Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia

1. The applicants seek a stay of proceedings pending the hearing of their application for special leave to appeal from the judgment of the Full Court of the Federal Court of Australia, which gave leave to appeal, varied the orders of North J made in the Federal Court on 21 April 1998 in ways which I do not now notice, but otherwise dismissed the appeals.

2. The principles to be applied in such an application are well established. The jurisdiction to grant a stay is part of the inherent jurisdiction of the Court and finds its most frequent use in order to preserve the subject matter of litigation. Thus, as was mentioned when the matter first came on before me last night, in Tait v The Queen, [163] the jurisdiction was invoked to prevent the execution of sentence upon Tait. There it was exercised: [164]

without giving any consideration to or expressing any opinion as to the grounds upon which [the substance of the application to the Court was] to be based, but entirely so that the authority of this Court may be maintained and we may have another opportunity of considering it. It is then an ample jurisdiction. 1. (1962) 108 CLR 620. 2. Tait v The Queen (1962) 108 CLR 620 at 624, per Dixon CJ.

3. To speak only of preserving the subject matter of litigation may in some cases obscure the fact that the jurisdiction can be invoked, if to grant a stay is necessary to prevent the exercise of rights of appeal being rendered futile [165] or their exercise in circumstances where restoration of the status quo cannot be achieved. [166]

1. cf Wilson v Church (No 2) (1879) 12 Ch 454; Erinford Properties Ltd v Cheshire County Council [1974] Ch 261. 2. See, eg, Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220 at 224, per Dawson J.

4. The jurisdiction to grant a stay is, however, an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. [167]

1. Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 684, per Brennan J; Marconi's Wireless Telegraph Co Ltd v The Commonwealth (No 3) (1913) 16 CLR 384 at 386, per Barton ACJ and Isaacs J.

5. It is equally clear that it is very important to bear steadily in mind that the grant of a stay would deprive the respondents to this application of the benefit of the orders which they obtained from North J and which were in substance upheld by the Full Court of the Federal Court. [168]

1. Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1997) 71 ALJR 814 at 816, per McHugh J.

The orders made by the primary judge as varied by the Full Court are in part orders restraining conduct, but in part are orders compelling the performance of acts by the applicants. It is perhaps least inconvenient to refer to the parties by the designation which they bore in the proceedings in the Full Court of the Federal Court of Australia, when I say that the first and 13th appellants are restrained from acting upon or giving effect to the purported termination in April 1998 of certain labour supply agreements which were allegedly made on 23 September 1997. [169]

The third, fourth, fifth and sixth respondents and the first appellant are restrained from terminating those agreements without first giving the Maritime Union of Australia 14 days' written notice of that intention and the reason for the proposed termination. [170] Further, the first and 13th appellants are restrained from acquiring the stevedoring services which, until 7 April 1998, they acquired from the third, fourth, fifth and sixth respondents, from any person other than those respondents.

I was told that the labour supply agreements concerned were non-exclusive agreements; that is, the companies taking the supply of labour were entitled to seek the provision of labour elsewhere than from the parties that in the Federal Court were the third, fourth, fifth and sixth respondents. The applicants contend that the effect of the orders made by North J is that they are now bound to take labour exclusively from the companies which I have referred to as the labour supply companies.

The third, fourth, fifth and sixth respondents are restrained also from doing anything having the effect that the employment of the employees engaged in their stevedoring businesses is or will be terminated. [171] The applicants contend that this order has the effect of compelling companies in the financial distress sufficient to warrant the appointment of administrators to continue to incur obligations, notwithstanding that distress - obligations which would, on the winding-up of a company, rank in priority to many other debts.

The first to 13th appellants were also restrained, in effect, from dealing with their assets otherwise than in the ordinary course of business, but as I understood it, no stay is now sought in respect of that order and its detail need not be noticed further. Similarly, the third, fourth, fifth and sixth respondents, and the first and 13th appellants, are ordered to "continue to treat the Labour Hire Agreements as remaining on foot and binding upon the parties to those agreements" and to "give effect to the terms of those agreements". [172]

All of the orders that I have mentioned were made upon certain undertakings given by the present respondents, the Maritime Union of Australia and others, that they "will not engage in any industrial action" and that they would not "hold the administrators appointed to the [labour hire companies] personally liable for their wages and other benefits arising from their employment with [those labour hire companies] for which the administrators would otherwise incur personal liability as administrators during the course of their administration".

In the Full Court a further order was made, intended as I would understand it, to give effect to the intention lying behind the undertaking I have just described. The Full Court ordered that Pt 5.3A of the Corporations Law should operate in relation to each of the labour hire companies in such a way that s 443A(1) of that law is not to operate in respect of services rendered to those companies by employees who are members of the Maritime Union of Australia. The effect of that order would be to relieve the administrators of the companies of the personal liability which otherwise they would incur by the continued employment of persons whilst the company was in administration. It is, however, as I would understand it at the moment, not an order which would prevent each of the companies concerned continuing to incur the liabilities for wages to their employees.

The applicants contend that the effect of these orders is to oblige them to use workers in their stevedoring operations other than the workers whom now they are using. They submit, in effect, that the orders require them to give effect to agreements which, so they contend, have been terminated, and, again so they contend, to do so otherwise than in accordance with the terms of those agreements. They contend further that they are obliged by the orders, if the orders are to have effect, to use in the course of stevedoring operations persons who since 7 April 1998 they have excluded from premises under their control.

They submit that if the operation of the orders made by North J, as varied by the Full Court, is not stayed, and if their application for special leave to appeal to this Court is granted and the appeal allowed, it will not be possible to restore them to the position that existed before the impugned orders were made.

No doubt as was observed in Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd : [173]

In general, the orderly administration of justice would be impeded if this Court intervened in interlocutory proceedings in a matter pending in a court of trial. It is the responsibility of a court of trial to determine the course of interlocutory proceedings, subject to appeal to the relevant intermediate appellate court. 1. (1988) 165 CLR 452 at 458, per Mason CJ, Brennan and Gaudron JJ.

Ordinarily, of course, the subject matter of litigation will not be lost, or for that matter injuriously affected, if interlocutory orders made in the action are permitted to operate according to their terms. Usually interlocutory orders are directed to the preservation of the subject matter of the action, not to its alteration, let alone its destruction.

In the course of argument counsel adverted to many of the large number of reported decisions in this Court about the grant or refusal of stay pending application for the grant of special leave. All of those decisions must be read in the light of the circumstances of the individual cases. Nothing that is said in them is to be read as identifying immutable principles which fetter the Court's jurisdiction to grant a stay. The jurisdiction is ample. The relevant question which falls for decision is whether it should be exercised in this case.

The present applicants applied to the Full Court of the Federal Court for a stay of proceedings pending their application to this Court for special leave. That application for stay was refused. In considering whether now to grant a stay, it is important to consider first whether there is a substantial prospect that special leave to appeal will be granted, to consider also what effects the grant or refusal of stay would have, and to consider where lies the balance of convenience.

Various matters were canvassed in the course of argument which were said to be possible grounds warranting the grant of special leave to appeal to this Court. Notwithstanding that the orders which it is sought to challenge are in the first instance interlocutory orders, I consider that the applicants' prospects of obtaining special leave are not insignificant. Since that application has yet to be argued, it is, in my view, inappropriate to say more.

Again, lest it be misunderstood, I emphasise that I express no concluded view that the matters which were canvassed in argument arise in the proceeding or that it is only the matters that were mentioned in argument which might attract a grant of special leave, or for that matter that the applicants should succeed in their application for special leave. Those are all questions that must await full argument and upon them I express no view greater than that I am of the opinion that the applicants' prospects of obtaining leave are not insignificant.

What loss would the respondents to the present application suffer if a stay were granted? No contract of employment has yet been terminated, whether by the administrators of the labour hire companies that are now in administration or by any of the applicants. Staying the orders that were made will not change that.

In the end, as I understood it, the respondents' principal contention in this regard was that the legitimate expectations of the respondents to enjoy the fruits of their success in the courts below would be dashed were the stay now to go. Against that consideration, powerful as it may be, must be balanced, among other things, what was said by the Full Court in connection with the application that had earlier been made to that Court for a stay of the orders of North J pending the hearing of the appeal to that Court. Their Honours in the Full Court said "We stayed those orders" [the orders of North J] "not because we had any view about their merits - at that stage we had not even seen North J's reasons - but simply because it seemed to us undesirable to run the risk of the chopping and changing that would occur if the orders were allowed to operate for a short time and were then set aside on appeal". The stay which now is sought is very short. As I have already indicated to the parties, a Full Court will be assembled in Canberra to deal with these matters at 10.15 am on Monday next.

I am persuaded that the harm to be suffered by the respondents being kept out of the fruits of the orders which they have obtained is outweighed by the disruption that would be caused were the position to be changed after proceedings were heard on Monday next. Importantly, I consider that there is a real risk that it would not be possible for the present applicants, if ultimately successful in an appeal to this Court, to be restored substantially to their former position if the orders made by North J were now to be executed.

Given the brevity of the period involved and the various considerations to which I have referred, I am of the opinion that if - but only if - the undertaking as to damages which was proffered at the hearing before me last night were to be renewed in substantially identical terms, there should then be an order staying pars 1, 2 and 4 of the orders of North J made on 21 April 1998, until 5 pm, 27 April 1998 or further order.

It will be noted that I have not dealt, in that proposed form of order, with the orders made by the Full Court dealing with some of the paragraphs of the orders of North J to which I referred. I have not done so because it seems to me that the Full Court's orders, being, as they were, stays of the operation of the orders of North J, need not be noticed in the form of order which I propose. However, that is a matter about which counsel may care to address me.

As I have indicated to counsel, it will be necessary to give directions about the steps that must be taken to permit the further prosecution of the application for special leave before the Court on Monday next. Again those are matters on which I will hear counsel. No doubt it will be necessary to make some order dealing with the costs of the present application.