To the extent necessary, the notice of appeal is taken to be an application for leave to appeal from the judgment in Queensland Nurses' Union of Employees v Australian Red Cross Society [2018] FCCA 3471.
The application for a stay of the orders made by the Federal Circuit Court of Australia on 17 December 2018 is refused.
Costs are reserved.
THE COURT NOTES THAT:
On or before 4 pm (Brisbane time) on 31 January 2019 the parties are to advise the Associate to Justice Perry as to whether agreement has been reached between the parties on the issue of costs, or alternatively as to a timetable within which short written submissions may be filed by the parties on that issue.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
[2]
INTRODUCTION
1 On 28 November 2018, the Federal Circuit of Australia (the FCC) delivered reasons for judgment in the matter of Queensland Nurses' Union of Employees v Australian Red Cross Society [2018] FCCA 3471 (the FCC liability judgment). In its reasons, the FCC found that the Australian Red Cross Society (the Red Cross), Ms Rhiannon Fealy and Ms Lisa McIlroy, the first, second and third appellants respectively, had contravened provisions of the Fair Work Act 2009 (Cth) (the FWA) by conduct taken against Ms Sandi Emblem who was then employed by the Red Cross. Declarations were made of the contraventions by orders made on 17 December 2018 to the effect that:
(1) the Red Cross contravened subs 340(1)(a) of the FWA by issuing Ms Emblem with a written first and final disciplinary warning on 11 April 2014, by issuing her with a letter on 28 May 2014 to attend a meeting, by suspending her from her employment on 30 May 2014, and by dismissing her from that employment on 2 June 2014; and
(2) the second and third appellants were involved in each of these contraventions within the meaning of s 550 of the FWA, and are taken to have contravened subs 340(1)(a) of that Act in each case.
2 The FCC also made orders on 17 December 2018 adjourning the proceeding to 29 January 2019 for a hearing in respect of penalty and compensation, and made timetabling orders requiring the appellants to file and serve legal submissions as to the nature and quantum of penalty and compensation by 22 January 2019, together with any affidavit material in support. An application for a stay of these orders or, in the alternative, for the adjournment of the penalty hearing was adjourned sine die following an exchange between Bar and the Bench in which it was resolved that the appellants would instead file an appeal in the Federal Court and seek a stay of the proceeding and orders, consistent with what was said to be "the usual practice".
3 The appellants appealed against the FCC liability judgment by a notice of appeal filed on 21 December 2018 in this Court. On 27 December 2018 they filed an interlocutory application seeking a stay of the orders made on 17 December 2018. That interlocutory application is supported by the affidavit of Ms Kaitlyn Gulle, solicitor, affirmed on 21 December 2018 in which Ms Gulle gives an estimate of the appellants' legal costs for the hearing on penalty and compensation. The appellants seek the stay in the interests of the efficient use of the resources of the FCC and avoiding unnecessary costs that would be potentially incurred by the parties as a result of the penalty hearing. The application for a stay is opposed.
4 The matter was allocated to me as duty judge on 21 January 2019. I listed the matter for an urgent hearing on 22 January 2019 and indicated that I would deliver judgment the following day. The apparent delay in the matter being referred to a duty judge despite the appellants' seeking a listing in early January was unfortunate. It meant that the interlocutory application was heard on the same day that the FCC orders required the appellants to file and serve their evidence and submissions on the penalty hearing in the FCC and only a week before the hearing on penalty was listed to be heard. That notwithstanding, the respondent's counsel very fairly indicated that the respondent would not take issue with the failure by the appellants to comply with the FCC timetabling orders pending the determination of the stay application by this Court.
[3]
PRINCIPLES GOVERNING THE GRANT OF A STAY
5 The principles governing the grant of a stay in this Court are well settled.
6 The discretion is a broad one which, in line with the approach adopted in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 (Alexander v Cambridge) at 694 (the Court), does not require that special or exceptional circumstances be shown. Rather, as Mahoney JA held in Re Middle Harbour Investments Ltd (In liq) (Unreported, New South Wales Court of Appeal, Moffitt P, Glass and Mahoney JJA, 15 December 1976) with the concurrence of the other members of the Court and in a passage approved by the Full Court of the Federal Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 (Powerflex Services) at 66 (the Court):
Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.
7 Furthermore, as was held in Alexander v Cambridge at 694:
The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties … The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears … The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it … Even where no order is made for the payment of part of a verdict, it is not at all unusual for the Court, in the exercise of its discretion, to grant a stay on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties.
(citations omitted)
8 In determining whether or not to grant a stay of first instance orders where appeal proceedings are pending, clearly one important factor is whether the grounds of appeal are reasonably arguable. In considering this question, the proposed grounds of appeal should be considered on their face and examined at a "reasonably impressionistic level"; the Court should not descend into a fuller consideration of the arguments for and against each ground: see by analogy MZABP v Minister for Immigration and Border Protection [2015] FCA 1391; (2015) 242 FCR 585 at [62]-[63] (Mortimer J) (approved on appeal in MZABP v Minister for Immigration and Border Protection [2016] FCAFC 110 at [38] (the Court).
9 Finally, in line with the approach endorsed in Powerflex Services, no single factor is necessarily determinative.
[4]
CONSIDERATION
10 A preliminary issue arose as to the competency of the appeal for the reason that, while declarations are final in nature, orders have not yet been made finally disposing of the matter. While in the event it was not necessary to decide the point and appreciating that it had been raised only shortly before the hearing and was not fully argued, it would appear that declarations made at the end of the first stage of a "split case" are interlocutory and therefore that leave to appeal is required under subs 24(1A) of the Federal Court of Australia Act 1976 (Cth): see Construction, Forestry, Mining and Energy Union v Employment Advocate [2001] FCA 1442 at [8]-[9] (the Court); Australian Builders' Labourers' Federated Union of Workers - Western Australian Branch v J-Corp Pty Limited (1993) 42 FCR 452 at 454 (Lockhart and Gummow JJ); Warramunda Village Inc v Pryde [2002] FCA 250; (2002) 116 FCR 58 at [69] (Finkelstein J). Ultimately the hearing of the interlocutory application proceeded on the basis that if need be, orders would be sought in due course that the notice of appeal be treated as an application for leave to appeal and any related procedural issues would be addressed. Thus in line with the parties' common position, I have dealt with the substance of the stay application without factoring in the additional hurdle that leave to appeal would potentially pose. That said, I nonetheless considered that I ought to make an order to the effect that, to the extent necessary, the notice of appeal is taken to be an application for leave to appeal.
11 By the notice of appeal, the appellants appeal from the whole of the FCC liability judgment and orders. The grounds of appeal may be summarised as follows:
(1) the primary judge erred in finding at [115]-[116] that s 361 of the FWA was enlivened as the evidence relied upon by the primary judge could not support a finding that the relevant decision-makers for the Red Cross knew that Ms Emblem had participated in industrial action (ground 1);
(2) the primary judge erred in finding that the Red Cross had failed to discharge the evidential onus pursuant to s 361 of the FWA (ground 2);
(3) the judgment and orders are unsafe by reason of the delay between the hearing of the proceeding on 21, 22 and 23 April 2015 and the delivery of the liability judgment on 28 November 2018, particularly given the findings of fact made by the primary judge which were adverse to the appellants, including apparent adverse credibility findings against witnesses called by the appellants (ground 3); and
(4) the primary judge erred in finding at [155] that the second and third appellants were involved in the contraventions by the Red Cross within the meaning of s 550 of the FWA and did not make any findings of fact or law which would meet the strict tests applicable for establishing accessorial liability under that provision of the FWA (grounds 4 and 5).
12 In support of the stay, the appellants first submitted that the grounds of appeal were reasonably arguable. This was accepted by the respondent for the purpose of the stay application, particularly having regard to the extensive delay in the delivery of judgment. I agree that the notice of appeal raises reasonably arguable grounds of appeal. Three examples suffice to explain my finding in this regard. First, the primary judge at [153] of his reasons arguably applied the reverse onus imposed by s 361 of the FWA in finding that the second and third appellants were "involved in" the contraventions as defined in subs 550(2) of the FWA. Yet the Full Court recently held in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 that:
59. The effect of s 361(1) of the FWA is that in an adverse action case where it is alleged that a respondent took action for a particular reason or with a particular intent, it is presumed that the action was taken for that reason or with that intent, unless the respondent proves otherwise. Section 361(1) does not usually apply to an allegation of contravention of s 340(1) through the operation of s 550: see Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99 at [448], Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013) 216 FCR 70 at [241]…
13 Secondly, it was necessary for the primary judge, in considering whether the second and third appellants were knowingly concerned in the contraventions, to determine whether they were intentional participants, the necessary intent being based upon their actual knowledge of the essential facts constituting the contravention: Yorke v Lucas (1985) 158 CLR 661 at 670 (Mason ACJ, Wilson, Deane and Dawson JJ). However, the primary judge appears not to have made any positive finding of actual knowledge but arguably relied instead at [153]-[155] upon the presumption in s 361 of the FWA to find that the second and third appellants were knowingly involved in the contraventions.
14 In this regard, I note that it is common ground between the parties that no penalties or compensation are sought against the second and third appellants who have indicated that they will not therefore be potentially exposed to expending costs unnecessarily if the stay is not granted as they do not intend to participate in the penalty hearing. However, the two arguable errors which I have identified above are still relevant to a consideration of the stay application because the primary judge held at [154] that the Red Cross is vicariously liable for the actions of the second and third appellants.
15 Thirdly, it is arguable that the extensive delay (three years and seven months) between the trial on liability and the judgment rendered unsafe the primary judge's rejection on credibility grounds of certain evidence of the second and third appellants and other witnesses for the appellants on material issues: see e.g. Tattsbet v Morrow [2015] FCAFC 62; (2015) 233 FCR 46 at [1] (Allsop CJ), [129]-[135] (Jessup J) and [140] (White J); Expectation Pty Ltd v PRD Realty Pty Ltd [2004] FCAFC 189; (2004) 140 FCR 17 at [66]-[83] (the Court).
16 In support of the stay application, the appellants also argued that, given that no pecuniary penalties, compensation or costs orders are sought against the second and third appellants, the declarations made, which reflected the reasons given in the liability judgment, disposed of all of the issues relevant to these appellants. As such, the appellants argued that the second and third appellants should not be put to the further delay of awaiting judgment on penalty and compensation before being able to proceed with the appeal. With respect to the position of the first appellant, the appellants contended that the Red Cross would potentially be put to wasted legal costs in or around the sum of $40,000-$50,000 including counsel's fees plus GST.
17 Notwithstanding the careful submissions by counsel for the appellants, on balance I would give greater weight to the following considerations, leading me to conclude that the stay should be refused.
18 First, the evidence as to the costs which the appellants say are likely to be incurred in the event that the stay is refused goes no higher than bare assertion. No details have been given as to the reason why costs in such a significant amount are anticipated given that the penalty hearing has been set down in the FCC for a one-day hearing only, the parties confirmed that this was likely to be adequate, and the factual foundation for the second stage of the proceeding has, subject to appeal, been largely determined by the liability judgment (bearing in mind that further evidence might be led, for example, on mitigating factors relevant to penalty outside the circumstances in which the contraventions occurred). Consistently with this, counsel for the respondent submitted that the issues on compensation appear to be limited in scope, while the setting of the appropriate penalty is, of course, a weighing exercise of the various factors.
19 Secondly, it is undesirable to fragment proceedings in the FCC as this gives rise to the possibility of multiple appeals. In this regard, I note that the risk of fragmentation of proceedings, particularly when rights of appeal are borne in mind, is one of the important considerations which weighs in the balance against orders to split a trial when the discretion to make such an order is being considered (Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-142 (Giles CJ in Comm Div)). Consistently with this, the making of orders for a split trial ought not to be regarded as encouraging further fragmentation through the exercise of appellate rights.
20 Counsel for the appellants accepted that granting the stay could lead ultimately to multiple appeals. However, he submitted that this concern effectively "cuts both ways" because if the grounds of appeal ultimately succeed, the factual findings underpinning any penalty that might now be imposed would be undermined and the penalty would have to be reassessed. So much may be accepted. However this will potentially always be the case where, on a split trial, liability is established at first instance. As such, I would give greater weight to the starting point that prima facie the Queensland Nurses' Union of Employees is entitled, as the successful party, to the benefit of the judgment on liability and therefore to proceed to a resolution of the matter in the FCC giving rise to a final judgment from which an appeal as of right on all issues would lie.
21 Thirdly, I have taken into account that the primary judge set the second stage of the proceeding down for hearing approximately two months after delivery of the judgment on liability and six weeks after making the declarations, notwithstanding the intervening Christmas and New Year break. Against the background of the lengthy delay in the delivery of the liability judgment, it is therefore reasonable to infer that the primary judge has appropriately prioritised the finalisation of the proceeding in the FCC and indeed is treating it as a matter of some urgency. The delay in the delivery of the liability judgment also suggests, in my view, that any appellants appealing against the final judgment of the FCC on the conclusion of the second stage of the trial would have compelling reasons for seeking an expedited hearing in the Federal Court.
22 It follows that the application for a stay should be refused. I will hear the parties as to costs.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.