His Honour concluded at paragraph 16 in these terms:
"The reasoning in these paragraphs applies equally, in my view, to the category of future claims for the purpose of s 553(1). If there was no obligation on the respondent on the date on which the winding up is taken to have begun, to indemnify the directors against their personal liability to the credit card companies or to pay the Directors amounts sufficient to enable them to discharge their liabilities to the credit card companies and such obligations can only arise if and when the Industrial Relations Commission makes orders, there was, in my view, no future claim against the company. Sheller JA said at para 41 the accepted practice is to compute the amount of a debt or claim at the relevant date. In these circumstances it seemed unlikely to His Honour that the legislative intention was no longer to confine an obligation to one in existence at the relevant date but to extend the category of future claim to any obligation which comes into existence at any time in the future. In my view, such a construction of s 553(1) would place an intolerable burden on a liquidator whose responsibility it is to determine which future claims are to be admitted to proof and in what amounts."
21 His Honour then concluded that there had been no error in principle in exercising the discretion. This result is just one of the matters to be taken into account, in my view, in the exercise of my discretion on whether or not to grant leave.
Would the plaintiff's claim rank in priority to the normal unsecured creditors?
22 Section 556 of the Corporations Act provides that in the winding up of a company a number of debts and claims must be paid in priority to all other unsecured debts and claims. These include, of course, expenses of the winding up and relevantly, the matters in the following sub paragraphs:
"(e) subject to subsection (1A)-next, wages and superannuation contributions payable by the company in respect of services rendered to the company by employees before the relevant date;
(f) next, amounts due in respect of injury compensation, being compensation the liability for which arose before the relevant date;
(g) subject to subsection (1B)-next, all amounts due:
(i) on or before the relevant date; and
(ii) because of an industrial instrument; and
(iii) to, or in respect of, employees of the company; and
(iv) in respect of leave of absence;
(h) subject to subsection (1C)-next, retrenchment payments payable to employees of the company."
23 Subsection (h) deals with retrenchment payments and the definition of a retrenchment payment found in s 556(2) of the Act is as follows:
""retrenchment payment" , in relation to an employee of a company, means an amount payable by the company to the employee, by virtue of an industrial instrument, in respect of the termination of the employee's employment by the company, whether the amount becomes payable before, on or after the relevant date."
In the present case the plaintiff does not suggest that he is entitled to a retrenchment payment, rather he seeks, in his application, to insert a term of payment in lieu of notice of termination and full redundancy. I assume from his application that he is thus is not entitled to a retrenchment payment payable by virtue in an industrial instrument, as he does not claim that in his application.
24 In these circumstances, when one considers the funds available, it is plain that the ultimate order for compensation, if it were made, would not have priority over the employees' claims which are presently made to the liquidator. There are 21 employees who have made what the liquidator describes as "the employees' proven claims" amounting to $14,559.50. It was not submitted that the order could be an expense in the winding up.
25 This result indicates that in a practical sense little would be achieved as a result of the order, if indeed it were made by the Commission.
The prejudices of the creditors
26 In paragraph 11 of the plaintiff's submissions the following submission was made:
"Given the financial position of the Defendant the real contest in the Industrial Relations Commission is between the Plaintiff and Challenge Disability Services. The Applicant, therefore, is willing to give an undertaking that he will not enforce any judgment obtained in any proceedings in the Industrial Relations Commission of New South Wales against Namoi Enterprises ( Re W A Brown & Sons Pty Ltd and Companies Act 1961 1964-65 NSWR 575 per McClelland CJ at 58.45)."