Grounds 1 and 2
84 The MUA submitted that: OMS "would not have been willing or able to employ the Loves for a 5 to 6 year period"; even if it had employed them, they would have been casuals and their work would not have been "at the intensity found by his Honour"; and even if they had been employed, there was a "real possibility that the Loves would not themselves have been willing to remain in the coastal shipping industry." The substantive submission on appeal was that the Loves could not prove that they would have received any more than one, perhaps two, "swings" in or about January 2010.
85 These challenges were framed as challenged findings of fact both as to future events, and as to a possibility. This, in part, can be understood from the expression of the primary judge's findings. But, in assessing the value of the loss or damage, being the lost opportunity to work on off-shore vessels caused by the MUA's contraventions, one looks to the probabilities and possibilities of the events that may well have taken place. Thus, the primary judge's finding that the Loves would have obtained employment in August 2009 was a conclusion that the material before him justified an assumption that work would be available for them from August 2009: see [118] of the Compensation Judgment.
86 In its challenge to the finding that OMS would have employed the Loves, the MUA points to the lack of comprehensiveness of Ms McSherry's evidence. Its main objections to her evidence may be summarised as follows: she was only a crewing officer for 20 months until June 2010; and she was not the decision-making crewing officer responsible for the two vessels (Jascon 25 and Castoro Otto) upon which she told the Loves she was hoping to place them in February 2009 (there were nine other crewing officers employed by OMS, each of whom were responsible for different vessels), and therefore she could not ensure that they would be so placed. These shortcomings were said by the MUA to be reflected in the primary judge's finding that the Loves would not have been employed until August 2009 (implicitly meaning that he did not find that Ms McSherry would have successfully placed them on these vessels). The MUA further submitted that there was no evidence of any positions becoming available in August; that August was a period of "very limited" employment because of weather and sea conditions; and that there was a downturn in coastal shipping in mid-2009. The essential criticism was that the primary judge's finding (at [53] Liability Judgment) was made in the absence of a specific opening during a time of industry downturn in a low period of seasonal employment.
87 A central submission of the MUA was that the whole of Ms McSherry's evidence was governed by a crucial concession given in cross-examination: "that if there was nobody experienced [she] would have put them forward." They were not experienced, others were, therefore, according to her own evidence, she would not have put them forward.
88 In assessing the findings of the primary judge, regard can be had to all the evidence that was called, and, especially, to all of Ms McSherry's evidence. The FWO called the Loves and a crewing officer who gave direct evidence that she would have sought to place them on vessels. No other crewing officer was called by OMS or the MUA to comment upon the Loves. Statistical evidence was called; Mr Caldwell gave evidence in general terms about the work. In cross-examination, he gave important evidence that supported the case of the FWO. There was no evidence from OMS or the MUA that at any time, or during any period, there were so-called "beached" stewards or cleaners, not only on the books, but who were also ready, willing, and able to undertake work. The statistics exhibited to Ms Grylls' affidavit revealed that there were a significant number of casual and permanent stewards, with these working numbers reflecting a seasonal industry. The evidence was not directed, beyond a few remarks in emails of Ms McSherry, to showing exactly how many (if indeed any) experienced stewards could not get work. If it were the case that there were such people, the MUA and OMS were the parties who would, in the ordinary course, be in a position to prove it.
89 It is also relevant to note here how this issue was dealt with during the course of the liability hearing. Although the FWO had not, at that stage, sought an order for compensation against the MUA, the question of whether OMS would, or would not have, been willing to employ the Loves but for the contraventions by the MUA was a live issue. During the course of this hearing evidence was given by Ms McSherry and by Mr Marten Quirk, who was the Human Resources Manager at OMS at the relevant time, that, but for the MUA membership issue, the Loves would have been given jobs at OMS. The MUA did not seek, in its cross-examination of these witnesses, to allege that even in the absence of contraventions by the MUA the Loves would still not have been given a job with OMS (for reasons such as inexperience or lack of available work). Indeed, the cross-examination by counsel for the MUA appeared to reflect instructions (or an assumption) accepting that they would have been so employed.
90 It should be further noted that, despite the MUA's submission on appeal that, at its highest, the Loves would have been employed for only one or two swings, during its closing submissions in the compensation hearing the MUA had contended that, if compensation was to be ordered, then the proper period would be for 10 months; in other words, for around four or five swings.
91 Looking at all the evidence, and assessing it according to the power of those to call it, the real question is whether there was sufficient evidence for the primary judge to infer that it was sufficiently likely that the Loves would have been placed on board a vessel by August 2009, in circumstances where they had proved that one crewing officer wanted to place them, no other crewing officer had said that they would not, and they were both qualified and anxious to begin working, even though neither had gone to sea.
92 It can be accepted that an experienced steward or cleaner may have an advantage in gaining work because of that experience. But the evidence did not rise as high as entitling a conclusion that the Loves would have been refused work by operators and other crewing officers because of their lack of experience.
93 Of course, once the Loves had been on board, they would have begun to obtain experience. This was a matter which the primary judge directly raised with the MUA during their final address. In response, the MUA contended that one swing would not be enough to place the Loves at the head of the queue. Nevertheless, the MUA did not deny that the Loves would, once on board, gain some degree of experience; it merely asserted that their experience would be less than that of others.
94 The evidence regarding the presence of so-called beached stewards (with whom it was contended the Loves would be competing for positions) was as follows. In March 2009, Ms McSherry told the Loves in an email that "we still have union members on the beach", who were mostly experienced marine stewards. A later email from Ms McSherry in December 2009 to the Loves stated that she had looked at the union list and "there were 20 stewards on there." This is far from a detailed and comprehensive understanding of the state of available and willing experienced marine stewards and cleaners to compete with the Loves. It cannot be doubted that the existence of beached experienced stewards was a factor to consider in assessing the intensity of likely work. Given, however, Ms McSherry's desire to get the Loves a start, and given the lack of any evidence from other crewing officers that they would not have placed them, a finding that they would have been so placed in August 2009 is not unreasonable. Her desire to get them a start can be seen to be a contemporaneous judgment by Ms McSherry of their suitability and, to some degree, of her comparative assessment of some "on the beach" stewards, as discussed below at [104]-[105].
95 The submission of the MUA identified January 2010 as the likely time that the Loves may first have got work. They so submitted by reference to the statistics in evidence about available jobs. Those statistics were a central part of the submission made at the hearing of the appeal that it was likely that the Loves would only have been placed on one swing, perhaps two swings. It will therefore be necessary to return to them. First, however, the submissions were directed to undermining the force of the evidence of Ms McSherry.
96 On its face, Ms McSherry's evidence was powerfully in support of the proposition that she would have placed them on vessels as casuals. However, there was also evidence that OMS had a practice of placing permanent employees ahead of casuals. In addition, the statistics exhibited to Ms Gryll's affidavit revealed employment of casuals and permanent staff, at the same time, throughout the period. Yet, without more precise evidence about the number of permanent staff at any one time or during the relevant period who could not get work - matters which, if anyone could prove, OMS and the MUA should have been in a position to prove to some degree of generality - it cannot be inferred that the Loves would not have got employment at some time in 2009.
97 In her first affidavit dated 28 March 2013, Ms McSherry said:
When I was working at OMS between late 2008 and mid 2010, there was regularly a need to fill positions on vessels with crew. There was a particular demand for stewards and also ship's cooks.
She was not directly challenged in cross-examination on this statement.
98 She also said in the same affidavit:
…I know that the only thing that would have prevented Mr and Mrs Love from obtaining employment with OMS was the fact they weren't members of the MUA.
She was not directly challenged on this.
99 Ms McSherry said directly that if the union-members-only practice had not existed:
I would have placed the Loves on a vessel in 2009.
100 That evidence of a crewing officer familiar with the industry and the Loves' background was powerful evidence, even if it was after the event, and provides a reasonable foundation for a conclusion that in 2009 they would have found casual employment as stewards.
101 The attack on Ms McSherry's evidence centred upon several issues: the asserted need for persons to have seafaring experience before they could be placed by OMS; the fact that the Loves had no relevant experience at sea; the practice that permanent employees would be placed on board vessels before casuals; and the fact that the work was cyclical. Thus it was argued by the appellants that the Loves would not have got a job until extreme demand for staff was present. The question of experience was also put as one of preference of the ultimate hirers of the labour - the owners or operators of the vessels in question. Many of the questions to Ms McSherry about this were put in a passive form, eg: "Generally people with shipboard experience would be preferred to people who had no such experience, correct? …" (see Tp11, 1 December 2014). The answers there masked the question: preferred by whom?
102 The reality was that OMS, as the crewing company, in almost all cases, made the decision about crewing a vessel. Ms McSherry and her colleagues had the responsibility of placing people. While she gave answers that generally experienced persons were preferred, that evidence should be seen in the light of all the evidence. It should also be recognised that Ms McSherry had said that there was a mix of experienced and non-experienced people placed.
103 While the Loves did not have seafaring experience, their basal experience covered common tasks performed by stewards: Mr Love had been a bar steward and waiter; they had both prepared and served food at a café, health food shop, and at a retirement village; they had both run a bakery.
104 It is to be inferred that the reason Ms McSherry wanted to employ the Loves was because they struck her as hard-working, determined people with a skill set (developed through their extensive past employment and business experience) which was highly suitable for the work, and she believed that they would very quickly develop into valuable, experienced, hard-working employees. The work the Loves were seeking principally involved cleaning, laundry, and serving food, with the potential to be promoted to more senior work. A recognition of the background of the Loves easily explains the enthusiasm of Ms McSherry to place them. The Loves had wide and varied experience working with their hands, in white collar work, in organisational tasks, in dealing with people of all kinds (from prisoners to pensioners, in various industries), in serving in the hospitality industry, and in food preparation and service in an institutional environment. They were well-suited, if they wished to follow it, to develop a long-term career on off-shore vessels and to become valued and easily placed employees.
105 Common-sense and life experience tells one that although a large group of people might be attracted to working in such jobs, such potential employees will possess a very diverse range of skills, backgrounds, and characteristics, and it is not uniformly the case that such persons would match the basic skill set, experience, and hard-working attitude of the Loves. This is further supported by evidence from Mrs Love that Ms McSherry had, in the course of their communications in 2009, complained to them about the fact that some of the OMS employees were "pretty ordinary workers" and that she could "pull [her] hair out sometimes". In turn, the contemporaneous view of Ms McSherry that the Loves should be employed, as they were likely to be hard-working and motivated employees, is to be given real weight, as the primary judge did.
106 If one recognises that these people were likely to be employed for their qualities, one recognises the defect of the next aspect of the submissions of the MUA.
107 The MUA submitted that, when one took into account the practice of OMS to employ permanent staff first, the cyclical nature of the employment, and the statistics revealed in the exhibits to Ms Grylls' affidavit, one could conclude that the Loves were unlikely to have been placed on vessels.
108 Two answers can be given to this submission. First, the statistics themselves do not permit qualitative statistical judgments to be made about who would have been employed. No person gave evidence from the MUA or OMS about the identities or numbers of people not working at any one time or about qualitative aspects of the statistics that might enable judgments to be made about the likelihood of any particular person to get work at any particular time.
109 Secondly, there was evidence that if a person was adept and skilled, he or she could expect to be given work, could expect to be retained on a vessel, and could expect there to be a long term, ongoing body of work available. Ms McSherry gave evidence as to this as follows:
(a) That "basically once you obtained the position, employment was ongoing".
(b) "Employees had ongoing positions and would generally return to work on the same vessel … unless their vessel had been de-mobilised … However, even if the vessel was de-mobilised, most employees were transferred to a different vessel after their off swing. There were circumstances where an employee could not immediately be placed on a new vessel and had to wait before they started on a new vessel, if the off swings and on swings did not line up."
(c) She was cross-examined as to demobilisation, but not as to the basic premise of (a) and (b).
(d) "Most employees would return to their position on their same vessel after their off swing, unless they were going on holidays, were moving to a higher paying vessel or were moving to another job outside OMS. However, during the period that I worked at OMS [2009-2010], I don't recall any employees who worked on offshore vessels leaving the offshore industry to pursue alternate career paths."
(e) "There were employees on off-shore vessels who had been employed by OMS for extended periods of time."
(f) She recalled a cook who had worked for 20 years, two others who had worked for 8, and another two who had worked for 4 and 5 years. "If Mr and Mrs Love had been employed by OMS, they could have kept ongoing regular roles as cooks or stewards for many years." (She was not cross-examined on this.)
110 Mr Caldwell, Operations Manager from OMS, gave evidence that, whilst people sometimes only worked for a shorter time, that was very often a matter of choice, and how long people stayed in the industry often depended on the particular person and their skills. He said:
You know what, it absolutely depends on the person and the skill set that they bring.
This answer was given to a question about length of service.
111 He was asked what were the factors that might allow a person to stick at a job. He said, as to: a willingness for hard work and determination: "absolutely". He also gave evidence that he was aware of stewards working on vessels for more than 10 years.
112 The evidence did not disclose that the likelihood of the Loves obtaining employment could be assessed only by looking at the overall numbers of people employed month to month. All the evidence not only permitted the inference (but, indeed, called for it) that if people were placed on vessels and were thereby able to obtain experience as a steward (a job, for which their background skills and experience amply suited them, but which was not, of itself, demanding in skill level), and in turn demonstrated the hard work and determination required to remain at such a job, then such people had good prospects of remaining on board vessels for years on end, and possibly being promoted. The MUA submitted that there was inadequate evidence to ground a provision in the income stream for promotion. We disagree. Assuming that the Loves would have gained employment and been determined to stay working off-shore, additional remuneration from award payments and some degree of promotion would be very likely.
113 The MUA submitted that it was unlikely that the Loves would have been willing to remain employed by OMS even if work was available. The following, it was said, militated in favour of that submission: their lack of experience living on board a ship; the extended swings involved in a four to five week off/on work schedule; the lack of privacy associated with on board life; the unique working conditions in coastal shipping; the personal preferences of the Loves to work together; the difficulty of rostering couples together or to be at sea at the same time; and the fact that the statements in evidence from the Loves as to their willingness to work were post hoc self-serving evidence which should be viewed in that light.
114 Before examining these submissions in a little more detail, the framework of the Loves' evidence should be noted. Mr Love gave evidence that he estimated that he would have worked with OMS for 5 to 10 years; Mrs Love for 5 to 7 years. He was 51, she, 50 years of age. The work was highly remunerative. Their circumstances made the maximisation of this remuneration critical to them. The prospective wages were much higher than they had ever received and that factor was important in assessing how they would have reacted to circumstances such as possible isolation from one another and lack of privacy.
115 Aspects that might have affected how long they would have worked with OMS were partly personal: how they would have reacted to shipboard life, the nature of the work, and how long they would have been prepared to undertake it.
116 The primary judge at [113] of the Compensation Judgment rejected the MUA's characterisation of the job of a steward as difficult and abnormal. No appeal is made against that finding. Nevertheless, the submission was repeated. It can be readily accepted that while the positions at sea were well-paid and with good conditions, a seafaring life has its own intrinsic challenges: possible sickness, the extended periods of time in confined spaces, isolation from others (especially from a loving companion and spouse), and a lack of privacy. Some people do not adapt to shipboard life.
117 Care must be exhibited, however, in assessing the effect of such matters. There was no doubt that the work was cyclical and that there was a degree of turnover of staff. Mr Caldwell said that a high proportion of stewards resigned shortly after commencing work. In cross-examination he said that this comment was principally drawn from his experience in the North Sea off Scotland, and that the principal reason for leaving or not depended on a person's willingness to work hard and their level of determination. It was not based on the involuntary physical or emotional reaction to shipboard life that might overcome a person's real determination. Ms McSherry's experience led her to deny the proposition that a high proportion of stewards resigned shortly after commencing. She said most stewards had ongoing work once they were placed. Certainly, there was some turnover, but the evidence did not support a finding that most left soon after starting because of a reaction to the seafaring life.
118 The Loves' lack of experience of life at sea, even accepting that pay and conditions were good, was however a relevant factor.
119 The MUA also pointed to the Loves' own preferences and their work history as telling against them likely remaining on board for 5 or 6 years. The MUA referred to the evidence that the Loves left a job at a caravan park because Mrs Love was not comfortable with the accommodation; that they left a job at the Kings Park Motel because they found the lack of outdoor space difficult and had problems with the "living quarters"; and their evidence that they preferred living together.
120 The MUA submitted, with some force, that in circumstances where OMS generally (unless an operator requested it) did not place couples on the same vessel, that there was a real question as to whether the Loves, long married and in their 50s, would be prepared to live and work separately for such extended periods.
121 Further, the evidence was that it was difficult to roster on couples so that they were both at sea at the same time (even if on different vessels). Such discordant swings would mean restricted time together, even ashore, unless, on the evidence, a reduction of pay was acceptable to them.
122 All these factors were real, but they were directly confronted by the Loves in their evidence. They deposed that, for the money the jobs would bring, they would have accepted separation. They also dealt with the contentions regarding their leaving of some jobs for reasons of conditions in a way that was understandable and which did not reflect, at all, upon the finding that they were determined people (against which there was no appeal).
123 Looking at the evidence as a whole, there were various contingencies that were necessary to consider in making a realistic assessment of the Loves' likely work period: how they physically and emotionally would react to shipboard life; how they would, even as determined people, react to separation; and how they would react to a lack of privacy and space. These contingencies were in addition to the question of whether, as casuals, they would obtain continuous employment. In relation to this last contingency, the primary judge gave a discount of 20%. He did not express any contingency for the other matters.
124 Whether a further discount should be made for the personal factors to which we have referred is not a question of credit, but it is a question involving the character of the Loves. No doubt can be cast (and none was sought to be cast) on the assessment of the Loves by the primary judge as hard-working, determined people. They had a skill set from their background that made them likely to be hard-working efficient stewards with good prospects for promotion. That they wanted and were determined to undertake and persevere with a new career cannot be doubted. Though appellate restraint should be shown, we are of the view that these exigencies and contingencies, in all fairness, needed to be taken into account.
125 One must recall what the primary judge was doing: he was seeking to estimate reasonable compensation - to determine a value for their lost opportunity. That could have been done in a variety of ways; he employed two approaches (the second of which will be considered in relation to ground 3 below). Any such valuation, ultimately, reduces to two factors: the appropriate income stream and the appropriate discount. In his first approach, the primary judge used a baseline of income of $109,886.40 plus 6% incremental annual increases, less actual earnings and then less a discount of 20% for contingencies. Even if we think the discount of 20% was inadequate to encompass all of the contingencies relevant to continuous casual work, it is relevant to note that the value of the income stream could legitimately have been significantly more if the primary judge had included the valuable award payments (discussed at [120]-[137] of the Compensation Judgment) and factored in the possibility of promotion.
126 The order sought in the notice of appeal is to set aside the ultimate monetary orders made by the primary judge - a final figure of $352,100 for Mr Love and $371,200 for Mrs Love (after averaging the two approaches used, see [150] of the Compensation Judgment). It is that sum which must be shown to be excessive. It is relevant to note here that, in its closing submissions before the primary judge, the MUA submitted that the appropriate ultimate monetary order would be $150,000 (as a total figure representing the loss of both Mr and Mrs Love). During the appeal hearing the MUA did not attempt to raise the question of what it considered to be the appropriate compensation amount to be ordered by this Court. However, in later written submissions the MUA contended either that the Loves lost only one contract each (one swing) in late 2009 or early 2010, to the value of $18,984.74 each, or that if the primary judge's first calculation approach was to be undertaken that the appropriate contingency discount would be 80%.
127 On the primary judge's first approach, Mr Love's compensation figure was $380,156.63, being a total income stream of $475,000 less 20% (see [144] of the Compensation Judgment). In arriving at this figure the primary judge proceeded by subtracting the actual annual earnings of Mr Love prior to applying the contingency discount. This was an error. By doing so the primary judge effectively discounted moneys actually earned. The proper way to approach the calculation of the loss of opportunity was by: first, calculating the value of potential earnings of Mr Love; secondly, applying the discount for contingencies to that figure; and then thirdly, subtracting Mr Love's actual annual income. Such an approach is in line with that formulated by Finkelstein J in La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4 at [97]-[105] (Jacobson and Besanko JJ agreed with that methodology at [116]); see also the comments in Valcorp Australia Pty Ltd v Angas Securities Limited [2012] FCAFC 22 at [177]-[180]. After the Court raised this issue with the parties, the FWO did not seek to make any objection to this finding regarding the appropriate approach to the calculation of compensation.
128 If one approaches the calculation in this manner, using the primary judge's figures and first approach, one takes the base figure of $109,886.40, then applies a 6% increase per annum, over six years, giving a total potential salary for Mr Love of $766,492.64. To this one would apply the contingency discount of 20% (resulting in a figure of $613,194.11) and then subtract actual earnings ($291,296.86), to reach a compensation figure for Mr Love of $321,897.25 (not $380,156.63).
129 If the same method of calculation was applied to Mrs Love, then the total salary for five years' employment would be $619,439.85, to which is applied a 20% contingency (resulting in a figure of $495,551.88), with actual earnings ($145,659) then being subtracted, to reach a final compensation figure of $349,892.88 (not $379,024.68).
130 The primary judge did not say that he was including any discount for contingencies in setting the level of the income stream.
131 One also cannot see in the reasons an allowance for the type of personal factors to which we have referred. Nevertheless, restraint must be shown. The choice of the income stream to reach the evaluative conclusion as to the appropriate compensation was conservative. The discount of 20% did not take into account consideration of the personal circumstances of the Loves and the contingencies as to how they would have reacted to life at sea. That was an evaluation made in part by a personal assessment of them as people. It was also an evaluation made in the context of a choice of a conservative income stream.
132 It should here be noted that the case by both parties was put on the basis of "2 in, none in"; that either both the Loves would have worked or neither would have. There is however a possibility that, after encountering the difficulties of off-shore work, one of the Loves would have continued to work in the off-shore industry (and perhaps for longer than posited by the primary judge) whilst the other ceased and worked on-shore instead. Nevertheless no such submission was made by the parties. In those circumstances, we will not approach the matter thus.
133 We are persuaded that there were two errors in how the primary judge approached the matter. First, the contingency discount was applied to the result of the subtraction of the income actually earned from the posited income from working on the vessels. If that were the only error it might simply be rectified by the calculations performed at [128]-[129] above. Secondly, we consider the discount for contingencies of 20% to be too low, exercising, as we do, restraint in assessing the evaluation.
134 The 20% discount for the likelihood of not getting continuous work reflected a high probability of gaining casual work for 5 to 6 years. There was evidence to support the conclusion that once skilled and experienced people (with the Loves gaining such experience following their initial period of employment) were placed on vessels, there was a likelihood of remaining. Set against that is the reduced amount of work that the evidence demonstrated was available, especially from the winter of 2012, and otherwise during the winter months. In our view, 20% as a discount for the likelihood of not obtaining continuous casual work was itself too low.
135 One must also consider the personal exigencies and contingencies. We think it not only reasonable, but also necessary, to factor in a discount for the strains of separation for long periods over years for such a couple as the Loves. Whilst we are reluctant to interfere with the evaluative judgment of the primary judge, we do not see that the primary judge made any allowance for such matters in the discount applied. In our view, it is necessary to take such matters into account. Therefore we consider that a 20% discount for contingencies was too low, sufficiently low for us to intervene. Taken together with other necessary personal exigencies and contingencies, and the contingencies relating to casual work in a cyclical market, we consider an appropriate discount to be significantly greater than 20%.
136 Having found there to be these errors in the approach of the primary judge, it becomes necessary for us to assess and evaluate for ourselves the value of the lost opportunity.