McEvoy v Incat Tasmania Pty Ltd [2003] FCA 810

McEvoy v Incat Tasmania Pty Ltd [2003] FCA 810

Section 558(1) does not apply to a receivership through s 433 so as to deem employees who remain employed to have been terminated on the receiver's appointment. Because the leave and retrenchment entitlements of continuing employees were accruing but not yet due and payable, s 433 did not oblige the receiver to pay them in priority. Section 419 did not impose personal liability because any liability for services arose from pre-existing employment contracts with the companies, not debts incurred by the receiver.

Jurisdiction
Australia
Judgment Date
01 August 2003
Procedural Posture
Application by Receiver and Manager for Declarations as to Liability for Employee Entitlements in Receivership / Judgment and Declarations After Hearing
Outcome
Declarations made that the plaintiff was not obliged under ss 433 or 419 of the Corporations Act 2001 (Cth) to pay the specified employee entitlements; costs ordered from the fund on an indemnity basis for the plaintiff and seventh, eighth and ninth defendants, with first to sixth defendants bearing their own costs.
Legal Topics
['receivership' 'priority Employee Entitlements' 'annual Leave' 'long Service Leave' 'retrenchment Payments' "receiver's Personal Liability"]
['corporations Law' 'insolvency' 'employment Law'] ['receivership' 'priority Employee Entitlements' 'annual Leave' 'long Service Leave' 'retrenchment Payments' "receiver's Personal Liability"]

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Application by Receiver and Manager for Declarations as to Liability for Employee Entitlements in Receivership / Judgment and Declarations After Hearing

Legal Issues

  1. 1 ['Whether s 433 of the Corporations Act 2001 (Cth) obliged the receiver to pay annual leave, long service leave and retrenchment entitlements that were accruing but not yet due and payable when receivers were appointed.' 'Whether s 558(1) of the Corporations Act 2001 (Cth) applied in a receivership so that continuing employees were deemed dismissed on the relevant date for the purposes of priority under s 433.' 'Whether s 419 of the Corporations Act 2001 (Cth) made the receiver liable for annual leave, long service leave, sick leave or retrenchment entitlements arising from continuing contracts of employment.']

Ratio Decidendi

Section 558(1) does not apply to a receivership through s 433 so as to deem employees who remain employed to have been terminated on the receiver's appointment. Because the leave and retrenchment entitlements of continuing employees were accruing but not yet due and payable, s 433 did not oblige the receiver to pay them in priority. Section 419 did not impose personal liability because any liability for services arose from pre-existing employment contracts with the companies, not debts incurred by the receiver.

Court Disposition

Declarations made that the plaintiff was not obliged under ss 433 or 419 of the Corporations Act 2001 (Cth) to pay the specified employee entitlements; costs ordered from the fund on an indemnity basis for the plaintiff and seventh, eighth and ninth defendants, with first to sixth defendants bearing their own costs.

Orders

  • ['Section 433 of the Corporations Act 2001 (Cth) does not oblige the plaintiff to pay annual leave, long service leave and retrenchment entitlements to employees of the first, second and third defendants, to whom such entitlements were accruing, but were not yet due and payable, as at 21 March 2002.' 'Section 433 of...