For his part, Mr Rosenblatt submitted that the quote restated the ordinary position concerning existing employees and receivers, and supported the receivers' contentions they could have no liability in the circumstances of this case. He submitted there has been no case where liability for a termination of employment has been ascribed to a receiver and manager. He also submitted that it would represent a misreading of Professor O'Donovan's work to include a termination of employment in the meaning of "or otherwise", when s419 is concerned with liability for a continued benefit not for a termination.
34 On the other hand, Mr Coleman submitted that personal liability had arisen under s419 because the receivers had not simply allowed the applicant's pre-existing contract of employment to continue without change. As contemplated in the quote from Professor O'Donovan, the personal liability had potentially arisen in circumstances of "variation, novation or otherwise". It was the nature of the receivers' decision to terminate the applicant's employment which gave rise to "a brand new head of damage" in the category of "or otherwise". The receivers' action in effecting the termination of employment, he submitted, may have given the receivers personal responsibility under s419 and may provide a basis for the Commission to deal with the claim against them.
35 I accept Mr Coleman's submission that the application before the Commission raises an issue concerning the liability of the receivers which is qualitatively different from the type considered in the employment-related cases to which the parties adverted. The cases and authors I have read in connection with the preparation of this decision do not really provide assistance in determining the issues raised in this case because they turn on different considerations. That is, the Australian cases concerning s419 of the Corporations Act and cases related to similar principles in English cases focus on disputes about indebtedness concerning the provision of goods and services, and, in employment-related cases, to liability for debts such as unpaid wages, redundancy payments and the like. For example, in Incat, the employees had relied on s419 as an alternative source of liability on the receiver to pay accrued annual leave and long service leave entitlements as well as any retrenchment entitlements which may have accrued since the receivers appointment. Referring to Nicoll v Cutts [1985] BCLC 322 and Sipad, Finkelstein J said he could not find the receiver liable for payment of the entitlements. Similarly, Sipad itself, referred to by both parties, concerned a receiver's liability for payment of employment-related entitlements. Other examples include Whitton v ACN 003 266 886 Pty Ltd (Controller Appointed) (In Liq) (1997) 42 NSWLR 123, Love v The Image Centre Pty Ltd (1991) 33 AILR 406; Re Office Co Furniture Pty Ltd [1999] QSC 63; Fisher v Madden as Receiver and Manager of Dataflow Computer Services Pty Ltd (2002) 54 NSWLR 179; Re Allders Department Stores Ltd and other companies [2005] EWHC 172 (Ch), [2005] 2 All ER 122; Re Huddersfield Fine Worsteds Limited [2005] EWCA Civ 1072. Simply stated, cases of this ilk do not appear to be in point, for none concerned the same type of claim now before the Commission - which involves an allegation that a termination of employment amounted to a dismissal which was statutorily harsh, unreasonable or unjust and that it was the conduct of the receivers themselves, as actual employers or quasi-employers, which had visited the unfairness on the employee. (For a comprehensive review of Australian developments in more general cases involving employee entitlements in situations such as corporate collapses, see the very informative paper recently released by the Corporate Law and Accountability Research Group (Monash University), namely, Working Paper No 1 - The New Corporate Law, by Stephen Bottomley and Anthony Forsyth.)
36 There was insufficient material before me at this stage of the proceedings to determine whether the receivers had, in allowing the applicant's period of employment to continue between 25 November to 5 December 2005, adopted the employment contract. For instance, there was no evidence as to what work, if any, the applicant performed during this period at the direction of the receivers. It is similarly unclear whether the decision of the receivers to terminate the applicant's employment in circumstances alleged to be unfair, after the applicant was kept-on in her employment by the receivers between 25 November to 5 December 2005, potentially resulted in an accrual of personal liability under s419 of the Corporation Act. It may be that s419 is concerned not only with liabilities such as debts simpliciter incurred in the ongoing management of a company's assets but also liabilities such as compensation orders stemming from personal default by receivers in the management of employees of the business concerned; I was not taken to any cases one way or the other in this respect. Moreover, the parties did not address on whether a compensation order under s89(5) of the Industrial Relations Act may amount to a "debt" within the meaning of s419 of the Corporations Act. I do note, however, that in a South Australian case named Tom, Wendy, Sally and Andrew Chapman v R H Heywood-Smith and J M Morgan as receivers and managers of Binalong Pty Ltd and the Marina Services Co Pty Ltd [1995] SAIRComm 46 (10 March 1995) the applicants sought a finding against the receivers and managers personally. Although no employment relationship was found to exist in that case, Hampton DP made an observation which may be apposite to any further consideration of this matter in arbitration:
I do not take s419 of the Corporations Law to determine the identity of the employer, and I am not required to decide who is liable for "debts" of the company nor whether s210 applies to any order of this Commission. In the context of s420 of the Corporations Law, the employer must be ascertained by reference to the particular facts of the case.
37 Issues concerning the adoption of employment, and rights in the event of some employee complaint against a receiver, administrators and liquidators other than underpayments simpliciter are sometimes defined by legislation. For example, s8 of the Companies (Receiver and Manager) Act 1959 (NSW) appears to have formerly provided receivers and managers with a blanket exemption from liability to any person for any acts or omissions. In Britain, certain rights and obligations arise under present-day insolvency legislation if an administrator continues an employee's employment for more than a fortnight. In other jurisdictions, such as Canada, applications may be made for receivers to be treated as "successor employers" within the meaning of employment legislation: see discussion in an internet report titled, Supreme Court of Canada opens the door to labour relations proceedings against insolvency administrators (www.mondaq.com). However, as I have not been referred to clear authority based on Australian statute law or case law concerning the liability of a receiver and manager in a claim for statutory compensation in an allegedly unfair dismissal, it would seem to me, as submitted by Mr Coleman, that the applicant may have an arguable case in relation to liability deriving from s419 of the Corporations Act.