REASONS FOR JUDGMENT
1 In a single Judgment published on 25 October 2011 a Judge of this Court concluded that the Applicants in five separate proceedings were employees of Combined Insurance Company of Australia ("Combined Insurance") rather than independent contractors: ACE Insurance Ltd v Trifunovski [2011] FCA 1204. Those Applicants had been employed by Combined Insurance to provide services in connection with the sale of insurance products. The conclusion of the primary Judge was reached notwithstanding the fact that each of the relevant contracts contained a clause that each of the persons would "operate hereunder as an independent contractor" and also a clause that nothing in the agreements "shall create any relationship of employer and employee": [2011] FCA 1204 at [114].
2 Pursuant to an Order of the Court made on 24 August 2010 the Australian insurance business of Combined Insurance was transferred to ACE Insurance Limited ("Ace Insurance").
3 Orders giving effect to the conclusions previously reached on 25 October 2011 were made on 18 November 2011. The form of those Orders, in summary, relevantly posed a series of questions and thereafter provided the answers.
4 Leave to appeal is now sought by Ace Insurance in each of the six proceedings. Leave is required because his Honour's judgment is clearly an interlocutory judgment: Federal Court of Australia Act 1976 (Cth) s 24(1A). Whether or not leave should be granted involves the exercise of a discretionary judgment in circumstances where it has been said that the discretion is an "unfettered discretion" and one which is conferred in "unqualified terms": Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399 to 400 per Sheppard, Burchett and Heerey JJ.
5 The proceedings first came before the Court at 9.30 am on 6 February 2012. On that occasion an invitation was extended to the parties to have the application for leave heard and determined at 10.15 am on that date. Both parties resisted that course and sought a date convenient to their counsel. Albeit not a date convenient to Senior Counsel for the Respondent, the first available date was 14 March 2012.
6 The principles to be applied when a party seeks leave to appeal were not put in issue. It is generally recognised that considerations relevant to the exercise of the discretion are:
(a) whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and
(b) whether substantial injustice would result if leave were refused supposing the decision would be wrong.
That test, so formulated, is "cumulative" and is not satisfied unless each limb is made out: Rawson Finances Pty Limited v Deputy Commissioner of Taxation [2010] FCAFC 139 at [5] per Ryan, Stone and Jagot JJ. But the two elements of the test are not unrelated: Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20] per Kenny, Tracey and Middleton JJ. The "… sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments": Sharp v Deputy Commissioner of Taxation (NSW) (1988) 19 ATR 908 at 910, 88 ATC 4184 at 4186 per Burchett J.
7 Notwithstanding the oft-repeated reference to these two generally recognised considerations, it is also well recognised that the discretion to grant leave is not constrained by rigid rules: Seven Network Ltd v News Ltd [2005] FCAFC 125 at [5], 144 FCR 379 at 380 per Branson J (Allsop and Edmonds JJ agreeing at [21] and [40] and at 383 and 386 respectively). "No rigid or exhaustive criteria should be laid down; the circumstances of different cases are infinitely various": The Sentry Corporation v Peat Marwick Mitchell & Co (A Firm) (1990) 24 FCR 463 at 488 per Lockhart J.
8 Leave to appeal has thus been granted where, for example, the questions posed for resolution on appeal "…have general importance beyond the concerns of the parties": Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123 at [10], 169 FCR 227 at 230 per Heerey, Moore and Tracey JJ. Leave may also be granted where the interlocutory orders have a serious effect upon a party's position and where there are seriously arguable questions to be resolved: The Sentry Corporation v Peat Marwick Mitchell & Co (A Firm) (1990) 24 FCR 463 at 488 per Lockhart J. By way of example, in Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 3) [2005] FCA 40, 138 IR 394 a question as to whether conduct was protected action within the terms of s 170ML of the Workplace Relations Act 1996 (Cth) and whether there had been a breach of s 170NC of the Act were determined in advance of any damages or penalties to be imposed. In granting leave to appeal from the refusal of declaratory relief, French J (as his Honour then was) concluded:
[7] I conclude that there is a seriously arguable case in support of the grounds of appeal. The formulation which would express that conclusion in terms of 'doubt' attending the decision in my opinion sets the bar too high in a case such as the present.
[8] The second factor which I have to take into account is a question essentially of case management. It is put by the applicant in terms of prejudice. That is to say if the proceeding were to go ahead to assessment of damages and penalties there would be considerable preparation, witness proofing and documentation involved in getting ready for the assessment hearing. In the event that an ultimate appeal against the first finding relating to the July action were upheld such work might have to be, at least in part, duplicated. The applicant submits that it is preferable to proceed to determine all issues which, as it were, go to liability, at the appellate level, before proceeding to damages assessment.
The amendment of the Federal Court of Australia Act 1976 in 2009 to include s 37M only reinforces the relevance of taking into account, in an appropriate case, considerations such as "case management".
9 When considering an application for leave to appeal, and in considering whether there are arguable grounds for appeal, an application for leave to appeal should not be conducted as though it is a preliminary hearing of the appeal itself: Food Channel Network Pty Ltd v Television Food Network, G.P. [2009] FCA 1446 at [26]; Petroulias v Commissioner of Taxation [2011] FCA 795 at [45].
10 It is within this framework that the current applications by Ace Insurance for leave to appeal are to be resolved.
11 Irrespective of any consideration as to whether the decision of the primary Judge was attendant with sufficient doubt, Ace Insurance has made out a "seriously arguable case" - and a case which has the prospect of having "a general importance beyond the concerns of the parties". Detailed written submissions filed by Ace Insurance exposed a series of errors said to have been committed by the primary Judge. Each was of some apparent merit. How they may fare on appeal remains, of course, a matter for another day.
12 The application for leave is thus to be resolved more by reference to an exercise of discretion rather than by reference to the merits of the appeal. That was the basis upon which Counsel for the Respondent was properly prepared to approach the matter.
13 In that context, it should be noted that the hearing before the primary Judge of the outstanding issues of quantum, interest and penalty was originally set down for hearing on 5 June 2012. But that date was changed and the hearing is now scheduled to take place on 17 April 2012. The length of that hearing is estimated to be 1 day.
14 As at 6 February 2012, Counsel for the Respondents indicated to the Court that the evidence upon which reliance was to be placed had been already finalised and that the only evidence outstanding was such evidence as may be filed in reply by the Applicant. This state of the evidence was confirmed this morning. Submissions have also already been filed.
15 Senior Counsel on behalf of Ace Insurance expressed optimism that if leave were granted, there would be the prospect of having the appeal heard in the April/May sittings of the Full Court. If that were not possible, an appeal it was proposed could be included in the July/August sittings. If leave were refused, any appeal would most probably be deferred to the November 2012 sittings of the Full Court. Even if attention was confined to the interests of the Ace Insurance, and any wider public interest be put to one side, Senior Counsel emphasised the immediate commercial prejudice suffered by the insurer. Reference was made to a recent letter from the State Revenue Office of Victoria referring to the decision of the primary Judge and stating that "[t]his decision will have an impact on Ace Insurance Ltd's payroll tax liability in Victoria …". The letter continued: "In order to take advantage of the reduced rate of penalty tax and interest" information was requested to be provided by 9 May 2012.
16 There is obvious merit in having an appeal raising seriously arguable issues - and issues having a potential importance extending beyond the interests of the parties - resolved sooner rather than later.
17 Had the parties availed themselves of the opportunity for a hearing on 6 February 2012, leave may have been then granted. There may well have been utility in then granting leave to appeal such that a Full Court could have considered the conclusions reached by the primary Judge well in advance of any hearing that may have been necessary to resolve outstanding issues. Had leave been granted, the appeal itself could probably have been listed for hearing in the April/May 2012 sittings of the Full Court and the 17 April hearing date vacated at that stage. But the parties jointly shunned that date. Of particular importance is the fact that the Applicant resisted that course.
18 Leave to appeal is now refused.
19 Any consideration of such factors as are frequently relied upon, such as:
saving the parties costs in the preparation of evidence to be relied upon in a further hearing; and
having a discrete question or a series of discrete questions resolved which may obviate the need for any further hearing
are outweighed in the present proceeding by:
the fact that such costs as are necessarily incurred in the preparation for the 17 April hearing, including the preparation of the evidence to be relied upon, have already been incurred and that such future additional costs as will inevitably be incurred by reason of the hearing itself may be expected to be comparatively less;
the fact that the Respondents oppose the grant of leave to appeal;
the fact that the hearing which will resolve all issues as to quantum, interest and penalty is to be held within the immediate future;
the desirability of avoiding a fragmentation of the proceeding; and
the fact that Ace Insurance deferred the availability of an earlier hearing of the present application for leave.
Now that over a month has passed since 6 February and it is just over four weeks before the 17 April hearing, it is concluded that any appeal process is best managed by now refusing leave to appeal from a judgment which resolves only some of the issues dividing the parties.
20 It is not in the interests of either the parties or the Court to encourage any course whereby a Full Court is called upon to resolve only some of the issues involved in a proceeding. Such a course may well not be consistent with the objective of s 37M(1)(b) in having a proceeding resolved as "efficiently as possible". Nor should a course be encouraged, as mooted by Senior Counsel for Ace Insurance, of having one appeal directed to the issues presently sought to be agitated listed for hearing at an early date with the hope that any subsequent appeal directed to other issues being possibly also heard at the same time.
21 The April 2012 hearing, it may be accepted, will not resolve all issues. Thereafter it will be necessary to have a yet further hearing on costs. Whether or not that further hearing can be held shortly thereafter remains a matter for the docket Judge to determine. If the further hearing as to costs cannot be quickly accommodated, Ace Insurance faces the prospect that it will still have no appeal "as of right" even after judgment on quantum, interest and penalty. The present reasons for decision, however, should not be seen as any impediment to any subsequent application for leave as may be made after judgment consequent upon the April hearing. Needless to say, it would be desirable if all issues dividing the parties - including costs - could be quickly resolved so that any appeal could be listed for hearing in the July/August sittings of the Full Court.