Corporations - Winding up - Proceedings against company in liquidation - Western Australian Industrial Commission "a court" - Leave of "the Court" required to proceed

Industrial law (WA) - Proceedings against company in liquidation - Western Australian Industrial Commission "a court" - Leave of "the Court" required to proceed

Industrial Relations Act 1979, s 12(1)

ALHMWU v Terranora Lakes Country Club Ltd (1996) 14 ACLC 1200

Alliance Petroleum Australia (NL) v Australian Gas Light Co (1983) 48 ALR 69

Amalgamated Metal Workers and Shipwrights Union of Western Australia v Griffin Coal Mining Co Ltd (1980) 60 WAIG 2137

Re Ashpurton Estates Ltd [1983] Ch 110

Attorney-General v British Broadcasting Corporation [1980] 3 All ER 161

Australian Postal Commission v Dao (No 2) (1986) 6 NSWLR 497

Barley v Depela Pty Ltd, unreported; Industrial Relations Court of Australia, NSW Registry; No 1392 of 1995

Builders' Registration Board of Western Australia v Kariba Constructions Pty Ltd (Provisional liquidator appointed), unreported; SCt of WA; (Master Seaman); Library No 6632; 13 March 1987

Commissioner of Police v Hollingsworth (No 2) (1998) 84 IR 192

Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd [1987] HCA 29; (1987) 163 CLR 140

Re David Lloyd & Co (1877) 6 Ch D 339

Foxcroft v The Ink Group Pty Ltd (1994) 12 ACLC 1063

Grabowski v Allert (1988) 6 ACLC 545

J J Leonard Properties Pty Ltd v Leonard (WA) Pty Ltd (In Liq) (1986) 11 ACLR 224

Ogilvie-Grant v East (1983) 7 ACLR 669

R v Gallagher; Ex parte Aberdare Collieries Pty Ltd (1963) 37 ALJR 40

Re Sharkey; Ex parte Robe River Mining Co Pty Ltd, unreported; FCt SCt of WA; Library No 940031; 28 January 1994

Re Vassal Pty Ltd [1983] 2 Qd R 769

Rokita v Jay Brock Pty Ltd t/a Drakebrockman First National Real Estate, unreported; IRC No 155 of 1998

Walden v Hansley Holdings Pty Ltd t/a GIS Engineering, unreported; IRC No 2142 of 1997 (Cmr Beech); 14 July 1998)

1 KENNEDY J: On 19 September 1997, pursuant to s 29(1)(b)(i) of the Industrial Relations Act 1979, the appellant filed a notice of application in the Western Australian Industrial Relations Commission, in which he claimed that he had been unfairly dismissed by the respondent on 18 September 1997. He did not seek reinstatement, and it appears that, by an amendment to his claim on 4 November 1997, he sought six months' salary, being the maximum allowable under s 23A(4) of the Act. In its notice of answer, filed on 1 October 1997, the respondent denied the claim, contending that the appellant had been made redundant due to the loss by the respondent of a major maintenance contract, that his redundancy had nothing to do with the appellant's work performance, and that he had received four weeks' pay in lieu of notice.

2 After what the Commissioner at first instance described as a somewhat chequered history of conferences, adjournments and other proceedings, the appellant's claim was brought on for hearing in the Commission on 24 August 1998, by which time the respondent was in liquidation. It was contended by the liquidator that s 471B of the Corporations Law applied, and that the appellant required leave to proceed with his application.

3 Section 471B of the Corporations Law provides as follows:

"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."

4 The expression "Court" has the meaning given to it by s 58AA. It means any of the following courts when exercising "the jurisdiction of this jurisdiction":

(b) the Supreme Court of this or any other jurisdiction;

(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."

5 There is a difficulty in relation to the definition of "court". The expression is defined in s 9 to have the meaning given to it by s 58AA of the Corporations Law. That section provides that "court" means "any court when exercising the jurisdiction of this jurisdiction". For the reasons expressed by Austin J in Brian Rochford Ltd (administrator appointed) v Textile Clothing & Footwear Union of NSW (1999) 17 ACLC 152, at 158 - 160, I am of the view that the word "jurisdiction" where it first appears in the 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.

6 The learned Commissioner at first instance identified the issue before her as being whether the Commission is "a court" for the purposes of the stay of proceedings imposed by s 440D(1) and s 471B of the Corporations Law. She upheld the respondent's submission that the Commission is "a court" for the purposes of the Corporations Law and she adjourned the proceedings and directed that there be no further proceedings unless and until the requisite authority for proceeding required pursuant to the Corporations Law is obtained. No such authority has been obtained by the appellant. The appellant appealed to the Full Bench of the Commission from this decision. On 18 December 1998, the Full Bench dismissed the appeal.

7 The appellant now appeals to this Court on a number of grounds, which may be summarised as follows:

(a) by construing "a proceeding in a court" in s 471B of the Corporations Law to include proceedings in the Western Australian Industrial Relations Commission.

(b) by holding that to interpret the section otherwise would be to defeat the object and intention of the Corporations Law, contrary to s 109H.

(c) in holding that by the Industrial Relations Act 1979 the Parliament of Western Australia intended to create a court of the Commission.

(d) by finding that s556 of the Corporations Law was irrelevant to the appeal.

8 In the alternative, it is claimed, in effect, that the Full Bench should have found that, in determining the issue of whether the appellant was entitled to compensation for unfair dismissal under s 29 of the Industrial Relations Act, the Commission would simply be quantifying the appellant's claim pursuant to s 556 of the Corporations Law and would thereby be promoting the object and purpose of the law.

9 The insuperable obstacle which the appellant faces is that, by s 12 of the Industrial Relations Act, it is expressly provided that the Commission is "a Court of Record". Furthermore, in determining whether an employee has been unfairly dismissed from his employment, and in considering whether, pursuant to s23A(1)(ba), it should order the employer to pay any, and what, amount of compensation to the claimant for loss or injury caused by the dismissal, the Commission is acting judicially.

10 It would be an extraordinary result if the Corporations Law, which is set out in s 82 of the Corporations Act 1989 (Cth), and which is declared by s 7 of the Corporations (WA) Act 1990 to apply as a law of Western Australia,where it refers to a court, is not intended to include within that description the Western Australian Industrial Commission which the Parliament has constituted as a court of record. As to courts of record generally, see Bl Comm iii 24, W S Holdsworth, A History of English Law, vol v at 157 - 161, vol ix at 147 - 148 and Enid Campbell, "Inferior and Superior Courts and Courts of Record" (1997) 6 JJA 249.

11 In the Brian Rochford case, Austin J, in a carefully reasoned judgment, held that the words "proceeding in a court" in s 440D of the Corporations Law have their general undefined meaning. Clearly, "proceeding in a court" must have the same meaning in s 471B as in s 440D. The appellant does not challenge this view, arguing that, in these terms, the Industrial Relations Commission is not a court.

12 In New South Wales, the Industrial Relations Act 1996 established the Industrial Relations Commission and vested it with certain jurisdiction and powers. It drew a distinction between the Commission and the Commission in Court Session. The latter, which is constituted by a judicial member or members, is established as a superior court of record. The former is not established as a court of record, either superior or inferior. Certain functions of the Commission are to be exercised only by the Commission in Court Session. But they do not include claims for unfair dismissal, which come within the jurisdiction of the Commission. Insofar as the Commission's jurisdiction with respect to unfair dismissals is concerned, the provisions in the New South Wales and in the Western Australian legislation are broadly similar, and it is unnecessary to detail them. It is sufficient to say that the following observations by Austin J in the Brian Rochford Ltd case at 167 are entirely apposite with reference to the Western Australian Act. Having indicated that some elements of the Commission's powers are not court-like, his Honour said:

"On the other hand, some of the functions of the Commission suggest that it is a court, quite apart from those functions which can be exercised only by the Commission in Court Session. The Commission's power to deal with unfair dismissal cases is defined by reference to criteria which would be familiar to any court, and the orders which the Commission may make are similar [to] the kinds of orders which can be made by the Supreme Court or other superior courts of record. To the extent that compensation may be awarded for unfair dismissal, there is a similarity between proceedings before the Commission and proceedings for common law damages. The Commission is empowered to make mandatory orders for reinstatement or re-employment, but the fact that the orders are mandatory in nature does not separate the Commission from a court, since courts are well accustomed to make mandatory orders by prerogative writ or mandatory injunction."

He then went on to reject the argument that its function of conciliation distinguished the Commission from a court. He said:

"While conciliation is no doubt given greater emphasis before the Commission than before other tribunals, the process of conciliation is well-known to superior courts of record which are accustomed to refer matters to arbitration, or to referees, and in recent times to other procedures for mediation or dispute resolution. What is significant is that despite these procedures, the tribunal has the ultimate authority to determine the dispute by making binding orders."

13 In the present case, the proceedings have already progressed beyond the stage of conciliation, and they came before the Commissioner for determination.

14 Austin J concluded that, for the purposes of s 440D of the Corporations Law, the New South Wales Industrial Relations Commission constituted a court and that the proceeding before it was "a proceeding in a court". On the basis of the same reasoning, which I would, with respect, adopt, and also having regard to s 12(1) of the Act, in my opinion, the Western Australian Industrial Relations Commission is a court for the present purposes.

15 I do not consider that the appellant can gain any support from the provisions of the Suitors' Fund Act 1964. The fund, established under that Act, is made up of fees paid upon the issue of writs in the Supreme or District Courts, upon the entry of plaints in the Local Court, and upon the issue of any summons to a defendant upon complaint under the Justices Act whereby proceedings are commenced in a Court of Petty Sessions. As its long title indicates, the Suitors' Fund Act is intended to meet the liability for costs of certain litigation. It appears to be directed to litigation, and primarily to appeals, in the hierarchy of what might be termed mainstream courts. This is not surprising having regard to the source of the fund. It has clearly been thought necessary specifically to include the Workers' Compensation Board and the Small Claims Tribunal within the expression "court", as used in the Suitors' Fund Act, notwithstanding in the case of the Workers' Compensation Board that, by s 112 of the Workers' Compensation and Assistance Act 1981, it was constituted a court of record as well as being a court within the meaning of that term in the Evidence Act 1906 and an inferior court within the meaning of that term in the Vexatious Proceedings Restriction Act 1930. Small Claims Tribunals are not courts of record.

16 Nor do I consider that the appellant can gain any support from the decision of the Australian Industrial Relations Commission in Qantas Airways Limited v Australian Municipal, Administrative, Clerical and Services Union (C No 20136 of 1998), unreported; 5 March 1999. That was a decision which relevantly turned upon the provisions of Chapter III of the Commonwealth Constitution. The question there was whether a Commissioner was purporting to exercise the judicial power of the Commonwealth, although the Commission did not meet the constitutional requirements of a federal court under Chapter III. For that purpose, it was necessary to distinguish between arbitral power and judicial power, the distinction being that between, on the one hand, the ascertainment of existing rights, and, on the other hand, the application of value judgments in deciding what rights ought to exist, but not to enforce such rights.

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 in this case.

18 In my opinion, the Commissioner and the Full Bench of the Commission correctly found that, for the present purposes, the matter before the Commissioner was a proceeding in a court against a company being wound up, and that the leave of a Court was required before the matter could proceed further.

20 ANDERSON J: I have had the advantage of reading in draft form the judgment prepared by Kennedy J. I entirely agree with it and there is nothing I wish to add.

21 PARKER J: I have had the advantage of reading in draft the judgment of the learned Presiding Judge with which I respectfully agree and have nothing to add.