of whose employment had been terminated on the ground of redundancy. 71 It is necessary to examine each of these two issues.

The state of mind of Mr Dixon 72 There is nothing in Mr Dixon's evidence to indicate that he was concerned with anything other than dealing with the financial position of Forgecast in the normal way. He had reasons for not recommending that Forgecast be put in liquidation that had nothing to do with Mr Beynon's intention. Mr Dixon described liquidation as being "discounted early" because "it's terminal." He saw the disadvantage of voluntary administration as being the need to seek the approval of all of the creditors for a deed of company arrangement. Receivership was cheaper and more efficient than voluntary administration, because it was unnecessary to hold meetings of creditors. There is nothing to suggest that, at the date when he was appointed as one of the receivers and managers of Forgecast, or at any time prior to that date, Mr Dixon shared the intention of Mr Beynon that the latter would emerge in control of Forgecast's business, having made some employees redundant, and having passed to GEERS the responsibility for their redundancy entitlements. Indeed, such a proposition was never put squarely to Mr Dixon in cross-examination.

The meeting of 25 November 2009 73 The trigger for the meeting at the AMWU office in Carlton on 25 November 2009 was the expiration on 23 November 2009 of the period during which expressions of interest in the purchase of Forgecast's business had been sought by means of advertisement by the receivers. At the close of that period, it was apparent that there was no viable expression of interest in purchasing the business from any outside party. Mr Beynon had expressed interest and had entered into a formal confidentiality agreement with the receivers (and paid the fee of $1,500 required by the receivers as part of the process), to facilitate negotiations about purchase of the business by an entity controlled by him. In this situation, Mr Beynon and Ms Bircham met Mr Dixon and Mr Bise on 24 November 2009. No witness had any clear recollection of this meeting. The only guide as to what was discussed is some notes taken by Chris Sequeira, an employee of BDO Kendalls, who was also present (but was not called to give evidence). According to the notes, Mr Dixon reported that there was "No serious interest bar Ian", ie Mr Beynon. The notes proceed: - Put back onto unions • What they require to sell to Ian - If unrealistic • Wind Down Mode • Bring Fwd Production - Ian goto [sic] Auctioneers - Buy in whole - Re-employ staff you want - Ian - Offer conditional on ppl transferring • Then do deal. There was an assumption during the evidence that the next part of the notes contains a record of the meeting at the office of the AMWU on 25 November 2009. On a close examination of the notes, it appears that this is not so. In addition, Mr Sequeira was not present at the meeting on 25 November 2009, so he cannot have taken a note of what occurred there. What appears to have happened is that, on 24 November 2009, Mr Beynon, Mr Dixon and Mr Bise discussed a proposal to meet with "Unions". The notes include a list of names of possible attendees. They contain the following passage: 2 ways forward → Requirements to Deal with Ian Alternate → Wind Down Mode The notes then record that there was a break. It appears that some contact may have been made with Mr Dargavel, probably by telephone. Mr Dargavel was not asked about this possibility, but the name "Steve Doug", with the word "Doug" crossed out appears, followed by some further items that include: • If Ian → Does he have cash - Pay creditors - Elecs - Till has support to go credit [next word illegible]? → Can he keep workforce? This is followed by some discussion that was said by Mr Bise in his evidence to indicate a suggestion that Mr Beynon should relinquish Ideal's security or assign it to the unions, so that they could use it to collect the entitlements of employees (although Mr Bise did not recall the actual discussion). The notes end with a reference to a meeting at 5.00 pm at Queensberry Street (the address of the AMWU office). From the fact that there was a discussion of a proposed meeting, the tenor of what is recorded in the notes, and the reference to the time and place of the meeting, I infer that Mr Dargavel participated in the discussions after the break. 74 The meeting on 25 November 2009 at the AMWU office began late in the afternoon. Those attending are listed in [34] above. Not all of the persons in attendance were called to give evidence. The recollections of some who attended (particularly Mr Dixon and Ms Bircham) were very vague. There are several differing versions of what did and did not occur. The only written record of the meeting, so far as the evidence goes, is some brief notes made by Mr Beynon (incorrectly dated 26/11/09). Those notes read: Question regarding security going forward. Union want to seek payment for unfunded liabilities. Want employee entitlements to rank ahead of security held by Ideal/I.B. BDO look to attempt to legally pay unfunded liabs [sic] on top of GEERS.!! Funds need to be provided. Additional 4 weeks offered, in redundant [sic] process. Response: No prospect that employees will accept this. Security over entitlements required. Pay off entitlements Mass meeting tomorrow afternoon (NOON). 75 It is clear that the purpose of the meeting was to enable the AMWU and the AWU to explore the extent to which the entitlements of employees of Forgecast would be protected, on the assumption that Mr Beynon was to be the purchaser of Forgecast's business. This is in accordance with what was apparently the advice of Mr Dixon and Mr Bise to Mr Beynon on the previous day, that he ascertain from the "Unions" what they would require for the business to be sold to him. 76 Mr Dargavel wanted Mr Beynon to make an offer that would ensure, so far as could be done, that entitlements were paid. Mr Beynon had the concern that is revealed in his notes as to whether it was legally possible for him to make a payment over and above what redundant employees would receive from GEERS, or whether anything he paid would simply be deducted from what GEERS would pay. 77 At least initially, the discussion appears to have been on the basis that Mr Beynon's purchaser entity would take on some, but not all, of the employees on a continuing basis. Mr Dargavel's evidence was that there was talk of between 20 and 25 employees becoming redundant. Mr Beynon said the figure was between 10 and 15. Nothing really turns on the outcome of this dispute, but I am inclined to accept Mr Dargavel's evidence. As I have said, in his evidence, Mr Beynon consistently understated estimates of the numbers of employees who would be likely to be made redundant, when comparisons are made with contemporaneous documents, including those of which he was the author. 78 At some point, the discussion moved to the question whether Mr Beynon would make an offer in respect of the entitlements of all employees of Forgecast. Mr Beynon said that Mr Dargavel was proposing that all employees be made redundant. Mr Dargavel said that Mr Beynon was talking of an entity he called "newco" purchasing the assets of Forgecast and engaging some of the employees to restart or continue the business. In my view, it is more probable that Mr Dargavel's account is closer to what occurred. It is likely that Mr Dargavel was expressing a lack of confidence in Mr Beynon's capacity or willingness to ensure that entitlements of continuing employees would be protected in the future. Such lack of confidence was based on the earlier restructure of Forgecast in 2004 and the subsequent failure of Mr Beynon to execute the proposed deed that was intended to safeguard entitlements in the event of future redundancies. If Mr Dargavel was proposing that all employees should be paid their redundancy entitlements as part of the proposed purchase deal, the proposal was in this context. 79 At all events, Mr Beynon did make an offer. There was disagreement in the evidence as to how this offer was expressed. Mr Rendich said it was to pay four weeks' pay (consistently with what Mr Beynon's notes record) and that, after a break in the meeting, Mr Beynon increased the offer to five weeks' pay. Mr Dargavel's evidence was that the offer was to pay $5,000 per person. He calculated that this was around five weeks' pay, depending on the level of remuneration of the particular person. Mr Beynon made reference to $250,000, which he said was $5,000 per person for 50 people. In whatever terms it was put, Mr Dargavel clearly did not think the offer was satisfactory. Nevertheless, he indicated that it would be put to the employees of Forgecast at a mass meeting on the following day.

The events of 26 November 2009 80 Clearly, there was a meeting of the shop floor employees of Forgecast on 26 November 2009. Mr Dargavel was there. He reported to the meeting the extent of Mr Beynon's offer. The employees did not consider it satisfactory. They voted to reject it. They voted to cease work. They gathered their personal belongings and left the premises in an orderly fashion, and then established a picket outside the premises. 81 It seems that the decision to cease work and to establish a picket line was the result of the understanding of the employees that they were to be dismissed. There are differences in the evidence as to how this understanding came to be conveyed. It is clear that, as a matter of fact, if Mr Beynon's proposal to purchase Forgecast's business as a going concern did not proceed, the receivers would not have continued to conduct the business for very long. As Mr Sequeira's notes of the meeting on 24 November 2009 made clear, the only alternative to Mr Beynon's purchase proposal was "Wind Down Mode". This would not have meant immediate closure, but would have meant a tailing off in work for employees, while existing orders were completed so far as they could be. Mr Rendich's evidence was that the shop stewards were called to the office by the receivers at 11.00 am and told that the receivers could not afford to continue to pay the whole weekly wage, so the company would be closed. Mr Bise was at the Forgecast premises on 26 November 2009. His evidence did not support Mr Rendich's account. Mr Dixon was not present. Mr Bise did concede in cross-examination that Mr Dargavel had been told on 25 November 2009 that the alternative to purchase of the business by Mr Beynon's proposed new entity was that the business would be wound down. It may have been that Mr Dargavel understood from this that (as was the fact) the receivers were not prepared to continue to conduct the business for much longer in the absence of a realistic possibility of its sale as a going concern. It may be that Mr Dargavel was responsible for communicating to the meeting of employees that the receivers would no longer support the business. 82 Whatever was the means of communication of impending job losses, matters were brought to a head by the taking of industrial action. Mr Dixon made the decision some days later to recognise the reality. He treated the employment of each of the employees as having come to an end on 26 November 2009, by reason of redundancy. He gave the employees documentary evidence to this effect.

Conclusion 83 This examination of the facts makes clear a number of things. The most important is that, at the date of the appointment of the receivers, Mr Beynon and Mr Dixon did not have a common intention; they were not "linked in purpose". Mr Beynon's purpose was to continue in control of Forgecast's business, after the receivership ended, having shed some of the employees of the business and having cast onto GEERS the responsibility for paying any redundancy entitlements of those employees. Mr Dixon did not share this purpose. From his point of view, he was giving arms-length advice as an insolvency practitioner to Mr Beynon and, once appointed as one of the receivers, exercising the powers of a receiver and manager in a perfectly normal way. His task was to collect what monies he could from continuing the business for as long as was practicable, and then from its sale or the sale of its assets, and then to account to the creditors for the money so received in accordance with the law. This was what Mr Dixon intended to do. It was what he did. Once appointed, he was the directing mind and will of Forgecast. He was required to act, and did act, without any obligation to carry out the wishes of Mr Beynon. 84 Also clear is that the events of 25 and 26 November 2009 effectively put it out of Mr Beynon's reach to achieve his purpose. Any proposal that he should meet all of the entitlements of all the employees of Forgecast (whatever the origin of such a proposal) was not in accordance with his intention. Once he had made an offer on this basis (as he did on 25 November 2009), and this offer had been rejected by the employees of Forgecast (as it was on 26 November 2009), there was effectively no prospect of Mr Beynon retaining control of the business as a going concern. Further, the demise of the business was bound to occur reasonably soon after those events. On a cash flow basis, it was losing money by continuing to trade. There was no other person demonstrating real interest in purchasing the business. The only purpose of continuing to conduct the business was that of selling it as a going concern. Once that disappeared as an option, "Wind Down Mode" was inevitable. The taking of industrial action by the employees on 26 November 2009 may have precipitated the complete closure of the business, which otherwise might have been carried out in a more measured fashion, but it did not alter the inevitability of a closure. 85 The closure of the business did not accord with Mr Beynon's intention, whether at the date of appointment of Mr Dixon or later. It was the closure of the business that gave rise to the liability of Forgecast to pay redundancy entitlements to all of its employees, as distinct from such lesser number as Mr Beynon may have wished to make redundant. In these circumstances, Mr Beynon could not be said to have been a person involved in the contravention. The contravention was occurring without any contribution from Mr Beynon, save perhaps for his inadequate offer to meet the entitlements of all employees. In short, what was identified in the further amended statement of claim as the "proposal" (see [42] above) was not what was put into effect. Mr Beynon's attempt to purchase the assets of Forgecast, with a view to restarting the business, was not something that he had in mind, or Mr Dixon had in mind, at the time of the appointment of the receivers. 86 It follows that the application of the AMWU and the AWU must be dismissed. They have failed to establish that either Mr Beynon or Ideal was a person involved in the contravention of the AMWU Agreement and the AWU Agreement by Forgecast, in failing to pay the redundancy entitlements of its employees. 87 It also follows that the cross-claims of Mr Beynon and Ideal against Mr Dixon must be dismissed. Not being liable for anything, Mr Beynon and Ideal have no claim against Mr Dixon for contribution. 88 The question of costs is covered by s 570 of the Fair Work Act. The application in this case is a proceeding exercising jurisdiction under the Fair Work Act, so that the starting point is that a party cannot be ordered to pay costs incurred by another party, pursuant to s 570(1). It could not be said that the AMWU and the AWU instituted the proceeding vexatiously or without reasonable cause, in the sense that it was at all times bound to fail. Nor were they guilty of any unreasonable act or omission that caused the other parties to incur costs. Section 570(2)(c) of the Fair Work Act is entirely irrelevant. 89 In the course of the trial, I explored the question whether Mr Beynon and Ideal ought to be ordered to pay the costs of their cross-claim against Mr Dixon. I did so on the basis that they had not pleaded in those cross-claims any facts that would give rise to a liability for contribution, but had simply restated the allegations made against them in the further amended statement of claim. 90 Although in each of the cross-claims, Mr Beynon and Ideal invoked s 23B of the Wrongs Act, it appears to me that s 570(1) of the Fair Work Act applies to each of the cross-claims. Each is a proceeding (or a step taken in a proceeding) in a court exercising jurisdiction under the Fair Work Act. Further, it could not be said that either cross-claim was instituted vexatiously or without reasonable cause. On reflection, and on re-examining the statements of cross-claim, I cannot be satisfied that either of them involved an unreasonable act or omission, for the purposes of s 570(2)(b) of the Fair Work Act. Once again, s 570(2)(c) is irrelevant to the case. There should be no order for the costs of either cross-claim. 91 The orders to be made therefore are that the application be dismissed, each of the cross-claims be dismissed and there be no order as to the costs of the proceeding, including the cross-claims. I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Gray.