Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd

1. Pursuant to s 500(2) of the Corporations Act 2001 (Cth), the appellant have leave to proceed against the first respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GOODMAN J 1 The appellant seeks leave, pursuant to s 500(2) of the Corporations Act 2001 (Cth), to proceed with this appeal as against the first respondent (AMK Images Pty Ltd), which was placed into liquidation after the commencement of the appeal. The application is supported by an affidavit affirmed on 21 August 2024 by Mr Thomas Fischer, a solicitor and legal industrial officer of the appellant. 2 The appeal concerns the decision of a judge of the Federal Circuit and Family Court of Australia (Division 2) in Construction, Forestry and Maritime Employees Union v AMK Imaging Pty Ltd [2024] FedCFamC2G 361, in which the primary judge dealt with the imposition of penalties upon AMK Images and Mr Anthony Gavran for contraventions of the Fair Work Act 2009 (Cth) (FW Act). The reference to "AMK Imaging Pty Ltd" is an error and should read "AMK Images Pty Ltd". 3 The appellant, which was the applicant below, commenced the appeal on 16 April 2024. The essence of the appeal is that the penalties imposed by the primary judge were inadequate. 4 On 2 May 2024, AMK Images and Mr Gavran filed a notice of objection to competency, the essence of which is that: they and the appellant reached an agreement concerning liability and the manner in which submissions would be made to the Court below concerning penalties; the appellant's decision to appeal the primary judgment constitutes a breach of that agreement; and by dint of the agreement the appellant is estopped from bringing the appeal. 5 On 21 June 2024, I made orders for the hearing of the appeal in Canberra on 29 October 2024 and for the preparation of the appeal for hearing. 6 On 5 July 2024, a resolution for the voluntary winding up of AMK Images was passed and Mr Frank Lo Pilato was appointed as liquidator of that company. The appellant was not notified of that appointment until mid-August 2024. 7 The appellant then brought the present application. The liquidator of AMK Images and Mr Gavran neither consent to, nor oppose, the application. 8 Section 500(2) of the Act provides that: After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes. 9 The relevant principles concerning the exercise of the discretion conferred by s 500(2) of the Act are well-established and need not be repeated. It is sufficient to record that I gratefully adopt the comprehensive analysis of those principles by Derrington J in Clean Energy Regulator v E Connect Solar & Electrical Pty Ltd [2023] FCA 1082 at [8] to [17]. 10 The leave sought should be granted for the following reasons. 11 First, I am satisfied that the appeal gives rise to a serious question to be tried as to the adequacy or otherwise of the penalties imposed by the primary judge (as well as the question of whether the appellant is estopped from pursuing the appeal). 12 Secondly, the relief sought pursuant to the appeal is not available within the proof of debt regime. This is a factor of significant weight: see Clean Energy at [17(b)]. 13 Thirdly, no potential prejudice to the creditors of AMK Images from the grant of leave is apparent. In particular, if the appeal were to succeed and greater penalties were to be imposed, this would have no effect upon the creditors of AMK Images because the effect of s 553B of the Act would be that such penalties would not be admissible to proof against AMK Images. 14 Fourthly, there is a public interest which extends beyond the current proceeding, in view of the pre-dominant purpose of the imposition of penalties under the FW Act being deterrence, including general deterrence; and thus there is a public interest in the correction of any error in the imposition of such penalties: see Clean Energy at [17(c)]; Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521 at [26] (Bromwich J). 15 Fifthly, any inability of AMK Images to pay any increase in penalties does not tend against the grant of leave given the object of general deterrence (see Clean Energy at [17(h)]; Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869 at [67]). 16 Sixthly, the appeal is well advanced. As mentioned earlier, it is set down for hearing on 29 October 2024. Further, before the appellant was informed of the appointment of Mr Lo Pilato, it had prepared and filed its submissions. The appellant and Mr Gavran have since filed further documents ahead of the hearing of the appeal and the appeal is ready to be heard (see Clean Energy at [17(e)]). 17 Seventhly, there appears to be no countervailing factors weighing against the grant of leave. 18 Finally, there is no opposition to the application. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.