Reported Decision : 154 IR 265 New South Wales Court of Appeal CITATION: HERTZ v INDUSTRIAL RELATIONS COMMISSION OF NSW & ORS [2006] NSWCA 16 HEARING DATE(S): 8 February 2006 JUDGMENT DATE: 8 February 2006 JUDGMENT OF: Mason P at 1; McColl JA at 21; Basten JA at 22 EX TEMPORE JUDGMENT DATE: 02/08/2006 DECISION: Summons dismissed CATCHWORDS: CORPORATIONS – creditor's voluntary winding up – effect on civil proceedings by or against company – stay of proceedings effected unless court grants leave to proceed – application of s 500(2) Corporations Act 2001 - PRACTICE – service of process – interested parties merely notified of proceedings – not made parties thereby – not invited to join thereby – lack of procedural fairness – presents "insurmountable difficulty" to proceedings continuing - APPEALS – standing – where claimant only a witness at first instance – need for utility in relief sought - CRIMINAL LAW – perjury – application of s 327 Crimes Act 1900 to a "judicial proceeding" – no requirement that "judicial proceeding" be concluded before offence of perjury established - CRIMINAL LAW – perjury – application of s 327 Crimes Act 1900 – whether evidence uncovered during stayed proceedings under s 500(2) Corporations Act 2001 admissible in criminal proceedings for breach of s 327 (ND) LEGISLATION CITED: Corporations Act 2001 s500(2) Industrial Relations Act 1996 CASES CITED: Awada v Linknarf Ltd (in liq) (2002) 55 NSWLR 745 Catto v Hampton Australia Limited (1998) 20 ACSR 225 PARTIES: Mark Phillip HERTZ v INDUSTRIAL RELATIONS COMMISSION OF NSW & ORS FILE NUMBER(S): CA 40822/2005 Applicant: Julian van Aalst COUNSEL: 1st Opponent: No appearance 2nd Opponent: No appearance Applicant: Williams, Woolf & Zuur, Dee Why SOLICITORS: 1st Opponent: Crown Solicitor 2nd Opponent: McClellands, Sydney LOWER COURT JURISDICTION: Industrial Relations Commission of NSW LOWER COURT JUDICIAL OFFICER: Commissioner Connor IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40822/2005 DC 5283/2002 MASON P McCOLL JA BASTEN JA Wednesday 8 February 2006 Mark Phillip HERTZ v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & Ors JUDGMENT 1 MASON P: The claimant seeks declaratory and other relief effectively to quash the decision and orders made by a Commissioner of the Industrial Relations Commission on the basis that the Commission disregarded the mandate of s500(2) of the Corporations Act 2001. That provision is one of several dealing with the consequences of the winding up of the company. It states: After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes. 2 In this provision "Court" is defined to include the Federal Court and the Supreme Court but does not extend to the Commission itself (see Corporations Act, s58AA). 3 Barrett J has held that s500(2) applies to a creditor's voluntary winding up but not to a member's winding up (see Awada v Linknarf Ltd (in liq) (2002) 55 NSWLR 745 (see also Catto v Hampton Australia Limited (1998) 20 ACSR 225). 4 Mr Brian Randall was employed as a tourist coach driver by Downtown Limousines Pty Limited (the company). His services were terminated on 9 September 2002. Proceedings were commenced in the Commission on behalf of the employee by the Transport Workers Union of Australia New South Wales branch, seeking relief pursuant to Pt 6, Unfair Dismissals, of Ch 2, Employment, of the Industrial Relations Act 1996. The hearing commenced before Commissioner Connor on 12 June 2003. Early in the proceedings it was indicated that compensation was sought in lieu of reinstatement. 5 On the first day of the hearing evidence was given by the claimant, Mr Mark Phillip Hertz. There was cross-examination. The cross-examination was incomplete. The proceedings were stood over for further hearing on 21 July 2003. At the adjourned hearing counsel previously representing the company, Mr Patterson, informed the Commission as a matter of courtesy that the company had been placed into voluntary liquidation the previous Friday, 18 July 2003. It is unnecessary to go into the details of what happened. A question was raised about his retainer. Mr Patterson was not permitted to develop the situation. His attendance was excused. 6 Commissioner Connor ruled that he was not satisfied that the Corporations Act imposed an obligation to stay the proceedings. It is unnecessary to look in any detail about his reasoning, but it did include uncertainty on the information he had been provided by Mr Hatcher, who was representing the Union, about whether or not the liquidation had actually and properly commenced. 7 The opponents joined in these proceedings are the Commission and the Union, each of which has submitted to the orders of the Court, save as to costs. Neither Mr Randall nor the company, nor its liquidator, if it is truly in liquidation, were joined as parties to these proceedings. 8 Mr Van Aalst, representing the claimant, has informed the Court that on his instructions Mr Randall and the company were notified of these proceedings in that they were served with copies of some of the process. To my mind that does not make them parties to the proceedings, nor operate as an invitation to become parties, or otherwise satisfy the mandate of the requirements of procedural fairness if it applies in the circumstances. 9 As indicated, the proceedings in the Commission were adjourned part heard from 12 June to 21 July 2003. The Commissioner ruled in effect that he did not consider that he was required to desist from further hearing the proceedings by virtue of the Corporations Act. He received a small amount of additional evidence. There was no continuation of the cross-examination of the claimant, who was not represented on the adjourned hearing date. The claimant swore an affidavit in these proceedings stating to the effect that he did not attend on advice, because that advice was to the effect that the proceedings were stayed and would not continue on 21 July. 10 The Commissioner has published a document called a Decision. It is dated 21 July 2003, although it would appear, and I infer, it was promulgated some time later; 21 July was the date when the hearing was completed. At the end of that hearing the Commissioner indicated the orders he was minded to make. He also indicated he would be reserving to consider his reasons. The document called "Decision", which is at p 5 of the combined book, appears to be a composite of the reasons and the formal orders constituting the conclusion of the application being made by the Union on Mr Randall's behalf for compensation for unfair dismissal. The orders were: (1) Okopny Pty Limited [the new name of Downtown Limousines Pty Limited] shall pay the sum of $20,500 to Mr Brian Randall within 21 days. (2) This order shall take effect on and from Monday 21 July 2003. 11 There is evidence in the combined book that Mr Randall has sought to enforce this money judgment. It seems clear to me that he has an interest in retaining the order, notwithstanding the fact that it would appear that the company is hopelessly insolvent. For one thing, the order clarifies the quantum and the entitlement and it means that the question of the proof of debt in the insolvent liquidation, if there is a liquidation in place, is beyond further dispute, or would appear to be so. 12 When the matter was called on for hearing Mr Van Aalst, who represents the claimant, was questioned about some of a number of issues that would appear to arise in the proceedings. As I have indicated, the summons seeks by declaratory and other forms of relief to quash the decision on the basis that the Commissioner disregarded the mandate of s 500(2) of the Corporations Act. 13 When the Court pointed out that it was concerned about the absence of Mr Randall and the company and/or its liquidator as parties in these proceedings, we were informed, as I have indicated, that there had been some notification to at least some of them, but it was clarified that they had not been made parties to these proceedings. This, it seems to me, is an insurmountable difficulty with the matter proceeding today, and it is one that in effect Mr Van Aalst has indicated he is not in a position to remedy today, although he seeks to proceed today. 14 There is an additional problem that in my view justifies the dismissal of the proceedings. Even if the proceedings were properly constituted, there is the question of the utility of granting the relief that is sought by the claimant. The claimant was not a party to the proceedings in the Commission, he was a witness. His concern - using that in a lay sense - has arisen out of the fact that he has quite recently been charged with offences under ss317 and 327 of the Crimes Act 1900. The factual basis of those charges, according to the matters alleged, is that Mr Hertz either fabricated false evidence with intent to mislead the Commission (that being the s317 charge) or committed perjury contrary to s327. The particulars of the charges indicate that the conduct forming the basis of these allegations relates to steps taken in relation to the evidence filed on his behalf in his witness statement and evidence that he gave in his sworn testimony on 12 June 2003 before the proceedings were adjourned. No part of the material sought to be ventilated in the criminal proceedings relates to what happened on 21 July 2003 in the absence of the claimant. 15 Counsel for the claimant accepts that it is s327 on which he relies in an endeavour to show the materiality and utility of this Court granting the relief that is sought. That section provides: 327 Offence of perjury (1) Any person who in or in connection with any judicial proceeding makes any false statement on oath concerning any matter which is material to the proceeding, knowing the statement to be false or not believing it to be true, is guilty of perjury and liable to imprisonment for 10 years. (2) A statement can be considered to have been made in connection with a judicial proceeding whether or not a judicial proceeding has commenced, or ever commences, in connection with it. (3) The determination of whether a statement is material to a judicial proceeding that has not commenced is to be made on the basis of any judicial proceeding likely to arise in connection with the statement. (4) The question of whether any matter is material to a proceeding is a question of law. 16 This is not an appropriate forum in which to be making rulings any more broadly than is necessary, and in particular in which to make rulings that could in some way set the legal parameters for the criminal proceedings that have just been commenced. Since, however, the claimant must satisfy us that there is any utility in the relief that he seeks, it is sufficient to say that I am entirely unpersuaded that the making of the orders that are sought in the summons would in any way advance the position of the claimant as a defendant in the criminal proceedings. Putting it around the other way, there is simply no utility in making the orders that are sought that would suggest that the claimant has a real interest in, or would gain anything by the making of those orders. As I have indicated, the charges relate to events that occurred prior to 21 July 2003 and also prior to 18 July 2003 when, taking matters at the highest, s500(2) of the Corporations Act may have impacted on the pending proceedings in the Commission. 17 I am entirely unpersuaded that anything in s327 requires the relevant judicial proceeding to have come to an end, let alone come to a lawful end, before the offence of perjury can be established. The question of materiality of the allegedly false statement will be a matter for the prosecution, but that is not in any way impacted upon by leaving standing the transcript of 21 July 2003 or the Commissioner's decision. That decision will not be evidence in any criminal proceedings and nothing we have been shown would indicate that anything happened on 21 July 2003 that goes to the materiality of the evidence previously given and said to have been false in the criminal charge. 18 It is unnecessary to do more than note that it may well also be open to the accused in the criminal proceedings to raise these issues by way of defence. 19 The two matters I have referred to seem to me to make these present proceedings hopeless, and there is no utility in them, nor any point in continuing with the other issues or even contemplating any adjournment - not that it has been sought - to overcome the natural justice issue that I have already referred to. It is also unnecessary, in the circumstances, to do more than note that there are additional clouds on the horizon as to whether a creditor's voluntary liquidation had commenced on 18 July and as to whether s179 of the Industrial Relations Act creates difficulties in this Court granting the relief that is sought. 20 For those reasons I propose that the summons be dismissed. 21 MCCOLL JA: I agree. 22 BASTEN JA: I agree with the President. 23 MASON P: That is the order of the Court. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.