Dhillon v Rail Corporation of NSW EOD

CITATION: Dhillon v Rail Corporation of NSW EOD [2009] NSWADTAP 63 This decision has been amended. Please see the end of the decision for a list of the amendments.

APPELLANT Anastasia Dhillon PARTIES: RESPONENT Rail Corporation of NSW

BEFORE: Hennessy N - Magistrate (Deputy President); Needham J SC - Deputy President; Hayes E - Non-Judicial Member

CATCHWORDS: Equal Opportunity - interim orders - statutory power - power to 'preserve status quo' - 'preserve rights of parties' - Anti-Discrimination Act 1977, s 105

DECISION UNDER APPEAL: Dhillon v Rail Corporation of NSW [2009] NSWADT 96

LEGISLATION CITED : Anti-Discrimination Act 1977 Administrative Decisions Tribunal Act 1997

Cardile v LED Builders Pty Ltd [1999] HCA 18 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 Hill v Director General of the Department of Education and Training (NSW) (1998) 85 IR 201 Western Sydney Area Health Service v Australian Salaried Medical Officers' Association (ASMOF) [2004] NSWIRComm 246 (18 November 2004) Nicholls and Nicholls v Director General, Department of Education and Training (No 2) [2009] NSWADTAP 20 White v University of Sydney (1992) EOC 92-462 CASES CITED: Ivory v Griffith University [1996] QADT 15 Associated Provisional Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 Talacko v Talacko [2009] VSC 349 Smith v University of Ballarat (2006) 229 ALR 343 [2006] FCA 148 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Australian Broadcasting Commission v O'Neill (2006) 227 CLR 57; [2006] HCA 46 ASMOF (NSW) on behalf of Dr Wojtulewicz v Director General of NSW Health Services [2008] NSWIRComm 229 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618

TEXTS CITED: N Rees, K Lindsay and S Rice, in Australian Anti-Discrimination Law, Text, Cases and Materials, the Federation Press, 2008, at p 690

APPLICANT P Thew, barrister REPRESENTATION: RESPONDENT Y Shariff, barrister

1. Leave is granted for the appeal against an interlocutory decision to proceed ORDERS: 2. The Tribunal's decision is set aside 3. Leave is granted for the appeal to extend to the merits of the Tribunal's decision 4. The application for interim order is refused.

1 In July 2005 Ms Dhillon, an employee of RailCorp, complained that four other employees had sexually harassed her. She lodged a workers compensation claim which was accepted and she has not worked since. A year later, in August 2006, Ms Dhillon's workers compensation entitlement decreased to 80% of her weekly salary. At Ms Dhillon's request, RailCorp decided to 'top up' her workers compensation payments so that she would be receiving the same salary she would have received if she had continued working (the special payment). According to Ms Dhillon, the amount of the special payment was $1925.28 net per fortnight.

2 In April 2007 Ms Dhillon lodged complaints of sexual harassment, sex discrimination and victimisation with the Anti-Discrimination Board. The President of the Board referred those complaints to the Tribunal in September 2007. Following a review in December 2008, RailCorp decided to stop paying Ms Dhillon the special payment. RailCorp says that the payment stopped on 14 March 2009 whereas Ms Dhillon says that it stopped in mid February. Ms Dhillon was unable to provide instructions to her solicitor for about a month from the beginning of March to the beginning of April. On 3 April 2009 Ms Dhillon's solicitor applied to the Tribunal for an interim order to reinstate the special payment. The parties agreed that at the time of that application, the special payment was no longer being paid. The Tribunal dismissed the application on the basis that it did not have power to make the order. Ms Dhillon has appealed to the Appeal Panel against that decision both on a question of law and on the merits: Administrative Decisions Tribunal Act 1997, s 113 . We refer to Ms Dhillon in this decision as the Appellant and to RailCorp as the Respondent.

3 As the Tribunal's decision was an interlocutory decision, the appeal cannot proceed unless the Appeal Panel gives leave: Anti-Discrimination Act 1977 (AD Act), s 106, Administrative Decisions Tribunal Act 1997, s 113(2A). The appeal is to be determined on the papers in accordance with s 76 of the ADT Act.

4 We have granted leave for the Appellant to appeal against the decision even though it is an interlocutory decision. The decision is attended by sufficient doubt to warrant reconsideration on appeal and the decision concerns the substantive interests of the parties as opposed to a matter of practice and procedure: Sebastian v Rail Infrastructure Corporation [2006] NSWADTAP 44 at [12]-[13].

5 The interim order sought by the Appellant was: That RailCorp reinstate the special allowance paid to Ms Dhillon between August 2006 that was terminated on 15 February 2009.

6 The Tribunal noted that at the hearing of the application for an interim order, the parties advised that an in principle agreement had been reached about a second proposed order. Given that agreement we have not dealt with the second proposed order.

7 The Tribunal has power to make interim orders under s 105 of the AD Act: (1) The Tribunal may, on the application of the President after a complaint is made and before the complaint is declined, terminated or otherwise resolved by the President, or referred to the Tribunal, or on the application of a complainant or respondent at any time, make an interim order:

(a) to preserve the status quo between the parties to the complaint, or (b) to preserve the rights of the parties to the complaint, or (c) to return the parties to the complaint to the circumstances they were in before the contravention of this Act or the regulations alleged in the complaint occurred,

pending determination of the matter the subject of the complaint.

8 The Appellant submitted that the status quo was not necessarily the state of affairs at the time of applying for the interim order. The Appellant said that the status quo was the state of affairs before 15 February 2009 at which time she had been receiving the special payment for over two and a half years. The Appellant submitted that the nature of the payment is irrelevant under both s 105(1)(a) and (b). Alternatively, she said that she was entitled to an interim order under s 105(1)(b) on the basis that she had a contractual right to the payment. The Appellant did not rely on s 105(c).

9 The Tribunal accepted RailCorp's submission that while it may 'preserve the status quo', it does not have power to reinstate or revive a previous state of affairs that no longer exists. The Tribunal's reasoning is set out at [25] to [27]: 25 As tempting as it may be in some circumstances to interpret the phrase 'to preserve the status quo' as entitling the Tribunal to wind back the clock, or indeed, if Ms Dhillon's argument is accepted, to wind it forward, to benefit or protect a complainant, to do so would be to stretch the language of the sub-section beyond breaking point. The sub-section appears to be intended to ensure that a respondent may not take future action that disadvantages or prejudices a complainant and to give complainants a right to claim the Tribunal's protection from threatened prejudice or disadvantage pending determination of their complaint by the Tribunal. This is to be inferred from the use of the word 'preserve'. That sub-section (1)(c) deals specifically with the restoration of a status quo ante bolsters RailCorp's argument for the interpretation that I have accepted.

26 Further, the definition accepted by both parties of the status quo - 'the state of affairs now or at some given time' - does not mean that the Tribunal can bend time to its own whim. The phrase 'or at some given time' merely enables the user of the phrase 'the status quo' to specify whether he or she is referring to a present state of affairs or a state of affairs at another time. This does not help Ms Dhillon because the state of affairs she would like preserved no longer exists unless she has an ongoing right or entitlement to the payment.

27 It is a statement of the obvious to say that something, whether it be a state of affairs or a previously tangible object that no longer exists cannot be preserved. For these reasons I have concluded that s 105(1)(a) does not confer power on the Tribunal to make the Order sought by Ms Dhillon. 10 In relation to s 105(1)(b), the Tribunal agreed with RailCorp that Ms Dhillon had no relevant rights to be preserved by an interim order as the special payment was not an entitlement under Ms Dhillon's contract of employment. The Tribunal's reasoning is at [28] to [36]: 28 I turn to the argument that Ms Dhillon has a right or entitlement to the Special Payment by virtue of custom, usage and the passage of time and accordingly s 105(1)(b) is available to make the Order sought.

29 It is fundamental to the law of contract that there is no contract, and therefore no rights and obligations under one, unless the parties in question have reached an agreement, which is to say, have a meeting of minds. An agreement may be inferred from the conduct of the parties. The test is an objective one: see, for example, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165.

30 The evidence of the alleged agreement does not, in my opinion, suggest that RailCorp at any time intended, much less reached an understanding with Ms Dhillon, that the payment would become part of her employment benefits under a contract. Rather, the payments were commenced, it is obvious, as a result of an attack on Rail Corp by the tabloid media and the political pressure that the media brought to bear on it. Mr Shariff argues that RailCorp was a generous and benevolent employer - perhaps so, but its primary interest, in my view, was the preservation of its corporate image.

31 Nowhere, even in the affidavit of Ms Dhillon, is there any direct evidence of a meeting of minds that the special payment or allowance would become a contractual entitlement.

32 The phrase 'special allowance' or 'special payment' implies that it is unusual and therefore not an ordinary entitlement. Following the flood of publicity in the media about the claims that the managers who had allegedly harassed Ms Dhillon continued to be paid their large salaries while suspended, and the efforts made by RailCorp to address the public perceptions of injustice and victimisation, Ms Dhillon understood that she was receiving special treatment. However, it is difficult to see any evidence, except that the payments continued for over two years, that RailCorp led her to understand that the special payments were anything other than special and related to her complaints of sexual harassment.

33 As is acknowledged in the affidavits tendered on her behalf, these payments were over and above her entitlements under workers' compensation legislation.

34 As time passed, Ms Dhillon may have hoped and even believed that this special treatment would continue ad infinitum. She, understandably, came to rely on them. She may even have thought she was entitled to them. However, her subjective understanding, belief or hopes about the nature of the payments is not the point. The test is an objective one. The only evidence of such a meeting of minds, if it exists, is inferential, namely, the passage of time.

35 The fact that the payments continued for a considerable period of time, however, is explained by the fact that the internal investigation and disciplining of the managers took time and the fact that the anti-discrimination proceedings have also been protracted. Having been bitten once, very hard, by the media, Rail Corp appears to have decided that, in fairness to Ms Dhillon, and in the hope that it would be viewed as a benevolent employer, it would continue the special payments until recently. However, its patience appears to have become thin, as the resolution of the complaint has drawn on.

36 When all these circumstances are considered, it seems to me more likely than not that the payments were always intended to be ex gratia payments and that there was never a tacit understanding reached by the parties that they would become contractual payments. In short, Ms Dhillon had no rights in respect of those payments to preserve. Accordingly in my view, the power conferred by s 105(1)(b) cannot be used to make the Order sought by Ms Dhillon.37 It follows that the Tribunal has no powers to exercise under s 105. Meaning of s 105(1)

11 Introduction. The underlying questions of law raised by the Appellant involve the construction of the phrases 'preserve the status quo' and 'preserve the rights of the parties'. To ascertain the meaning of those phrases we need to examine the relationship between s 105 and interlocutory injunctions in general and the purpose of s 105.

12 Relationship between s 105 and interlocutory injunctions. Section 105 is modelled on the power of courts to make interlocutory injunctions. While the power of the Tribunal to grant interim relief is not subject to any limitation which is not strictly required by the language and purpose of the AD Act, the principles applicable to interlocutory injunctions provide useful guidance: Cardile v LED Builders Pty Ltd [1999] HCA 18, per Kirby J at [110]; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 per Gummow and Hayne at [89].

13 Nature of interlocutory orders. Interlocutory orders are made by courts and tribunals in numerous contexts including breach of contract, breach of trust, breach of statute and in proceedings relating to intellectual property and defamation. Injunctive orders are available either to restrain the infringement or threatened infringement of a legal or equitable right including a statutory right (prohibitory injunctions) or, more rarely, to compel performance of some positive act (mandatory injunctions). Examples of prohibitory orders are preventing property being sold or a company being wound up, prohibiting the infringement of copyright, trade marks or patents, preventing the disclosure of confidential information and restraining conduct in denial of natural justice. Examples of mandatory orders include compelling a mortgagee to pay mortgage instalments and compelling a trustee to perform his or her duties under a trust: LexisNexis, Court Forms, Precedents & Pleadings NSW, Injunctions: Principles & Practice: Injunctions at [31,030]. The granting of interlocutory relief is discretionary and should generally be the minimum relief necessary to do justice between the parties. In most cases it will cease to operate when the court or tribunal hands down its final decision: Cardile v LED Builders Pty Ltd [1999] HCA 18, per Gaudron, McHugh, Gummow and Callinan JJ at [70]. Under s 105 orders are made 'pending determination of the matter'.

14 Injunctions in employment context. In an employment context, courts have been reluctant to grant injunctions which would have the effect of keeping alive an employer/employee relationship: Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383. Compelling actual performance of a contract for personal services is considered to be fraught because of the personal nature of that relationship. Nevertheless, there are statutory provisions which give courts and tribunals that power. For example, s 89(7) of the Industrial Relations Act 1996 gives the Industrial Relations Commission power to order an employer not to dismiss an employee who has been threatened with termination: Hill v Director General of the Department of Education and Training (NSW) (1998) 85 IR 201 at 208. The Commission held in Western Sydney Area Health Service v Australian Salaried Medical Officers' Association (ASMOF) [2004] NSWIRComm 246 (18 November 2004) at [38] that its power under that provision was limited to 'preserving the employment of the employee from dismissal in accordance with an alleged threat until the substantive application has been heard and determined'.

15 Employment decisions under AD Act. Similarly, s 105 of the AD Act has most commonly been invoked where an employer intends to dismiss an employee on allegedly discriminatory grounds. An example is where a university threatens to compulsorily retire an employees in breach of his or her statutory rights: White v University of Sydney (1992) EOC 92-462; Ivory v Griffith University [1996] QADT 15.

16 Purpose of s 105. Section 105 must be interpreted in light of the purpose of that provision: Interpretation Act 1987, s 33. In Patrick Stevedores Operations No 2 Pty Ltd and Others v Maritime Union of Australia and Others (1998) 153 ALR 643, the High Court considered the exercise by the Federal Court of its powers to make 'orders of such kinds, including interlocutory orders ... as the court thinks appropriate': Federal Court of Australia Act 1976 (Cth), s 23. The occasion for the exercise of the power in that case arose from the assumption that one of the reasons for the restructure of the Patrick Group was to dismiss the union workforce. The High Court held that:

The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceedings against whom final relief might be granted, as are needed to ensure the effectiveness of the jurisdiction invoked: Tait v R (1962) 108 CLR 620.

17 Young J pointed out in Smith v University of Ballarat (2006) 229 ALR 343; 150 IR 371; [2006] FCA 148; BC200602407 that the formulation of the purpose in this way may not be apt in every case. Referring to the High Court's decision in Australian Broadcasting Corp (ABC) v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1; [2001] HCA 63 his Honour held that: [24] The purpose ordinarily served by an interlocutory injunction is to preserve the status quo. The way in which Gleeson CJ put it in ABC was that the justice and convenience of imposing an interim restraint, pending the hearing of the final action, if it exists, lies in the need to prevent the practical destruction of the right that is sought to be vindicated by the proceedings before there has been an opportunity to have its existence finally established (at 217, [12]). This formulation may not be apt in every case, but it draws attention to the fact that there must be an appropriate connection between the form of interim relief that is sought, the danger or damage that is sought to be averted by the interim relief, and the final relief which is claimed in the action.

18 In our view, when determining whether or not to make an interim order, the Tribunal should examine the connection between the form of interim relief, the danger or damage that is sought to be averted by the interim relief, and the final relief which is claimed in the action. This thinking was encapsulated by N Rees, K Lindsay and S Rice, in Australian Anti-Discrimination Law, Text, Cases and Materials, the Federation Press, 2008, at p 690, where the two overlapping purposes of s 105 (and similar provisions throughout Australia) were identified as: . . .first, to ensure that the processes established by law to deal with complaints of unlawful discrimination are not rendered ineffective as a result of conduct by one of the parties which may make it difficult or impossible for a court or tribunal to grant an appropriate remedy if a complaint is substantiated and, secondly, to protect or preserve those rights of a party which, in the absence of an interim restraining order, may be irreparably damaged as a result of the inevitable delay in processing a complaint.

19 The Tribunal does not have power 'at large' to make interlocutory orders affecting every legal, equitable or statutory right a party to a complaint of discrimination may have. The power is limited by the language and purpose of s 105 to making orders relating to or affecting the statutory rights of the parties under the AD Act. The 'right' which is referred to in s 105(1)(b) will often be the 'right' which the applicant seeks to vindicate at the hearing. Examples include the right to work in a harassment free environment or a right not to be dismissed on a discriminatory ground. If that right might be destroyed, or substantially impaired, between the application and the final determination of the proceedings, an interim order may be justified: MR Meagher D Heydon M Leeming, Meagher, Gummow and Lehane's Equity Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002 p 775. The 'right' may also be a right that is related to statutory rights, such as any entitlement to damages or to mandatory or prohibtory injunctive style relief if the complaint is substantiated: AD Act s 108(2)(a),(b) and (c). Given these observations and the purpose of s 105 it is apparent that the 'rights of the parties' in this case are not dependent on a finding that the Appellant had a contractual right to receive the special payment. In our view, the Tribunal made an error of law in concluding that in the absence of such a right it did not have power to entertain an application for an interim order under s 105(1)(b).

20 Submissions. The Appellant submitted that the status quo is '[T]he state of affairs existing now or at some given date': Butterworths Legal Dictionary, eds. Peter E Nygh and Peter Butt, Butterworths, Sydney, 1997. It was said that this construction is the only interpretation of s 105(1)(a) which gives that provision work to do in circumstances where an employer stops a payment or other benefit or terminates an employee's employment after the complaint alleging a contravention of the AD Act has been made. Further, it was submitted that it is not to the point that s 105(1)(c) of the AD Act 'deals specifically with the restoration of a status quo ante', as the Tribunal found at [25]. The Respondent submitted that the Tribunal correctly found that the Tribunal lacked jurisdiction to make an order under s 105 to 'reinstate' a state of affairs. It was said that nothing the Appellant had submitted overcomes the insurmountable obstacle that the Tribunal is not empowered to 'reinstate' (as opposed to preserve) a state of affairs or an asserted right.

21 Relevant case law on meaning of status quo. In a recent decision, Talacko v Talacko [2009] VSC 349, Kyrou J surveyed the case law on the meaning of maintaining or preserving the 'status quo' and concluded that, in general, the status quo is either the state of affairs before the substantive application is made or the state of affairs before the interlocutory application is made. However, his Honour went on to observe at [40] to [42] that: [40] . . . in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia , Gaudron J referred to, among other cases, Garden Cottage and appeared to take a broader view. Her Honour said: 'As a general rule, interlocutory orders and injunctions are confined to orders maintaining the status quo at the time of the making of an application for those orders. However, that is not invariably so.' Malcolm CJ in Carr Boyd Minerals Ltd v Ashton Mining Ltd also referred to Garden Cottage before commenting: 'The determination of what is, or what is not, the status quo in any given case for the purpose of considering an application for an interlocutory injunction is, in my view, a question of fact'. In Walsh v Police Assn , Gillard J said that 'the status quo clearly depends upon the particular circumstances' and that 'it would be unjust to the plaintiff if a defendant could by an unlawful act obtain an advantage which could not be reversed because it was the state of the circumstances immediately prior to the institution of the proceeding'.

[41] This issue was considered in some detail by Warren J (as her Honour then was) in Liquorland (Aust) Pty Ltd v Anghie in the context of the principles applicable to an ordinary interlocutory injunction. To obtain such an injunction, the plaintiff must establish that there is a serious question to be tried and that the balance of convenience favours the grant of the injunction. Her Honour said:

Ultimately, the plaintiffs' argument was one that relied upon retention of the status quo in support of the assertion that the balance of convenience weighed in their favour. Preservation of the status quo will depend always upon a variety of considerations in any particular case. Thus, although the most usual basis for the grant of an interlocutory injunction is to preserve the circumstances that exist at the time of the application until trial it is nevertheless a factor to be weighed very carefully. The discretion as to that which constitutes the status quo and its need for protection will often warrant the exercise of a very general discretion …

… In my view the status quo here forms but one part of the multiple factors that may or may not invoke the general discretion. Ultimately a court will consider all factors and pursue an approach that reflects the flexible and discretionary principles that underlie the exercise of the remedy …

[42] . . . .It follows that the status quo is not necessarily constituted by the state of affairs in the period immediately before the filing of the writ or application, and what constitutes the status quo is a matter that must be determined based on the facts of each case and a careful and commonsense exercise of the court's discretion. 22 That conclusion is supported by the approach taken by the Industrial Relations Commission. Although the words 'status quo' are not used in the Industrial Relations Act 1996 the Commission has relied on common law principles in recognising that the status quo may be a state of affairs that existed at some time other than immediately before the application for interim relief was made. In ASMOF (NSW) on behalf of Dr Wojtulewicz v Director General of NSW Health Services [2008] NSWIRComm 229, Boland J decided that the suspension of Dr Wojtulewicz on full pay on 22 June 2006 constituted the status quo even though the respondent issued a letter purporting to terminate his employment on 22 August 2008 and the hearing took place on 26 November 2008. Boland J made the following observation at [36] about the status quo: The status quo may be the position of the parties at the time of the commencement of the proceedings. However, the defendant's allegedly wrongful conduct may have commenced by the time the proceedings is issued. In that case the plaintiff will seek to maintain the status quo pending trial in the sense that it wants the position to remain as it was before the defendant commenced to engage in the conduct complained of. That is the present case.

23 In most cases the status quo needs to be in existence when the application is made because a change in the status quo will mean that the 'damage' has already been done and is not reversible. For example, in other contexts if property is sold, a company wound up or a trade mark breached, nothing can be done straight away to remedy the situation. On the other hand an employer may be able to reverse a decision to dismiss an employee or change their terms or conditions of employment. Although the principles applicable to interlocutory injunctions do not govern applications under s 105, in our view we should apply the common law meaning of preserving or maintaining the status quo as outlined above when interpreting s 105. That interpretation is consistent with the language and purpose of the provision. It follows that the Tribunal made an error of law by construing s 105(1)(a) to mean, by implication, that the status quo had to be the state of affairs in existence at the time the application for interim relief is made.

24 Comment at [26]. The Tribunal said at [26] that the state of affairs that Ms Dhillon sought to have preserved 'no longer existed unless she has an ongoing right or entitlement to the payment'. The Appellant submitted that it was irrational and/or not reasonably open to find that s 105(1)(a) required a 'right or entitlement' to engage the 'status quo between the parties': Associated Provisional Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 at 229-30.

25 Conclusion. Assuming the Appellant's interpretation of this passage is correct, it raises the issue of the relationship between s 105(1)(a), (b) and (c). Although each of those matters is expressed in the alternative, the Tribunal does not have power 'at large' to make interlocutory orders to preserve any state of affair or every legal, equitable or statutory right a party to a complaint of discrimination may have. The power is limited by the language and purpose of s 105 to making orders affecting or relating to the statutory rights of the parties under the AD Act. The application must be for one of the purposes identified at [18] above and there must be 'an appropriate connection between the form of interim relief that is sought, the danger or damage that is sought to be averted by the interim relief, and the final relief which is claimed in the action': Smith v University of Ballarat (2006) 229 ALR 343; [2006] FCA 148 at [24]. If, as the Appellant submits, the Tribunal required both that the status quo be preserved and the rights of the parties be affected before making an interim order, it made an error of law in the way it construed s 105. However, as the Tribunal was addressing the question of whether it had power to make the order, rather than whether it should exercise its discretion to do so, the error was not of a kind referred to in Associated Provisional Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223. That case was concerned with the exercise of an administrative discretion.

26 The Appellant submitted that the Tribunal's finding at [30] that, 'the payments were commenced, it is obvious, as a result of an attack on Rail Corp by the tabloid media and the political pressure that the media brought to bear on it' was an error of law because there was no evidence on which to make the relevant finding. In addition, the Appellant challenged the Tribunal's finding at [35]: 35 The fact that the payments continued for a considerable period of time, however, is explained by the fact that the internal investigation and disciplining of the managers took time and the fact that the anti-discrimination proceedings have also been protracted. Having been bitten once, very hard, by the media, Rail Corp appears to have decided that, in fairness to Ms Dhillon, and in the hope that it would be viewed as a benevolent employer, it would continue the special payments until recently. However, its patience appears to have become thin, as the resolution of the complaint has drawn on. [Emphasis added].

27 The Appellant submitted that on the Tribunal's reasoning, the findings at paragraphs [30] and [35] support the finding at both [26] in relation to s 105(1)(a) (that the appellant had no ongoing right or entitlement to the payment) and [36] in relation to s 106(1)(b) (that the Appellant had no 'rights in respect of those payments to preserve'). It was said that these errors were therefore material to the Tribunal's ultimate decision.

28 We agree with the Tribunal's finding of fact at [36] that 'the payments were always intended to be ex gratia payments'. It was common ground that the reason for commencing the payments was to put Ms Dhillon in the same position as she would have been in had she continued working. Whether the commencement of the payments was triggered by media publicity or a request from Ms Dhillon is irrelevant. Similarly, the reason the Respondent terminated the payment is irrelevant to the question of whether or not they were ex gratia payments. Consequently there is no need to address this ground of appeal.

29 Extension to the merits. As well as appealing on questions of law, the Appellant applied for leave for the appeal to be extended to the merits of the Tribunal's decision: ADT Act, s 113(2). In relation to the application for leave to extend to the merits, both parties relied upon Nicholls and Nicholls v Director General, Department of Education and Training (No 2) [2009] NSWADTAP 20.

30 Given the errors of law we have identified, we grant leave for the appeal to extend to the merits of the Tribunal's decision. In the interests of timeliness we have decided to determine the merits of the application on the basis of the evidence before the Tribunal rather than remitting the matter to be heard again.

31 Principles to be applied. Prior to 2006, the principles in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 were routinely applied when considering whether to grant or refuse an interlocutory injunction. Mason CJ said at 153, [11]: The principles governing the grant or refusal of interlocutory injunctions in private litigation have been applied in public law cases, including constitutional cases, notwithstanding that different factors arise for consideration. In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

32 However, in Australian Broadcasting Commission v O'Neill (2006) 227 CLR 57; [2006] HCA 46 the High Court reinstated the test set out in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618. The High Court in O'Neill explained that the court should address itself to two main inquiries: The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief . . The second inquiry is. . whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

33 One effect of the decision in O'Neill is that the issue of 'irreparable damage' is not a discrete factor to be taken into account in determining whether to grant an interim order. Rather, it is one of the factors to be weighed when deciding where the balance of convenience lies.

34 Factual findings. Before applying those principles relevant findings of fact need to be made. In accordance with our reasoning at [20] to [23] above, the status quo is the state of affairs before the Respondent ceased making the special payment. In accordance with our reasoning at [19], the right to which this application is related is any entitlement to damages (including loss of income) the Appellant may have if the complaint is substantiated. Whether or not we should make an interim order depends on whether the application is made for the purpose of ensuring that the hearing is not 'rendered ineffective' as a result of the termination of the special payment such that it will be 'difficult or impossible' for the Tribunal to grant an appropriate remedy if the complaint is substantiated. We accept the Appellant's submissions that there is a prima facie case of sexual harassment against employees of the Respondent. The Respondent does not dispute that that is the case.

35 Balance of convenience. The inconvenience or injury that the Appellant is likely to suffer if an interim order is refused is that she will not have the benefit of the special payment pending the hearing. The evidence discloses that the Appellant was experiencing financial hardship and that she was relying on the continuing payment of the special allowance to meet her financial commitments. The Appellant's evidence was that while she was receiving the special payment of $1,925.28 per fortnight she could meet her expenses. She will no longer be able to meet her loan repayments now that her fortnightly income is reduced to $812.40. In addition she will not be able to obtain suitable rental accommodation for herself and her son. The Appellant submitted that given the size of the Respondent's workforce and its resources together with the relatively short period of time that the orders will be in force, the balance of convenience favours the granting of the orders.

36 The Appellant says she will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted. If an interim order is not granted the Appellant will not have the money she says she needs at the moment to rent suitable accommodation. Nevertheless, if her complaint is substantiated, she will be entitled to damages to a maximum of $40,000 for any loss incurred as a result of the alleged discrimination. Because damages are available, it cannot be said that the injury is 'irreparable'.

37 According to the Respondent, the Appellant's 'precarious' financial position has arisen, at least in part, because of the degree of debt she has accumulated. The Respondent says that it should not made to subsidise the Appellant's poor financial decisions. The Respondent says that the special payment is entirely discretionary and is ultimately being funded by taxpayers. If the complaint is not substantiated, the Respondent will be unlikely to be able to recover that money. The Respondent also notes that the proceedings have been on foot for approximately 18 months and that the matter has not yet been listed for hearing. For various reasons, the Appellant has repeatedly been in default of the timetables set by the Tribunal. Further, the Appellant has not performed any work for the Respondent for nearly four years. The unconditional grant of the interim order would be a disincentive to the finalisation of the complaint. Finally the Appellant submitted that if the order were granted that would be a disincentive to granting special payments in the future. That outcome would be prejudicial to both RailCorp and future complainants. In short, the Respondent says it should not be punished for having been an exemplary and generous employer in extending an ex gratia payment to the Appellant for a period of over two and a half years.

38 In our view the balance of convenience is in favour of the Respondent. We are satisfied that the special payment is a discretionary or ex gratia payment which the Respondent was not legally obliged to provide. Continuing the special payment would result in the Respondent being ordered to compensate the Appellant in advance of any finding against it under the AD Act. The hearing will not be 'rendered ineffective' if the special payment is not reinsated nor will it be 'difficult or impossible' for the Tribunal to grant an appropriate remedy if the complaint is substantiated.

Orders 1. Leave is granted for the appeal against an interlocutory decision to proceed. 2. The Tribunal's decision is set aside. 3. Leave is granted for the appeal to extend to the merits of the Tribunal's decision. 4. The application for interim order is refused.

17/11/2009 - Amount changed from $100,000 to $40,000. Proceedings commenced prior to operation of amendments to section 108(2)(a) of the Anti-Discrimination Act 1977 - Paragraph(s) Paragraph 36

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