Melbourne University Student Union Inc. (In Liq.) v Sherriff [2004] VSC 266 (30 July 2004)

Last Updated: 4 August 2004

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

No. 6969 of 2004

IN THE MATTER OF MELBOURNE UNIVERSITY STUDENT

UNION INC. (IN LIQUIDATION)

Melbourne University Student Union Inc. (In Liquidation)	Plaintiff
V
Dean Sherriff	Defendant

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JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 July 2004
DATE OF JUDGMENT:	30 July 2004
CASE MAY BE CITED AS:	Melbourne University Student Union Inc. (In Liq.) v Sherriff
MEDIUM NEUTRAL CITATION:	[2004] VSC 266

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CORPORATIONS - claim against company in liquidation - whether a claim in the Australian Industrial Relations Commission is a "proceeding in a court" under s.471B of the Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Galvin	Ellinghaus Weill
For the Defendant	No Appearance

HIS HONOUR:

1. The Court has before it an application by originating process dated 12 July 2004 for a declaration and for injunctive relief in the following circumstances.
2. The defendant (who does not appear but has been served by substituted service), before the plaintiff went into liquidation, had made an application to the Australian Industrial Relations Commission alleging unfair dismissal and claiming relief including damages. The Court then ordered that the plaintiff be wound up and appointed a liquidator.
3. The plaintiff contends that s.471B of the Corporations Act is applicable, and that the defendant cannot proceed with his application to the Commission.
4. Section 471B of the Corporations Act 2001 (Cth) provides that while a company is being wound up in insolvency or by the Court, a person cannot begin or proceed with a proceeding in a court against the company, except with the leave of the Court.
5. There are two kinds of court referred to in s.471B. There is a capital "C" Court, which for present purposes is either the Supreme Court of Victoria or the Federal Court, and there is a small "c" court which is defined by s.58AA(1) of the Corporations Act as being "any court." However, there are a number of decisions by judges sitting in the Corporations jurisdiction that a proceeding such as that brought by the defendant or a similar proceeding is a proceeding in a small "c" court, quite apart from s.58AA, for the purposes of this or similar sections.
6. There is a decision of Justice Austin of the Supreme Court of New South Wales in Brian Rochford Ltd v Textile Clothing & Footwear Union of New South Wales (1998) 47 NSWLR 47, in which His Honour gave a purposive interpretation to the word "court" in a similar provision in the Corporations Law and decided that a proceeding before the Industrial Relations Commission of New South Wales was a proceeding for the purposes of the section that he was there dealing with and that the Industrial Relations Commission was a court. He was there concerned with s.440D of the Corporations Law, but the same principle is applicable. In that case His Honour restrained the defendant from proceeding further with the application to the New South Wales Industrial Relations Commission.
7. Then there is a decision of the Supreme Court of Western Australia, the Court of Appeal, comprised of Kennedy, Anderson and Parker, JJ. That case involved the Western Australian Industrial Relations Commission and concerned the same section of the Corporations Law which is now found in the Act.
8. The decision is Helm v Hansley Holdings Pty Ltd (In Liquidation) [1999] WASCA 71. The court followed what had been decided by Justice Austin and held that the Commissioner and the Full Bench of the Commission had correctly found that the matter before the Commissioner was a proceeding in a court against the company being wound up and that leave of the Court was required and they therefore dismissed an appeal from the Commissioner and the Full Bench of the Commission.
9. And then in Australian Liquor Hospitality & Miscellaneous Workers Union v HomeCare Transport Pty Ltd [2002] FCA 497; (2002) 117 FCR 87, Justice Merkel in the Federal Court followed the decisions to which I have referred, and applied them to the Australian Industrial Relations Commission itself, determining that that Commission was a court within s.471B, and that the word "court" in that section had a wider meaning than that referred to in s.58AA of the Corporations Act.
10. His Honour's reasoning is similar to that contained in the decisions of Justice Austin and in the Court of Appeal of the Supreme Court of Western Australia to which I have referred, and His Honour referred to those authorities in detail.
11. There is also a decision of Justice Nettle in this court in Moorabool Shire Council v Taitapanui [2002] VSC 418, in which Justice Nettle says at para [15]:

"Authority makes plain that the reference to 'court' in s.471B is not to be construed in a strict sense, but in a fashion that is broad enough to cover a proceeding in a tribunal such as the Victorian Civil and Administrative Tribunal: see the recent decision of Justice Merkel in Australian Liquor Hospitality & Miscellaneous Workers Union v HomeCare Transport Pty Ltd (In Liquidation) and also earlier decisions concerned with the comparable provisions of the Companies Code..."

12. As against that, my attention has been drawn to a decision of the Australian Industrial Relations Commission itself, and the Full Bench of that Commission, directly to the contrary.[1]
13. However, as the authorities make plain,[2] this Court ought to follow decisions of intermediate appellate courts in the Corporations jurisdiction unless they are plainly wrong, and I also think that I should follow the decision of Justice Merkel.
14. The decision of Justice Merkel was directly in point, and not only is it in point, but I think that it is probably correct. So I think that the plaintiff is entitled to the declaration which it seeks.
15. I am not persuaded however that I should grant an injunction against the defendant. It would put the defendant in an invidious situation when Courts in the Corporations jurisdiction are saying one thing, and the Commission under the Workplace Relations Act is saying another. Obviously this conflict has to be resolved.[3]
16. So I do not require the plaintiff to give the undertaking. I will simply declare that by reason of the operation of s.471B of the Corporations Act 2001 (Cth), the defendant is precluded from proceeding with Action No.2003/5102 commenced by the defendant against the plaintiff in the Australian Industrial Relations Commission without the leave of the Court.
17. I will secondly order that the defendant pay the plaintiff's costs of this application including reserved costs.

[1] Smith v Trollope Silverwood & Beck Pty Ltd (In Liquidation) (Australian Industrial Relations Commission, 17 November 2003, Justice Giudice, President, Vice-President Ross, Commissioner Whelan, No. PR 940508).

[2] Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485, 492.

[3] I note that a Federal Court Judge was sitting as President of the Commission when the decision was made in the matter to which I have referred.