2007 WAIRC 01148

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIESJoe Visser

APPLICANT

-v-

ERAL PTY LTD as trustee for the prestige products unit trust tRADING ASCompleat Angler & Camping World Rockingham

RESPONDENT

CORAMCommissioner S J Kenner

HEARDWednesday, 22 August 2007, Friday, 7 September 2007

DELIVEREDTHURSDAY, 4 OCTOBER 2007

FILE NO.U 118 OF 2007

CITATION NO.2007 WAIRC 01148

CatchWordsIndustrial law – Termination of employment – Harsh, oppressive and unfair dismissal – Whether Commission has jurisdiction – Principles applied – Commission satisfied respondent is a constitutional corporation – Claim beyond Commission’s jurisdiction – Application dismissed – Industrial Relations Act 1979 (WA) s29(1)(b)(i), Commonwealth Constitution s51(xx)

ResultOrder Issued

2007 WAIRC 01148

Representation

ApplicantIn person

RespondentMs A Gee

Reasons for Decision

1.This is a claim brought pursuant to s29(1)(b)(i) of the Industrial Relations Act 1979 (“the Act”) by which the applicant alleges that he was harshly, oppressively and unfairly dismissed by the respondent on or about 21 June 2007.

2.The respondent objects to and opposes the applicant’s claim and says that the applicant was dismissed as a consequence of failing on a number of occasions, to attend for duty as rostered.

Preliminary Issue of Jurisdiction

3.The notice of application cites “Compleat Angler Camping World Rockingham” as the respondent. It was submitted by the respondent and it is self evident, that the respondent as named is merely a trading name and as such has no identifiable legal personality and could not have been the applicant’s employer. The respondent submitted that the applicant’s employer was in fact “Eral Pty Ltd as trustee for the Prestige Products Unit Trust trading as Compleat Angler & Camping World Rockingham” (“Eral”). The Commission afforded the parties the opportunity of being heard on this issue and both parties, as a part of putting their cases, gave evidence about these matters.

4.The applicant testified that when he commenced employment, there was no document setting out the terms and conditions of his employment, other than a document described as “pay and job description” a copy of which was tendered as exhibit A1. This document does not refer to any corporate entity as the employer. A Tax File Declaration form was tendered in evidence as exhibit A2, which discloses that the applicant’s payer referred to an Australian Business Number “60015 952 132” and a business or trading name as “Compleat Angler & Camping World Rockingham”. The applicant further testified that he received his wages generally in cash and a copy of a bundle of time sheets tendered in evidence by the applicant as exhibit A7, apparently taken as an extract from the respondent’s wages book, only refers to the respondent by its trading name.

5.However, also tendered in evidence as exhibit A4, was a letter of 9July 2007 to the applicant, enclosing his final termination payment. A photocopy of a cheque in the sum of $395.20 is included on the copy of this letter, which describes the payer as “ERAL PTY LTD ACN 009465543 ITF PRESTIGE PRODUCTS UNIT TRUST T/AS ROCKINGHAM FISHING CAMPING WORLD”.

6.Ms Gee, who appeared for the respondent, also gave evidence. She testified that at all material times the employer of the applicant was Eral Pty Ltd as the corporate trustee of the Prestige Products Unit Trust. Ms Gee tendered a number of documents in support of this contention. A “Business Names Extract – Western Australia”, as exhibit R2discloses that the respondent’s business name is that as set out in the notice of application. It further identifies the corporation currently carrying on the business as Eral with a corporate registration number 009 465 543. The business address of Eral as set out in the Business Names Extract is “c/- Harden East and Conti L1 20 Kings Park Road West Perth WA 6005”. Also tendered in evidence as exhibit R3 was a letter dated 5September 2007 from Harden East and Conti Chartered Accountants by a MrSimon Read, to the effect that Eralowns and operates the respondent business. Furthermore, tendered as exhibits R4 and R5 were firstly, a copy of the certificate of incorporation of Eral establishing its incorporation as a proprietary limited company limited by shares on 5July 1990.

7.Exhibit R5 is a copy of a deed of trust dated 8 August 1990, establishing a trust known as the Prestige Products Unit Trust with Eral Pty Ltd appointed as the trustee. The trustinstrument confers a variety of powers on Eral Pty Ltd as trustee, including the powers at cl33(j) to carry on either alone or in partnership under any name the trustee thinks fit, a trade or business and under cl 33(k), to employ any person in connection with any such trade or business carried on by the trustee and any incidental powers necessary to effect those purposes.

Proper Identity of Employer

8.It is trite to observe, as I have noted above, that a business or trading name is not a separate legal entity and cannot be an employer. Similarly, a trust upon its creation is not accorded any separate legal personality. It has been said that the nature of a trust is:

“a collection of duties, disabilities, rights and powers in relation to some specific property imposed upon or accorded to an existing legal person, the trustee. A trustee, as such, is not a distinct legal person, in a representative capacity, separate from himself, in his personal capacity. ….a trust not being an entity separate from the trustee or beneficiaries cannot be a party to legal proceedings. A person who is the trustee is the appropriate party. In general, apart from statute, in proceedings relating to trust activity the trustee is not sued and does not sue in any special capacity”: Principles of the Law of Trusts Ford and Lee LBC 1983 at 39. (See also as to corporate trustees Ford’s Principles of Corporations Law 13th Ed 2007 at 1.360-1.370; 4.225)

9.In this case, I am satisfied and I find on the evidence, that the business of the respondent as cited by the applicant in the notice of application, was conducted by a common form of trading trust through the corporate trustee Eral Pty Ltd. I am satisfied on the evidence and I find that at all material times Eral has conducted and conducts the business of the named respondent and as a part of its responsibility for conducting the business, employed and employs all relevant staff including the applicant. This is despite the fact that the existence of the corporate trustee and the trading trust was not apparent to the applicant at the time that he accepted his offer of employment. However, this does not alter the conclusion that must be reached, that at all material times it was Eral that was his employer.

10.Moreover, a trust, such as the unit trading trust conducting the business of the respondent, does not have liabilities or assets as those assets and liabilities vest in and are imposed on the trustee, in this case Eral Pty Ltd. It is to Eral Pty Ltd, as the corporate trustee, and as his former employer, to which the applicant must turn to seek a remedy in the present case.

11.Given that the applicant has genuinely laboured under a misapprehension as to the proper identity of his employer, and I am satisfied that at all material times the applicant intended to commence these proceedings against his employer, it is an appropriate case for the exercise of the Commission’s powers of amendment under s27(1)(l) and (m) of the Act, to substitute the proper identity of the applicant’s employer for the trading or business name as presently cited: Rai v Dogrin Pty Ltd(2000) 80 WAIG 1375. The Commission will order accordingly.

Trading or Financial Corporation

12.The Commission foreshadowed with the parties the issue as to whether, if a corporation was found to be the applicant’s properly identified employer, it is a trading corporation and thus beyond the Commission’s jurisdiction: Sewell v Glenn Brown – CTI Logistics (2006) 86 WAIG 3278 per Kenner C at pars 15-19.

13.Whether a corporation is a trading corporation is essentially a matter of fact. In Lawrence v The Aboriginal Legal Service (2006) (unreported 2006 WAIRC 05849) I considered the relevant principles in relation to this issue and said at pars 20-21:

“Whether a corporation is a trading corporation for these purposes is a question of fact and agree. There are a number of guiding principles which have fallen from several judgments of the High Court to which reference should be made in order to determine whether in any particular case, a corporation can be so characterised. If trading activities form a significant or substantial part of a corporation’s activities, and trading is not precluded by the organic rules of the corporation, then the conclusion that the corporation is a trading corporation is one that is open: R v ex parte The Western Australian National Football League (1979) 143 CR 190 per Barwick CJ at 208; per Mason J at 233. It has been said that “it is the acts of buying and selling that are at the very heart of trade: as Lush J said in Higgins v Beauchamp [1914] 3 KB 1192 at 1195, “a trading business is one which depends on the buying and selling of goods”. The word “trade” was said by the Lordships in Commissioners of Taxation v Kirk [1900] AC 588 at 592, to mean primarily “traffic by way of sale or exchange or commercial dealing”. The Shorter Oxford English Dictionary gives, as meaning of “trading”, “carrying on of trade; buying and selling; commerce, trade, traffic”: E v Australian Red Cross (1991) 99 ALR 601 per Wilcox J at 632.

The attainment of profit is not necessary to the conclusion that a corporation is a trading or financial corporation, and the motive or object of a corporation does not necessarily condition the conclusion as to whether it is a trading corporation: R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533 per Stephen J at 569-570. Furthermore, trading activities do not cease to be trading because they are entered into in the course of carrying out some other primary undertaking, which is not characterised as trade, as long as the carrying on of that undertaking requires or involves the engaging in trading activities: State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 per Mason Murphy and Deane JJ at 303-304. In the case of a corporation which has yet to commence any activity, then the “purpose test” taken from the constitution of a corporation can be used: Fencott v Muller (1983) 152 CLR 570 at 602. (See also the discussion of these principles generally in Quickenden v O’Connor (2001) 184 ALR 260).”

14.I adopt and apply what I said on that occasion for present purposes. These matters were further considered and amplified on appeal to the Full Bench of the Commission in Aboriginal Legal Service of Western Australia Incorporated v Mark James Lawrence (2007) 87 WAIG 856, which appeal was dismissed. (Also see the helpful summary of these principles in Hardeman v Children’s Medical Research Institute [2007] NSWIRComm at pars 17-18).

15.In order for the Commission to determine whether or not the respondent is a trading or financial corporation for the purposes of s51(xx) of the Commonwealth Constitution, the respondent was granted leave to file and serve an affidavit by its accountant in relation to the respondent’s trading activities. By an affidavit filed on 17September 2007, Mr Gregory John Cochrane the principal of Harden East and Conti Pty Ltd, Chartered Accountants, enclosed a true copy of the special purpose financial statements for Eral ending as at 30 June 2006. Given that the content of Mr Cochrane’s affidavit refers to the profits and financial position of the respondent, the material contained in the affidavit is only to be disclosed to the Commission pursuant to s 33(3) of the Act. Having considered the content of Mr Cochrane’s affidavit I am well satisfied that in conducting the business of the respondent, Eral engages in trading activities in terms of the buying and selling of goods and services and other activities, associated with the conduct of a commercial enterprise. Eral expends and receives substantial sums of money in the conduct of the business and the business returns a profit, which is available for distribution to unit holders. There was no evidence before me to suggest that Eral engages in any other activities. Even if it does its activities in the conduct of the respondent business is plainly significant or substantial. I am therefore well satisfied on the evidence and I find that on the authorities the respondent is a trading corporation.

Conclusion

16.In light of the Commission’s conclusions as to this preliminary issue, it is inevitable therefore that on the authority of Sewell,having found the respondent to be a trading corporation for the purposes of s 51(xx) of the Commonwealth Constitution, that the present claim is beyond the jurisdiction of the Commission and it must be dismissed. It is therefore unnecessary for the Commission to further consider the other evidence and issues raised in these proceedings.