High Court of Australia Barwick C.J. McTiernan, Kitto, Menzies and Owen JJ. Stein v Saywell [1969] HCA 16 ORDER Appeal dismissed with costs. Cur. adv. vult. The following written judgments were delivered:— 1969, April 24 Barwick C.J. Upon an originating summons taken out in the Supreme Court of New South Wales by the respondent, George Montague Saywell, as receiver on behalf of the respondents Keith Alfred Britter, Cestus O'Donnell, John Michael Quain and Norman Jeffrey Robinson (the respondent creditors) and also as liquidator of Carapark Industries Pty. Ltd. (the company) for declarations and directions in connexion with the order of priority of payment of certain debts of the company, his Honour Mr. Justice Street sitting in the equitable jurisdiction of the Court held that the date of the making of the order winding up the company was relevantly the commencement of the winding up. Upon this footing, his Honour gave certain directions unfavourable to the claims of certain employees of the company. The employees claimed priority of payment under s. 292 (1) (d) of the Companies Act, 1961 N.S.W. (the Companies Act) for money payable to them in respect of annual and long service leave. Section 292 (1) (d) is in the following terms: 172. (1) Subject to the provisions of this Act, in a winding up there shall be paid in priority to all other unsecured debts— (d) fourthly, all remuneration payable to any employee in respect of annual leave or long service leave, or both or in the case of his death to any other person in his right, accrued in respect of any period before the commencement of the winding up. From his Honour's order an appeal was unsuccessfully taken by the appellant as representative of the employees to the Court of Appeal Division of the Supreme Court. The matter was dealt with at both stages in the Supreme Court as if the entitlement to annual leave upon which the rejected claims were in part based was derived by the employees under the Annual Holidays Act, 1944, of the State of New South Wales and their entitlement to long service leave upon which the other part of those claims was based arose under the Long Service Leave Act, 1955, of that State (the Long Service Leave Act). No precise information was before the Supreme Court as to the circumstances affecting the entitlement of the claimant employees to annual or to long service leave respectively. However, at the instance of this Court during the argument of this appeal the employees' claims for which priority is asserted in the winding up were further and more fully investigated. As a result a statement of mutually admitted facts was lodged with the Court. It is upon the state of facts thus disclosed that the Court proposes to deal with the appeal. The company at relevant times was a member of the Metal Trades Employers' Association which during those times was a respondent bound by The Vehicle Industry Award, 1953 (the award). As to employees who were dismissed on or after 26th October 1965 it was bound by the Vehicle Industry (Long Service Leave) Award, 1965 (the Long Service Leave Award). Prior to that date the company's employees were entitled to the benefit of the Long Service Leave Act. On 13th August 1965 a petition to wind up the company was lodged in the Supreme Court by a creditor of the company and on that date the respondent Saywell was appointed provisional liquidator of the company with power to carry on its business. On 24th August the respondent Saywell was appointed receiver and manager of the company under powers conferred by a deed of floating charge which had been given by the company to creditors other than the respondent creditors. That charge was supported by specific charges over land and chattels of the company which in the event were realized to produce the amount secured: thus no resort by those creditors to the security comprised in that floating charge was necessary. However, the appointment of the receiver and manager under that deed of charge made the sum secured to the respondent creditors by another deed of floating charge immediately payable according to the terms of the latter deed. Also, because the sum secured became due, the floating charge, again according to the terms of the deed of charge, then crystallized and became specific. But no receiver was appointed under this deed till 11th November 1965, when the respondent Saywell was appointed receiver and manager of the company on behalf of the respondent creditors. The company was ordered by the Supreme Court to be wound up under the provisions of the Companies Act on 22nd November 1965 and the respondent Saywell was appointed liquidator. Apparently the business of the company was carried on after the presentation of the petition to wind up and none of its employees on whose behalf claims to priority in payment are made in these proceedings was dismissed prior to or upon the presentation of the petition: but they were all dismissed by 29th October 1965. The respondent Saywell received certain money as receiver and manager under the deed of charge given in favour of the respondent creditors. The money predominantly came from sundry debtors of the company. There are no assets of the company available to pay the general creditors; but, if it should be decided that there are creditors having priority and entitled to access to the money in the hands of the receiver, he is willing to transfer the moneys in his hands to the liquidator's account. Under the award an employee on weekly hiring becomes entitled to a period of twenty-one consecutive days' leave after twelve months' continuous service (less the period of annual leave) in an occupation covered by the award (cl. 14 (a)). Under the Long Service Leave Act a worker who has completed at least fifteen years' service with an employer is entitled to long service leave to an extent specified in s. 4 of the Act. Under the Long Service Leave Award an employee who has completed at least fifteen years' service with an employer is entitled to long service leave as specified in cl. 6 (2) (a) of that award. Each of these instruments makes provision for the rights of an employee upon termination of his services otherwise than for his own default. It will be convenient to set out the respective provisions of the award, of the Long Service Leave Act and of the Long Service Leave Award which relate to such termination. The Award Clause 14 (1): (1) If after one month's continuous service in any qualifying twelve monthly period an employee lawfully leaves his employment or his employment is terminated by the employer through no fault of the employee, the employee shall be paid at his ordinary rate of wage for 10 hours in respect of each completed one month of continuous service in respect of which leave has not been granted hereunder. Long Service Leave Act Section 4: (2) (a) Subject to paragraph (a2) of this subsection and subsection thirteen of this section the amount of long service leave to which a worker shall be so entitled shall— (i) (ii) in the case of a worker who has completed at least ten years service but less than fifteen years with an employer and whose services with the employer are terminated or cease for any reason, be a proportionate amount on the basis of three months for fifteen years service; and (iii) in the case of a worker who has completed with an employer at least five years service as an adult, and whose services are terminated by the employer for any reason other than the worker's serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of three months for fifteen years service (such service to include service with the employer as an adult and otherwise than as an adult). (5) (a) Where the services of a worker are terminated otherwise than by his death and any long service leave— (i) to which the worker was entitled has not been taken, or (ii) accrues to the worker upon such termination and has not been taken, the worker shall, subject to subsection thirteen of this section, be deemed to have entered upon the leave from the date of such termination and the employer shall forthwith pay to the worker in full his ordinary pay for the leave less any amount already paid to the worker in respect of that leave. Long Service Leave Award Clause 6: (2) (b) in the case of an employee who has completed at least ten but less than fifteen years service with an employer and whose employment is terminated— (i) by the employer for any cause other than serious and wilful misconduct; or (ii) by the employee on account of illness incapacity or domestic or any other pressing necessity where such illness incapacity or necessity is of such nature as to justify such termination; or (iii) by the death of the employee; a proportionate amount on the basis of thirteen weeks for fifteen years service. (3) Such leave shall be granted and taken and, except as by this award permitted, payment in lieu thereof shall not be made or accepted. Clause 8: (2) (a) Where the employment of an employee is terminated otherwise than by his death and any long service leave— (i) to which the employee was entitled has not been taken; or (ii) accrues to the employee upon such termination the employer shall forthwith pay to the employee in full the amount in respect of such leave calculated as at the date of the termination in the manner set out in clause 7 (1) hereof less any amount already paid to the employee in respect of that leave. It appears from the agreed statement of facts that a number of employees of the company had had the twelve months' continuous service with the company prior to 13th August 1965 necessary to entitle them as at that date to a period of annual leave (cl. 14 (a) of the award). Also there was a number of such employees who had before that date completed under an unbroken contract of employment at least fifteen years' service with the company or with the employer of whose business the company was in fact a transmittee: (see s. 4 (2) Long Service Leave Act: cl. 5 Long Service Leave Award). The rest of the employees had not so served. But as I understand the agreed facts, at least some of this group had served a sufficient period in the employment of the company or of the transmittor of its business prior to their dismissal to fulfil the requirements of cl. 14 (1) of the award, s. 4 (2) (a) (ii) of the Long Service Leave Act, or cl. 6 (2) (b) of the Long Service Leave Award as the case may be. Whether any employees had served sufficiently to come within s. 4 (2) (a) (iii) of the Long Service Leave Act does not appear. But the reasoning applicable to employees entitled under s. 4 (2) (a) (ii) would be applicable to employees entitled under s. 4 (2) (a) (iii). There was thus remuneration payable to each employee upon dismissal. It was in respect of annual leave or long service leave or both. Some part of what was paid in respect of such leave may have related to the service of the employee with the company between the date of presentation of the petition, namely, 13th August 1965 and date of dismissal in October 1965. But some other part of the remuneration paid must have been related to the service of the employee with the company before 13th August. I see no difficulty in determining that part, having regard to the formula on which such remuneration payable on dismissal is calculated under the awards and the Act respectively. The appellant claims priority under s. 292 (1) (d) for all remuneration paid or payable in respect of annual leave or long service leave or both which in point of calculation related to the service of the employee with the company or with the company and the transmittor of its business before 13th August 1965. He submits in the first place that upon their true construction, the appropriate provisions of the award, of the Long Service Leave Act and, if and where applicable, of the Long Service Leave Award provide that a right to be remunerated upon dismissal for leave not taken accrues from day to day and that upon its true construction s. 292 (1) (d) of the Companies Act gives priority for remuneration thus accrued in relation to service before the commencement of the winding up. He puts an alternative argument that under the provisions giving a right to annual or long service leave the right to leave accrues from day to day and that the payments made to the employees on dismissal can be divided up into payments in respect of the ratable amount of leave accrued on a daily basis as at 13th August and payments in respect of the proper amount of leave which daily accrued thereafter up to the date of dismissal. Thus he seeks to bring the situation of all the dismissed employees within s. 292 (1) (d) in respect of so much of the remuneration paid or payable to them as related to their service prior to 13th August 1965, whether the section requires the remuneration or the leave to have been accrued at the commencement of the winding up. He disputes the proposition that leave, whether it be annual or long service, can only be said to be accrued when the employee by reason of the completion of the appropriate qualifying term of service with the employer is entitled to take it, subject only to those provisions of the awards or the Act which allow the employer some discretion as to the actual time when it shall be enjoyed. Faced with the position that, even if the appropriate part of the remuneration payable to the employees on dismissal is brought within the terms of s. 292 (1) (d), there are no assets of the company available for the payment of general creditors to meet the amount of such remuneration according to the priorities of that section, the appellant relies upon the provisions of s. 292 (4) of the Companies Act which are as follows: 292. (4) So far as the assets of the company available for payment of general creditors are insufficient to meet any preferential debts specified in paragraphs (b) and (d) of subsection (1) of this section and any amount payable in priority by virtue of subsection (3) of this section, those debts shall have priority over the claims of the holders of debentures under any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge. The appellant did not press before this Court an argument founded upon s. 196 (1) of the Companies Act though he called attention to its terms in relation to the construction of s. 292 (4). The amount payable on the termination of their services to those employees who by reason of length of service had by 13th August 1965 become entitled to annual or long service leave, would clearly qualify for priority according to the terms of s. 292 (1) (d). That leave had accrued in respect of a period before the commencement of the winding up whether the date of the presentation of the petition or the date of the order winding up the company is selected as the commencement of the winding up within the meaning of s. 292 (1) (d). But, as already mentioned, the appellant resorts to s. 292 (4) to obtain payment of the amount of that remuneration out of the property comprised in or subject to the charge given by the company to the respondent creditors. Before considering the proper meaning of that subsection, I shall deal with the position of those employees who by 13th August had not completed the full term of service to entitle them to annual leave or to any long service leave as the case may be. I have taken 13th August 1965 as the relevant date because, in my opinion, the date of the presentation of the petition is the date of the commencement of the winding up within the meaning of s. 292 (1) (d). But, in point of fact, it is not suggested that during the period from 13th August to the date of dismissal, any employee not entitled to leave, annual or long service as the case may be, at that date became entitled thereto by reason of the addition of service during that period to the period of service prior to that date. Thus, as I understand the admitted facts, it would make no difference to the cases of the employees who had not become entitled to leave, annual or long service as the case may be, on 13th August so far as priority under s. 292 (1) (d) is concerned, if the date of the making of the winding-up order should be chosen as the commencement of the winding up. Therefore, for the purpose of deciding whether or not those employees are entitled to priority in respect of any part of the remuneration paid or payable to them on dismissal there is actually no need to decide when for the purposes of s. 292 (1) (d) the winding up commenced. But, if any part of the remuneration paid or payable to any of the company's employees does have priority, the date of the commencement of the winding up may affect the amount of money in respect of which priority of payment is given. I therefore propose to express my view as to when this winding up commenced within the meaning, and for the purposes, of s. 292 (1) (d). In Motor Terms Co. Pty. Ltd. v. Liberty Insurance Ltd. [1] , the Court had occasion to decide whether a debt not statute-barred by the Statute of Limitations or by analogy thereto at the date of the presentation of a petition to wind up was admissible to proof in the liquidation which followed upon the making of the winding-up order, where by the date of that order the debt had become statute-barred. The Court concluded that the position of a debt in relation to the time bar was to be considered as at the date of the presentation of the petition to wind up and not as at the date of the winding-up order. It was said by some of the participating Justices that the commencement of the winding up was the date of the presentation of the petition. Having regard to the discussion of this question which has taken place and the views expressed so far in this case as well as the general importance of the question, I have re-examined the matter, including the practical difficulties which it has been suggested the choice of the date of the presentation of the petition as the commencement of the winding up will entail for those who have the task of administering company liquidations. 1. (1967) 116 C.L.R. 177. After due consideration, I affirm the view I expressed in the above-mentioned case. In the first place the language of s. 223 (2) as to the commencement of the winding up in cases other than those for which s. 223 (1) provides, is unqualified and intractible. It is not expressed, as is the case with a mere definition, to be subject to context. It "deems" the commencement of the winding up which ensues upon the order to wind up to be the time of the presentation of the petition. In my opinion, that means it is so at least for all the purposes and in relation to all the provisions of the Act contained in Div. 2 of Pt X of the Act. That view to my mind gives consistency to the various portions of Div. 4. For example, in sub-div. 3 of Div. 4, though of course the time for proof of debts does not arise till the order to wind up is made, questions as to preferences, the validity of certain dealings, rights of disclaimer and the like are consistently referred to the date of the lodgment of the petition to wind up. Until the order to wind up is made, the company will not be in course of being wound up, unless perhaps a provisional liquidator with appropriate powers has been appointed. But once the order is made the winding up is deemed to have commenced with the lodgment of the petition. Further, I am unable to accept the view that practical difficulties of such proportions would arise from such a construction as to call for such judicial surgery as has been proposed. It must be remembered that the date of the presentation of the petition has no significance unless an order is subsequently made upon it. No provision of the Act requires a long interval of time to elapse between the presentation of the petition and the making of the order. Perhaps we too complacently accept the too frequent occurrence of a considerable delay between those two events. But that is not a situation contemplated by or covered by any of the Act's provisions. The presentation of a petition is a notorious fact, much more so, I should think, than the service or the expiry of a bankruptcy notice. I see nothing impractical in relating the rights of creditors to the date of the presentation of the petition. It may well be that insufficient attention has been given by the legislature to the period which may elapse between the presentation of a petition and the order to wind up. In practice, for a variety of reasons, this may be a substantial space of time though such delays as I have said should not, in my opinion, lightly be tolerated. But the rounding out of a statutory scheme of liquidation based on the presentation of the petition as its commencement is a matter for the legislature. Any deficiencies there may be in the legislation in relation to acts and transactions, including debts made or incurred during the period between the presentation of the petition and the making of the order, can afford no reason, in my opinion, to gainsay the positive language of the statute. In my opinion, therefore, 13th August 1965 is the date of the commencement of the liquidation in the application of the sections of the Act here involved. I return then to consider the position of those employees who had not become entitled to leave, annual or long service as the case may be, before 13th August 1965. It seems to me there is no need to consider whether any of the dismissed employees had the benefit of the Long Service Leave Act rather than the benefit of the Long Service Leave Award. There are no doubt some differences between the two sets of provisions but none of those differences, in my opinion, affect any of the reasons or conclusions which I am to give and express. But it is necessary to observe the differences in structure between the annual leave provisions of the award and the long service leave provisions of the Long Service Leave Act and the Long Service Leave Award. It must first be remembered that leave, whether annual or long service, represents a period within the employment during which the employee is excused from the performance of duty but entitled to remuneration though no compensating work is performed. But this leave is not itself remuneration: it must be taken by the employee and must not be substituted by a money payment. In the case of long service leave, the employee may not during the period of the leave under the Long Service Leave Award take other employment with employers bound by that award. Section 292 (1) (d) deals primarily with a money payment by way of remuneration. It must be in respect of leave which has accrued in respect of a specified period of time, that is to say, accrued in respect of service in the employment during a period prior to the commencement of the winding up. Thus it is the entitlement to a period of enforced and paid leisure that, in my opinion, must have accrued in respect of service before the commencement of the winding up. As the accrual of leave coincides with the expiry of the requisite period of service in the employment, this means that the entitlement to take leave must have accrued prior to the commencement of the liquidation. Examination of the awards and the Act shows that such leave only accrues after a specified period of service in the employment, the employment including employment with a transmittor of the employer's business. If the employment terminates, otherwise than for the fault of the employee before the annual leave to which the employee is entitled has been enjoyed, the award and the Long Service Leave Act do not notionally extend the employment so that the remuneration in the form of wages in respect of it will be payable. cf. s. 4 (1) of the Annual Holidays Act. But none the less, in my opinion, as I have indicated, the payment to the dismissed employee of the amount of wages which would have been paid to him during his enjoyment of the annual leave to which he had become entitled by reason of his service before 13th August 1965, precisely qualifies as remuneration payable in respect of leave accrued in respect of a period before the commencement of the winding up: see cl. 14 (1) of the award, s. 4 (2) (a) (ii) of the Long Service Leave Act and cl. 6 (2) (b) of the Long Service Leave Award. The award, however, deals with the case of the employee whose dismissal precludes the completion of the period of service requisite to entitle him to annual leave: see cl. 14 (1). It provides for such a situation not by regarding him as entitled to enter upon a period of leave proportioned to the extent of his service and by extending his employment accordingly so that his wages will continue to accrue due to him during that period of leave: but, on the contrary, it creates a new and a different right, namely, a right to be paid money of which the amount is quantified by reference to his length of service. The amount of the money payable is clearly enough proportioned to the length which the actual period of service of the employee bears to the period of service which would have entitled the employee to the leave. But that relationship does not mean, in my opinion, that annual leave accrues from day to day: or that the money is paid in respect of accrued annual leave. In my opinion, the remuneration payable on dismissal to those employees who had not before 13th August 1965 become entitled to annual leave is not remuneration payable in respect of leave accrued before the commencement of the winding up. On the contrary, it is payable because leave had not accrued as at the date of dismissal and could not thereafter accrue. It might be thought that there was no reason to differentiate in the granting of priority of payment between remuneration paid to a dismissed employee who had not fully served a qualifying period of service and one who had done so. But, in my opinion, the legislature has quite clearly only given priority to the latter. As the Act stands, it represents the full extent to which the legislature has been prepared to go in according priority to payments made to employees in respect of leave upon termination of their services. Long service leave, however, in my opinion, stands in a slightly different case. The provisions of the Long Service Leave Act and of the Long Service Leave Award which I have earlier set out clearly treat the proportionate amount of long service leave as accruing to the employee upon his dismissal, that is to say, in the case of an employee who had served at least ten years prior to his dismissal, long service leave according to the stated scale will accrue to him on dismissal: and likewise in the case of an employee with at least five years' service. But these provisions, in my opinion, deny that the long service leave is accruing from day to day. An employee with four years' service is not entitled to any long service leave and an employee with, for example, five and a half years' service has no right to leave in respect of the incomplete year of service. On the other hand, the long service leave in the cases of employees falling within s. 4 (2) (a) (ii) or (iii) of the Act and cl. 6 (2) (b) (ii) or (iii) of the Long Service Leave Award will properly be regarded as accrued on dismissal and the payments directed to be made by s. 4 (5) (a) (ii) of the Long Service Leave Act and cl. 8 (2) (a) (ii) of the Long Service Leave Award as remuneration payable in respect of accrued long service leave. But the employees had not been dismissed prior to 13th August. Their entitlement to this leave only accrued thereafter, namely, on dismissal. The payments thus directed to be made cannot qualify under s. 292 (1) (d) because of the reference to the commencement of the winding up. The remaining question is whether the employees who had become entitled to leave before 13th August 1965 can have resort to the assets covered by the deed of floating charge. The answer to this question depends upon the construction of s. 292 (4) of the Companies Act, bearing in mind the presence in the Act of s. 196. The respondent creditors rightly say that after 24th August 1965, when the respondent Saywell was first appointed a receiver, their charge over the company's assets ceased to be a floating charge and became specific. They therefore submit that their right to the money in the hands of the receiver is not a claim "of the holders of debentures under any floating charge created by the company" nor is that money "properly comprised in or subject to" such a charge within the meaning of the subsection. The respondent creditors referred to in In re Griffin Hotel Co. Ltd.; Joshua Tetley & Son Ltd. v. The Company [1] , in support of their submission that s. 292 (4) had no application in this case because the floating charge given by the company to them had become specific prior to the making of the winding-up order. In that case the debts for which priority was claimed were incurred after the floating charge had become specific and a receiver appointed. The decision was placed upon the ground that unless the charge remained a floating charge immediately before the making of an order to wind up, no debts whenever incurred were to be paid out of the assets charged by virtue of a section the counterpart of s. 292 (4). It was thought that this reason was the corollary of the decision in In re Lewis Merthyr Consolidated Collieries Ltd.; Lloyds Bank Ltd. v. The Company [2] . There it was decided that in a case where there was at the outset both a fixed and a floating charge, given by the same instrument, the priority of the preferred debts over the secured debt was limited to the property subject to the floating charge. But in my respectful opinion, this decision did not require the conclusion that the payment of the preferred debts was required out of the assets covered by the floating charge only if it were still a floating charge at the date of the winding up order. The question in the case was of a very different kind, namely, whether the inclusion in the deed of charge of both a fixed and a floating charge brought the property the subject of the fixed charge within the operation of the equivalent of s. 196. It was decided, and with respect, I would agree that it did not. 1. [1941] Ch. 129. 2. [1929] 1 Ch. 498. In the case of Westminster Corporation and United Travellers Club Co. Ltd. v. Chapman [1] , s. 209 (2) of the Companies (Consolidation) Act, 1908, fell for application. It was so far as presently relevant in the following terms: The foregoing debts shall— so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge. 1. [1916] 1 Ch. 161. The company was ordered to be wound up on 27th May 1913 and a liquidator appointed. The trustees of the debenture deed on 23rd and 24th July 1913 realized the property comprised in the security and paid the net proceeds to the debenture holders. There being insufficient assets in the hands of the liquidator to pay the debts having priority, the debenture holder was ordered to pay to the preferred creditor the amount of the preferred debt. In that case, the charge would appear to have been floating at the date of the order to wind up but not at the time the liquidator came to resort to the provisions of the section. But it is significant that the section was regarded as requiring the chargee to disgorge the proceeds of what, when his receiver realized it, must have been a specific charge. It would be possible, in my opinion, to support an order in favour of the appellant in relation to those employees who had accrued annual or long service leave due to them as at 13th August 1965, upon the reason given for the decision in In re Griffin Hotel Co. Ltd.; Joshua Tetley & Son Ltd. v. The Company [2] . The sense of the judgment in In re Griffin Hotel Co. Ltd.; Joshua Tetley & Son Ltd. v. The Company [2] was that the preferred creditors could not have resort to the assets covered by the deed of charge if before the commencement of the winding up, which under the law in force in England was the date of the winding-up order, the charge had become specific. In fact at that date, which was the commencement of the winding up in this case, the respondent creditors' charge was still floating. 1. [1941] Ch. 129. 2. [1941] Ch. 129. But, I would prefer not to base my reasons for the appellant's success on that ground. This Court is not bound by the decision in that case. In my opinion, the proposition that s. 292 (4) does not defer the claim of the debenture holder if in any case before the making of the winding-up order, or the commencement of the liquidation, the charge over the assets of the company has crystallized is, in my opinion, insupportable. I can derive neither assistance nor find compulsion from or in the circumstance that subsequent to that decision a legislature has enacted ss. 196 and 292 (4). It is quite clear to my mind that the legislature in enacting these sections did not intend that the priority which it accorded to such debts as those due to employees for wages or accrued leave should be defeated by the circumstance that the floating charge had become crystallized before the time had arrived for determining and giving effect to that priority. The policy behind s. 196 and s. 292 (4) is, I think, quite plain. A creditor who accepts a floating charge over a company's assets allows the business of the company to be carried on and the assets of the company which are subject to the floating charge to be altered, perhaps augmented, by the efforts of the company and its employees. The holder of the floating charge is not to be able to displace the priorities which the legislation accords certain debts which accrue during the carrying on of the business; amongst those priorities is certain remuneration of employees of the company. The method of ensuring that the holder of such a charge does not compete with those creditors to whose debts priority of payment is given is best seen, I think, in s. 196. Under that section, in the period prior to the actual commencement of the liquidation of a company, a receiver for the debenture holder, with funds in hand which are the produce of the realization of the charge created initially as a floating charge is bound to pay out of those funds the debts of the preferred creditors. Of course, there will be occasions when the appointment of the receiver is the event which crystallizes the floating charge. Quite clearly the fact that the charge then becomes specific is irrelevant to the operation of the section. But in general the appointment of a receiver follows upon the falling due of the sum charged and the consequential crystallization of the floating charge. This was so in the present case. The description in the section "on behalf of the holders of any debentures secured by a floating charge" ought to be read as wide enough to include the chargees whose rights derive from a floating charge which had become specific. It would be, in my opinion, far too narrow and an unduly literal construction to confine that description to those chargees only so long as the charge remained floating. Indeed, it would in a practical sense denude the section of much, if not the greater part, of its utility. I can find no reason, connected with the evident policy the section is designed to effect, which would support such a construction. Further, the alternative in the section, namely, the taking of possession of any property comprised in or subject to a floating charge, in my opinion, tends against such an interpretation of the section. Possession could only be taken if the amount charged had become due in which event in general the charge becomes specific. I would think it would in every case be specific before the actual taking of possession of a particular asset. In my opinion, s. 292 (4) must be construed in the same sense. It seems to me that the expression "the claims of the holders of debentures" has been chosen to describe the right of the chargee whose charge originated as a floating charge to be paid out of any of the assets or the proceeds of any assets which in the event come within the charge by reason of the terms of the charge initially created by the company. The two sections are complementary. Section 196 governs the matter provided the company is not in the course of being wound up, and s. 292 (4) governs it from the commencement of the winding up: it provides part of the rules applicable in the winding up. Where the making of the order to wind up is the commencement of the winding up, the total scheme is easily seen; the operation of the two sections, where both operate, dovetails. But when the winding up is deemed to commence at the date of the lodging of the petition, an appearance of an overlap between operation of the two sections emerges. But actually I doubt if there is any real overlap. If no receiver is appointed before the making of the order to wind up, s. 292 (4) will provide the occasion to defer the claims of the debenture holder. If a receiver is appointed before the petition to wind up is lodged, s. 196 will operate to defer the claims of the chargee to so much of the employees' preferred claims as have accrued to the date of the appointment of the receiver. On the making of the order to wind up upon a subsequently lodged petition, s. 292 (4) will operate with respect to any sums which after the appointment of the receiver come within the preference provisions of s. 292 (1) (d): see In re Griffin Hotel Co. Ltd.; Joshua Tetley & Son Ltd. v. The Company [1] on this point. Where as here the receiver is appointed after the commencement of the winding up but before the making of the winding-up order, it seems to me that s. 292 (4) will be the provision under which the rights of the chargee and preferred creditors will be worked out. But the possibility that in the interval between the lodging of the petition and the making of the order to wind up proceedings may be taken against the receiver on behalf of the preferred creditors must be considered. In my opinion, in such a case, if before the order to wind up is made, the employees have received the amounts relevantly due to them at the date of the appointment of the receiver, there will be no scope for the operation of s. 292 (4). It might be noticed in passing that the amount in respect of which priority of payment is given, whilst related to the date of the appointment of the receiver, may well be further limited by the fact of the lodgment of the petition. For on that event occurring the extent of the preference in payment in the winding up is limited by s. 292 (1) (d) to the amount payable in respect of a period prior to that event. Of course if no winding up supervenes upon the petition that limitation will not be present. Further, if no receiver has been appointed under a charge which according to the terms of the deed creating it has become specific before the making of an order to wind up, s. 196 would have no operation. But as I have said, when, as here, no proceedings have been taken against the receiver before the winding-up order has been made, s. 292 (4) in my opinion, and not s. 196, provides the means by which the preferred creditors will obtain such access to the assets covered by the charge to which they are entitled. Under s. 292 (4) as much as under s. 196 the claims of the chargee are to be deferred, in my opinion, in the given circumstances not because the charge under which the chargee derives his rights remains floating but because it has been floating. Logically the priority as against the chargee would be expected to be limited to debts which arose during the period it was floating. But neither s. 196 nor s. 292 (4) is so limited. 1. [1941] Ch. 129. In my opinion, the operation of s. 292 (4) cannot be limited to the occasions when the charge remains floating at the commencement of the winding up. It will come into play if the claims of the chargee to assets or their proceeds arises out of a security which initially created a floating charge which, having become specific, now comprises those assets. The final words of s. 292 (4) "and shall be paid accordingly out of any property comprised in or subject to that charge", in my opinion, support this view of the operation of the section. In my opinion, so much of the money paid or payable on dismissal to those employees who had become entitled before 13th August 1965 to take leave, annual or long service as the case may be, by reason of having fully served for the entitling period, as was paid or payable in respect of such leave is entitled to priority of payment in the liquidation by reason of s. 292 (1) (d). There being no assets available for payment of general creditors, those employees are entitled to be paid that money out of the proceeds of any assets to which the respondent creditors obtained access by reason of the deed of floating charge given to them by the company, that is to say the money in the hands of the receiver should be employed in payment of the remuneration payable to those employees so far as the same will extend. There is no need for any transfer of funds to the liquidator's account. The payment should be made by the receiver. None of the employees of the company represented by the appellant is entitled to any priority in payment of any money otherwise paid on dismissal. In concrete terms, this means that the respondent receiver should pay to those employees who had prior to 13th August 1965 served the qualifying period for annual or any long service leave or both that part of the money that was due to them in respect of such leave. I would to this extent allow the appeal. McTiernan and Menzies JJ. This is an appeal from an order of the Court of Appeal of the Supreme Court of New South Wales [1] dismissing an appeal from Street J. [2] denying in the liquidation of Carapark Industries Pty. Ltd.—hereafter called "the company"—priority for remuneration payable to the appellant and other employees of the company in respect of annual leave or long service leave. The appellant's claim for priority depended upon s. 292 (1) (d) and (4) of the Companies Act of New South Wales. Section 292 (1) (d) gives priority over unsecured debts to: all remuneration payable to any employee in respect of annual leave or long service leave, or both or in the case of his death to any other person in his right, accrued in respect of any period before the commencement of the winding up. Section 292 (4) is as follows: So far as the assets of the company available for payment of general creditors are insufficient to meet any preferential debts specified in paragraphs (b) and (d) of subsection (1) of this section and any amount payable in priority by virtue of subsection (3) of this section, those debts shall have priority over the claims of the holders of debentures under any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge. 1. (1968) 88 W.N. (Pt 1) (N.S.W.) 1. 2. (1967) 86 W.N. (Pt 1) (N.S.W.) 165. The facts, as they were known, were conveniently summarized by the President of the Court of Appeal as follows [3] : 1. The company was incorporated on 7th March 1962. 2. Four separate groups of securities were granted by the company between 1963 and 1965 of which I need mention only two, viz. (a) A fourth mortgage over real estate of the company and a bill of sale over certain of its chattels and a deed of floating charge over the whole of the company's undertaking to Keith Britter Pty. Ltd. in 1963. (b) A fifth mortgage over real estate and another bill of sale (of no importance for present purposes) and also a second floating charge over the whole of the company's assets to Messrs. Britter, O'Donnell, Quain and Robinson on 29th June 1964. These gentlemen are the last four-named respondents to this appeal. The dispute is really between them and the appellant. The first-named respondent is the receiver the liquidator G. M. Saywell. 3. On 13th August 1965 Australian Aluminium Co. Ltd. presented a winding-up petition against the company. 4. On the same day the first-named respondent Saywell was appointed provisional liquidator. 5. On 24th August 1965 Keith Britter Pty. Ltd. appointed the first-named respondent receiver and manager pursuant to powers contained in the deed of floating charge referred to in 2 (a) above. [By virtue of a certain term in the second floating charge referred to in 2 (b) above such second charge also crystallized and became fixed and specific "ipso facto" on 24th August 1965.] Keith Britter Pty. Ltd. appears to have been paid in full by virtue of its position as mortgagee of the real estate. 6. The company's employees were dismissed upon the company ceasing to carry on business—29th October 1965. 7. On 11th November 1965 the last four-named respondents Britter, O'Donnell, Quain and Robinson appointed Saywell receiver and manager pursuant to powers contained in the floating charge referred to in 2 (b) above. 8. A winding-up order was made on 22nd November 1965. Mr. Saywell was thereby appointed liquidator. 9. Certain moneys came into the hands of Mr. Saywell as provisional liquidator and after payment thereout of certain sums for (inter alia) wages and the costs of running the business there remained the sum of £7,521—which he transferred to his receiver's account before the winding-up order. Some doubt was cast on the propriety of this transfer, but the matter does not appear to be of present importance. 10. Mr. Saywell has not received any other moneys of the company since the date of his appointment as liquidator. 1. (1968) 88 W.N. (Pt 1) (N.S.W.) at pp. 2, 3. Since argument concluded in this Court it has been ascertained, contrary to the assumptions upon which the case was argued and upon which it was determined by Street J. and the Court of Appeal [1] (a) that the claims of all employees represented by the appellant in respect of annual leave arise under cl. 14 of the Vehicle Industry Award, 1953 and not under the Annual Holidays Act, 1944-1967 N.S.W., and (b) that the claims of some of the employees in respect of long service leave arise under the Vehicle Industry (Long Service Leave) Award, 1965 and the claims of others arise under the Long Service Leave Act, 1955-1967 N.S.W.. Furthermore, as appears from par. 6 of the statement of facts by the President of the Court of Appeal, the case was conducted upon the footing that all the company's employees were dismissed on 29th October 1965. It now appears that some employees were dismissed between 13th August 1965 and 29th October 1965. Moreover, it has been ascertained (a) that the company is the transmittee of a business in which some of the employees concerned were employed and (b) that some of these employees did, as at 13th August 1965, have fifteen years' continuous service with the company or the transmittor of its business. Finally, it now appears, that some of the employees had, before 13th August 1965, become entitled to twenty-one consecutive days leave pursuant to cl. 14 of the Vehicle Industry Award. 1. (1967) 86 W.N. (Pt 1) (N.S.W.) 165; (1968) 88 W.N. (Pt 1) (N.S.W.) 1. The foregoing information which has been set out in a statement of admitted facts is, we think, of particular significance to employees who, prior to 13th August 1965, had become entitled to take either annual leave or long service leave. It seems to us that their case is altogether different from those of employees who had not become so entitled. The first question is whether remuneration, payable to any and which of the employees whom the appellant represents, in respect of annual or long service leave was remuneration in respect of leave which had accrued in respect of any period before the commencement of the winding up—i.e., 13th August 1965—so as to fall under s. 292 (1) (d). So far as the employees who had, by that date, become entitled to take leave, we think the question should, without doubt, be answered affirmatively. A more difficult problem is with respect to employees who had not so become entitled. Leave, both annual and long service, is required to be given in respect of a period of service. Thus annual leave is given in respect of a year's service and long service leave is given in respect of fifteen years' service. Leave when due must be taken and the granting of pay in lieu of leave is, in general, prohibited. It follows that if priority under s. 292 (1) (d) attaches only to remuneration for a completed period of service entitling an employee to take leave, the priority is of little importance because it must be a very small percentage of employees who, at any particular time, have completed the requisite period of service and have not taken leave. Of course there can and will be such cases, as the facts admitted here show, and, if the language of the Companies Act so requires, priority can be limited to such cases. It is not possible in this case to say that a construction which would so limit the operation of the statutory provision would render it abortive although, without doubt, a construction, which would give priority to remuneration which has become payable because the employment of an employee has, after the commencement of the winding up, been brought to an end, would seem to be one more likely to serve the purposes of legislation intended to benefit employees of companies who cannot pay their debts in full. The leave for which provision is made by par. 14—Annual Leave—of the Vehicle Industry Award, 1953 conforms to the general description of annual leave stated previously and it is not necessary to do more than quote par. 14 (1)— If after one month's continuous service in any qualifying twelve monthly period an employee lawfully leaves his employment or his employment is terminated by the employer through no fault of the employee, the employee shall be paid at his ordinary rate of wage for 10 hours in respect of each completed one month of continuous service in respect of which leave has not been granted hereunder. Do employees becoming entitled to payment under this provision become entitled to "remuneration in respect of annual leave accrued in respect of any period before the commencement of the winding up", i.e., 13th August 1965? (See Companies Act, 1961-1965 N.S.W., s. 292 (1) (d).) Such employees can, we think, be said to have become entitled to remuneration in respect of a period of service of less than a year, but not to remuneration in respect of annual leave accrued in respect of a period before the commencement of the winding up. Annual leave is leave for a year, not for a period of less than a year and "remuneration in respect of annual leave accrued " is remuneration for annual leave to which an employee had become entitled. In our opinion, payments to be made pursuant to cl. 14 of the award upon the termination of an employment after the commencement of a winding up do not fall within the description of remuneration in respect of annual leave accrued in respect of a period before the commencement of a winding up. The words "annual leave" accrued and before in s. 292 (1) (d) compel this conclusion. Although we think that the same principles apply in deciding whether remuneration is payable in respect of long service leave in respect of the period terminating after the commencement of the winding up of a company, it is, perhaps more difficult to apply the principles to provisions such as s. 4 (2) (ii) and (iii) of the Long Service Leave Act N.S.W. and par. 6 (2) (b) and 8 (2) (a) of the Vehicle Industry (Long Service Leave) Award because such provisions can be regarded as entitling an employee to leave in respect of a period of long service when the service is terminated. However, it is only remuneration in respect of long service leave which has accrued in respect of a period before the commencement of the winding up that is given priority by s. 292 (1) (d) and, at the commencement of the winding up, the employees who had completed less than fifteen years' service had no entitlement to long service leave. Such employees only became entitled to long service leave upon their discharge after 13th August 1965 and then they became so entitled for the period of service up to the date of this termination of their service. In my opinion such employees obtained no priority by the operation of s. 292 (1) (d). It is only employees who have completed fifteen years' service before the commencement of the winding up whose remuneration in respect of long service leave is given priority thereby. The next problem is to determine whether employees entitled to priority under s. 292 (1) (d) against unsecured debts have priority by virtue of s. 292 (4) over the debenture holders here. The claims of the debenture holders in the winding up—and it is with the competition between the appellants and such claims that we are here concerned—were originally claims under a floating charge created by the company, but on 24th August 1965 the debentures crystallized. It is, of course, clear that s. 292 as a whole is not merely concerned with the position as at the commencement of the winding up of the company, i.e., 13th August 1965. The section is concerned with the priority in which specified obligations should be paid and it gives first priority to obligations arising, for the most part, both after the commencement of the winding up and after the making of a winding-up order, viz. the costs and expenses of the winding up. Furthermore, when in s. 292 (4) there is a reference to "assets of the company available for payment of general creditors" the reference cannot be to the position as at the commencement of the winding up. The balance from which general creditors are payable can only be determined by taking into account assets acquired subsequently and obligations incurred subsequently. It is not possible, however, to read s. 292 (4) as referring simply to the point, which may occur at a late stage in a liquidation, when the liquidator is in a position to pay claims. Every floating charge would, of necessity, crystallize at the latest upon the making of a winding-up order, for the essence of such a charge is that it is over the assets of a going concern. A floating charge, however, may, as a matter of common practice, survive the commencement of a winding up as specified by s. 222 (2) for it is quite usual to specify the making of a winding-up order as one of the occasions to cause the floating charge to crystallize. In these circumstances we consider the difficult problem of construing s. 292 (4) should be solved by the application of established authority to the effect that the subsection is concerned with debentures which are floating charges at the time when legal steps giving rise to liquidation are completed, i.e., upon the passing of a resolution for winding up, or, in the absence of such a resolution before the presentation of a petition for winding up, upon the making of a winding-up order. Up to this point a floating charge may continue to exist, notwithstanding an earlier presentation of a petition to wind up. In re Griffin Hotel Co. Ltd. [1] was, of course, decided upon a statute which did not contain the provisions of s. 223, sub-s. (2), but we do not think that the inclusion of this provision in the New South Wales Act does require a changed interpretation to be given to s. 292 (1) (d). 1. [1941] 1 Ch. 129. It is our opinion, therefore, that none of the appellants are entitled to priority as against the debenture holders by virtue of s. 292 (4) for at the time for the application of this provision the debentures were not floating charges. We are not content, however, to leave the matter here, for this conclusion still leaves the possibility of employees obtaining priority against the debenture holders through the receiver by virtue of s. 196 of the Companies Act. It does seem that, in the Court of Appeal, reliance upon this section was abandoned, and it is a fact that there is no ground in the notice of appeal to this Court relying upon this section. In the course of argument, however, the effect of s. 196 of the Companies Act was debated in this Court—as it had been in the court of first instance—and we think that justice requires that the possibility of the appellants obtaining priority thereunder should be considered. Although s. 222 (2) of the Companies Act requires that the winding up of a company shall be deemed to have commenced upon the presentation of the petition upon which a winding-up order is subsequently made, we consider that, for the purposes of s. 196 of the Companies Act, a company would not be in the course of being wound up at any time before the actual making of the winding-up order. Furthermore, we consider that, for the purposes of s. 196, the critical date is not the date of the commencement of the winding up, nor the date of the winding-up order, but the date of the appointment of the receiver under a debenture secured by a floating charge. Here the priority asserted by the appellant under s. 196 was against assets coming to the hands of the receiver by virtue of his appointment on 11th November and it is, of course, clear that by that date there were debts owing to the appellant to which s. 292 (1) (d) of the Companies Act would give priority. However, the debenture had crystallized at an earlier date, namely 24th August, upon the appointment of the receiver under another debenture. Consequently, by the time of the appointment of the receiver by the holders of the debenture with which we are concerned, that debenture was no longer secured by a floating charge. Consequently s. 196 could not apply to the receiver to give the appellant priority over assets coming to his hands. It is on this ground that the appellant's claim under s. 196 fails, as Street J. correctly decided. For the foregoing reasons we have come to the conclusion that this appeal must fail. Kitto J. Carapark Industries Pty. Ltd., which I shall call the company, is an insolvent company in course of being wound up by the court under the provisions of the Companies Act, 1961 N.S.W.. A number of its former employees claim to be creditors entitled to provable debts answering the description in par. (d) of sub-s. (1) of s. 292 of the Act, namely "remuneration payable to any employee in respect of annual leave or long service leave, or both or in the case of his death to any other person in his right, accrued in respect of any period before the commencement of the winding up". The subsection gives the debts specified in its paragraphs priority over all other unsecured debts, and sub-s. (4) of the same section gives the debts specified in par. (d) of sub-s. (1) priority over "the claims of the holders of debentures under any floating charge created by the company" so far as the assets available for payment of the general creditors are insufficient to meet them. Since the only assets of the company which now remain available for distribution are assets over which certain other creditors have security under a deed of 29th June 1964, the question arises whether the employees above referred to, assuming that they are entitled to debts within the description in par. (d), are entitled, by virtue of sub-s. (4), to priority in respect of those debts over the claims of the creditors under that deed. This in turn raises the question whether the claims of the secured creditors are "claims of the holders of debentures under any floating charge created by the company" within the meaning of sub-s. (4). By the deed of 29th June 1964 the company charged all its assets with the payment of the moneys payable thereunder. The charge was expressed to operate as a fixed charge as regards certain specified assets, but those assets have been exhausted in the payment of mortgage debts which had priority over the charge. As regards all other assets, the charge was expressed to operate as a floating security only, but so that it should become a fixed and specific charge over such other assets upon the moneys secured by the deed becoming payable. By the deed the moneys thereby secured were made payable in any of a number of events including the appointment of a receiver of the undertaking of the company. That event happened on 24th August 1965. The order for winding up was not made until 22nd November 1965, but the petition on which it was made was presented on 13th August 1965. The charge, therefore, was a floating charge at the time at which, according to s. 223 (2), the winding up is to be deemed to have commenced, but it had become a fixed and not a floating charge by the time the winding up order was made. As I read sub-s. (4), it is at the latter time that a charge must be floating if it is to be postponed to the claims of creditors whose debts are preferential under par. (d) of sub-s. (1). This is the view which has prevailed in England in respect of a similar provision ever since Bennett J. affirmed it in In re Griffin Hotel Co. Ltd. [1] ; and in amending and consolidating company legislation in New South Wales since that time recurring opportunities to displace it have not been taken. Twenty years after Bennett J.'s decision, sub-s. (4) was re-enacted in New South Wales, in the Act of 1961, and some strong reason would need to be found to justify placing a different construction upon it now. I have not been able to see any such reason, and indeed the decision seems to me, if I may say so with respect, to be correct. Subsection (4) operates as a qualification upon the general provision in s. 292 (2) that the rights of secured creditors are governed by the same rules as are in force under the law of the Commonwealth relating to bankruptcy, which include the rule in s. 58 (5) of the Bankruptcy Act 1966 Cth that the right of a secured creditor to realize his security is not affected by provisions against the enforcing of remedies in respect of provable debts. The provision in s. 291 (2) applying bankruptcy rules in respect of debts provable (operating by reference to s. 82 of the Bankruptcy Act and the definition in s. 5 of the date of the bankruptcy) makes the date of the winding-up order the date for determining what debts are provable. Obviously the order of priorities established by s. 292 is for provable debts. It necessarily follows, as I see the matter, that sub-s. (4) of s. 292 must be applied as at the date of the winding-up order, so that a charge, to be affected by the grant of priority to the preferential debts there referred to, must be at that date within the description of "floating charge". That conclusion accords with the restatement by Younger J. in Westminster Corporation v. Chapman [1] , of the effect of the corresponding English provisions. His Lordship said [2] : The effect of these sub-sections read together appears to me to be that if the general assets after discharge of the costs and expenses of the winding up are insufficient for the payment of these preferential debts whether a creditor be an unsecured creditor or a debenture-holder whose only security is that of a floating charge, he is equally to be postponed in respect of any claim of his against the assets of the company until those preferential debts have been paid, but the free general assets must be exhausted before recourse is had to the assets charged. It is not to the point, I think, that by virtue of s. 223 (2) the winding up is to be deemed to have commenced at the time of the presentation of the petition for winding up. The Act does not make that the time for ascertaining what debts are provable or what facts exist which are relevant to their priorities inter se; indeed, so arbitrary would be the result if it did that only the most explicit language could justify a conclusion to that effect. A charge which at one time was floating but had become fixed would be in a worse situation than a charge which was always fixed. 1. [1941] 1 Ch. 129. 2. [1916] 1 Ch. 161. 3. [1916] 1 Ch., at p. 168. In In re Lewis Merthyr Consolidated Collieries Ltd. [3] Tomlin J., speaking of the provision in the then English Act corresponding with s. 196 of the New South Wales Act, said [4] : It is plain in terms in s. 209, that in the case of winding up, the priority is only given in relation to assets which are subject to the floating charge. In the view I take the same result follows in the case of a debenture holder's action where there is no winding up. Mr. Grant says there are reasons why it should be otherwise. I am not sure that I am satisfied that any such reasons exist at all. I quite understand that in regard to a floating charge there may be a reason for giving the priority, because until the receiver is appointed or possession is taken, the charge does not crystallize, and it may well be said that this particular class of debts, which may perhaps have contributed to produce the very assets upon which the floating charge will crystallize, are proper to be paid out of those assets before the debenture holder takes his principal and interest out of them. That seems to me to be a perfectly intelligible reason for the legislation, and is in accord with the view which I take of the section. This reasoning, as applied to a case of winding up, would treat a floating charge as within the section if it crystallizes upon the making of the winding-up order—not if at some earlier time, possibly years before, it had ceased to be a floating charge. It is not, of course, a distinguishing feature, though it is a feature, of a floating charge that it attaches to future-acquired property. Its distinguishing feature is that, the class of present and future assets that are charged being such as in the ordinary course of the company's business would be changing from time to time, the company is left at liberty, until one of the "crystallizing" events happens, to dispose freely, in the ordinary course of its business, of any property to which it attaches: see In re Yorkshire Woolcombers Association Ltd. [1] . The explanation of the enactment of ss. 196 and 292 (4) that suggests itself is perhaps that, the decision having been made to give the relevant remuneration a priority over all unsecured debts existing at the date of the winding-up order, the view was taken that debts secured only by a charge which until that date the company was at liberty to ignore in carrying on its business were sufficiently similar in kind to unsecured debts to be subjected to the same postponement; and that consistently with this conception a similar course was adopted for the other event upon which the company would cease to be carrying on its business freely, namely the appointment of a receiver. It is clear that the debts which are postponed to the claims described in s. 292 (1) (d) are those which were unsecured at the date of the winding-up order. Section 223 (2) does not alter that. It would be odd if s. 292 (4), postponing to the same class of claims debts which though not entirely unsecured were at some date secured only by a floating charge, had selected a different date as the date as at which the charge must be found to have been floating. 1. [1929] 1 Ch. 498. 2. [1929] 1 Ch., at pp. 507, 508. 3. [1903] 2 Ch. 284 (affirmed, sub nom. Illingworth v. Houldsworth, [1904] A.C. 355). In my opinion s. 292 (4) has no application in this case. The orders of Street J. and the Court of Appeal being to that effect, I would dismiss the appeal. Owen J. In the present appeal questions arise in the winding up of Carapark Industries Pty. Ltd. as to the interpretation and application of s. 292 (1) (d) and (4) of the Companies Act 1961 N.S.W.. Section 292 (1) is in these terms: 172. (1) Subject to the provisions of this Act, in a winding up there shall be paid in priority to all other unsecured debts— (a) firstly, the costs and expenses of the winding up including the taxed costs of a petitioner payable under section two hundred and twenty-four the remuneration of the liquidator and the costs of any audit carried out pursuant to section two hundred and eighty-one; (b) secondly, all wages or salary of any employee not exceeding three hundred pounds whether for time or piece work in respect of services rendered by him to the company within a period of four months before the commencement of the winding up; (c) thirdly, all amounts due in respect of workers' compensation under the Workers' Compensation Act, 1926-1960, accrued before the commencement of the winding up; (d) fourthly, all remuneration payable to any employee in respect of annual leave or long service leave, or both or in the case of his death to any other person in his right, accrued in respect of any period before the commencement of the winding up; and (e) fifthly, the amount of all municipal or other local rates due from the company at the date of the commencement of the winding up and having become due and payable within the twelve months next preceding that date, the amount of all land tax and income tax assessed under any Act or Act of the Commonwealth before the date of the commencement of the winding up and any amount due and payable by way of repayment of any advance made to the company, or in payment of any amount owing by the company for goods supplied or services rendered to it under any Act or Act of the Commonwealth or law of a Territory of the Commonwealth relating to or providing for the improvement development or settlement of land or the aid development or encouragement of mining. It will be noticed that the words "the commencement of the winding up", which I have italicized, are used in many but not all of these paragraphs as part of the description of the debt to which priority is to be given. No such phrase occurs in s. 292 (4) which is as follows: (4) So far as the assets of the company available for payment of general creditors are insufficient to meet any preferential debts specified in paragraphs (b) and (d) of subsection (1) of this section those debts shall have priority over the claims of the holders of debentures under any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge. Section 223 (2) provides that, except where a resolution for voluntary winding up has been passed by a company before the presentation of the petition for winding up—and that is not the case here—the winding up shall be deemed to have commenced at the time of the presentation of the petition for winding up. The issue which arises on the appeal is between debenture holders under a floating charge created by the company in 1964 and certain persons (represented by the appellant) who were employed by the company before it ceased to carry on business and whose claims are based upon s. 292 (1) (d). The only assets of the company that are available for distribution were subject to the floating charge and the ex-employees who claim to come within s. 292 (1) (d) contend that they are entitled under s. 292 (4) to priority over the claims of the debenture holders under that charge. It appears that on 13th August 1965 a petition to wind up the company was presented and a winding-up order was made on 22nd November 1965. As at 13th August 1965 a number of persons held debentures under the floating charge and it is agreed that on 24th August 1965 that charge crystallized and became a fixed charge. On 29th October 1965 the company ceased to carry on business and on that date those who were still in its employ were dismissed. Between 13th August and 29th October 1965 the employment of others had been terminated. In the Supreme Court the judge of first instance, Street J. [1] , formed the opinion, with considerable hesitation, that notwith-standing the terms of s. 223 (2) the words "the commencement of the winding up" where used in s. 292 (1) (d) and in other lettered paragraphs refer to the date of the making of the winding-up order and not to the time of the presentation of the petition. He held then that 22nd November 1965 was the date to which regard must be had in considering the application of s. 292 (1) (d) and (4). Before that date, however, the floating charge had crystallized and became a fixed charge and, in those circumstances, his Honour was of opinion that whatever rights the ex-employees may have had to remuneration in respect of annual or long service leave, their claims were not entitled to priority over the claims of the debenture holders. Accordingly he made a declaration that the claims of the debenture holders were entitled to priority over the claims of the ex-employees. In the Court of Appeal [1] their Honours held that, by virtue of s. 223 (2), the relevant date to be considered for the purpose of s. 292 (1) (d) was the date of the presentation of the petition, viz., 13th August 1965. On the material before them they considered that, as at that date, there was no remuneration payable to any employee for annual or long service leave and they dismissed the appeal. 1. (1967) 86 W.N. (Pt 1) (N.S.W.) 165. 2. (1968) 88 W.N. (Pt 1) (N.S.W.) 1. Unfortunately throughout the proceedings in the Supreme Court and during the oral argument before us the case proceeded upon a basis of fact which has since turned out to have been incorrect. The responsibility for this rests with the parties since no close investigation of the relevant facts relating to the rights of the company's employees in respect of annual and long service leave appears to have been made by any of them. After we reserved judgment in the appeal, however, the parties placed before us what they agreed to be a correct statement of the position and asked that we determine the questions of law on that basis. I have felt some doubt about the propriety of doing this but in all the circumstances I am prepared to adopt the course which the parties have asked us to take. From this agreed statement it appears that, as at 13th August 1965, the rights of employees to annual leave were governed by cl. 14 of the federal Vehicle Industry Award, 1953 and not, as was earlier thought, by the New South Wales Annual Holidays Act. In the view that I have formed of the case, however, this does not affect the position. The right to long service leave, as at 13th August 1965, was governed by the New South Wales Long Service Leave Act although on 26th October 1965, the federal Vehicle Industry (Long Service Leave) Award came into force and the rights of employees to long service leave thereupon became dependent upon it. But here again this does not affect the conclusion to which I have come. It appears further that, as at the date of the presentation of the petition for winding up, a number of employees had served for fifteen years or more with the company and with an earlier employer of whose business the company had become the successor or "transmittee" and that these employees had thus become entitled to remuneration for long service leave under the Long Service Leave Act, while others had become entitled to remuneration for annual leave under the Vehicle Industry Award. With all respect to the learned judge of first instance I am not able to agree with his view that the words "the commencement of the winding up" where used in many of the lettered paragraphs of s. 292 (1) refer to the date of the winding-up order. I find it impossible—as a matter of statutory construction—not to apply to the phrase "the commencement of the winding up" where used in s. 292 (1) the clear words of s. 223 (2) that "the winding up shall be deemed to have commenced at the time of the presentation of the petition for winding up". The phrase in question is used in various parts of s. 292 (1) to describe one of the conditions which must exist if a debt is to be given priority in a winding up. On the facts as now known it seems to me to follow that some at least of those who were in the employ of the company are entitled to say that they are entitled to the priority given by s. 292 (1) (d). But that does not end the matter. The question remains whether they are entitled to have their claims met out of the proceeds of assets which were subject to the floating charge. The answer to that question depends upon the construction to be given to s. 292 (4). Do the words "any floating charge created by the company" refer to any charge which was originally created as a floating charge, no matter that it may later have become a fixed charge, or do they refer only to a charge which is floating immediately prior to the time when the petition for winding up is presented, that is to say immediately prior to the commencement of the winding up as defined by s. 223 (2), or do they refer to a charge which is floating immediately prior to the making of the winding-up order? It is, I think, of significance to compare s. 292 of the 1961 Act with the corresponding provision (s. 297) of the New South Wales Companies Act, 1936-1959, which was previously in force. Section 297 (1) of that Act made no reference in its lettered paragraphs to "the commencement of the winding up". Instead it used the phrase "the relevant date" which was, with certain exceptions not relevant to the present case, defined by s. 297 (8) to mean the date of the winding-up order. Section 297 (4) was, for present purposes, identical with the present s. 292 (4) and gave priority to certain of the debts mentioned in the lettered paragraphs of s. 297 (1) over the claims of holders of debentures under any floating charge created by the company. In Griffin Hotel Co. [1] , the court was called upon to consider s. 264 (4) of the English Companies Act of 1929 which, for present purposes, was similar to s. 297 (4) of the earlier New South Wales Act and to s. 292 (4) of the present Act. Bennett J. held that the phrase "any floating charge created by the company" in s. 264 (4) had no application to a charge originally created as a floating charge but which had become a fixed charge prior to the date of the winding-up order. His Lordship's ruling was in reply to an argument that the phrase "any floating charge created by the company" included all charges which had originally been created as floating charges. It seems to me to be improbable that the draftsman of s. 292 (4) of the present New South Wales Act would have been unaware of this decision which has stood for so many years, particularly since it is cited in a number of the books dealing with company law including Buckley on the Companies Acts, 12th ed. (1949), p. 648, and Halsbury's Laws of England, vol. 6, p. 667. I am of opinion therefore that s. 292 (4) has no application to a case such as the present in which the floating charge has become a fixed charge prior to the date of the winding-up order. 1. [1941] Ch. 129. In the result, therefore, and with all respect to those who hold the contrary view, I am of opinion that s. 292 (4) is not, in the present case, available to any of the claimants who are represented by the appellant. I would therefore dismiss the appeal.