Bi and Secretary, Department of Employment [2016] AATA 690 (8 September 2016)

Last Updated: 8 September 2016

Bi and Secretary, Department of Employment [2016] AATA 690 (8 September 2016)

Division	GENERAL DIVISION
File Number	2016/0367
Re	Shainaz Bi
	APPLICANT
And	Secretary, Department of Employment
	RESPONDENT

DECISION

Tribunal	Senior Member J Sosso
Date	8 September 2016
Place	Brisbane

The Tribunal affirms the decision under review.

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Senior Member J Sosso

Catchwords

EMPLOYMENT – Fair Entitlements Guarantee Act – where an insolvency event occurs – where a liquidator was appointed – where employment of applicant had ceased less than six months before the appointment of a liquidator – whether applicant an ‘excluded employee’ for the purposes of the relevant legislation – where the applicant had been married to a director of the liquidated company – whether the applicant was a spouse of a director of the company in the relevant period – decision under review affirmed

WORDS AND PRHASES – “spouse”

Legislation

Acts Interpretation Act 1901 (Cth) s 15AA
Corporations Act 2001 (Cth) ss 9, 513A, 556
Fair Entitlements Guarantee Act 2012 (Cth) ss 3, 5, 10, 11, 12, 13, 20, 21, 22, 23, 24
Fair Entitlements Guarantee Bill 2012 Explanatory Memorandum

Cases

Dennis and Secretary, Department of Employment [2014] AATA 942
Fitzpatrick v Sterling Housing Association [1999] UKHL 42; [1999] 3 WLR 1113

Secondary Materials

Macquarie Dictionary (4^th ed, 2005)

REASONS FOR DECISION

Senior Member J Sosso


8 September 2016

INTRODUCTION

1. Ms Shainaz Bi (the Applicant) was employed as Manager of Crane Trucks R Us Pty Ltd (the Company) from 1 July 2009 until 28 August 2015 (Exhibit 1, T6, p.56).
2. The Director and Secretary of the Company from 2007 until 2015 was Mr Farmouz Farhaad Mohammed. Mr Mohammed and the Applicant were married on 26 September 2005 in New South Wales (Exhibit 6). Both Mr Mohammed and the Applicant are Australian citizens (Exhibit 8), are separated but still married and have two children, a boy born in 2007 and a girl in 2010.
3. On 6 November 2015 the Supreme Court of Queensland appointed Mr Mark William Pearce of Pearce & Heers as liquidator of the Company (the insolvency practitioner). The appointment of a liquidator is an “insolvency event” that triggers the beneficial scheme for persons under the Fair Entitlements Guarantee Act 2012 (Cth) (the Act) – section 10(1)(c). Further, the Applicant’s employment had ceased less than 6 months before the appointment of the liquidator – section 10(1)(c)(ii).
4. The Act provides a scheme for employees to gain access to certain unpaid employee entitlements where the employee has become unemployed due to the insolvency of the employer.
5. On 20 November 2015 the Applicant submitted a claim under the Act (Exhibit 1, T6).
6. On 8 December 2015 the delegate for the Secretary, Department of Employment (the Respondent) determined that the Applicant was ineligible to receive assistance under the Act (Exhibit 1, T9). On 15 December 2015 the Applicant sought reconsideration of that decision and on 12 January 2016 the review delegate of the Respondent affirmed the primary decision (Exhibit 1, T10).
7. The Applicant applied on 19 January 2016 for a review of the 12 January 2016 decision (Exhibit 1, T1).

The Issue

8. Section 11 of the Act excludes from eligibility of assistance an person who had a personal connection with an employer. Relevantly, subsection 11(1) excludes a person who is an “excluded employee” pursuant to section 556 of the Corporations Act 2001 (Cth). the term “excluded employee” includes a person who in the 12 months ending on the relevant date was the spouse of a director of the Company.
9. The “relevant date” is 6 November 2015, when the winding up order was made by the Supreme Court of Queensland – section 513A Corporations Act 2001.
10. The term “spouse” is defined in section 9 of the Corporations Act 2001 to mean:

“spouse of a person includes a de facto partner of the person within the meaning of the Acts Interpretation Act 1901”

11. The sole issue in contention is whether the Applicant was the spouse of Mr Mohammed in the twelve months leading up to 6 November 2015.

Contentions of the Applicant

12. In her Application for Review (Exhibit 1, T1), the Applicant submitted that she had been separated from her husband since June 2014. She provided a copy of a Muslim Marriage Certificate dated 5 January 2014, which evidenced that her husband had married in India another woman while still married to the Applicant.
13. The second wife contacted the Applicant in June 2014 informing her of the situation. The Applicant stated (Exhibit 1, T1, p. 6):

“when I confronted him about this and he admitted to this relationship. It was than (sic) when our relationship came to an end.”

14. When the Applicant sought reconsideration of the primary decision she submitted, firstly, a Medical Certificate from Dr Shahriar Aghakhani dated 15 December 2015 (Exhibit 1, T10, p. 119). Dr Aghakhani said, inter alia: “Her husband has left her and her two children since July 2015.”
15. Secondly, the Applicant provided copies of Centrelink Parenting Payment Statements (Exhibit 1, T10, pp. 120 - 125). These Statements disclose that the Applicant has been in receipt of a single parenting payment from Centrelink since 5 August 2015.
16. Thirdly, the Applicant provided copies of receipts from various service providers (Queensland Urban Utilities, AGL Electricity, AGL Gas, Ipswich City Council Rates Notice and Body Corporate Contributions – Exhibit 1, T10, pp.126 - 131), which cumulatively disclose that in the period September to December 2015 the Applicant was solely being billed for the expenses of maintaining the family home in Brookwater, Queensland.
17. Finally, the Applicant submitted a reference dated 16 December 2015 from her father, Mr Mohammed Rafiq (Exhibit 1, T 10, p. 132). Mr Rafiq stated:

“My daughter has been separated from her husband since mid this year.”

18. More recently the Applicant provided to the Tribunal a further Medical Certificate from Dr Aghakhani dated 22 March 2016 (Exhibit 3). In this Certificate Dr Aghakhani states:

“The above-named is a regular patient of this practice. She has been seen at this practice for management of mental health issues a few times a few times (sic) since 30/08/2015.
She reports that her symptoms started in June 2014 when she realized that her husband was not fidel (sic); he had married to another woman in 2010. She and her husband were separated under the same room (sic) since then and finally her husband left her and her two children in July 2015.”

19. The Applicant also provided a further statement from her father dated 19 March 2016 (Exhibit 2). So far as is relevant Mr Rafiq states:

“After the confrontation with him in June 2014 she called myself and my wife over to let us know what had happened, we tried to settle the matter with them both but it was quiet (sic) clear that they both wanted out of their relationship. At that stage they both were not financially stable to move out on their own so they decided to live separated under the same roof till they could afford to go on their own. They both have 2 young kids together who were also involved in this big mess, it was hard to explain to them on (sic) what was going on straight away.
After continuing to live together things got worse by day, my wife and I were there nearly every second day trying to counsel the situation, on many occasions the police were also called.
It got to a point where things were getting out of hand and they couldn’t live separated under the same roof any longer, it’s then when the husband moved out in Mid-2015.”

20. The Applicant, finally, submitted an Application for Divorce Kit (Exhibit 5). When giving evidence before the Tribunal, the Applicant confirmed that she had not, as of 26 August 2016, formally commenced divorce proceedings in the Family Court.
21. At the hearing, the Applicant submitted to the Tribunal that following the birth of their second child on 13 December 2010, she and her husband ceased sleeping together and no longer had intimate relations. This marital arrangement deteriorated further when the Applicant was contacted by her husband’s second wife in 2014. Although the Applicant and her husband continued to live in the same house their marriage had irretrievably broken down (Exhibit 1, T1, p. 6). As Mr Rafiq stated in his letter dated 19 March 2016, the relationship was unhappy and turbulent, and collapsed totally in mid-2015 when Mr Mohammed left the family home (Exhibit 2).
22. The Applicant submitted that even though she was formally married to Mr Mohammed, she ceased to be his spouse in reality from the time she became aware of his infidelity and marriage to another woman (Exhibit 1, T1, p. 6). Their “marriage” was, from June 2014, one in name only and existed only because of their young children and financial circumstances.

Contentions of the Respondent

23. In the Respondent’s Statement of Facts, Issues and Contentions (SFIC) the Tribunal’s attention is drawn to the Applicant’s 2014-2015 Income Tax Return, where the Applicant answered “yes” to the question: “[did you have a spouse for the full year – 1 July 2014 to 30 June 2015” (Exhibit 1, T6, p.74).
24. The Respondent also draws the Tribunal’s attention to the record of a claim officer who spoke to the Applicant by telephone on 7 January 2016 (SFIC, para 3.9). The claim officer records that the Applicant confirmed that she and her husband had separated in July 2015 and this was not more than 12 months before the Company was placed into liquidation (Exhibit 1, T14, p.140).
25. It is the Respondent’s contention that the Applicant and her husband were married in the 12 months prior to 6 November 2015. It is further contended that the ordinary definition of the word “spouse” includes persons legally married to each other, and therefore the Applicant was a spouse of the Director for the entire period they were (and are) married to each other (SFIC, para 5.3).
26. In support of this contention the Respondent relies on Dennis and Secretary, Department of Employment [2014] AATA 942.
27. Senior Member McCabe (as he then was) found that Ms Dennis was a “spouse” for the purpose of section 556(2) of the Corporations Act 2001 because she remained married to Mr Dennis even though they were separated and living apart. Senior Member McCabe found as follows:
    14. ...The fact the individuals have separated does not change anything; unless and until they are divorced, they remain spouses for the purposes of the Corporations Act.
    15. In order for Ms Dennis to succeed, it would be necessary for me to read down the plain English expression spouse so that it only includes people who are married (or who are de facto partners) who continue living together as a couple. I do not think there is any basis for doing so. Indeed, this case demonstrates the problem in that approach. The limitation is designed to prevent persons who do not have an arms’ length relationship with the management of the failed employer from benefitting from the scheme; that much is evident from the legislation as a whole....”

CONSIDERATION

28. Apart from Senior Member McCabe’s helpful decision, the Respondent was unable to refer to any other cases on the proper construction of the word “spouse” for the purposes of the Act.
29. When interpreting the word “spouse”, the Tribunal is required to adopt the ordinary meaning of the word, in the general context of the legislation, unless this construction would not promote the purpose or object underlying the statute – section 15AA Acts Interpretation Act 1901 (Cth).
30. In determining the ordinary meaning of spouse, reference can be made to the definition of that word in the Macquarie Dictionary (4^th ed 2005):

“1. either member of a married pair in relation to the other; one’s husband or wife.”

31. The main objects of the Act are set out in section 3 as follows:

“The main objects of this Act are:

(a) to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers in cases where:

• (i) the employers are insolvent or bankrupt; and
• (ii) the end of the employment of the former employees was connected with that insolvency or bankruptcy; and
• (iii) the former employees cannot get payment of the entitlements from other sources; and

(b) to allow the Commonwealth to recover the advances through the winding up or bankruptcy of the employers and from other payments the former employees receive for the entitlements.”

32. The Act replaced the General Employee Entitlements and Redundancy Scheme with provisions designed to enhance the protection of Australian employees who otherwise could lose their entitlements due to the insolvency of their employer. This objective is facilitated by a scheme whereby financial assistance, called an “advance”, is provided to persons where the cessation of their employment is linked to the insolvency or bankruptcy of their employer. In turn the Commonwealth assumes the employee’s recovery rights in the winding up.
33. The scheme provided for by the Act is a very generous one, and enables persons, provided they meet the statutory criteria, to receive advances comprising entitlements in relation to unused annual leave, unused long service leave, up to five weeks’ payment in lieu of notice, redundancy pay (capped at four weeks per full year of service) and unpaid wages for up to 13 weeks – sections 5, 20 – 24.
34. Section 11 of the Act was inserted to ensure that persons who had a personal connection with an employer were excluded from this scheme. As Senior Member McCabe correctly highlighted, this is to ensure that recipients of an advance have an “arm’s length” relationship with the management of the employer and are not in a position to unfairly benefit from the insolvency of the employer.
35. The ordinary and unstrained meaning of spouse is one of a married couple of husband and wife. The statutory definition of spouse under the Corporations Act 2001 specifically extends the category of excluded employees to include de facto couples. There is no suggestion from the objects of the Act in section 3, the wording of either section 11 of the Act or section 556 of the Corporations Act 2001, that a narrower definition of spouse was intended. On the contrary, it is clear from the statutory definition of spouse that the Commonwealth Parliament intended that term to have as broad and expansive a definition as was reasonably open. The reason for this approach is clear. The statutory scheme of advances is very generous and a reading of section 10 (conditions of eligibility for advance) with the exclusions from eligibility as outlined in sections 11 – 13, highlight that the Act is targeted at a particular class of persons.
36. The Applicant contends that although she remains married to Mr Mohammed, she ceased being his spouse from June 2014. The Tribunal has no reason to doubt the evidence, both oral and written, given by the Applicant. The uncontested evidence before the Tribunal is the Applicant and her husband ceased being intimate after the birth of their second child, and their marriage disintegrated from that point forward, culminating in the severing of any semblance of married life in June 2014 and the final departure of Mr Mohammed from the family home in mid-2015.
37. The Tribunal draws no adverse inferences from any of the material provided by the Applicant. It was submitted by the Respondent that the Applicant both on her income tax return and in a conversation with a claim officer specifically acknowledged that Mr Mohammed was her spouse. Clearly for the purposes of the income tax return and in normal nomenclature he was, and the Applicant said as much. However, the gravamen of the Applicant’s case is that although she was still legally married to Mr Mohammed, it was a marriage in name only, and that in reality she did not regard herself as his spouse from 2014. She contends that the Tribunal give the term spouse a narrow interpretation to reflect the reality of her relations with Mr Mohammed.
38. The word spouse must be interpreted in the relevant statutory context. Lord Slynn in Fitzpatrick v Sterling Housing Association [1999] UKHL 42; [1999] 3 WLR 1113 said of the word spouse (at 1118): “The question is, therefore, was the plaintiff the spouse of or a member of the family of Mr Thompson within the meaning of the Act? I stress ‘within the meaning of the Act’ since it is all that your Lordships are concerned with. In other statutes, in other contexts, the words may have a wider or a narrower meaning.” In the context of the Act the word “spouse” has a specific and precise meaning. There is no scope for spouse to be interpreted in the manner contended by the Applicant. Not only would such an interpretation be at odds with the clear objects of the Act, it would also import into the legislation a degree of uncertainty. If the word spouse means something other than a person in a married or de facto relationship, then the obvious question is: what does it mean? What latitude is open to this Tribunal to import into the word a meaning other than its ordinary and well understood meaning, where it is not directed to do so by legislation? Such an approach would be contrary to the normal rules of statutory interpretation and contrary to public policy.

CONCLUSION

39. For the reasons outlined above, Ms Shainaz Bi is not eligible for an advance under the Act as she was the spouse of Mr Farmouz Farhaad Mohammed, the director of the Company, within twelve months prior to the Company being placed into liquidation on 6 November 2015 and therefore an excluded employee under section 556 of the Corporations Act 2001.

DECISION

40. The Tribunal affirms the decision under review.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the decision herein of Senior Member J Sosso

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Associate

Dated 8 September 2016

Date of hearing	26 August 2016
Applicant	In person
Solicitors for the Respondent	Ashurst Australia