The Plaintiffs apply for a stay of judgment of the Appeal Panel of the Civil and Administrative Tribunal New South Wales pending an appeal to this Court.
The First Plaintiff, Bronzewing, holds two licences issued by the Defendant under the Explosives Act, namely a licence to manufactures explosives and a licence to import/export explosives. It manufactures shotgun cartridges.
The business address under each of those licences was Bronzewing's property at Doug McWilliam Road, Yenda.
Between 19 February 2010 and 28 May 2014, Mr Marcello Casella was the sole director and sole shareholder of Bronzewing. He was also concerned in 2 other corporations, namely Casella Wines Pty Ltd (Casella Wines) and Casella Management Pty Ltd (Casella Management).
Casella Management owned a property in Barracks Road, Yenda, comprising a warehouse/factory. It also owned a property in Wood Road, Yenda, being a farm and residential property.
On 12 and 13 February 2014, New South Wales Police executed search warrants at the properties owned by Casella Management at Wood Road and Barracks Road, in respect of unrelated matters or enquiries. In the course of doing so, they observed ammunition and propellant at the Wood Road property and saw individuals packing and unloading pallets of shotgun cartridges at the Barracks Road property.
On 6 March 2014, NSW Police charged Mr Casella with offences under the Explosives Act 2003 (NSW), the Explosives Regulation 2013 and the Firearms Act 1996 (NSW). No prosecutions were commenced against Bronzewing or the Second Plaintiff, Mr Boyle.
On 18 March 2014, the Defendant advised Mr Boyle that it had determined to cancel Bronzewing's licences and Mr Boyle's security clearance under the Explosives Act. It did so upon the purported grounds that Bronzewing had breached the conditions of its licenses by storing ammunition at properties other than at its property, and that it and Mr Boyle were not fit and proper persons to hold a licence or security clearance.
On 27 May 2014, Ms Tracey Rothwell was appointed a director of Bronzewing and is its sole director. On 28 August 2014, Mr Casella transferred his shares in Bronzewing to a company controlled by Ms Rothwell who, since that time, has been its sole director and shareholder.
On 25 August 2014, NCAT granted a stay of the Defendant's decision, on the condition that the Defendant was satisfied that Bronzewing was operating in compliance with applicable legislation, in contemplation that the Defendant would conduct an audit of Bronzewing.
On 2 October 2014, the condition of the stay was lifted until 17 October 2014. On 17 October, the Defendant did not contest the continuation of the unconditional stay pending final hearing of the proceedings.
On 5 May 2015, the judgment of the single member of NCAT in Boyle v WorkCover Authority of New South Wales [2015] NSWCATAD 90 was delivered, affirming the Defendant's determinations. Bronzewing and Mr Boyle appealed from that judgment. The stay was subsequently continued on 2 June 2015, pending resolution of the NCAT appeal.
The Appeal Panel delivered judgment on 1 September 2015: Boyle v WorkCover Authority of New South Wales [2015] NSWCATAP 183. The Appeal Panel extended the stay to 29 September 2015, with a view to enabling any application for leave to appeal to be made to this Court. On 29 September 2015 Harrison J ordered a further stay until further order of the Court.
The Plaintiffs contend that it is appropriate that a stay be granted pending the outcome of these proceedings relevantly on the following bases:
(a) the proposed appeal concerns issues militating in favour of a grant of leave to appeal and enjoys not insignificant prospects of success;
(b) absent a stay, in order to avoid criminal sanctions Bronzewing would be forced to incur the costs associated with disposal of the ammunition which are likely to amount to approximately $727,000;
(c) Bronzewing has not been manufacturing ammunition since the original stay was granted by the Tribunal in August 2014. Since that time it has been selling off ammunition and components on a piecemeal basis but has been unable to dispose of all such materials in its possession;
(d) in the circumstances a stay in the form sought by the Plaintiffs will cause no substantial prejudice to the Defendant and would result in no danger to the community.
On 1 September 2015 the Defendant named in the proceedings, WorkCover Authority of New South Wales, was abolished and its functions have been taken over by a body known as Safework New South Wales. An order was made by the Registrar earlier today substituting that body as the Defendant in the proceedings.
The Defendant opposes any further stay principally on the basis that the Plaintiffs do not have reasonably arguable grounds of appeal but also because the Defendant says that the Plaintiffs have put themselves in the position of needing to incur the cost, if no stay is granted, of the disposal of the ammunition. The Defendant said that the Plaintiffs have had ample time to dispose of the stock they had and have contributed to the problem by ordering more from an overseas supplier.
In that regard it is submitted that there is some inconsistency between paragraphs 7 to 9 of the affidavit of Tracey Rothwell of 23 September 2015 which says that, as from 2 October 2014 the Plaintiffs have not purchased propellant or primed cases and have not ordered or manufactured products or parts of products, and paragraphs 5, 6 and 17 of the affidavit of Anna Shedrina of 28 September 2015 where she says, that to maintain its market share while Bronzewing's manufacturing licences are in issue and to minimise damage to its brand an overseas manufacturer has been contracted to ensure continuity in supply to Bronzewing's customers pending resolution of these legal proceedings, and that she was overseas on behalf of Bronzewing to seek to develop other areas for Bronzewing to expand into.
I have read the grounds of appeal contained in the Summons and I have read what the Plaintiffs have set out in length in their submissions being the principal legal arguments that they wish to put to this Court. These arguments include a denial of procedural fairness and errors of law regarding the level of proof the Tribunal was required to find, and errors regarding the Tribunal's approach to the issue of "fitness and propriety". The Defendant submits that the arguments the Plaintiffs wish to put are the same arguments they unsuccessfully put before the Appeal Panel.
The principles relating to a stay pending an appeal are summarised by McColl JA in Penrith Whitewater Stadium Ltd v Lesvos Pty Ltd [2007] NSWCA 103 at [18] and [19].
[18] The overriding principle in an application for a stay is to ask what the interests of justice require: New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83] per Spigelman CJ (Meagher JA and Sheller JA agreeing).
[19] The detailed principles concerning the grant of a stay are set out in Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 at 694:
a. Where there is a risk that an appeal will prove abortive if the appellant succeeds and a stay is not granted, the Court will normally exercise its discretion in favour of granting a stay;
b. the onus is upon the applicant to demonstrate a proper basis for a stay;
c. it is a matter of discretion whether the Court grants a stay and if so as to the terms which would be fair as part of the granting of a stay;
d. what is important in considering whether or not a stay ought be granted is the balance of convenience and the competing rights of the parties before it;
e. it is not necessary that special or exceptional circumstances should be made out; it is sufficient for the applicant to demonstrate a reason or an appropriate case to warrant the exercise of discretion in its favour.
Further, in Hickey v Land and Enviro Corp Pty Ltd [2014] NSWSC 472 Harrison J said at [17]:
An appellant's ability to identify reasonably arguable grounds of appeal is relevant to the exercise of the discretion to grant a stay. The existence of arguable grounds of appeal is not necessarily sufficient to justify the grant of a stay but their absence is likely to be a determinative consideration against the grant of a stay.
I have read the judgments of Senior Member Lucy and the Appeal Panel in the Tribunal below. There is considerable force in the Defendant's submission that the grounds and arguments to be relied on in this Court largely mirror those that were put to the Appeal Panel. There is also force in the Defendant's submission that there was considerable evidence to support the original decisions to cancel the licences and security clearances, as well as to support both the judgments of the Tribunal.
That does not necessarily lead, however, to the conclusion that these grounds sought to be argued on the appeal are not arguable. The Law Reports are replete with decisions in the High Court where the successful party was unsuccessful at both levels below. Nevertheless, I must give weight to the careful and thorough judgments at both levels of the Tribunal. These judgments certainly point to the Plaintiffs having a considerable task in persuading this Court that errors were made, but this is not the only consideration.
Balance of convenience, including the notion that an appeal may prove abortive if no stay is granted, is significant here. There are two particular matters.
(1) I am not at all convinced that the present position the Plaintiffs find themselves in has been of their own doing. A close understanding of the evidence of Ms Shedrina and Ms Rothwell tends to suggest no real conflict in their evidence.
What seems clear in the first instance is that Bronzewing has not since WorkCover's decision manufactured products or parts of products. Secondly, the better view of the evidence is that Bronzewing has not itself imported any ammunition; rather Ms Shedrina has done the importing of cartridges produced overseas for Bronzewing and with their labelling through her own business to help maintain Bronzewing's business with its customers. She said in her oral evidence that these cartridges were imported into Victoria where her business is based. Under that arrangement Bronzewing receives income from the use by Ms Shedrina's business of Bronzewing's cartridges.
Apart from that, Bronzewing has managed to reduce its stock of propellant to zero but has still 2.8 million primed cases, 1.89 million primers and quantities of wads. Ms Rothwell estimates, and her evidence was not challenged, that it is likely to cost in the vicinity of $725,000 to destroy this stock. This destruction may be required, as is made clear in the affidavit of Sarah Wyatt of 2 October 2015, although a further possibility is that the Defendant could have another entity store it if that could be arranged.
A cost of $725,000 is a significant cost especially if no stay was granted and the appeal was ultimately upheld. Moreover, the position at the conclusion of a successful appeal when Bronzewing may be permitted to resume these activities would be that Bronzewing would have no stock of its own with only the right to some income from the arrangement with Ms Shedrina.
(2) The stay has been in place since 25 August 2014 and there is no evidence of any further breaches of the licences or the security clearance. Apart from the Defendant's valid point about the grounds of appeal and the likely outcome, the strongest argument against a stay is the protection and safety of the public. Although the Explosives Act does not contain an objects clause the protection and safety of the public must be a significant, if not the significant, object of the legislation. What the Plaintiffs seek is a stay for a further period until the appeal is determined.
The matter was this morning fixed for hearing on 12th February 2016 that is exactly four months hence. Without discounting the matter of public safety, the length of the existing stay, the potential cost to and the impact on the Plaintiffs' business if a stay is not granted, when taken with what are at least arguable grounds of appeal, mean that the status quo should be preserved pending the determination of the appeal.
The orders that I make therefore are:
(1) The stay granted by Harrison J on 29 September 2015 be continued until further order of the Court.
(2) The costs of the motion for the stay will be the costs in the appeal.
[3]
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Decision last updated: 13 October 2015