Sturesteps v A G McGrath & ors

[2010] NSWSC 896

Supreme Court of NSW

Built by Barristers,
For Australian Law.

1. Corporations
2. › Winding up
3. › Winding up in insolvency
4. › Priority payments
5. › Excluded employees
6. › Whether period as director of related company counts as non priority days
7. › Whether retrenchment payment attributable to non priority days
8. › Corporations Act 2001 (Cth), s 556
1. Corporations
2. › Winding up
3. › Liquidators
4. › Appeal from rejection of proof of debt
5. › Whether court should direct payment within specific timeframe
6. › Corporations Act 2001 (Cth), s 1321
1. Corporations
2. › Winding up
3. › Winding up in insolvency
4. › Interest on debts and claims
5. › Whether plaintiff entitled to interest on judgment debt
6. › Whether personal liability of liquidators for wrongful rejection of proof
7. › Corporations Act 2001 (Cth), s 563B
1. Practice and Procedure
2. › Costs
3. › Indemnity costs
4. › Whether proof of debt can be treated as Calderbank offer
5. › Whether failure to concede unanswerable component of claim warrants indemnity costs

The definition of 'excluded employee' and 'non priority days' in s 556 of the Corporations Act 2001 (Cth) is confined to the company in liquidation and does not extend to related companies or predecessor employers.
A retrenchment payment accrues upon the event of termination, not over the period of service; accordingly, it is 'attributable to' the date of termination for the purposes of s 556(1C), and if termination occurs after the employee ceases to be a director, none of the payment is attributable to non priority days.
An initial proof of debt cannot be treated as a Calderbank offer where it was subsequently amended and there was no indication the original amount remained acceptable after proceedings commenced.