China Australia Travel Group Pty Ltd v Yang

1. The application for an extension of time and leave to appeal be dismissed.
2. The proceeding be remitted to the primary judge for the hearing and determination of pecuniary penalties. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMWICH J: 1 This is a determination of whether an extension of time and leave to appeal is required to appeal from a decision of a Judge of Div 2 of the Federal Circuit and Family Court of Australia and, if so, whether that leave should be granted. Leave would be required to commence the contemplated appeal if the primary judgment was interlocutory in nature, whereas there would be an appeal by right if that was not so. The applicant below, and now respondent in this appeal proceeding, is Mr Xijie Yang (Mr Yang). The respondents below and now either applicants or appellants are: (a) China Australia Travel Group Pty Ltd (CAT); (b) Mr Xiao Lei Zhao (Mr Zhao); and (c) Ms Jin Zi Huang (Ms Huang), (collectively the putative appellants). 2 On 10 November 2023, the primary judge made declarations of contravention of provisions of the Fair Work Act 2009 (Cth), arising from allegations found to be established of failure by CAT to pay employee entitlements to Mr Yang. Her Honour also: (a) made declarations that Mr Zhao and Ms Huang were involved in CAT's contraventions; and (b) ordered payment for by CAT, Mr Zhao and Ms Huang, on a joint and several basis, of compensation for those entitlements and for the payment of related superannuation entitlements arising from the contraventions that are the subject of the declarations. Her Honour has not yet finally determined the outstanding question of whether to impose pecuniary penalties and if so, the quantum. Rather, her Honour has stayed the separate hearing for that determination in light of this appeal proceeding having been commenced. 3 The declarations by the primary judge were made following a contested trial at which Mr Yang gave evidence, but neither Mr Zhao nor Ms Huang gave evidence. There was, apparently, a substantial volume of documentary evidence. The issue before the primary judge determinative of liability was whether Mr Yang was an employee of CAT with entitlements required to be paid to him under the Passenger Vehicle Transport Award 2010, as he contended, or whether he was an independent contractor with no such entitlements, as the putative appellants contended. Mr Yang's case succeeded. 4 On 7 December 2023 the putative appellants filed a notice of appeal. The grounds in that notice are as follows: [1] [The primary judge] erred in finding that the respondent was an employee of the appellants. [2] [The primary judge] failed to exercise jurisdiction by not considering all of the appellants' submissions with respect to the credit of the respondent. [3] [The primary judge] failed to exercise jurisdiction by not resolving the inconsistency as between the respondent's sworn case that he only earned $7,900.39 and $5,000 during the period he was allegedly employed by the appellant and his later concessions that he earned significantly more from a range of tour operators. [4] The Court should have found that the respondent's evidence as to the nature of his employment and amounts of money he was paid was plainly false and not evidence capable of supporting the relief sought. 5 Mr Yang took issue with the competency of the appeal, asserting that the decision of the primary judge was interlocutory and therefore required leave to appeal by reason of s 24(1A) of the Federal Court of Australia Act 1976 (Cth). Mr Yang opposed leave to appeal being granted. I should add that if this was so, the putative appellants also required an extension of time as the notice of appeal was not filed within 14 days as required for leave to appeal from an interlocutory decision: see rr 35.13(a) and 35.14 of the Federal Court Rules 2011 (Cth). I would take Mr Yang also to oppose any extension of time. 6 The putative appellants contend that the primary judge's decision is not interlocutory and, in the alternative, that leave to appeal should be granted. I would take them also to seek an extension of time. 7 I have decided to treat the notice of appeal as being an application for an extension of time and for leave to appeal, if that is required. 8 The competing arguments have been furnished by way of written submissions, which I have carefully read and considered. I did not require any further assistance by way of oral submissions at a hearing. I therefore proceed to determine the contested issue of the status of the primary judgment on the papers. 9 Both sides referred to Heiko Constructions v Tyson [2020] FCAFC 208; 282 FCR 297 (Collier, Logan and Griffiths JJ). Relevantly, their Honours said as part of [19]: The Federal Circuit Court has yet to hear and determine the consequential questions as to the penalty, if any, which ought to be imposed and other orders, if any, which ought to be made in respect of the contravention found. Ordinarily, Heiko's challenge would have to await the making of such final orders. Even though it determined liability, the declaration was interlocutory in character. However, the course adopted by the learned primary judge in the circumstances so as to reach his conclusion with respect to liability and the nature of Heiko's related procedural fairness challenge raises issues of general importance in relation to a pecuniary penalty ("civil remedy") proceeding in the Federal Circuit Court. These warranted the grant to it, notwithstanding the interlocutory stage of the proceeding, of leave to appeal: Heiko Constructions v Tyson [2020] FCA 697. 10 In Power Ledger Pty Ltd v Griffiths [2021] FCA 624; 308 IR 147, Banks-Smith J observed at [18]: The approach to the question of leave in the Heiko and Qantas Airways decisions, where liability under the FW Act was determined ahead of penalty, is consistent with a body of cases that have proceeded on the basis that a declaration made by the Court in respect of a separate issue, which does not dispose of the whole of the proceedings, is interlocutory, and leave to appeal from the grant of the declaration is required. 11 In Computer Edge Pty Ltd v Apple Computer Inc [1984] HCA 47; 54 ALR 767, a case in which permanent injunctions had been granted and were being purportedly appealed as of right, Gibbs CJ (Murphy and Wilson JJ agreeing) said at 767-8: The test for determining whether a judgment is final, which has been laid down in a number of cases including Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 ; 34 ALR 449, is whether the judgment finally determines the rights of the parties, and the authorities have held that the court in applying the test must have regard to the legal rather than the practical effect of the judgment. So that the question in the present case is whether the whole judgment finally determined, in a legal sense, all the rights of the parties that were at issue in these proceedings. And the answer is, plainly, that it did not, because it left undetermined the question whether any, and what, damages were payable. 12 This issue has been further considered more recently, in a case not referred to by either side, Monash Health v Singh [2023] FCAFC 166; 327 IR 196 (Katzmann, Snaden and Raper JJ). In Monash Health, only liability had been determined, but not reinstatement, compensation or civil penalties. The issue of the need for leave to appeal was considered in some detail at [27]-[44]. Of particular relevance to the present situation, their Honours said: [38] In the present matter, it might be recalled that the primary judge resolved the preliminary (liability) question by granting declaratory relief. Relief of that nature is, by necessity, final relief. There is no such thing as an interlocutory declaration: Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 at [127] per Kirby J, [143] per Hayne and Callinan JJ. [39] Nonetheless, the authorities appear to draw a distinction - at least insofar as concerns rights of appeal - between an order that is or is not final and a judgment that is or is not final. Computer Edge is a good example. Gibbs CJ (with whom Murphy J and Wilson J agreed) accepted - and, with respect, it was plainly the case - that the permanent injunctive relief from which the appeal was sought to be brought as of right was final in nature. Nonetheless, the judgment that gave expression to that relief was not. … [41] Little can be made of the fact that the declaratory relief the primary judge granted was relief that was final in nature. That it was is obvious enough, as is the fact that it purported to determine, on a final basis, the question as to whether or not Monash Health had contravened s340(1) of the FW Act. But these matters are not determinative of whether the judgment was interlocutory for the purposes of s 24(1A) of the FCA Act. … [44] The proposition that a judgment as to liability that is made prior to, and separate from, any consideration of further questions (including as to relief) is "an interlocutory judgment" is "…too well established to be doubted": Robinson at [6] per Leeming JA (in obiter, with whom Kirk JA agreed; Simpson AJA agreeing in the result). Notwithstanding that it consists principally of final (declaratory) relief, the authorities are tolerably clear: for the purposes of s 24(1A) of the FCA Act, the primary judgment is "an interlocutory judgment" in respect of which no appeal lies without leave. 13 The putative appellants attempted to distinguish Heiko and, I would take it, would also seek to distinguish like authority including Monash Health, on the basis that compensation orders also having been made by the primary judge in this case means that it was not a bare liability finding by her Honour. The putative appellants argue that compensation and penalty are distinct, and the judgment is here final and enforceable on the issue of compensation even where penalty has not yet been determined. However, both by reference to first principles, and by reference to the above authority, that cannot be accepted as a valid point of distinction. 14 What matters is not whether some other aspect of relief as well as liability has been determined, but rather whether all the substantive issues below have been determined including, in this case, civil penalties. That is, the question is not whether an order sought to be appealed is final, but rather whether the judgment is final: see Monash Health at [39], reproduced above. 15 The policy behind not allowing the fragmentation of a proceeding by an appeal proceeding, unless leave is properly justified and granted, is obvious enough. An appeal court needs to be able to retain control of its processes and in particular to resist an incomplete proceeding going to a final appeal hearing as of right, while still being able to permit such fragmentation in an appropriate case. This explains why apparently final decisions within a proceeding do not prevent a judgment in that proceeding itself remaining interlocutory in nature until the proceeding has concluded, as the Full Court in Monash Health observed at [39] had occurred in Computer Edge when permanent injunctions had been made. 16 By reason of the foregoing, I am satisfied that the decision of the primary judge is interlocutory and both an extension of time and leave to appeal is required. The question of an extension of time seems to have been overlooked, but I would not be inclined to refuse one if a sufficient basis for the grant of leave to appeal is made out. There was no substantial delay in appealing within 28 days, rather than seeking leave to appeal within 14 days. An error in this regard on the part of the putative appellants' lawyers should not be visited upon them in the circumstances of this case if leave is otherwise justified. 17 I turn now to the question of leave to appeal. In my opinion, ordinarily leave to appeal from a liability decision should not be granted when an aspect of the remedies sought remains outstanding unless the reasons for doing so are sufficiently compelling, such as was identified in Monash Health at [45]: Here, leave to appeal should be granted; and not merely because it was not opposed. The primary judgment is attended by doubt sufficient to warrant its reconsideration and substantial injustice would be caused to Monash Health unless leave were granted (those being the questions that govern the granting of leave established by authorities such as Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9 per Sheppard, Burchett and Heerey JJ). The substantial injustice arises here because of the likelihood (if not certainty) that Monash Health will be subjected to penalties and other relief following a further hearing directed to those questions, even though no such relief may ultimately be justified. It also arises because, having regard to s 570 of the FW Act, the additional costs associated with such a hearing are unlikely to be recoverable. 18 The putative appellants' case for the grant of leave to appeal fell well short of meeting anything like that. 19 The first limb of the test generally applied for deciding whether or not to grant leave to appeal, summarised in Monash Health at [45] reproduced above, namely whether primary judgment is attended by sufficient doubt to warrant its reconsideration by an appeal court, needs to be refined in its application to this proceeding to reflect the fact that refusal of leave to appeal at this stage would not preclude the filing of an appeal as of right upon the proceedings below being concluded. That permits a preliminary view to be formed of the prospects of establishing error on the part of the primary judge on the face of the appeal grounds sought to be advanced, reproduced above at [4]. That approach is permissible, although not mandatory, when deciding whether to let a proceeding or aspect of a proceeding to proceed as an appeal: see by analogy, in relation to an extension of time to bring an appeal, Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] HCA 28; 404 ALR 604, especially per Kiefel CJ, Gageler, Keane and Gleeson JJ at [18]-[20], and per Gordon, Edelman and Steward JJ at [62]; see also Ali v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCAFC 140 at [13]-[14], in which the Full Court extended the application of Katoa to the question of granting leave to agitate a ground of review for the first time on appeal. 20 Having read the primary judge's reasons in some detail, I do not regard those proposed grounds of appeal to be very promising. On the limited material before me, the correctness of the primary judgment is not attended by sufficient doubt to warrant a granting leave to appeal to enable an appeal to be brought before the proceeding below has concluded. I have reached that conclusion for the following reasons, addressing each of the proposed grounds of appeal. 21 As to proposed ground 1 (error in finding Mr Yang was an employee), the primary judge made factual findings principally upon the testimony of Mr Yang, although documentary evidence was also involved. As noted above at [3], neither Mr Zhao nor Ms Huang gave evidence. The primary judge drew conventional inferences arising from that failure to give evidence. There is no readily apparent error in her Honour's reasoning and none has been suggested. The putative appellants face a steep hurdle to vitiate these findings, especially when credit findings are involved for which a trial judge may have, and in this case apparently did have, substantial advantages: see Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 261 FCR 301 at [45]-[46] (Perram J, with whom Allsop CJ and Markovic J agreed). 22 As to proposed ground 2 (failure to exercise jurisdiction by not considering all of the putative appellants' submissions with respect to the credit of Mr Yang), it is not readily apparent how the putative appellants will be able to establish, as a fact, that the primary judge did not consider all of the submissions going to the credit of Mr Yang merely by not referring to every aspect of them in her Honour's reasons, let alone how they would be able to establish that this amounted to a failure to exercise jurisdiction. 23 As to proposed ground 3 (failure to exercise jurisdiction by not resolving asserted inconsistencies between Mr Yang's evidence as to his earnings from CAT and his concession as to earning money from other tour operators), the foundation for this allegation seems to entail a misreading of the primary judge's reasons. It is not apparent to me that there was any material inconsistency between Mr Yang's evidence as to his earnings from the appellant and his later concession that he also earned money from a range of other tour operators via the CAT. That is especially so given the way the primary judge expressly addressed this aspect of Mr Yang's evidence. In any event, it is not apparent how this would amount to a failure to exercise jurisdiction. 24 As to proposed ground 4 (the Court should have found Mr Yang's evidence as to the nature of his employment and amounts of money he was paid was plainly false and not capable of supporting the relief sought), this again involves vitiating credit findings, for which, again, the putative appellants face a steep hurdle in light of the principles set out in Aldi Foods at [45]-[46]. 25 While remaining open to being persuaded to the contrary on each ground in the event of a later appeal by right, I am not satisfied that sufficient merit is apparent on the face of the appeal grounds or on the arguments advanced by the putative appellants to warrant fragmentation of the proceeding below by allowing an appeal to take place on liability before the civil penalty determination has taken place, which may also then be appealed. Nor is any point of principle advanced, let alone one sufficient to warrant splintering the questions of liability and compensation on the one hand and civil penalty on the other. 26 As to the second limb of the ordinary test for the grant of leave to appeal summarised in Monash Health at [45] reproduced above, namely whether substantial injustice would be caused to the putative appellants if leave to appeal was not granted, no injustice, let alone substantial injustice, would result if the appeal rights sought to be advanced were left until the conclusion of the proceeding below. To the contrary, Mr Yang is more likely to be caused substantial injustice because he is in peril of incurring costs of two appeal proceedings in a jurisdiction that ordinarily involves no costs orders being made. 27 It follows from the above that the putative appellants must be refused both an extension of time and leave to appeal, and that the proceeding must be remitted to the primary judge for the hearing and determination of pecuniary penalties. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.