AUSTRALIANGOVERNMENT:THETREASURY
ActionagainstfraudulentphoenixactivityProposalsPaperNovember2009
Commentsbythe
Automotive,Food,Metals,Engineering,PrintingandKindredIndustriesUnionknownastheAustralianManufacturingWorkers’Union(AMWU)
5February2010
AMWU
National ResearchCentreLevel 3,133ParramattaRoad
Granville NSW2142
Page 1 of15
The AMWUthanksthe Treasuryand Senator Nick Sherry, Assistant Treasurer, for thisopportunitytorespond to thispaper andis grateful for the extensionof time inwhichto lodge.
The AMWUrepresentsapproximately120,000membersworkingacrossmajor sectorsof theAustralianeconomy. AMWUmembersare primarilybased inthemanufacturingdivisioninthe sub-divisions ofmetalmanufacturing, printingand graphicarts,food and vehiclebuilding, repair andservice.The AMWUalso hassignificantmembership inthe mining, building and construction, aircraftand airline operations, laboratory, technical, supervisoryand publicsector employment. Ourmemberswork inunskilled, semiskilled, trade and professional occupationswithinthese industriesand source their workplace entitlementsand responsibilitiesfrom a varietyof industrial instrumentsincludingaward,over award certified agreementsand commonlaw arrangements.
The AMWUwelcomesthe release ofthisdiscussionpaper onthe proposalstotake actionagainstfraudulent phoenixactivityand agreeswholeheartedlywithSenator Sherry’sopeningremarksintheForeword of the paper, that
Fraudulent phoenix activity is anabuse of the corporate formand the privilege of limitedliability. At a time of greater uncertaintyfor workers, the avoidance of employee entitlementssuch assuperannuation and longservice leaveis particularlyunacceptable.
Itis of course insucheconomictimesaswe arecurrentlyinwhenthe incidence of failingcompaniesrisesand the threat to employee entitlementsisgreatest. Accordingto AustralianSecuritiesandInvestmentCommission(ASIC) figures1corporate collapsesincreased 4 per cent in2009 and areathistoricallyhighlevels;up25 per cent compared withthe average for the previous five years.
The AMWUhasbeeninthe unenviable positionona number of occasions inthe past 12 monthsofhavingto provide adviceand supportfor itsmemberswho have lost their entitlementsas a result ofthe avoidance practisesofcertaincompanydirectors. The AMWUknowsall too well the devastatingimpact these avoidance practiseshas onemployeesand their dependents. Tothensee phoenixactivityafter experiencingtheselossesfurther compoundsthe devastatingaffect and leavestheaffected employeesand theUnionbemused and outraged that suchnefariousdirectorsappear to beunscathed by the procedure and untouched by the law. At the end of thissubmissionis Appendix‘A’whichprovides someexamples of phoenixactivitywhichhasaffected members of the AMWU.
The AMWUbroadlywelcomesand endorsesmost ofthe optionsthat the Government isexploringinthispaper, aswhen looked at together theydemonstrate that the Government is takingseriouslythephoenixphenomenonandis recognisingtheimpactthat it has onAustralianworkersand theirfamiliesaswell asthe economyand businesscompetition.
1
Incommentingonthispaper the AMWUanswerseachdistinct questioninturn. Some of theseresponsesaremoreinvolved and fullyargued thanothers, but thisis not to be takenasindicative ofthe weight that theUniongivesto anyparticular issue raised. Inadditionto providinga response tothe questionsthe AMWUwill also take the opportunityto provide further suggestionsasinvited to doso underconsultationquestion15.
1.Ifamendmentsweremadeto thedirectorpenalty regime toeffectively‘automate’directorpenalties, what period oftime would itbe reasonable fora directortoavoidliabilityto ensurethatlegitimate directorswhomay be facing adverseeconomicconditionsorbusiness cyclesarenotundulyaffected?Isthree monthsa reasonableperiod?
Response to question1
The AMWUhasanappreciationof theinadequaciesthat currentlyfrustrate the AustralianTaxOfficer(ATO) and itsCommissioner inrespect ofcollectingPAYG(W) amounts. Theproposed amendment tothe director penaltyregime to effectively ‘automate’ director penaltiesshould help relieve thefrustrationandultimatelysee fewer instances of directorsappointingadministratorsor windingupcompanies.The AMWUbelievesthat thisshouldstrike a reasonable balance betweentacklingtheissueof rogue directorsand overlyburdeninghonest directors.
Thesuggested three monthperiod isreasonable.There would bemuch lessincentive for roguedirectorsnot to remit PAYG(W) amountsif the time period for themto dosowasrestricted to threemonths.
2.If this‘automated’approachwere taken with thedirectorpenaltyregime,would there beacontinuingrole forthe directorpenaltynotice?
Response to question2.
Whilst recognisingthe administrative limitationsthe AMWUbelievesthat maintainingthe roleof thedirector penaltynoticeshould allow the ATO the abilityto better track recurrent and frequentoffendersand to takeactionearlier thanotherwisewould be thecase if the practise wasremoved.
Before a final decisionistakenonwhether to ceasethe practice altogether itmaybe prudent toobserve how effective itscontinuanceis for a number of years (or other reasonable time frame).
3.If thelaw wereamended to‘automate’directorliabilities,shouldanyadditionallimitationson
the operation of theregimebe imposed?Notably:
a)Doestheperiodof timein whichadirectorisnot held liable for apenalty (three months issuggested), alongwith theexistingdefences,ensuretheright balance betweenproviding anincentivefordirectorsto cause theircompanytocomply with theirobligationsand notimposingpenalties ininappropriatecircumstances?
b)Isthere aneed foradditionaldefencesto theregime,modelled on thosein theCorporationsLawrelatingtoinsolvent trading? What undesirableconsequencewouldsuchadefenceseek toavoid?
c)Shouldthe period of timein which theATOhasto recoverthe penalty belimited,forinstance,tofouryears(consistent withusualthe amendment period forcompanies)?
Response to question3.
The positionof the AMWUisthat there doesnot need to be additional limitations onthe operationofthe regime if the law wereamended to ‘automate’director liabilities.
There isalreadyaneffective balance at present. Itistoo soonto be consideringcreatingadditionaldefencesfor directorsbefore the regime hasevenbeenintroduced. The AMWUacknowledgesthatsome parties mayhave concerns, but these could beaddressed by the useofareviewmechanism,allowingfor anobjectiveassessment at some near future point.
The AMWUis neutral inrespect of the period of time inwhichthe ATOmayhave to recover thepenalty. We note four yearsissuggested, but alsoobserve thatsixyearsisthe civil limitationinmostjurisdictions for which a debt is recoverable.
4.Should the directorpenaltynotice regimebeexpanded toincludeanadditionalrangeofpayments,taxesand duties? For instance,shoulditbeexpanded to include SuperannuationGuaranteeamounts,the company’s own incometaxand/orindirect taxessuchas GST andexcise?
Response to question4.
The AMWUstronglysupportsthe expansionof the director penaltynotice regime toinclude anadditional range of payments, taxesand dutiessuchasSuperannuation Guarantee amounts.Thiswould help inprotectingworkersSG entitlements.Also includingthe company’sown income taxand/or indirect taxessuchasGSTand excise should certainlyactas a major disincentive for directorsto engage infraudulent phoenixactivity. An honestdirector would have nothingto fear and noadministrative burdentobear.
5.If the directorpenaltynoticeregime wereexpanded tocovera range ofliabilities,should theestimation regimein Division8of Part VI ofthe ITAA1936 besimilarlyamended?
Response to question5.
The AMWUnotesthe logic of amendingthe estimationregime inDivision8 of Part VI of the ITAA 1936 if the director penaltynotice regime were expanded to cover sucharangeof liabilitiesandsupportsthe requisite amendments. Makingthe amendmentswouldassist inmaintainingconsistencyinthe collectionmechanismsof the expanded rangeof liabilities.
6.Should the promotion of fraudulent phoenixbehaviourbe madesubject to the promoterpenalty regime?
Response to question6.
Without doubt, the answer to whether the promotionof fraudulent phoenixbehaviour should bemadesubjectto the promoter penaltyregimemust be yes. Amendingthe penalty regime to includeschemesthat avoid SG paymentsand taxliabilitiesis bound todeter people promotingthemisuse ofthe corporateformand itsconcomitant privilegesand as such the AMWUfully endorsesthisapproach.
7.Should the taxationlaw include anti-avoidance provisionsthatgive the Commissionertheabilitytotrace the benefitderived fromfraudulentphoenix activitytoindividualsand entitiesother than the liquidatedcompany?
Response to question7.
The AMWUbelievesthatit is crucial that assets of directorsare able to be traced and notesthe rolethat the Proceeds ofCrime Act 2002mayplayinassistingwiththis.
8.Woulditbeappropriate toremove therequirement that adirectorhasmanaged two or morefailed corporationsbeforeASICcan disqualifya director?
Response to question8.
The AMWUnotesthat ASIC’spower of disqualificationiscontained ins206Fof the CorporationsAct(the Act).This power allowsASICto disqualifya personfrommanagingcorporations forup to 5 yearsprovided a numberof conditionshave beenmet. The AMWUsubmitsthat whenone looksat s206Fand the sectionsthat are referenced withinthat sectionthe threshold requirement that there be twocorporate failureswithin7 years inwhichthe director hasbeeninvolvedinisunnecessary.TheAMWUsupportsitsremoval.
Currently,inadditionto the personbeinganofficerof two or more corporationsthat were wound upwithinthat period a liquidator musthave lodged areport unders 533(1) about the corporation'sinabilityto payits debts.Under s 533 a liquidator isrequired to report to ASIC ifit appearsthat anofficer of thecompanymayhave beenguiltyof anoffence under anAustralianlaw inrelationto thecompany;orifa personwho hastakenpart inthe formation, promotion, administrationor windingupof thecompanyhasmisapplied, retainedor become liable for anymoneyor propertyof thecompany;ormayhave beenguiltyof anynegligence, default, breachof dutyortrustinrelationto thecompany;orif the companymaybe unable to payitsunsecured creditorsmore than50 cents inthedollar.
ASICmust thengive to the officer a notice that requiresthemto demonstrate whytheyshould not bedisqualified. ASIChasto consider a number of factors inthendeterminingwhether disqualificationisjustifiedincludinghavingregard to whether anyof the corporationsmentioned ins 206F(1) wererelated to one another;the person'sconduct inrelationto themanagement, business or propertyofanycorporationand anyothermatter that ASICconsidersappropriate.
The AMWUsubmitsthat removal of the requirementof two corporate failures inthe past 7 yearswillnot detract fromthe object ofs 206F, whichwasheld in Nicholas vCAC (Vic) [1988] VR 289 asbeing‘to facilitate and improvethe performance of companies, and intheinterestsof commercial certaintyto protect the interests ofthe publicdealingwithcompaniesby preventingpeople who, by reasonofpast conduct, are unfit fromdirecting, promotingormanagingthe affairsof corporations’fromactingasdirectors.
The AMWUfurther submitsthat itshould be openfora creditor toapplyto the Court for anorderdisqualifyinga personfrombeinga director ofa corporationif the elementscontained ins 533 towhich a liquidator hastohave regard are present.
9.Shouldan offence forthe non-remittance of PAYG(W) amountsbereintroduced into thetaxationlaw?
Response to question9.
The AMWUis firmlyof the belief that the reintroductionof the offence for the non-remittance ofPAYG(W) amountsinto the taxationlaw will be of significant assistance incurbingphoenixactivities.It would plainlyactas a disincentive for directorsplanningnot to remit withheld amounts, especiallywhencoupled withthe threat of disqualificationfromtheinvolvement ofmanagingcorporationsunder Part 2D.6 of the Act.
There are adequate defencesincorporated into theTAA1953 for innocent directorsto feel secure.
The AMWUnotesthat limited resources of the CommonwealthDirector of PublicProsecutionsmightnegativelyimpactontheeffectiveness of the pursuingoffenders, andsuggeststhat the set level ofpenalties forother agenciesbe reviewed to enable greater agencyparticipation. Of course anincreaseinthe direct fundingamount of the CommonwealthDirector ofPublicProsecutionswouldalso assist.
Inrelationtofunding more generallythe AMWUnotesthat the Howard government had via GEERS,aninsolvencylitigation fund where administratorshad the optionof applyingfor fundingto suesuspected rogue directorsto recoveremployee entitlements. Thisishow theAMWUgot itsmembersat CoghlanRussel 100% of what theywere owed. The Liberal Government funded theadministratortoattack the directors’assetsand won. Thescheme hasbeensuspended;it should berestored and broadened.
10.Should a similaroffenceprovision be created inrelation to non-compliancewith SGobligations?
Response to question10.
The AMWUis without doubt that a similar offenceshould be createdinrelationto SG obligations.
The AMWUlooksforwardto the publicationof theCommonwealthGovernment’saudit ofCommonwealthlawsreform of personal criminal liabilityfor corporate fault.
11.Isthe denialof PAYGwithholdingcreditsto directorsby theATO an appropriate mechanismtodealwith fraudulentphoenixbehaviour?Shouldit extend toall directors and closerelativesofthe director(provided thatthe Commissioner isgivenadiscretion toallowPAYG(W)creditswhereitisappropriate todo so)?
Response to question11.
Whilst acknowledgingsomeof the practicalitiesinvolved inadministeringthe provision, the AMWUbelievesthat denyingPAYG withholdingcredits incircumstanceswhere amountshave not beenwithheld to directorswould clearlyassist. Extendingit to all directorsand close relatives of thedirector would likewise assistincircumstanceswhere the Commissioner thinks itappropriate.
12.Would a restrictiononthe useofa similarnameortradingstylebean effective mechanismincurbingfraudulent phoenixactivity?
Response to question12.
The AMWUnotesthat inthe UKInsolvencyAct 1986, s 216 preventsthe use ofa name ofa companywhichhasrecentlybeenwound up beinggiventoa companywiththe samepeople concerned inthemanagement of the company. The AMWUis of theopinionthat restrictionsonthe useofa similarname or tradingstyle willbe of assistance incombatingphoenixactivity.Makingthe director ofaliquidatedcompanyliablefor the new company’sdebtswould act asa deterrence. The AMWUsubmitsthat enactingsimilar provisionsto theNewZealand legislationmakingit anoffence foradirector ofafailed company to be involved ina phoenixcompanypunishableby5 yearsimprisonment ora $200,000 would also greatly assist indeterringsuch actions.
13.Should it bean offencefordirectorsto claimnon-remitted PAYG(W)when the company hasnot remitted PAYG(W)? As thisapproach would target both fraudulent phoenixdirectors as wellas legitimate directors,woulditachieve the rightbalance between protectingrevenueandprotectingtheinterestsoflegitimate directors?
Response to question13.
The AMWUsupportsmakingit anoffence for directorstoclaimnon-remitted PAYG(W) whenthecompanyhasnot remitted PAYG(W). Makingit anoffence would actasanadditional disincentive fordirectorsto claimthosecredits.
Althoughthisapproachmaytarget bothfraudulentphoenixdirectorsaswell aslegitimate directorsthe AMWUsubmitsthat onlythe fraudulent phoenixdirectorsare the oneswho would be pursued.
14.Is it appropriate fortheATOto requireabondtobe paidin relation toan expandedrange ofliabilities if fraudulent phoenixactivity issuspectedorexpected?What would beanappropriateamount? Shoulditbereferable to three monthsofanticipated taxliabilities? Six months?
Response to question14.
The AMWUbelievesthat theremaywell be circumstanceswhereit isappropriate for the ATO torequire a bond to be paidinrelationto anexpanded range of liabilities if fraudulent phoenixactivity issuspected or expected.The amount that would be appropriate would depend onthe size of thecorporationsoperationsand anassessment of the risk involved, whichitselfwould be referable to thescale of fraudsuspected.Three monthsanticipatedtaxliabilitiesmight suffice insome occasions, inothers a higher thresholdmight be deemed more appropriate.
It should be borneinmind that simplybecause the ATO hasbeengranted such a power doesnotnecessarilymeansthat itwill be exercised, but anadditional toolinthe arsenalincombatingphoenixactivitieswould be welcomed as a meansofallowing a flexible response.
15.Doyou have anyother suggestionsthat wouldassistto deterentitiesfromengaging infraudulent phoenixactivity?
Responsesto question15.AMWUadditionalsuggestions:
First suggestion.
At the beginningof the Paper under the ‘Optionsinthe taxationlaw table’theoptionto adopt thedoctrine ofinadequate capitalisation wasmooted.However, thisdid not appear asanindividualquestionto be addressed.The AMWUwouldsupport its adoption as it wouldassist inpiercingthecorporate veil where a director establishesanother companywithinsufficientcapital to meet thedebtsthatcould reasonablybe expected to arise and would therebyactas a strongdisincentive fordirectorsto engage inphoenixactivity.
Second suggestion.
Whilst acknowledgingthedifficulties indefiningwhat phoenixactivityactuallyis, the AMWUstronglypressesfor theinsertionof a definitionof the activityinto the Act. Havinga definitionof the practisesand a provisiondealingwithappropriate penaltiesif anact isproved to be phoenixinnaturehelps
providecertaintyand guidance to the courts, the businesscommunity, employeesandstakeholdersmore widely.
The ATO definesphoenixactivityto be ‘the evasionof taxthroughthe deliberate, systematicandsometimescyclicliquidationof related corporate tradingentities.’
The AMWUsubmitsthat the ATO definitionis a good startingpoint and can be addedtoso thatitencompassesnot justsituations of taxfraud or evasionbut creditorsmore generally.
ASICdefined a phoenixcompanyasanincorporatedentitythat either:
- failsand isunable to payitsdebts;and/or
- actsina manner whichintentionallydeniesunsecured creditorsequal accessto the entity’sassetsinorder tomeetunpaid debts;and
- within 12 monthsanotherbusinesscommenceswhichmayuse someor all ofthe assets of theformer business,and iscontrolledby partiesrelated to either themanagement or directors ofthepreviousentity. company.2
Treasurysuccinctlydefined the phoenixcompanyphenomenon asbeing:
where businessoperationsare transferred fromone companyto another to avoid havingtomeet liabilitiestounsecured creditors(particularlyrevenue authorities
andemployees).3
The AMWUsubmitsthatit would not be too onerous a task to definea phoenixcompanyor phoenixactivityinthe Act and thebenefits indoingso would soonbecome apparent. The definitionwhensettled needsto be broadenoughto capture the activitiesthat have occurred inthe Forgecastexample whichfollowsbelow. The AMWUfurthersubmitsthat becauseof the inherent difficultiesintracingthemovement of assetsbetweencompaniesand evenindividuals a reverse onusof proofshould apply. Legitimatedirectorswouldhave nothingto fear.
Third suggestion.
TheTrust Fund Option
TheAMWUcontinuesto press for thisoption. Aswehave previouslyargued4:
2ASCResearchPaper95/01.
3CorporateInsolvencyReformReport2005.
4AMWUsubmissionintotheInquiryintoAustralia’sInsolvencyLaws,31July2003.
Settingasideemployee entitlement will ensure [that] all employersfunctionwithinAccountingStandards, regardless[of whetheror not] theyare exempt fromcomplyingwithAccountingStandards.This will ensure acrossthe board protectionfor all employees.
The trust fund optionif instigated Australia wide will guarantee payment of entitlements inthe event of insolvency, providinga comprehensivesolutionto thisissue. Wepropose thistobe implemented withno exemptionsto ensure the protectionofall employees. The trust fundoption‘overcomesthe need to relyonspecificlegislationto provide alegal remedyto protectemployee entitlements, and would also remove theneed fora unionor groupof employeestotakecourt actionto obtain a remedy.’5Employerswill be forced tomeet theirlegal obligation,without the taxpayer bailingout themof their responsibilitiesor decreasingthe lendingcapacityof business.
…
A good exampleof the trust fund optioniswiththealreadyfunctional National EntitlementSecurityTrust (NEST). NESTis anindependent not for profit trust facilityestablished toreceive employercontributionstowardsemployee entitlementssuch asannual leave, longservice leave, redundancy, severance pay, and otherentitlementsfollowingagreementbetweenthe parties or anindustrial award governingtheir relationship. The trusteesconsistequallyofemployer and employee representativeswithanindependent Chairman. Under itstrust deed, NESTisempowered to invest contributed fundsat interest inapproved securitiesbut is unable to reduce the capital base of the trust.The trust'sincome fundsadministrationand is thendistributed toeither employers, employeesor, at the employer'sdirection, appliedto futureobligationstocontribute. By thismeans, an element of self-fundingof employeeentitlementsis provided.Thissolutioneffectivelydealswiththeissue of employeeentitlement ininsolvencywhile providingbenefitsto all related stakeholders.
Fourth Suggestion.6
The AMWUcontinuesto assert the need for the reverse onusto apply incases of companycollapsewhere creditors, includingemployeeshave not beenpaid. The onusshould be oncompanydirectorsto prove to anASICInquirythat theyhave fulfilled allof their fiduciarydutiesbefore theyarepermitted to hold anypositionsasa companydirector or officer. A range of other penaltiesshouldalso apply.If they are found not to have fulfilled their fiduciarydutiestheyshould beheld individuallyliable.
5TheAustralian,9 August2001.
6ThissuggestionisbasedonpropositionscontainedinScheduleAoftheAMWUsubmissionintotheInquiryintoAustralia’sInsolvencyLaws,31July2003.
ASICmust be adequatelyfunded and resourced to allow it to properlyinvestigate blatant breaches ofcorporationslaws, particularlythose that lead to lossof employee entitlements.
Fifthsuggestion.
TheAMWUhasalso previouslyargued7that directors ofa companyshould bepersonallyliable foranypenaltyimposedagainsta companyfor nonpayment of superannuationcontributions. Courtsshould be empowered tomake anorder for underpayment of entitlementsdirectlyagainst therelevant executive officers. Unionsshould be empowered to bringactionsagainstcompaniesandtheir directors for unpaidSG contributions.
While companydirectorscannot insure against theimpositionofa penalty,itis possible toinsureagainst the possibilityof compensationbeingawarded against them inrespect oftheir dutiesasdirectors. Insurerswould no doubt scrutinise corporate accountingsystemsto ensure that employeeentitlementswere protected
Imposingultimate responsibilityforsuperannuationentitlements ondirectorswouldhelp ensurethat directorscomplywiththeir superannuationrequirementsand therebysafeguard employees’entitlements.
Sixthsuggestion.
Apractical additional tool,inrelationto companiescomingout of Deedsof CompanyArrangementsunder Part 5.3Aof the Act(whichalthoughare not strictlyspeakingphoenixcompanies) would be forthe restructuredcompaniesto be required to remitSG contributions,includingsalarysacrifice, at thesame time asweeklyor fortnightlypayroll fora specified period, for exampletwo years. Pay asyougomeansthat a large liabilitywill not accrue andis as likelyto be aseffective, ifnot more, thanpayupfront insomecases.
Inclosingthe AMWUwould like to take thisopportunityto highlight acoupleof examplesofsituationswhere theexistinglawsare provingto be inadequate inprotectingworkers’entitlementsand where individualscontinue to act asdirectorsof corporations.
7Ibid.
Example A
CarltonSheet Metal PtyLtd is a Sydneybasedcompanyworkinginthe constructionindustry.Primarily, Carltonisinvolved inthe installationandmaintenance of airconditioningsystemsand themanufacture and installationofsheet metal onlarge-scale commercial constructionprojects. Suchwork is performed from afactorylocated intheSydneysuburbof Carltonandis also performed on-site. Up until two yearsago, Carltonemployed approximately100 employees.
The directors of CarltonSheet Metal PtyLtd consistof SimonUsalj, DominicUsalj, Filomena UsaljandJosephUsalj. SimonUsaljand DominicUsaljare brothers. Their parentsare Filomena UsaljandJosephUsalj. The shareholder inCarltonSheet Metal PtyLtd is Filomena Usalj. Ona day-to-daybasis,CarltonSheet Metal PtyLtd wasoperated by SimonUsalj.
On16 June 2009,CarltonSheet Metal PtyLtd went into liquidation. It isestimated that at the time ofgoinginto liquidation, Carlton Sheet Metal PtyLtd owed inexcessof $300,000inunpaid employeeentitlements. The mostsignificant unpaidemployee entitlement wassuperannuation. However, otherentitlements, such aswages, annual leave, notice inlieu of terminationand redundancypaywere alsooutstanding. To date the workershave not received anyoftheirunpaid entitlements.
Inthe weeksleadingup to CarltonSheetMetal PtyLtd goinginto liquidation,the companyretrencheda large numberof workers. Manyof these workerswere longservingemployees. Onbeing retrenched, the workerswere not paidout their entitlements- redundancy, annual leave, noticeinlieu of terminationand, insome cases, wages.
Onlydaysafter goinginto liquidation, two new companiesemerged. The firstcompanyisCSMAustralia PtyLtd and thesecond companyis IndustryAccess Hire PtyLtd. DominicUsaljisthedirector ofCSM AustraliaPtyLtd. Antoinette Frankland is the shareholder ofCSM Australia PtyLtd.Antoinette Frankland isthe sister of Simonand DominicUsaljand the daughter of JosephandFilomena Usalj. CraigFrankland is the director andshareholder of IndustryAccessHire PtyLtd.CraigFrankland ismarried to Antoinette Frankland. Ona day-to-daybasis, both CSM Australia PtyLtd and IndustryAccessHire PtyLtd are operatedby SimonUsalj.
The threecompaniesare associated entitieswithinthe meaningof the Corporations Act 2001.
IndustryAccess Hire Pty Ltd employsmanyof the same employeesthat were employed by CarltonSheet Metal PtyLtd and works outof thesame factory. CSM Australia PtyLtd employsthemanyof thesame employeesthat were employed by CarltonSheet Metal PtyLtd and carriesout thesame on-sitework that wasperformedbyCarltonSheet Metal Pty Ltd. Indeed, jobsthat were beingperformed byCarltonSheet Metal PtyLtd have simplybeenperformed by the two new entities. Inreality, the onlychange hasbeena formalname change. At the present time, bothcompaniesemploya total ofapproximately20 employees.