Qantas Airways Ltd v Transport Workers' Union of Australia

Qantas Airways Ltd v Transport Workers' Union of Australia - [2011] FCA 816 - FCA 2011 case summary — Zoe

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1 INTRODUCTION 2 COMPENSATORY ORDERS 2.1 The nature and the 2.2 Additional labour 2.2.1 Evidence 2.2.2 Qantas' Submissions 2.2.3 The TWU's Submissions 2.2.4 Consideration 2.3 Mishandled baggage 2.3.1 Evidence 2.3.2 Qantas' Submissions 2.3.3 The TWU's Submissions 2.3.4 Consideration 2.4 Accommodation 2.4.1 Evidence 2.4.2 Qantas' Submissions 2.4.3 The TWU's Submissions 2.4.4 Consideration 2.5 Transport 2.5.1 Evidence 2.5.2 Qantas' Submissions 2.5.3 The TWU's Submissions 2.5.4 Consideration 2.6 Meal Vouchers 2.6.1 Evidence 2.6.2 Qantas' Submissions 2.6.3 The TWU's Submissions 2.6.4 Consideration 2.7 Flight delays 2.7.1 Evidence 2.7.2 Qantas' Submissions 2.7.3 The TWU's Submissons 2.7.4 Consideration 2.8 Flight Interruption Manifests 2.8.1 Evidence 2.8.2 Qantas' Submissions 2.8.3 The TWU's Submissions 2.8.4 Consideration 2.9 Miscellaneous costs 2.9.1 Evidence 2.9.2 Qantas' Submissions 2.9.3 The TWU's Submissions 2.9.4 Consideration 2.10 Offshore losses 2.10.1 Evidence 2.10.2 Qantas' Submissions 2.10.2.1 Christchurch 2.10.2.2 Auckland 2.10.2.3 Los Angeles 2.10.2.4 New York 2.10.2.5 Hong Kong 2.10.2.6 Bangkok 2.10.2.7 Singapore 2.10.2.8 Shanghai 2.10.2.9 Beijing 2.10.2.10 Manila 2.10.2.11 Indonesia 2.10.2.12 Johannesburg 2.10.3 The TWU's Submissions 2.10.4 Consideration 2.11 Customer care 2.11.1 Evidence 2.11.2 Qantas' Submissions 2.11.3 The TWU's Submissions 2.11.4 Consideration 2.12 Technical crew 2.12.1 Evidence 2.12.2 Qantas' Submissions 2.12.3 The TWU's Submissions 2.12.4 Consideration 2.13 Cabin crew 2.13.1 Evidence 2.13.2 Qantas's Submissions 2.13.3 The TWU's Submissions 2.13.4 Consideration 2.14 Fuel usage 2.14.1 Evidence 2.14.2 Qantas' Submissions 2.14.3 The TWU's Submissions 2.14.4 Consideration 2.15 Maintenance 2.15.1 Evidence 2.15.2 Qantas' Submissions 2.15.3 The TWU's Submissions 2.15.4 Consideration 2.16 Freight 2.16.1 Evidence 2.16.2 Qantas' Submissions 2.16.3 The TWU's Submissions 2.16.4 Consideration 2.17 Telesales 2.17.1 Evidence 2.17.2 Qantas' Submissions 2.17.3 The TWU's Submissions 2.17.4 Consideration 2.18 Brand and Reputation 2.18.1 Evidence 2.18.2 Qantas' submissions 2.18.3 The TWU's submissions 2.18.4 Consideration 2.19 Time to Pay and Interest 3 Penalties 4 Costs 4.1 Submissions on costs [1] [4] exercise of the power to make an order remedying the effects of industrial action. [4] costs for ground staff [18] [18] [19] [23] [25] [31] [31] [37] [44] [46] [50] [50] [51] [52] [53] [54] [54] [55] [58] [59] [60] [60] [62] [63] [64] [67] [67] [68] [70] [71] [72] [72] [73] [75] [76] [77] [77] [78] [80] [82] [83] [83] [84] [87] [89] [91] [93] [95] [97] [99] [101] [103] [104] [106] [107] [109] [111] [112] [112] [116] [117] [118] [122] [122] [123] [129] [132] [133] [133] [135] [137] [139] [144] [144] [145] [148] [152] [154] [154] [156] [157] [158] [159] [159] [160] [162] [165] [167] [167] [170] [171] [172] [173] [173] [174] [177] [181] [182] [184] [201] [201]

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INTRODUCTION 1 Qantas Airways Ltd ("Qantas") commenced proceedings (NSD 340 of 2009) on 23 April 2009 against the Transport Workers' Union of Australia ("TWU") and individual respondents alleging contravention of s 494 of the Workplace Relations Act 1996 (Cth) ("WR Act"), the commission of the torts of inducing breach of contracts, interference with trade or business by unlawful means and nuisance, breaches of clause 7 and 11 of the Qantas Enterprise Agreement ("EBA 7") and contravention of what was then called the Trade Practices Act 1974 (Cth) ("Trade Practices Act"). The Fair Work Ombudsman ("Ombudsman") commenced separate but similar proceedings alleging contravention of s 494 of the WR Act on 26 October 2009 seeking the imposition of penalties (NSD 1204 of 2009). I should, at this point, note that Qantas filed only one application and one statement of claim though each was subsequently amended. The proceedings commenced by that process were given the one matter or proceedings number. This is relevant to a later discussion about costs. The trial of the Ombudsman's proceedings was held jointly with the Qantas proceedings. The TWU cross-claimed. 2 In reasons published on 13 May 2011 Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470 ("liability judgment" which is to be read in conjunction with this judgment), I indicated I would dismiss the claim under the Trade Practices Act and the tortious claims of interference with trade or business, inducing breach of contract and nuisance. I indicated the cross-claim should also be dismissed. I concluded some of the respondents had engaged in unlawful industrial action in contravention of s 494. There were three aspects of Sheldon's conduct that involved contravention of s 494. The conduct of Pieri, Connolly, Loader, Gallacher and Burton also involved contravention of s 494. I found that Magree did nothing which constituted contravention of s 494. Qantas discontinued the proceedings against one respondent, Spring. However no formal orders were made giving effect to these conclusions. 3 In the liability judgment I discussed two legal issues in relation to which the TWU has made further submissions. While Qantas and the Ombudsman have, themselves, made further responsive submissions, the primary position of at least Qantas is that what I said in the liability judgment should be taken to have determined those legal issues and they should not be reopened. The issues concern the nature of the power conferred by s 494(5)(b) and whether some of the individual respondents had engaged in particular conduct which resulted in one or a number a number of contraventions of s 494(1). No orders were made giving effect to what I said in the liability judgment and, at least in relation to the second issue, the arguments now advanced by all parties were not made initially or at least did not then focus, as they now do, my attention on an important issue. Both legal issues are not, as far as I am aware, the subject of a considered judgment in this Court or elsewhere. In these circumstances I propose to give further consideration to both legal issues. It is preferable, I think, for me to endeavour to arrive at the right answer rather than insist upon adhering to an earlier answer (if they be different). I address the power issue now and the contravention issue later.

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2.1 The nature and the exercise of the power to make an order remedying the effects of industrial action. 4 Qantas' position was to the following effect. It seeks payment of a sum of money to remedy the effects of the respondents' contraventions of s 494(1) on 25 and 30 March 2009. Qantas submitted that the terms of s 494(5)(b) should not be read narrowly and referred to I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109. The word "remedy" should be understood as "the means by which the violation of a right is prevented, redressed, or compensated" or "reparation, redress, relief". Reference was made to the decision of Madgwick J in Australian Municipal Administrative Clerical Services Union v Greater Dandenong City Council (No 2) [2001] FCA 1076 where his Honour stated that the phrase "and any other orders" refers to "any reasonable curial order" and one that gives the court "maximum power and flexibility" to do what is appropriate in the circumstances. 5 The amount it sought to compensate it for the loss and damage arising from the events of 30 March 2009 is approximately $1.2 million plus interest from 30 March 2009 to the date of judgment. While it is extremely difficult to precisely quantify the pecuniary loss it suffered, an order requiring payment is not limited to pecuniary loss that can be specifically proven. The sum awarded can be based on all the circumstances, reflecting the pecuniary loss and can be estimated by the Court. If further loss is reasonably incurred in an effort to mitigate the damage, this may also be recovered. Once significant loss has been established, the Court can assess the financial loss and order the TWU to compensate it. It did seek orders requiring individual respondents to compensate it for its loss. There should not be any reduction in the compensation payable because there may have been other factors which contributed to the extent of its loss or because some of the amounts it paid were more than it was contractually bound to pay. Penalties that may be ordered are not intended to provide compensation. 6 The respondents' position was to the following effect. An order for the payment of monetary compensation cannot be made under s 494(5)(b) of the WR Act. If however, an order of that type can be made, the power (to make the order) is discretionary. If an award of compensation is made in this matter the amount should be minimal due to the failure of Qantas to take reasonable steps to avoid or minimise the loss or damage related to the stoppage. A number of reasons were advanced as to why the full amount of any loss or damage proved by Qantas should not be awarded. They included that Qantas could have avoided a very substantial part of any loss or damage incurred if they had adopted the same approach at Sydney International Terminal ("SIT"), Brisbane, Adelaide and Perth as they did at Sydney Domestic Terminal ("SDT") where they facilitated a return to work by agreeing to pay employees for the two hour meeting. In addition, Qantas failed to take action to facilitate employees returning to work even where they indicated a willingness to do so. 7 Substantially for the reasons I gave in the liability judgment, I consider I have power to order the payment of a sum of money by a person or corporation who has engaged in industrial action if the payment remedies the effect of the industrial action. That would arise when the industrial action caused financial loss to the person to whom payment was, under the order, to be made. The payment would thereby remedy the effect of the industrial action. 8 I accept, and notwithstanding observations suggesting otherwise in the liability judgment, that the power to make the order and to determine its scope and terms is discretionary. How the order was framed would depend on, amongst other things, how the effect was characterized. I do not doubt that while s 494(5) speaks of "effect" in the singular it would comprehend "effects" in the plural. Industrial action may have a multiplicity of particular effects and whether any, some or all of them were to be remedied by an order would be a matter for the Court to determine as a matter of discretion. I focus a little more on the nature of the power when I consider the first subject matter identified by Qantas as an area of its operations or business in which it suffered a loss (additional labour costs for ground staff). I have analysed the losses by using the same approach (as to subject matter) adopted by the parties. 9 However, I should observe at this stage that the nature of the discretion to order the payment of a sum to remedy the effects of industrial action is not, in my opinion, exercisable by reference to general considerations of fairness. It is a power conferred for a specific purpose as part of a statutory scheme which made certain conduct unlawful. Whether this proscription of conduct is, in some broad sense, fair, desirable or appropriate is not a matter for me to assess. Also whether engaging in proscribed conduct might, in any given situation, be reasonable or justifiable on broad grounds concerning fairness or "industrial justice" is again not a matter for me to assess. Once it is accepted that the purpose of the conferral of the power to make an order to remedy the effects of industrial action is to address the consequences of unlawful industrial action then the exercise of the discretion both to make an order and to determine the terms on which it is made, is limited. 10 It would be undesirable for me to endeavour to catalogue in a comprehensive way, considerations which might inform the exercise of the discretion. However, I can deal with those that appear to me as possibly arising in the present case. First, an application needs to be made for an order, at least in the ordinary course. Qantas need not have, but has, made such an application. Another employer in similar circumstances might conclude that, on balance, it was preferable not to risk alienating or antagonizing its workforce, and the union and its officers representing them, by seeking an order for payment of money from union funds. However, Qantas has a legal right to seek an order and it has exercised that right. It is entitled to do so. 11 Another consideration would be whether the application for the order was bona fide. By that I mean the order was not being sought for an ulterior purpose. There has been no suggestion in the evidence or in the submissions that Qantas has sought the order, not simply to secure payment to compensate it for losses suffered, but rather to secure some advantage in future workplace negotiations with the TWU and its members which Qantas employs. Such negotiations are, I assume, imminent as EBA 7 nominally expired on 1 July 2011. Had there been such an ulterior purpose, I would not make the order I propose to make. 12 Another consideration would be whether the effect of the industrial action was occasioned, in whole or in part, by the unreasonable conduct of the party seeking the order and, in particular, unreasonable conduct in response to the industrial action. In the present case the respondents submitted it was. They pointed to Qantas acting at SIT, Brisbane, Adelaide and Perth on the basis that it was obliged not to pay the TWU members who had engaged in some form of industrial action four hours pay. This, the respondents pointed out, was not the approach Qantas adopted at SDT where some industrial action was effectively sanctioned by local management, the employees told their pay would not be docked and they returned to work. I must acknowledge the difference in approach. However, the response at SIT, Brisbane, Adelaide and Perth was not the unreasonable one, in the circumstances. On one view of s 507 (but not, in my opinion, the correct view) the employer has no capacity to agree or approve of industrial action after it has taken place. On that view Qantas was obliged to take the approach it did. Also it was not unreasonable to inform the TWU membership of the consequences for them of what they had done. I would not infer that Qantas' response (even though one of the principal architects of the response, Brad Moore, was not called) was anything other than a genuine response to events as they unfolded, based on the legal effect of s 507 as understood by Moore and others. 13 Also the respondents point to the failure of Qantas to take up offers made at some airports by the workforce to return to work sooner than they, in fact, did. However, having deployed contingency teams of salaried staff to handle unprocessed baggage, it was not unreasonable for Qantas to avoid an environment where there was a possible intermingling of salaried staff and the usual workforce in circumstances where there was likely to be a high measure of animosity on the part of the usual workforce directed to Qantas personified by the management staff then processing baggage. This antipathy was illustrated by the conversation in Brisbane with Goebel (see liability judgment [213]). In any event, the offers to return to work were either conditional (see liability judgment [175]) or limited as to the number of employees making the offer (see liability judgment [175] and [219]). 14 Another consideration would be whether the effect of the industrial action was foreseen by those who engaged in it or, if not, was nonetheless reasonably foreseeable. In the present case it is probable the effect was foreseen by the respondents, particularly Sheldon, Gallacher and Connolly. 15 Another consideration would be whether compliance with the order was practicable or likely. This would be particularly so if the order was not directed to the payment of money. However, as to such an order in the present case, no submission was made that the TWU did not have the capacity to pay the amounts to be ordered though obviously it will have the significantly undesirable consequence of depleting funds which are, in effect, the funds of the membership as a whole which would otherwise be deployed for the benefit of that membership. 16 I am not persuaded I should exercise my discretion not to make an order requiring the TWU to compensate Qantas for the losses it suffered. I am satisfied I should. 17 I should deal with one other matter. The industrial action of the respondents was not the immediate cause of the losses suffered by Qantas. It was the conduct of the TWU membership in stopping work and not resuming work for a period of four hours (see liability judgment [360]). Even though in many instances, the TWU membership was not contractually bound to work for a period (see liability judgment [349]) that situation arose as a direct consequence of a chain of events precipitated by the calling of the meetings and the way in which they were called. That, in turn, had its genesis in the decision to hold the meetings taken on 25 March 2009. The TWU is responsible for the unlawful conduct of the other respondents as well as delegates (see liability judgment [374]). The unlawful conduct of the other respondents, and in particular making the decision taken at the meeting on 25 March 2009, led to the conduct of the TWU membership. It was a foreseen and foreseeable consequence of the unlawful conduct of the individual respondents and of the TWU. In these circumstances the consequences of the unlawful conduct of all respondents was the failure of the TWU membership to undertake tasks such as processing baggage as they otherwise would have done on 30 March 2009. That led directly to certain losses (discussed shortly) for which the TWU should be ordered to compensate Qantas as a method of remedying the effect of the unlawful conduct of all the respondents. I proceed now to consider the claimed losses by reference to the framework (as to subject matter) adopted by the parties. In this analysis I refer to the submissions of the respondents as those of the TWU only given that the order is sought only against the TWU.

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2.2.2 Qantas' Submissions 19 As a result of the industrial action and subsequent flight delays on 30 March 2009 Qantas incurred losses as it was required to deploy extra staff to assist dealing with baggage arrivals, departure lounges and customer handling activities. Some employees were also required to perform overtime to attempt to bring its network back into normal operation over the subsequent days. A number of its salaried corporate and administrative staff were deployed as contingency teams at various airports around Australia to provide assistance to regular airport staff. 20 Following the industrial action Burgess requested several Qantas financial controllers to collate data recording additional labour costs incurred as a result of the stoppage. There was an additional 4,371 hours of work performed resulting in a total cost of $227,872. An order should be made requiring the TWU to pay that amount. This figure does not include costs relating to engineering, technical or cabin crew, all of which are dealt with separately. The table below quantifies, by reference to locations and designations, its claim: Additional Labour Costs incurred Location Ordinary Customer Service Ordinary Ramp Services Ordinary Admin/Corporate Staff Overtime Customer Service Overtime Ramp Services Overtime Baggage Security Services Departure Lounge Overtime Departure Lounge SIT $1,725 $0 $98,305 (contingency team of 164 staff for 30 and 31 March 2009) $26,894 $13,001 $0 $2,000 $1,320 SDT $690 $874 $15,182 (contingency team of 15 admin staff for 30 and 31 March 2009) $154 $352 $0 $0 $0 Melbourne Domestic $598 $575 $1,518 $6,380 $6,336 $2,160 $480 $3,102 Brisbane Domestic $2,162 $0 $11,387 $4,268 $0 $0 $560 $960 Perth Domestic $152 $522 $0 $713 $2,543 $0 $0 $0 Adelaide $233 $0 $1,771 $6,055 $2,112 $0 $0 $469 Cairns $0 $0 $0 $198 $1,078 $0 $0 $0 Darwin $391 $35 $1,518 $1,892 $836 $0 $200 $231 Townsville $0 $0 $0 $44 $176 $0 $0 $0 Alice Springs $23 $0 $0 $1,320 $1,760 $0 $0 $0 Ayers Rock $83 $97 $0 $1,597 $840 $0 $0 $0 TOTAL $6,057 $2,103 $129,681 $49,515 $29,034 $2,160 $3,240 $6,082

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2.2.4 Consideration 25 This subject matter directly raises for consideration the content of the power to make in order to "remedy [the industrial action's] effect" in so far as that power might be exercised to order the payment of money. It may well be that many of the principles concerning the assessment of damages and the awarding of monetary compensation in other contexts would be apt to apply to the exercise of this power. But that would not be because they are principles of general application but rather because they establish an approach which aligns with this statutory power having regard to the way in which it is expressed and the purpose for which the power is conferred. However, in my opinion, I should not be distracted by those principles from the terms in which the power is conferred and its purpose and the constraints and limits those terms create. An obvious starting point when considering whether to make an order and in what terms, is to identify a possible "effect" of proscribed industrial action established in the proceedings. Part of that task is to determine whether the proscribed industrial action brought about that "effect". Having done so it is then necessary to consider whether the orders sought "remedy" that "effect". 26 In relation to a proposed order requiring the payment of money, it seems to me that it would be necessary for the Court to be satisfied that the beneficiary of the proposed order had suffered an actual loss, incurred an actual expense or directly forewent income as the "effect" before an order could be made requiring such a payment. That is because, in my opinion, only if there had been such a loss or expense would the receipt of money remedy its effect. If I could illustrate this by reference to an aspect of this head of compensation claimed by Qantas. Salaried employees were needed to work on contingency teams to deal with accumulating baggage. This was an effect of the industrial action. They were paid their salary while undertaking this work. The payment of these salaries was not an effect of the industrial action. They would have been paid anyway. 27 It may be possible to characterise one effect of the industrial action as being that salaried employees were required to perform tasks they would not ordinarily perform and were distracted from their ordinary duties. (As an aside I should observe that if, as it was, working in a contingency team was part of what a salaried employee might be required to do then this dichotomy between ordinary and other duties probably is of no moment. The only relevant question is whether working on a contingency team was part of those duties. The answer appears clearly to be yes). However one then asks how this effect is remedied by ordering the payment of money. I cannot see how it is. It would be different if overtime (or some other additional payment) had been paid to members of the contingency team or other people engaged to perform the ordinary duties of the members of the contingency team either then or later. The need to pay the overtime (or some other additional payment) or pay the additional staff would be an effect remedied by an order to pay money. But how does the payment of money remedy the effect of salaried employees working on a contingency term? In my opinion it does not. 28 One effect of the industrial action was that Qantas had to pay additional overtime to non-salaried employees to deal with accumulated baggage. Accordingly an order can (and should) be made requiring the TWU to pay Qantas an amount equivalent to the additional overtime payments. Such an order will remedy an effect of that action. 29 It is convenient, at this point, also to consider the question of whether some form of offsetting should be undertaken in relation to what is said by the TWU to be a saving to Qantas because a significant sum did not have to be paid to employees who had their pay docked for four hours. It is true Qantas did not pay some of its workforce wages it would otherwise have been obliged to pay. But were Qantas to have made the payment, it would have been on the basis that Qantas received some benefit in return (the performance of work). It received no such benefit. There was no real "saving". 30 I propose to order the TWU to pay Qantas $98,191 to remedy this aspect of the effect of the industrial action.

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2.3.1 Evidence 31 It was not in issue that, as a result of the events of 30 March 2009, some passengers flew from the airports at which the industrial action took place without their baggage in the holds of their planes. The baggage was transported on later flights. It was also not in issue that, in addition, some passengers were not able, at their destination, to retrieve baggage which did accompany them within a reasonable period and left the airport without it. It was not in issue that Qantas took steps to reunite these passengers with their baggage. It did so by arranging for it to be couriered or otherwise delivered to the passenger at their home or where they were staying. Qantas incurred costs in doing this. Plainly this is an effect of the industrial action which can be remedied by an order that the TWU pay Qantas an amount equal to the costs incurred. The central issue is what that amount is. 32 This cost was initially addressed in Burgess' affidavit sworn 1 October 2010. She indicated that there was a significant amount of mishandled baggage as a result of the stoppage on 30 March 2009. It took approximately a week to rectify the problem. The baggage could not be loaded on to or unloaded from aircraft and had to be stored temporarily. The mishandled baggage was couriered to passengers at Qantas' expense. Burgess used the Worldtracer Management System ("Worldtracer") to calculate the average cost of repatriating a bag to its owner. The average cost includes the cost of couriers and handling fees. Burgess swore a supplementary affidavit on 12 December 2010 which provided further details about the mishandled bags, including the procedure undertaken when a bag is reported "missing", the reasons that not all the mishandled bags were recorded in Worldtracer, and the reasons why it is very difficult to determine the precise cost of mishandled baggage using only the invoices received from the courier companies. 33 The estimate of mishandled bags was provided to Burgess by Hardy. Hardy, in his affidavit of 14 December 2010, estimated that there were 2,250 mishandled bags for SIT and 1,500 for SDT. These numbers were attained by his observations and the observations of Claudio Grasso, at the time the Customer Services Manager. Hardy said that he was not able to record precisely the number of mishandled bags because they were piled on top of each other and his priority was to sort which bags were to remain in Sydney and which ones had to be sent to other ports. 34 The functioning of Worldtracer was explained by Hardy. A Worldtracer record is generated for each customer when they complete a report or generate a mishandled baggage file. There is no record of the passenger's misplaced baggage in the system unless a form is completed, so not all mishandled bags arising from the stoppage on 30 March 2009 would have been recorded in the system. A form would not have been completed if the passengers waited at the airport until their baggage was located, if they returned later in the day or if the mishandled baggage was forwarded to other ports within Australia, in which case the record may have been created at a port other than Sydney. Passengers on international flights may have departed without their baggage and it would have been forwarded on the next available flight. The data on Worldtracer is therefore not a complete representation of all the mishandled baggage. 35 Hardy explained that the data from Worldtracer is simultaneously transferred to the Qantas Corporate Data Warehouse ("CDW") and Airline Services Operations Reports are generated weekly. The increase in numbers of mishandled baggage was based on a review of reports. Hardy said that the spreadsheet records indicated that on 30 March 2009 in Sydney, 1161 bags were mishandled, an increase from the average range of 100 to 200 bags earlier in the month. The spike in the numbers of mishandled bags from the report of 29 March 2009, to the numbers in the report of 5 April 2009 was regarded by Hardy as significant. A table of lost bags per 1,000 passengers was provided as follows: Port Report Week Ending 29 March 2009 Report Week Ending 5 April 2009 Perth 5.3 51.2 Adelaide 1.9 30.1 Sydney 9.1 23.2 Brisbane 6.2 14.2 Melbourne 5.5 12.8 Other 2.3 1.9

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2.3.2 Qantas' Submissions 37 In the submissions of Qantas of 21 March 2011 reference was made to the evidence of Burgess. The reasons Burgess found it "very difficult" to determine the precise costs arising from mishandled baggage using only the invoices received from courier companies were summarised as follows: (a) Qantas uses a number of different courier companies; (b) not every piece of baggage is reconciled and delivered to a passenger on the same day it is reported missing; (c) courier invoices may be received up to 6 months after the cost has been incurred; (d) many courier companies do not attach copies of mishandled bag tag numbers (which are used to identify the bags) to their invoices; and (e) the invoices do not include monetary compensation provided to passengers, labour costs or insurance costs associated with mishandled baggage. 38 The cost of repatriating baggage as a result of the stoppage was summarised by Qantas as $138,602.65 which was based on: (a) taking the number of Worldtracer files generated for mishandled bags on 30 and 31 March 2009; (b) multiplying that number by the total average repatriation cost per file during March 2009, as recorded in Worldtracer; and (c) subtracting the equivalent average daily figures for March (other than 30 and 31 March 2009 and April 2009). 39 The calculations were summarized by Qantas as follows: Total Number of Files in Respect of Mishandled Bags (30 and 31 March 2009) less equivalent daily averages) Average Repatriation Cost (per file) Cost of Repatriating Mishandled Bags Sydney 1238.1 $39.62 $49,053.52 Melbourne 340.2 $28.81 $9,801.16 Hobart/Launceston 0 $28.81 $0.00 Brisbane 282.48 $43.22 $12,208.79 Perth 1188.86 $43.22 $51,382.53 Adelaide 546.76 $28.81 $15,752.16 Darwin/Cairns/Ayers Rock/Mackay/Alice Springs/Townsville 14.04 $28.81 $404.49 TOTAL $138,602.65

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The cost of repatriating bags in Hobart/Launceston, Adelaide and Darwin was calculated by Burgess using the Melbourne average repatriation cost. The cost of repatriating bags in Perth was calculated using the Brisbane average. 40 Evidence relating to mishandled baggage in the northern Australian airports was provided by Crippin in his affidavit of 13 December 2010. Crippin provided this information to Burgess. He said there were 350 mishandled bags, although he was not aware how each of the airport managers determined the number of mishandled bags at each port. 41 Burgess' estimated cost of repatriating mishandled baggage based on Worldtracer was generally consistent with the invoices submitted by Qantas. The exceptions included the invoices for Adelaide which indicated courier costs of $15,238, slightly less than the $15,752.16 estimated by Burgess. The invoices for Melbourne indicated that the costs of delivering mishandled baggage on 31 March and 1 April 2009 was $28,961.00 which was greater than the estimate provided by Burgess of $9,801.16. The averaging of Melbourne invoices indicated that the courier costs were approximately $11,000.00 above the average. 42 Counsel for Qantas noted that during cross-examination Burgess was not prepared to concede that there were files in the Worldtracer system that did not incur a delivery cost. Hardy, similarly did not concede that only a proportion of the Worldtracer files actually incurred a cost, although they did agree that the Worldtracer data did not provide a complete picture. Counsel for Qantas submitted that Hardy stated at the hearing that Qantas would not have couriered a bag to a passenger unless a Worldtracer file was generated. 43 In further submissions of 5 April 2011 it was emphasised that the estimate for mishandled baggage was consistent with costs reflected in actual invoices and if anything an underestimate. Although some files in Worldtracer did not have a cost attributed to them, it does not follow that no cost was incurred. The inconvenience occasioned by customers who had to return to the airport to collect their baggage did not show as a cost for it, however such inconvenience is compensable. If a discount is applied by the Court for files where no cost applied, that this discount should be no more than 20%.

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2.3.4 Consideration 46 Both Qantas and the TWU necessarily engaged in estimation and some speculation in arriving at the figures of $138,602.65 and $83,160.00 respectively. The parties appeared to agree that it is not possible to arrive at a precise cost for the mishandled baggage. 47 Qantas and the TWU do not agree about whether there were a substantial number of mishandled baggage files that did not incur costs. At the hearing on 13 December 2010 Burgess said during cross-examination that she was not 100 per cent sure that there were no files in the Worldtracer data of the Sydney mishandled baggage that were files for which there were no costs generated: Mr Hatcher: …It's possible that the number 1161 for Sydney, for example, includes files for which no cost was generated? Ms Burgess: No, I cannot confirm that. I would have to go back to the actual data. Mr Hatcher: Well, you certainly can't confirm the contrary position, that it only includes files for which a cost was generated? Ms Burgess: At this point in time, I can only assume that those files that were entered in there had a cost that was directly entered into the WorldTracer system. Mr Hatcher: Well, you assume that, but you don't know that? Ms Burgess: No, I don't know 100 percent that that would be the case. 48 Burgess did make allowance for the equivalent daily average figures for mishandled baggage by subtracting this numbers from the total. However, she was not able to state definitely that there were no costs associated with some of the mishandled baggage. 49 For my part, I find it difficult to determine whether any measure of precision what costs Qantas incurred in delivering mishandled baggage. I think I am able to say that the TWU's criticism of Qantas's methodology is correct. That is, it is not possible to make an assumption that all mishandled baggage recorded on the Worldtracer system had to be delivered, at a cost to Qantas, to the passenger. The records themselves indicate this is not so. However I accept that the records themselves would not constitute a complete record of all mishandled baggage. I do not accept Qantas' suggestion that if no cost was incurred in delivering baggage, somehow Qantas occasioned loss and damage in circumstances where, for example, a customer had to return to the airport to collect baggage or wait around at the airport for their baggage. I prefer the TWU's estimate and accordingly will order it to pay Qantas $83,160 to remedy this aspect of the effect of the industrial action.

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2.10.2.12 Johannesburg 107 It claimed an amount of $41,136.01 it incurred in costs for accommodation, telephone calls, transport, aircraft parking and meals for passengers as well as accommodation and allowances for its staff as a result of delays to flights QF63 and QF64 and relies on exhibits CN-19 and CN-20 to the first affidavit of Noorbergen. These exhibits relevantly contain: (a) a spreadsheet created by Debbie Carr (its manager commercial support) itemising costs incurred in relation to South Africa and totalling these to ZAR $266,641.57; (b) an invoice from Birchwood Hotel for accommodation, telephone calls and meals totalling ZAR $9,050.77 (not including Value Added Tax ("VAT"); (c) an invoice from Peermont Global Pty Ltd for accommodation, food and telephone calls totalling ZAR $66,612.03; (d) an invoice from Garden Court Southern Sun for accommodation and telephone calls totalling ZAR $1,301.97 (including VAT); (e) an invoice from Melrose Arch Hotel for accommodation totalling ZAR $2,462.38 (including VAT); (f) an invoice from Flight Centre Pineslopes for accommodation totalling ZAR $2,890; (g) an invoice from Tambo International for aircraft parking on 31 March 2009 totalling ZAR $1,069.82; (h) an invoice from Peermont Global for accommodation totalling ZAR $732.44 (excluding VAT); (i) an invoice from Peermont Global for accommodation totalling ZAR $809.20 (excluding VAT); (j) an invoice from Peermont Global for accommodation, meals and telephone usage totalling ZAR $18,593.64 (excluding VAT); (k) an invoice from Peermont Global for accommodation, meals and telephone usage totalling ZAR $51,716.96 (excluding VAT); (l) an invoice from JIATA for taxi usage totalling ZAR $740; (m) an invoice from Southern Sun for crew accommodation totalling ZAR $50,571.94; (n) an invoice from Southern Sun that is illegible and the total cannot be seen; (o) two invoices relating to crew meals totalling ZAR $6,802; and (p) two invoices for passenger accommodation totalling ZAR $2,995. The total of these invoices is ZAR $216,348.15, which based on Noorbergen's foreign exchange calculations is $33,377.02. 108 Noorbergen was cross-examined on the details of a number of the invoices but was unable to give specific information. Due to the lengthy delays to flights QF63 and QF64 it is reasonable for the court to conclude that these costs arose as a result of the stoppage on 30 March 2009.

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2.10.3 The TWU's Submissions 109 Qantas' submissions on Offshore Losses are critically flawed as Noorbergen's evidence was admitted on a limited basis only. Noorbergen's inability to give direct evidence on the invoices and their causation means that the analysis must be approached with caution. 110 Many of the invoices that cover costs incurred before and after 30 March 2009 do not make clear what costs were incurred as a result of the stoppage and in a number of cases the basis upon which the totals have been calculated are unknown. There are a number of contentious invoices and it is convenient to illustrate this in a table as follows: LOCATION Applicant's Tender Bundle Reference TWU's Contentions Amount in Foreign Cuurency Amount in AUD$ CHRISTCHURCH 3087 Invoice re flight QF 141 - not a flight delayed on 30 March 2009 NZD $100.00 $79.26 3088 Delay Vouchers for 2 and 3 April NZD $778.60 $617.10 AUCKLAND 3097 Unexplained baggage delivery NZD $70.00 $55.48 3098 Vouchers issued on 16 and 20 March 2009 NZD $119.30 $94.55 3099 Vouchers with no date of issue identified and flights not identified as delayed on 30 March 2009 NZD $817.50 $647.94 3101 - 3102 Meal voucher invoice for whole of fortnight period with no cause shown NZD $736 $583.34 3103 - 3104 Meal voucher invoice for whole of fortnight period with no cause shown NSD $96.30 $76.33 3105 - 3106 Taxi fares for a period of a week with no cause shown NZD $3,047 $2415 LOS ANGELES 3168 Hotel charges - invoice issued on 8 April 2009 and no dates or cause otherwise identified, with the rest of the document apparently not included (vouchers given to Qantas passengers included) USD $8,198.18 $12,695.40 NEW YORK 3322 Ground handling fees charged for late notice of cancelled flight QF108 - fee would still have been payable if flight had not been cancelled USD $5,963.26 $9,234.48 HONG KONG 3326 Baggage delivery invoice for whole month of March with no details or cause identified HKD $2,020 $403.43 3327 Baggage delivery invoice for 1 to 14 April 2009 with no details or cause identified HKD $3,465 $692.02 3328 Baggage delivery invoice for 31 March to 14 April 2009 with no cause or details identified HKD $12,030 $2,402.60 3334 Invoice totalling HKD $1,409, but only HKD $470.50 apparently attributable to the stoppage and otherwise virtually illegible HKD $938.50 $187.43 BANGKOK 3345 No explanation why meal vouchers payable in Bangkok for flight QF1 stopping en route to London, even if late [T552 L.28-42] THB $3,088 $134.04 3346 No explanation why meal vouchers payable in Bangkok for flight QF1 stopping en route to London, even if late [T552 L.45 - 553 L.5] THB $10,986 $476.88 3347 No explanation why meal vouchers payable in Bangkok for flight QF1 en route to London, even if late [T553 L.7] THB $2,410 $104.61 3348 - 3362 No explanation why meal vouchers payable in Bangkok for flight QF1 stopping en route to London, even if late [T553 L.9-14] THB $18,059 $783.90 3363 Conceded by Noorbergen in cross-examination "probably incorrect" and not explicable [T553 L.16-47] THB $7,212.31 $313.07 3366 Apart from a handwritten note "THB 3560 related to TWU", it is an invoice for the full month of March 2009 and otherwise illegible THB $3,560 $154.53 3367 - 3368 Apart from handwritten note "THB 3204 related to TWU", no connection to stoppage identified and invoice relates to period 21 March 2009 to 20 April 2009 THB $3,204 $139.08 3369 Dates on invoice shown are 2 or 3 April 2009 or otherwise not shown THB $4,536 $196.90 3370 No identification of any Qantas flight number; no basis to attribute to stoppage [T555 L.1-9] Included above Included above 3371 Date of cost is in April 2009 or not identifiable Included above Included above 3372 Invoice dated 30 April 2009; date cost incurred not identifiable [T555 L.18-29] THB $800 $34.73 3373 Invoice dated 29 April 2009 and otherwise no linkage to the stoppage [T555 L.31-35] THB $2,500 $108.52 3374 Invoice dated 2(?) April 2009 and not referrable to stoppage but to bags lost on flight QF1 2-3 April 2009 [T555 L.31 - T556 L.3] THB $2,500 $108.52 3375 Invoice dated 4 April 2009 for in respect of search for bags on 1 April 2009 [T556 L.5-13] THB $2,500 $108.52 3376 Invoice dated 31 March 2009 but refers to search for bags on 1 April 2009 and no identifiable connection to stoppage apparent [T556 L.15-18] THB $5,000 $217.04 SHANGHAI 3389 Invoice relates to mishandled bags, but there is no evidence flight left Sydney without bags being loaded [T557 L.38 - T558 L.5] CNY $3,180 $720.30 3390 Invoice relates to mishandled bags, but there is no evidence flight left Sydney without bags being loaded [T557 L.38 - T558 L.5] CNY $550 $124.58 3391 Invoice relates to mishandled bags, but there is no evidence flight left Sydney without bags being loaded [T557 L.38 - T558 L.5] CNY $1,325 $300.12 3392 Invoice relates to mishandled bags, but there is no evidence flight left Sydney without bags being loaded [T557 L.38 - T558 L.5] CNY $1,650 $373.74 3397 Nothing on invoice in English to identify date or linkage to stoppage, and no explanation as to why meal vouchers needed to be issued CNY $4,680 $1060.06 BEIJING 3411 Document is in Chinese characters, and nothing written on document links it to stoppage CNY $1,060 $240.10 3412 Document is in Chinese characters, and nothing written on document links it to stoppage CNY $5,730 $1297.90 MANILA 3415 - 3419 Nothing on the face of the invoices indicating link to stoppage. Noorbergen unable to identify any flight delayed to or from Manila, and apart from speculation cannot say why or how stoppage related costs were incurred. 3419 covers entire month of March 2009 [T558 L.7-35] PHP $31,012.48 $2,911.80 INDONESIA 3421 Invoice dates 1 to 13 April 2009 and does not otherwise indicate any link to stoppage. IDR $675,000 $87.52 3422 Invoice for bus hire with no explanation of link to stoppage IDR $675,000 $87.52 3424 Hotel invoice includes fee for room on 29 March 2009 comprising half of total room cost IDR $5,067,705 $657.09 3437 Invoice repeats hotel cost identified at 3423 IDR $5,809,703 $753.30 JOHANNESBURG 3442 Invoice charges for "No-show accommodation" for 31 March 2009 (including 50% discount). Noorbergen could not give any intelligible explanation of how this could relate to the late arrival of flight QF63 on 31 March 2009 [T559 L.32 - T560 L.15] ZAR $4,620 $712.45 3465 Invoice dated 1 April 2009 for accommodation on 31 March 2009. Noorbergen accepted it could not be referrable to the later flights QF63/QF64 and could not otherwise identify link to stoppage [T560 L.32-41] ZAR $620.00 $95.65 3466 Invoice for accommodation and food on 31 March 2009. Noorbergen could only speculate on scenario linking invoice to stoppage [T560 L.41 - T561 L.5] ZAR $922.50 $142.32 3487 Taxi fare from airport to Wendywood and return on 31 March 2009 with no explanation for linkage to stoppage. Noorbergen could not explain what its link was to delayed flights. [T561 l.7-12] ZAR $740.00 $114.16 3489-3492 Apart from handwritten notes "Delay cost crew 50571.94" and "Allowance crew delay" this hotel invoice is virtually illegible. In particular, the dates cannot be identified, and the amount in the note cannot be related to anything in the invoice. The invoice appears to relate to a far larger number of crew than can be explained by the delayed flights QF63/QF64. Noorbergen could not explain it. The number of crew actually delayed was only 19 - see documents at 3493-3494. Item is a double-counting of an item separately and properly costed by Knight ZAR $50,571.94 $7,801.96 TOTAL: $50,545.27

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2.10.4 Consideration 111 Qantas has tendered a significant number of invoices from a variety of overseas ports they said were costs incurred as a result of the industrial action on 30 March 2009. It is convenient at this point to say that the evidence relied on by Qantas, being a large number of invoices and other documents were tendered without objection as business records of the companies who provided them. Qantas sought to rely on other evidence in the proceeding in conjunction with these invoices and asked the court to draw the inference that the costs incurred came about as a result of the industrial stoppage. I am satisfied that the invoices not disputed by the TWU are as a result of the industrial action, but it is necessary to consider the disputed invoices individually as the contentions relating to each are different. It is convenient, for the purposes of quantifying the amount of loss to Qantas as a result of the stoppage to use the applicant's tender bundle pagination references when considering the separate invoices that are disputed by the TWU. The points below set out my consideration on each of the disputed invoices: 3087: The disputed invoice for NZD $100.00 has a reference to flight QF141 which was not a flight affected by the industrial action and is accordingly rejected. 3088: The disputed amounts relating to 2 and 3 April 2009 are rejected, though it should be noted these amounts were not part of the totals attributed to Qantas' claim. Qantas should receive NZD $2,482.06 from this invoice. 3097: The invoice for delivery of baggage is dated 30 March 2009. It is conceivable that this occurred as a result of the industrial stoppage and I infer so. Qantas should receive NZD $70.00 for this invoice. 3098: The disputed amounts relating to 16 and 20 March 2009 are rejected, though it should be noted that these amounts were not included in the total attributed to Qantas' claim. Qantas should receive NZD $48.00. 3099: The disputed amounts relating to flights not delayed as a result of the industrial action are rejected, though it should be noted these amounts were not part of the totals attributed in to Qantas' claim. Qantas should receive NZD $107.80 from this invoice. 3101 - 3102: The amounts shown on the invoice from dates other that 30 March 2009 are rejected, however I am satisfied that the amounts shown on the invoice from 30 March 2009 were incurred as a result of the stoppage. Qantas should receive NZD $317.71. 3103 - 3104: The amounts shown on the invoice from dates other that 30 March 2009 are rejected, however I am satisfied that the amounts shown on the invoice from 30 March 2009 were incurred as a result of the stoppage. Qantas should receive NZD $67.20. 3105 - 3106: The amounts shown on the invoice from dates other that 30 and 31 March 2009 are rejected, however I am satisfied that the amounts shown on the invoice from 30 March 2009 were incurred as a result of the stoppage. Qantas should receive NZD $467.00. 3168 - 3266: The TWU's complaint that there were no identified dates is unfounded. Pages 3176 to 3243 are itemisations of accommodation and meal charges provided by the Hilton Hotel that incurred on 30 and 31 March 2009. I am satisfied that this invoice was incurred as a result of the industrial action. Qantas should receive USD $8,198.18. 3322: The onus is on Qantas to prove that, although the flight was cancelled and alternative arrangements for affected passengers had to be made, it received no profit as a result of selling the tickets by doing so. This was a cost normally attributable to the cancelled flight and Qantas may still have received income from the sale of tickets. Qantas have not satisfied the burden of proving there was loss as a result of incurring this cost. 3326: The disputed invoice covers the period of the entire month of March 2009 with no itemisation or causation attributable to the industrial action. The claim is rejected. 3327: The disputed invoice covers the period of 1 to 14 April 2009 with no itemisation or causation attributable to the industrial action. The claim is rejected. 3328: The disputed amount covers the period 31 March 2009 to 4 April 2009. I am prepared to infer that the baggage deliveries on 31 March 2009 and 1 April 2009 were attributable to the stoppage, but reject the claim for the dates after. Qantas should receive HKD $6,100.00. 3334: The invoice is written in Chinese and other than handwritten notes is virtually illegible. The TWU do not dispute the amount of HKD $470.50 that appears to be attributable to the stoppage. Qantas should receive HKD $470.50 for this invoice. 3345: There was no explanation by Qantas why meal vouchers were necessary for flight QF1 as it was only delayed, and did not spend any extra time in Bangkok. While there may be specific explanation for the issue of each of the meal vouchers, they were not revealed in the evidence. The claim by Qantas should be rejected. 3346: There was no explanation by Qantas why meal vouchers were necessary for flight QF1 as it was only delayed, and did not spend any extra time in Bangkok. While there may be specific explanation for the issue of each of the meal vouchers, they were not revealed in the evidence. The claim by Qantas should be rejected. 3347: There was no explanation by Qantas why meal vouchers were necessary for flight QF1 as it was only delayed, and did not spend any extra time in Bangkok. While there may be specific explanation for the issue of each of the meal vouchers, they were not revealed in the evidence. The claim by Qantas should be rejected. 3348 - 3362: There was no explanation by Qantas why meal vouchers were necessary for flight QF1 as it was only delayed, and did not spend any extra time in Bangkok. While there may be specific explanation for the issue of each of the meal vouchers, they were not revealed in the evidence. The claim by Qantas should be rejected. 3363: It is unclear how this invoice relates to effects of the industrial stoppage and Noorbergen was unable to provide any detailed explanation. The claim by Qantas should be rejected. 3366: It is unclear how this invoice bears any relation to the effects of the industrial stoppage. There is only a handwritten note with the words "THB 3560 Related to TWU". I am not satisfied this cost was incurred as a result of the stoppage. The claim by Qantas should be rejected. 3367 - 3368: It is unclear how this invoice bears any relation to the effects of the industrial stoppage. There is only a handwritten note with the words "THB 3204 Related to TWU". I am not satisfied this cost was incurred as a result of the stoppage. The claim by Qantas should be rejected. 3369: I am not prepared to infer that baggage delivered on unspecified dates, or on 2 April 2009 or later without a reference to any flight numbers is attributable to the industrial action. Qantas were unable to provide any direct explanation. The claim by Qantas should be rejected. 3370: The reference to flight QF264 on the face of the invoice is a reference to a flight that was unaffected by the industrial action. I am not prepared to draw the invoice that this cost was incurred as a result of the action. The claim by Qantas should be rejected. 3371: The only dated invoice on this page has the date 29 April 2009 written on it. The other two invoices have no date or flight number apparent on their faces. I am not prepared to infer that these costs were incurred as a result of the industrial action. The claim by Qantas should be rejected. 3372: The invoice is dated 30 April 2009 and the date the cost or costs were incurred are not apparent. I am not prepared to draw the inference that the costs related to this invoice were incurred as a result of the stoppage. The claim by Qantas should be rejected. 3373: The invoice is dated 29 April 2009 and there are no references to flights or other dates. I am not prepared to infer that these costs were incurred as a result of the stoppage. The claim by Qantas should be rejected. 3374: The invoice is dated 2 April 2009 and the only references on the invoice appear to be to flight QF1 on 2 and 3 April 2009. I am not prepared to draw the inference that this cost was incurred as a result of the industrial action. The claim by Qantas should be rejected. 3375: The invoice is dated 4 April 2009, but the telex message below indicates that the passenger's bag was still being searched for on 1 April 2009 and was subsequently received on that day. I am prepared to infer that this cost was incurred as a result of the industrial action. Qantas should receive THB $2,500. 3376: The invoice is dated 31 March 2009, but the telex message appears to ask for luggage to be forwarded on the next flight QF1 on 1 April 2009. As flight QF1 only arrived in Bangkok on 31 March 2009, I am prepared to draw the inference that this cost was incurred as a result of the industrial action. Qantas should receive THB $5,000. 3389: The invoice is dated 31 March 2009, but is written in Chinese characters with only English translations written on after the invoice was created. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3390: The invoice is dated 30 March 2009, but is written in Chinese characters with only English translations written on after the invoice was created. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3391: The invoice is dated 30 March 2009, but is written in Chinese characters with only English translations written on after the invoice was created. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3392: The invoice is dated 31 March 2009, but is written in Chinese characters with only English translations written on after the invoice was created. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3397: The invoice is written in Chinese characters with only handwritten English translations put on after the invoice was created. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3411: The invoice is written in Chinese characters with no visible dates or flight numbers apparent on its face. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3412: The invoice is written in Chinese characters with no visible dates or flight numbers apparent on its face. I am not prepared to draw the inference that this cost was attributable to the industrial action. The claim by Qantas should be rejected. 3415 - 3419: I am not satisfied that the invoice appearing on page 3415 from the Sofitel Philippine Plaza was incurred as a result of the industrial action, as QF20 was delayed, not cancelled. No direct evidence was put on by Qantas to establish the link. I am also not satisfied that the invoice appearing on page 3416 from Hari Raya Coffee Shops Inc was incurred as a result of the industrial action. The invoice is dated 31 March 2009, but there is no indication of what was provided and when. I am satisfied that the amount of USD $561.75 attributable to flight QF20 on the invoice from MacroAsia Catering Services Inc. was incurred as a result of the industrial action. Qantas' claim, except for the amount of USD $561.75, should be rejected. 3421: I am satisfied that that the costs associated with the invoice for transport to the Borobudur Hotel were incurred as a result of the stoppage. The invoice states "DELAY QF041/30MAR" which I infer relates to the delay to flight QF41 on 30 March 2009. Qantas should receive IDR $675,000. 3422: I infer that this is invoice is directly related to the invoice on page 3421, and the two invoices should be treated as one. 3424: This invoice includes a cost relating to charges incurred for 29 - 30 March 2009. I am not satisfied that the costs incurred were incurred as a result of the industrial action. The claim by Qantas should be rejected. 3437: This invoice appears to be a copy of the invoice appearing at page 3423. The claim for the cost of this by Qantas should be rejected, though it should be noted the cost of this invoice was not included in Qantas' calculations. 3442: The invoice has a charge of ZAR $9,240 for "No-Show Accommodation x 14 Rooms" which had been discounted by half to ZAR $4,620. Qantas were unable to give direct evidence as to how this was attributable to the industrial action. I am not satisfied that charge on the invoice was attributable to the stoppage. Accordingly Qantas' claim in respect of this invoice for ZAR $9050.77 should be reduced by ZAR $4,620.00 to ZAR $4,430.77. 3465: The invoice for accommodation, food and beverage has a check-in date of 30 March 2009 and a check-out date of 31 March 2009. I am satisfied the costs on this invoice were incurred as a result of the industrial stoppage. Qantas should receive ZAR $732.44. 3466: The invoice for accommodation, telephone usage, food and beverage has a check-in date of 30 March 2009 and a check-out date of 31 March 2009. I am satisfied the costs on this invoice were incurred as a result of the industrial stoppage. Qantas should receive ZAR $809.20. 3487 - 3488: The invoices have written on both slips "Delay QF064" and are dated 30 March 2009. I am satisfied that these costs were incurred as a result of the stoppage. Qantas should receive ZAR $740. 3489 - 3492: The invoices are virtually illegible and other than the handwritten notes "Delay Cost Crew 50571.94" and "Allowance Crew Delay". There are no visible dates, invoice amounts, reasons or itemisations of charges on the faces of the invoices. I am not satisfied these costs were incurred as a result of the stoppage. 112 The TWU should be ordered to pay Qantas $96,376 to remedy this aspect of the effect of the industrial action.

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2.11.1 Evidence 113 This matter concerns the costs to Qantas of taking steps to maintain, in a variety of circumstances, the support and business of premium passengers and to deal with complaints of (and mollify) passengers more generally. Evidence on this matter was given by Justin Hyams (Qantas head of people, customer and marketing). In his affidavit dated 1 October 2010 he explained that his area of work, that is Customer Care, is responsible for proactive recovery of customer service by way of a letter of apology with a gesture of goodwill before a complaint is made, proactive recovery after a complaint has been made in an attempt to resolve the issue and regain the customer, responsibility for trying to protect the customer's journey if there has been a significant disruption to the service and limiting the impact on passengers if there is a stoppage. Customer Care monitor Extreme Service Failures ("ESF") which includes any event that impacts significantly on passengers and may involve significant delays, passengers not receiving their baggage and absence of in-flight entertainment or catering on a flight. This is tracked by the Service Recovery Management Database ("SRMD"). A Miscellaneous Charge Order ("MCO") or Qantas gift voucher is then provided to some customers with the letter of apology. 114 Hyams observed that, as a result of the industrial action on 30 March 2009, there had had been 17 domestic sectors cancelled (affecting 1,517 passengers), 176 domestic departures delayed for an average of one hour and 27 minutes (affecting 25,000 passengers) two international sectors cancelled (affecting 279 passengers) and 47 international departures delayed for more than 15 minutes (affecting approximately 11,500 passengers). MCOs to the value of $7,400.00 were issued to passengers on flight QF566 from Perth to Sydney which had been delayed by 47 minutes, had been late arriving in Sydney and, accordingly, the passengers had been unable to collect their baggage. 115 Another aspect of this part of Qantas' operations is the maintenance of a baggage call centre. Hyams gave evidence that overtime was worked by employees in the baggage services call centre totalling 144.5 additional hours worked. There were related expenses for meal allowances and shift penalties which, in total, cost $7,384.12 as a result of the stoppage. 116 Qantas also has a practice of issuing Customer Care Vouchers ("CVO") to customers whose bags remain unclaimed at an airport. There were 200 CVOs of $30.00 each issued to passengers who experienced problems with their baggage and incurred parking and taxi costs. The amount of $6,000.00 was deposited by credit card payment.

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2.11.4 Consideration 119 As with a meal vouchers, I do not accept the TWU's submission that because Qantas was under no contractual obligation to provide these benefits to premium and other passengers, their provision is not a compensable "effect" of the industrial action. If it was a settled practice of Qantas to provide them, the fact that it was not contractually obliged to provide them does not preclude their provision being an "effect" of the industrial action. It was not suggested in cross-examination of the Qantas witness who gave evidence on this topic that it was not a settled practice or was, in some way, an unreasonable one. Nonetheless there is a fundamental difficulty, as I perceive it, with a significant element of this aspect of Qantas' case. 120 Issuing or providing an MCO to a customer creates an opportunity for that customer to redeem it at some later stage. However its redemption does not necessarily result in additional costs being incurred by Qantas at least of the magnitude of the face value of the MCO itself (there may be some additional costs such as, I assume, the cost of additional fuel (marginal though that might be), for example, which is consumed in flying each additional passenger). The MCO could be redeemed on a flight on which there was spare seating (in the sense of seats unsold at the time of flight). While I do not underestimate the difficulty of the task, it would have been open to Qantas to prove whether this was so. In addition, it cannot be assumed (at least in the absence of some evidence indicating otherwise) that the flight taken by the person redeeming the MCO would have otherwise been taken by that person for which he or she would have been prepared to pay a commercial fare. So the issuing of an MCO does not necessarily result in lost revenue equivalent to the face value of the MCO. There is the additional consideration that the evidence was scant about the extent to which MCOs are, in fact, redeemed. It does not appear to me that I can be satisfied an "effect" of the industrial action is the incurring of costs equal to the value of the MCOs issued or indeed any portion of them. 121 As to the CVOs, I am not satisfied that these payments were not already accounted for because they had been recorded in Worldtracer and arise under another head of compensation namely the mishandled baggage. It is simply insufficient for Qantas to submit, as it did, there was no evidence that they were not so recorded. It would have been open to Qantas to prove they were not. It did not do so. 122 As to the overtime worked at the baggage services call centre I accept, on the evidence, that the additional overtime worked (and associated costs) were a direct result of the stoppage on 30 March 2009 and accordingly this cost incurred by Qantas. The TWU should be ordered to pay Qantas $7,384 to remedy this aspect of the effect of the industrial action.

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2.12.2 Qantas' Submissions 124 It suffered loss and damage as a result of the stoppages on 30 March 2009 by incurring additional labour costs relating to technical crew. Nicholas worked on 30 March 2009 when the stoppage occurred, and was requested to work in the Integrated Operations Centre for the duration of the day. His role was to ensure that all aircraft were staffed with the required technical crew and that the staffing was compliant with any industrial instrument or CASA regulation. 125 Nicholas gave evidence that although the stoppages on 30 March 2009 were over relatively quickly, there was a "critical impact to Qantas' operation for the entire day because a significant number of flights were no longer running to schedule". He also gave evidence that there was an ongoing effect on 31 March 2009 as operations were still recovering from the previous day. As a result and as noted earlier, many pilots had their tours of duty extended, and in a number of cases it became necessary to completely re-crew flights. 126 Before the stoppages on 30 March 2009 Nicholas, along with a number of other employees, had already been tasked with recording the financial effects that flight changes had on the business. On 30 March 2009, when the stoppages occurred, Nicholas, with the assistance of other employees, created a specific spreadsheet, exhibit PN-1, to record additional costs that were incurred by technical crew as a result of the stoppages. 127 The evidence in exhibit PN-1 was generated from records in the Aircrew Resource Management System which records movement of both technical and cabin crew all over the world and payroll data maintained by it. Exhibits PN-2, PN-3 and PN-4 are respectively codes used by it when recording the reasons for delays, a spreadsheet containing records of both international and domestic flights delayed as a result of the stoppages on 30 March 2009, and a collection of weather reports for 30 March 2009. 128 The total loss relating to technical crew costs as a result of the stoppages on 30 March 2009 was $125,149. This is comprised of: (a) labour costs from long haul technical crew of $119,679; (b) labour costs from short haul technical crew of $3,303; and (c) additional reserve call out costs of $2,167. These amounts come from the calculations made in exhibit PN-1 to Nicholas' affidavit. It should be noted that these amounts do not include amounts for any meal allowances or "paxing". Paxing is a process by which technical crew are flown first or business class to another destination in order for them to commence or pick up their tour of duty and this process reduces the amount of revenue Qantas can earn through ticket sales, as the seats are not able to be sold to the public for profit. The amount of $119,679 in sub-paragraph 6(a) is comprised of three elements (referred to in the TWU's submissions). 129 During cross-examination, it was put to Nicholas that it had the ability to offset at least some of the additional costs it incurred as a result of the stoppages by requiring technical crew to make up the extra hours. Nicholas agreed that this was possible, however, the costs recorded in exhibit PN-1 were amounts Qantas incurred over and above what it would have in the course of normal operations. Although Nicholas could not provide precise details about how this was done, that alone is not a fair basis upon which any claim for loss and damages should be reduced.

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2.13.1 Evidence 134 The industrial action of 30 March 2009 delayed flights and the crewing (of cabin crew) of some aircraft needed to be reorganised. This was said by Qantas to have resulted in additional costs. Knight provided evidence of her calculations concerning the additional costs for cabin crew in an affidavit dated 1 October 2010 and in a supplementary affidavit dated 13 December 2010. The total estimated for the domestic and international cabin crew was $135,617.14 in the first affidavit and a total amount of $133,296.14 in the supplementary affidavit. The discrepancy was explained by reference to the spreadsheet exhibit KN-1 (attached to the first affidavit) and exhibit KN-4 (attached to the supplementary affidavit) which contains the revised calculations for domestic cabin crew. Knight stated that exhibit KN-1 did not record the overtime and allowances in respect of all domestic cabin crew on 31 March 2009 and 1 April 2009 and only recorded the daily overtime and allowances up to an including 30 March 2009. In the supplementary affidavit Knight explained how the calculations were actually performed and how this differed from the explanation offered in the first affidavit. The other important omission in KN-1 was the costs attributed to technical crew. Exhibit KN-7 contains the calculations for the substitute days off resulting from the stoppage on 30 Mach 2009. An estimate of ten days was provided by John Swan (Qantas operations domestic crew and planning operations). The estimate was based on an annual salary of $85,000 per year, the average salary of a flight attendant. 135 In relation to the calculation of international cabin crews, Knight used the data contained in exhibit KN-8 and created an Excel table to calculate overtime and long range duty hour credits. An estimate was provided for some employees because not all the data was available. The revised spreadsheet was contained in exhibit KN-10 which excluded employees whose data was not included in exhibit KN-8.

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2.13.4 Consideration 140 I generally accept the criticism of the TWU of the methodology used by Knight to found her contention that additional costs were incurred in relation to domestic cabin crew and qualify those costs as a result of the events of 30 March 2009. Her calculations were based on a comparison between what were identified as costs incurred on 30 March 2009 and either average costs for the month of March 2009 or costs incurred on 16 March 2009. However, as demonstrated in cross examination, there were unexplained spikes in these figures and no settled pattern could be discerned which raised a real doubt in my mind about whether this analysis by Knight demonstrated abnormal costs were incurred on 30 March 2009 because of the industrial action and, more significantly, the quantification of the abnormal costs if they had been incurred. I accept that it would not be surprising that some additional costs in relation to cabin crew were incurred because of the delays arising from the events of 30 March 2009. However Qantas is, in this respect, seeking the payment of a significant sum (over $30,000). I need to be satisfied that an abnormal cost was, in fact, incurred. To order its payment, I also need to be satisfied at least on the balance of probabilities that the amount claimed (or even an amount approximating the amount claimed) constituted an "effect" of the industrial action. I am not so satisfied. 141 The evidence concerning costs associated with the re-crewing of a flight to or from Johannesburg is confusing. In her second affidavit Knight attached, as an exhibit (KN-10), a document (a spreadsheet of sorts) she created. It contained a list of delayed flights, the names of the cabin crew on each of them and various costs associated with the payment of each member of the cabin crew. This list (and these particulars) recorded payments to cabin crew on QF63. At the end of the exhibit was a notation described as an "estimate" of the cost of re-crewing flight QF63. In the body of her affidavit, she described as "re-crewing flight QF63 in Johannesburg". QF63 was the flight from Sydney to Johannesburg. There is no doubt this flight (QF63) was delayed (when departing Sydney) by over nine hours. Later in the body of the affidavit she said "QF64 had to be re-crewed prior to returning to Australia" there was no doubt the return flight (QF64) was delayed out of Johannesburg by over 15 hours. Probably her evidence concerned the re-crewing of QF64. 142 In cross-examination certain propositions were put to her about this "estimate" and whether an additional cost had, in fact, been incurred and as to each proposition she said that she could not speculate about the matter. It was clear from her evidence that she had no direct knowledge of whether there had been a re-crewing and, if so, whether payments were made which were out of the ordinary. No primary records were produced to show such additional payments had, in fact, been made. It would be extremely surprising if some record had not existed within the business records of Qantas which could have been retrieved and retained at the time Knight began to gather this information shortly after the events of 30 March 2009. 143 Again, the amount claimed is significant (over $32,000). As noted earlier, I need to be satisfied that this abnormal cost was, in fact, incurred and constituted an "effect" of the industrial action. I am not so satisfied. 144 I am, as to the other amounts addressed by Knight's evidence, satisfied they represent additional costs incurred by Qantas and were an effect of the stoppage on 30 March 2009. The TWU should be ordered to pay Qantas $70,486 to remedy this aspect of the effect of the industrial action.

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2.14.3 The TWU's Submissions 149 There are two major flaws with Qantas' assessment of loss and damage it suffered as a result of increased fuel usage on 30 March 2009. The first was that Qantas used flawed methodology when calculating extra fuel usage and the second is that Qantas failed to take in to account any offsetting savings in the usage of fuel. 150 Arora's methodology was flawed when calculating the costs associated with the stoppage. Arora's methodology attributed both positive and negative departures from the average taxi-in and taxi-out times to the stoppage and it can be expected on any day that taxi-in and taxi-out times will depart from the average with no logical basis to conclude that the differences on 30 March 2009 could be attributable to the stoppage. Arora's evidence attributing some lower than average taxi-in times on 30 March 2009 to the stoppage was "absurd" and when this was put to him, he was unable to give any rational explanation as to why. There were numerous taxi-in times that were higher than the monthly average but still sat within the range of outcomes from the previous four weeks. It was then impossible to conclude then that these departures from average times could have been caused by the stoppage. Also, the significant differences between the taxi-in times during the preceding four weeks to 30 March 2009 makes it clear that there could be many other operational reasons as to why taxi-in times may be extended. In the absence of direct evidence from operational personnel of the connection between taxi-in times and the stoppages on 30 March 2009 Qantas' analysis should be rejected. 151 Qantas has also not taken into account additional savings made by it relating to fuel usage as a result of the stoppages on 30 March 2009. As a result of Qantas cancelling a number of flights on 30 March 2009 it made significant savings on fuel usage as the planes did not fly and did not consume fuel. As there is no evidence that Qantas did not receive or refunded ticket revenue to passengers who had had their flights cancelled and there is no sub-claim seeking to recover any related costs, Qantas then made savings as these passengers were either put on other Qantas flights or flights with other airlines through the use of FIMs. As the TWU does not contest the compensation sought in regards to FIMs issued by Qantas and Qantas seeks to recover the costs of providing accommodation and emergency payments to affected passengers, Qantas' proposition that it lost the profit for the cancelled flights is incorrect. Seventeen domestic flights and two international flights were cancelled following the events of 30 March 2009 and the affidavit of Alfred shows that 186 FIMs were issued as a result of the stoppages on 30 March 2009. These cancelled legs generated savings for Qantas as they were not flown on 30 March 2009. 152 Using estimates from Arora's oral evidence on the amount of fuel that would be normally be used by planes flying the journeys that were cancelled, the TWU estimated that an amount of $142,560 was saved by Qantas as a result of the stoppages. This is inclusive of an estimate of $52,800 for the Los Angeles to New York and return, and a total estimate of $89,760 for the 17 domestic flights that were cancelled (Sydney to Melbourne was used as a basis for the calculations). This amount, along with the $24,488 should not be accepted in relation to taxi-in times and should be reduced from the total claimed by Qantas. In fact, Qantas made a net saving of $131,907 relating to fuel usage as a result of the stoppages on 30 March 2009.

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2.14.4 Consideration 153 Putting to one side, for the moment, the TWU's argument about savings because fuel was not used on cancelled flights, its attack on this aspect of Qantas' case is that the statistical analysis concerning the departures from averages on 30 March 2009 does not, properly analysed, prove any additional fuel was consumed because of the stoppage on that day. The difficulty with this attack is that Arora gave direct evidence that there was significant congestion of aircraft at the arrival gates leading to significant additional taxiing in time on 30 March 2009. Implicit, if not explicit in this evidence, also is that aircraft were remaining at the gate. This direct evidence was not objected to and not challenged in cross-examination (though Arora's analysis of fuel consumption statistics pointing in the same direction was). His direct evidence is entirely consistent with an obvious inference to be drawn from all the circumstances, namely that flights were delayed and sometimes extensively delayed because of the industrial action on 30 March 2009 and, in the result, delayed departing aircraft remained at the gate for much longer periods than they otherwise would have which had the consequential effect that arriving aircraft could not readily and quickly access a gate and remained taxiing to a gate for longer periods than usual. I accept these were consequences of the industrial action on 30 March 2009. It follows, in my opinion, that I can more readily accept, and I do, the statistical analysis undertaken by Arora as demonstrating greater fuel consumption that day leading to a corresponding increase in Qantas's fuel costs. As an amount, this was $35,141. 154 I reject the TWU's argument that a saving represented by the cost of fuel not consumed on cancelled flights should be used to offset this amount and, as I understand the argument, more generally offset amounts which otherwise might be ordered to be paid to Qantas. I have already touched upon this notion of a "saving" and what role it might play in the earlier discussion about additional labour costs for ground staff. But in truth it would be erroneous, in my opinion, to characterise fuel not consumed on cancelled flights as a "saving". Qantas did not save anything. It simply did not expend money on fuel on flights which otherwise would have been flown. I accept that there is the possibility of some double counting in the sense that Qantas did not fly these cancelled flights and did not incur the costs of doing so (for example by having to pay for fuel consumed) but it was able to retain at least some of the income those flights would have generated (income which, in aggregate, may well have covered the costs of the flight including the cost of the fuel) by arranging for passengers to travel on other airlines and issuing FIMs (discussed elsewhere and the subject of an order for payment by the TWU) or by arranging for passengers to fly on other Qantas flights. However the extent to which there has been any such double counting cannot, on the evidence before me, be determined and certainly no analysis of the evidence was undertaken to establish its extent. I should add that I do not underestimate the complexity of the task. However if there was such double counting, it is not to be accounted for (if it is to be accounted for at all) by the crude device of offsetting the cost of fuel not used as a "saving". The TWU should be ordered to pay Qantas $35,141 to remedy this aspect of the effect of the industrial action.

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2.16.2 Qantas' Submissions 161 As a result of the stoppages on 30 March 2009, it suffered loss and damage relating to its freight transporting activities. Nel gave evidence that the losses associated with freight activities consisted of: (a) a claim made by a receiver in respect of a puppy that died (it seems because it remained in the aircraft's hold in adverse conditions for an unusually long period, became critically dehydrated and later died) in the amount of $2,800; (b) compensation paid to Gorman Vernel International Freight Ltd for heat damage and a resulting loss of monetary value to parsnips (the transhipment of which was delayed) being shipped from New Zealand in the amount $1,050; (c) revenue losses as a result of flight QF63 from Sydney to Johannesburg leaving without any freight in its cargo holds in the amount of $15,160; and (d) revenue losses as a result of flight QDF321 from Sydney to Santiago leaving without any freight in its cargo holds in the amount of $19,196. The total of these amounts is $38,206 which it suffered as a loss due to the stoppages on 30 March 2009. It accepted that these losses were incurred by Qantas Freight Enterprises Ltd, a separate corporate entity and wholly owned subsidiary and not directly by it. Nel confirmed this, but gave evidence about the relation ship between Qantas Freight Enterprises Ltd and it: Qantas Freight operates as a separate business entity but is integral of the Qantas group, so all revenues and profits and losses incurred by Qantas Freight Enterprises are integrated into the Qantas group's financial statements at the end of each financial year. 162 Nel gave evidence that in order to calculate the revenue losses relating to flights QF63 and QF321, he used an average total of sales revenue earned each day during the month of March 2009 excluding 30 March 2009. There is no proper basis upon which it could be inferred that this loss attributed to 30 March 2009 was recouped by transporting the delayed freight on flights the following day.

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2.17.1 Evidence 168 Qantas operates a call centre. It claims costs or losses said to be associated with or arising from the increase in the volume of calls on 30 March 2009. The evidence relating to this was given by Alice Koch (Qantas manager online performance) in an affidavit of 30 September 2010 and a supplementary affidavit of 13 December 2010. Evidence was also given by David Schlenker (Qantas manager contact centre, planning and resources) who provided details of the data he provided to Koch from the call management system in an affidavit of 14 December 2010. 169 Koch explained the fees charged for customers using the telesales booking service or for amending an existing booking which are used to offset the labour costs of the call centres. The booking fees were $30.00 for an initial domestic flight booking and $60.00 for an international flight. The amendment fee was $10.00 for domestic flights booked in the call centre, $30 for other domestic flight amendments and $60.00 for international flights. 170 Exhibit AK-1 to the affidavit of Koch (30 September 2010) contained a spreadsheet used to estimate the total cost to telesales of the stoppage on 30 March 2009. The figures used were the "calls offered on 30 March 2009 (29,077), calls offered on 23 March 2009 (26,000), calls handled on 20 [sic] March 2009 (19,545) and calls handled on 23 March 2009 (17,887)". Koch compared the number of calls on 23 March with calls on 30 March 2009 to estimate the number of additional calls (3,077) relating to the stoppage. She said this was a conservative number because the calls on 23 March 2009 were slightly higher than normal because there was an evacuation and a plane crash around that time. To arrive at the total additional cost of $4,691.00, Koch multiplied the additional calls handled (1,658) by 463 seconds (the average handling time) using the average hourly rate of $22.00 per hour. The total cost did not include the loss of passenger revenue from ticket sales. Qantas did not charge the passengers for rescheduling flights on 30 March 2009 because "the rescheduling of flights on 30 March 2009 was due to the TWU stoppage".

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2.18.2 Qantas' submissions 175 Qantas did not claim a specific amount as compensation, but instead asked the court to make a determination based on the evidence available. As a result of the industrial stoppage on 30 March 2009 there were significant disruptions to its network operations. Seventeen domestic and two international flight sectors were cancelled affecting 1,796 passengers, 176 domestic flights were delayed by more than 15 minutes with an average delay of one hour and 27 minutes affecting approximately 25,000 passengers, 47 international flights were delayed by more than 15 minutes with an average delay of three hours and 34 minutes affecting approximately 11,500 passengers, a large number of passengers' bags were mishandled with the subsequent repatriation process taking five days to complete, and accommodation, transport as well as flights with other carriers had to be arranged for and provided to a number of passengers. Additionally, the stoppage impacted its business of providing ramp services to third party client airlines and disrupted its business of transporting freight within and outside of Australia. 176 Hyams gave evidence about a number of customer complaints received by it from passengers who were affected by the events of 2009. Hyams gave evidence that he received a number of complaints from passengers who had had their travel affected by the stoppage who said that they would not fly with it again, would choose to fly with competitor airlines in future or would not recommend Qantas to others. 177 Nicholson gave evidence about customer satisfaction surveys, and in particular the effect that delayed flights had on a passenger's willingness to travel with it again. Exhibited to affidavits were results of surveys undertaken by it comparing delay length to flight satisfaction as well as likeliness to fly with it again. The data used to create these graphs was collected from the period March 2009 to April 2010 surveying approximately 50,000 passengers. The delays to flights as a result of the industrial stoppage were significantly long enough to give rise to impacts upon affected passengers' overall flight satisfaction, willingness to fly with it again and willingness to recommend it to others. This was more apparent in relation to domestic travel than international and it contended that the average delay time of 87 minutes to flights affected by the industrial stoppage on 30 March 2009 could give rise to these effects.

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Penalties 185 Before considering what penalties should be imposed on each of the individual respondents who I have held contravened s 494 in the liability judgment, it is necessary to focus more carefully on how the contravening conduct engaged s 494 and also necessary to refine observations I made in that judgment. That is because an issue has now arisen about whether an individual's participation in the meeting of 25 March 2009 (involving Sheldon, Connolly and Gallacher) constituted one or four contraventions of the section. The starting point for this analysis is obviously the terms of s 494 itself. It spoke of "organise or engage in industrial action". I think fairly clearly the section comprehended conduct of two types: as to the construction of an expression of this character in a section which may create one or a number of offences see, for example, Linehan v Australian Public Service Association (Fourth Division Officers) (1982) 66 FLR 90 at 109-110. The first is organising industrial action and the second is engaging in it. By penalising this conduct, the WR Act was endeavouring to stop industrial action occurring during the currency of a collective agreement. That purpose would be best achieved by treating the section as prohibiting the organising of industrial action whether or not, in fact, it occurred and also prohibiting conduct constituting industrial action if it did occur. Doing either would constitute a contravention of the section. Doing both would involve two contraventions of the section. The difficulty in applying these general statements in the present case arises in the following way. 186 As I mentioned in the liability judgment, the expression "engaging in industrial action" picked up s 4(5) and s 728 and those provisions (and in particular the latter) gave extremely wide content to the expression. Because of this wide content the Ombudsman made a submission that, as I understood it, even though the conduct of each individual on 25 March 2009 of attending the meeting and making certain decisions was one act of organising, because the industrial action on 30 March 2009 can be viewed as four instances of industrial action (an instance at each airport), the very same conduct involved "engag[ing]" in these four instances of industrial action. This conduct therefore entailed four contraventions of s 494 and exposed each individual to four penalties for what they did on 25 March 2009. I do not accept this. 187 If, as I think is the case, the section comprehended conduct of two types then the question must arise whether the expression "engage in" was, in a context where "organising" was separately dealt with, intended to comprehend conduct which is, in substance, the same. Both s 4(5) and s 728 were, in effect or at least analogous to, definition sections in the sense that they supplemented and gave content to words describing conduct elsewhere in the Act. Their application in any particular context must be consonant with that context. It seems to me the operation of both sections in s 494 must accommodate the fact that "organising" is separately dealt with in that section. That would be achieved, as a matter of construction, by treating the operation of both sections as not yielding the result that organising industrial action was also engaging in industrial action. The rationale for doing so is much like the modification, as a matter of construction, of the operation of a definition if the context requires it: see Pierce DC and Geddes RS, Statutory Interpretation in Australia (6th ed, Lexis Nexis, 2006) at 6.62. The conduct of Sheldon, Connolly and Gallacher on 25 March 2009 involved one contravention by each of s 494. 188 Even if the construction of s 494 founding the Ombudsman's analysis was correct I very much doubt that it would be appropriate to treat the events of 30 March 2009 as four instances of industrial action and then work backwards, as it were, to impute to each of the participants in the meeting four separate acts of engaging in that conduct giving rise to four contraventions by each of the participants in the meeting of 25 March 2009. It would, in my opinion, be a perverse result. But even if it is an available analysis the characterisation of the four contraventions by each participant as a course of conduct attracting one penalty is irresistible: Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417. 189 This conveniently leads to a consideration of whether for Sheldon what he did on 25 March 2009 together with what he did on 30 March 2009 was, for the purposes of considering the imposition of a penalty, one course of conduct. Sheldon organised the industrial action when he participated in the meeting on 25 March 2009, he did so again on the morning of 30 March 2009 at the Rowers Club and then engaged in the industrial action (having regard to its extended meaning and the effect of s 728) by speaking at the meeting at SIT. I noted at [361] in the liability judgment that in making the decision on 25 March 2009 to hold meetings at the various airports Sheldon knew that the likely sequence of events to unfold were the events which in fact occurred. That was the essence of his conduct that day which attracts s 494. What he did on 30 March 2009 was to perfect or give effect to the decision which had been earlier made. Doing so added little or nothing to the gravity and effect of the decision he was involved in making six days earlier. His conduct on 25 March 2009 and his conduct on 30 March 2009 were similar and had a common purpose, and to use the language of Lord Diplock in Director of Public Prosecutions v Merriman [1973] AC 584 was conduct which "could fairly be regarded as forming part of the same transaction or criminal enterprise". I proposed to treat the contravening conduct of Sheldon as one course of conduct. 190 The matters which may be considered in imposing a penalty have been articulated in many judgments of this Court by both single judges and Full Courts. One authority of a single judge which is often cited is the judgment of Branson J In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714; 94 IR 231 and, more recently, the judgment of Tracey J in Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426 at [40]. Sheldon was a senior and influential official in the TWU. He was a leader. His support at the meeting of 25 March 2009 for the decision to hold meetings on 30 March 2009 would doubtless have been important in securing that result. Because Sheldon knew that what was likely to occur was what in fact occurred, he probably knew that taking the decision was unlawful conduct (this appears near enough to having been conceded in cross examination when he agreed he appreciated that the union and employees are prohibited from taking industrial action during the currency of an EBA), he knew that the decision and giving effect to it was likely to lead to enormous disruption to domestic and international air traffic, very great inconvenience to the travelling public and financial harm, and potentially significant financial harm, to Qantas. 191 At the commencement of the liability judgment I referred to Qantas' objective of reducing labour costs and the TWU's objective of retaining jobs and existing incomes and conditions of employment. From Qantas' perspective its objective is doubtless viewed as a legitimate commercial one. However equally, from the TWU's perspective, its objective is a legitimate industrial one. Regrettably, the TWU led by Sheldon, elected to pursue its objective by unlawful means. The evolution of Commonwealth industrial law has resulted in the statutory legitimisation of industrial action but only in certain circumstances. The WR Act, as at 30 March 2009, marked out the circumstances prevailing on that day for baggage handlers and other ramps staff employed by Qantas, as circumstances in which industrial action could not be taken. The contravention by Sheldon was a serious one though it is his first contravention. The penalty should have a specific and general deterrent effect. Sheldon has shown only limited contrition. The respondents repeat the expression of contrition advance before Besanko J in Fair Work Ombudsman v Transport Workers' Union of Australia [2010] FCA 768 at [29]-[30]. His Honour accepted this was an expression of contrition. I do likewise though I note there is no expression of contrition about damage caused to Qantas. The common expression of contrition is limited to inconvenience caused to the travelling public. The maximum penalty which can be imposed on individuals is 30 penalty units ($6600). The seriousness of Sheldon's contravention should be reflected in the penalty. I proposed to impose a penalty within the upper range, namely $5,000. 192 In relation to Gallacher, much the same as appears in the preceding paragraph can be said of him. He was the President of the TWU. He was a leader. However his participation in the meeting of 25 March 2009 was the only conduct he engaged in contravention of s 494. He no longer is a union official so the need for specific deterrence is less though I do not accept that this factor (or any other factor) should lead to no penalty being imposed. I propose to impose a penalty of $4,000. 193 In relation to Connolly, the observations I made about Sheldon's participation in the meeting of 25 March 2009 apply, with one qualification, to him. He had a significant role in relation to the representation of the membership in the airline industry and in the events which culminated in the industrial action on 30 March 2009. While in that sense he had a leadership role, it was not of the same character as Sheldon. While his views at the meeting on 25 March 2009 would have been important, I doubt that they would have been as influential as those of Sheldon. Like Sheldon, Connolly also engaged in contravening conduct on 30 March 2009. Also, for the reasons given in relation to Sheldon, Connolly's conduct on 25 March 2009 and 30 March 2009 should be treated as the one course of conduct. He has shown limited contrition. This is his first contravention. I accept, as Qantas submitted, that as an aggravating factor (and this is true of Burton and Loader as well) he was in a position to engage in the contravening conduct because his entry to the airport and ability to conduct a meeting was facilitated by Qantas. The penalty should have a specific and general deterrent effect. I proposed to impose a penalty of $3000. All the factors which influenced my determination of the penalty for Sheldon are applicable to Connolly save for his leadership role. 194 Pieri attended the meeting at the Rowers Club and orchestrated the attendance of members at the meeting in front of SIT. Again, to use the language of Lord Diplock in Director of Public Prosecutions v Merriman it was conduct which "could fairly be regarded as forming part of the same transaction or criminal enterprise". I propose to treat the contravening conduct of Pieri as one course of conduct. Having regard to the conclusions reached in the liability judgment about Pieri's conversation(s) with Tenkate (see, in particular, [118]), Pieri knew at the beginning of the day on 30 March 2009 that events were likely to unfold as they did. While his conduct concerned only Sydney, he knew that there would be serious disruption at a major international airport in Australia with the consequences for the travelling public and Qantas discussed earlier in relation to Sheldon. Pieri was instrumental in creating the circumstances which led to that disruption. It is his first contravention. He has shown limited contrition. The penalty should have specific and general deterrent effect. I proposed to impose a penalty of $2,500. 195 Burton's position is slightly different. The office he held within the TWU was not of the same order as those held by Sheldon, Gallagher and, to a lesser extent, Connolly. But his local influence was doubtless significant. While he had not been one of the architects of the industrial action Australia wide, he failed, in Perth, to ensure a skeleton crew was in place and used inflammatory language. He knew that once everyone was in the lunchroom they would probably be docked four hours pay. In other words, Burton had more than an inkling that what occurred in Perth, would occur. He facilitated its occurrence. It is his first contravention. He has shown limited contrition. Again, the penalty should have a specific and general deterrent effect. His responsibility for their serious consequences of the industrial action concerns its effects only in Perth. This is, I think, relevant. I proposed to impose a penalty of $2,000 on Burton. 196 Loader's position is different yet again. What I have said about the office Burton held, applies equally to Loader. His contravening conduct was less egregious in the sense that he commenced to conduct the meeting in the normal way and was not initially intent on causing disruption. When disruption did occur he persisted with the meeting and used inflammatory language. He had no broader role. It is his first contravention. He has shown limited contrition. He no longer holds office within the TWU and this is relevant to specific deterrence. His responsibility for the serious consequences of the industrial action concerns its effects only in Adelaide. Again, I think this is relevant. I proposed to impose a penalty of $1,500 on Loader. 197 The TWU is, by statute, vicariously liable for each of the contraventions discussed to this point as well as the contravening conduct of delegates who requested members to attend each of the meetings. Probably this is best treated as six contraventions. Whether this is correct, however, probably does not much matter as I view all the contraventions as part of the same course of conduct by the TWU. 198 In organising the meeting on 25 March 2009 and in making the decision to hold the meetings, the TWU can be taken to have had the same understanding of what was likely to occur as the participants. In other words, the die was cast by the taking of the decision. All other acts imputed to the TWU to give effect to the decision did no more than bring about what the decision makers contemplated would occur. The TWU can be treated as having known that taking the decision was unlawful conduct and that the decision and giving effect to it was likely to lead to enormous disruption to domestic and international air traffic, very great inconvenience to the travelling public and financial harm, and potentially significant financial harm, to Qantas. Yet again, to use the language of Lord Diplock in Director of Public Prosecutions v Merriman all other acts imputed to the TWU constituted conduct which "could fairly be regarded as forming part of the same transaction or criminal enterprise". 199 The only matter additional to those I have discussed in relation to individual respondents which is relevant to determining penalty is the fact that the TWU has been found to have twice contravened the Act by a judge of this court (Besanko J in the judgment referred to earlier) and once by a Federal Magistrate ([2010] FMCA 826). The contravening conduct occurred respectively on 12 December 2007 and 16 February 2009 and the judgments were given on respectively 23 July 2010 and 2 November 2010. The respondents submitted that because no determination had been made as at 25 and 30 March 2009 that the conduct was contravening conduct, the fact of contravention should not be brought to account at least as a significant element in determining the extent of the need for specific deterrence. There is some force in this submission though equally (in the absence of findings that the earlier contraventions were inadvertent) the fact of prior contraventions seems to me to be relevant. 200 The maximum penalty for any contravention by a corporation is 600 penalty units, which is presently $33,000. The TWU's contravention was serious for the reasons I have discussed in relation to individual respondents and Sheldon in particular. I propose to impose a penalty of $20,000. The respondents made a submission that the fact they will also be ordered to pay Qantas a considerable sum to remedy the effects of the contravening conduct should influence the amount of the penalty. I regret to say that for my part I do not see any principled basis for doing so. The sum to remedy the effects of the contravening conduct serves that very purpose. The payment to Qantas of the penalties serves another and quite distinct purpose, namely to encourage individuals to bring, in appropriate circumstances, proceedings of this type. 201 I have concluded that an order should be made that the penalties be paid to Qantas and not into consolidated revenue as submitted by the Ombudsman. The former approach was advanced by Qantas and supported by the respondents. There is a practical reason for taking this approach as well as a reason founded on principle. The practical reason is that the penalties should be imposed in the Qantas proceedings given that two respondents (Pieri and Gallacher) to those proceedings who will be ordered to pay penalties are not respondents in the Ombudsman proceedings. As a practical matter, this rather suggests that any order directing the penalties to be paid to the prosecutor should be in favour of Qantas. As to principle, the rationale for making such an order (adverted to briefly in the preceding paragraph) was discussed by Finkelstein J (putting aside his Honour's observations about windfalls) in CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228 at 232 and see also Rojas v Esselte Australia Pty Ltd (No 2) (2008) 177 IR 306 at 326 together with the judgment of the Full Court (and cases cited therein) in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357. Qantas has assumed the organisational and financial burden of prosecuting those proceedings and, in those circumstances, it is appropriate penalties be paid to it. I understood the Ombudsman to accept that if I reached this conclusion that I should order that his proceedings be dismissed. 202 Qantas seeks declaratory orders declaring what the contravening conduct of each of the respondents was. For my part, I do not see the need to make such orders. I hope I have described with sufficient clarity and precision in these and the earlier reasons what each respondent did that was conduct contravening s 494. That, I think, is sufficient in the circumstances.

[114]

4.1 Submissions on costs 203 It was not an issue that, as a general proposition, what costs orders may be made in these proceedings is governed by s 824 of the Act. That section provides: (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first mentioned party instituted the proceeding vexatiously or without reasonable cause. (2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs. (3) In subsections (1) and (2): costs includes all legal and professional costs and disbursements and expenses of witnesses. 204 While accepting that generally Qantas could not be ordered to pay their costs (which, s 824 aside, would have been unlikely given that the respondents failed in their defence of a central element of the proceedings), the respondents nonetheless sought special costs orders in relation to the proceedings in so far as they concerned the respondents Spring and Magree and also a special costs order arising from the unsuccessful case alleging nuisance as well such an order in relation to the unsuccessful case under the Trade Practices Act. 205 I think I can deal briefly with the respondents' argument that a costs order can be made in their favour in relation to Qantas' Trade Practices Act claim which did not succeed. It was submitted there was power make a costs order (and it should be made because costs follow the event) because s 824(1) had no application to a claim under another federal law even if brought in proceedings making a claim under the Workplace Relations Act. Bahonko v Sterjov (2008) 166 FCR 415 was said to establish this limit on the reach of s 824. I disagree. The Full Court was, in that matter, dealing with a most unusual situation. It had before it two proceedings. Though they had been consolidated, they remained separate proceedings. Accordingly only one of the proceedings attracted the operation of the section limiting the power to award costs. The other was unaffected in the sense that the section had no application to it. It was in those latter proceedings that the unconstrained discretionary power to award costs could be invoked. The judgment stands for nothing more notwithstanding the width of some of the language used. The orthodox approach, as I apprehend it, is that s 824 operates in relation a proceeding in which any claim is advanced as part of a matter constituted by the entire controversy between the parties to that proceeding. I think so much is apparent from at least the judgment of Black CJ and Jessup J in Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62 at [86] and [380] respectively. 206 In so far as the respondents Spring and Magree were concerned, the gravamen of the argument was that from the outset there was no case of substance at all which could be maintained against either of them, but Qantas persisted in its case against both of them. In summary, the circumstances relied on by respondents were these. In relation to Spring, Qantas ultimately abandoned the case but only after a no case submission was foreshadowed, a letter written and submissions prepared and forwarded to Qantas' lawyers. In relation to Magree, Qantas did not resile from prosecuting its case against him notwithstanding that, it was submitted, at the end of the day there was no evidence on which a finding of contravention of s 494 might be made against him and there never had been (at least on the facts alleged in a statement of facts prepared by Qantas). Again a letter had been earlier written inviting Qantas to discontinue the proceedings against Magree. 207 The respondents submitted these circumstances engage both the proviso in s 824(1) (institution of proceedings without reasonable cause) and the precondition for an order under 824(2) (the prosecution or continued prosecution of the case against them (particularly after correspondence was exchanged in December 2010 about the position of both) was an unreasonable act). They noted that it has been held that an application that had no substantial prospect of success is incompetent or hopeless would be comprehended by the expression "without reasonable cause": Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257. For my part, I accept that the proceedings against Magree and Spring were barely justified certainly with the benefit of hindsight and that Qantas could have brought a greater measure of judgment to bear in identifying respondents. However I accept, as Qantas submitted, in relation to Magree that there are observations in some authorities which would suggest an extremely wide operation for s 494 and, at the outer reaches suggested by those observations, Magree's conduct may have been caught by the section. As for Spring, I accept Qantas' submission that there was some evidence in one of the affidavits (Howieson) which might remotely have led to a finding of him having engaged in contravening conduct. I do not propose to make costs orders against Qantas in relation to its case against these two individuals. I am not satisfied either the proviso or the precondition has been enlivened. 208 Different considerations arise in relation to Qantas' case based on the tort of nuisance. As the evidence unfolded, the case was not even barely arguable. But that should have been apparent to Qantas at the outset as it should then have had a reasonable appreciation of what facts it could prove (or not prove) to support that claim. I am inclined to think that the bringing and maintenance of that cause of action constituted an unreasonable act. But, if so, should I exercise the discretionary power to make a special and specific costs order, by ordering Qantas to pay the respondents costs of defending that part of the proceedings concerning the case based on the tort of nuisance? I think, on balance, I should not. 209 The costs order sought by the respondents is that Qantas pay 10% of its total costs to provide for them having had to defend the proceedings against Spring and Magree as well as the case based on the tort of nuisance. I have already rejected the argument that the first and second elements (arising from the case against Spring and Magree and the Trade Practices Act claim) should result in a costs order. The factual contest which might be thought to have concerned the nuisance case alone (and resulted in the respondents incurring additional costs) was extremely limited in compass, if not non-existent. It was reasonable for Qantas to lead evidence about the totality of events at SIT before, during and after the meeting outside Santos as part of painting a comprehensive picture of events that day which necessarily would have included evidence about the blocking of the road after the meeting. It is true that the respondents were required to prepare written submissions concerning the nuisance case and did. But the submission was extremely brief and did not involve any particularly detailed or complex legal or factual analysis. They also invoked the defence of justification which probably was as arguable as Qantas' case on this topic. That is, not even barely. Such additional costs as the respondents may have incurred in preparing that submission would be absolutely minimal. In these circumstances no special costs order should, in my opinion, be made. 210 I now consider the position of the Ombudsman. Its proceedings were commenced well after the institution of the Qantas proceedings. The respondents made an application for an order staying the Ombudsman's proceedings. That application was resolved (with a little urging from me) on the basis that the Ombudsman furnished an undertaking in relation to costs. The undertaking was in the following terms: A. He will not seek discovery from any Respondent without the leave of the Court. B. He will not at trial call any witness or otherwise adduce any evidence without the leave of the Court. C. He will not at trial cross-examine any witness without the leave of the Court. D. He will pay to the Respondents their party-party costs incurred in this proceeding where such costs are additional to the costs incurred by the Respondents in defending or meeting the claims in proceeding NSD340/2009 (the Qantas proceeding), save in relation to: (i) the determination of issues, raised in the Further Amended Application and Further Amended Statement of Claim in matter NSD 1204 of 2009, which are not raised in the Qantas proceeding; and (ii) the pursuit of factual or legal issues common to this proceeding and the Qantas proceeding, to the extent that the Court determines was reasonable. 211 The reason advanced by the Ombudsman at the time for bringing his own proceedings notwithstanding that the Qantas proceedings were on foot was that the industrial action of 30 March 2009 was of a type to warrant civil penalty proceedings against appropriate respondents. There was an apprehension, so it was said, the Qantas proceedings might settle with the result that those centrally involved in the industrial action would, in effect, go unpunished. 212 The respondents want the Ombudsman to meet their costs of defending its case against them. A number of bases were advanced. The first was that the Ombudsman proceedings were commenced without reasonable cause. The second was that the prosecution of the proceedings constituted an unreasonable act. The third was that it was not reasonable for the Ombudsman to have pursued factual and legal issues common to the Qantas proceedings and accordingly the Ombudsman was bound by its undertaking to pay party-party costs additional to those incurred in defending Qantas' case. 213 I am not satisfied the Ombudsman proceedings were commenced without reasonable cause. The Ombudsman is, amongst other things, a regulatory agency with the power to bring proceedings of this type. In appropriate cases, he can be expected to do so. Counsel for the Ombudsman was unable, during argument about costs, to satisfactorily explain what time limits there are in relation to bringing proceedings of this type and I can assume the Ombudsman proceedings were not commenced when they were because there was concern about the proceedings being time-barred. However I think it was reasonable for the Ombudsman to have initiated its proceedings for the very reason given. 214 However it was, in my opinion, entirely unnecessary for the Ombudsman to have thereafter actively participated in the proceedings thereby substantially duplicating (in ways I mention shortly) the prosecution of the case by Qantas. Necessarily the respondents had to assume the burden (with the associated legal costs) of answering or dealing with any step that the Ombudsman took (steps sustained by public funds) in addition to what was being done by Qantas in prosecuting its case itself. I accept that the Ombudsman played an extremely limited role in the hearing. However it did call three witnesses who, in my opinion, added nothing of substance to Qantas' case. It filed extensive final written submissions (over 100 pages) and five related detailed chronologies (of a little over a further 80 pages). Some, though not extensive, oral submissions were made by senior counsel. Again these submissions added nothing of substance to Qantas' submissions though I acknowledge different perspectives were advanced and some of the legal issues dealt with in greater detail than by Qantas. That said, Qantas' final submissions were over 300 pages and dealt, in great detail, with the factual and legal issues raised in the proceedings. 215 Of course had Qantas settled with the respondents (a possibility which must be acknowledged as not fanciful - indeed I twice ordered mediation) the Ombudsman would then have been able to take such steps as advised to pursue his case if that remained the desired course. But there was no justification, in my opinion, for the Ombudsman taking any role in prosecuting in any way a case against the respondents in the absence of such a settlement. 216 I am not prepared to say, as I was invited to by counsel for the Ombudsman, that such steps as it did take were "reasonable" for the purposes of paragraph (ii) of the undertaking. They were not. I have power, for these same reasons, to make a costs order because s 824(2) has been engaged. While I would hope that such an order would be unnecessary, I propose to make one to give the parties access to processes of taxation if they cannot agree on the quantification of the additional costs incurred by the respondents. That may be necessary because I do not propose to make the costs order sought by the respondents (that they receive 10% of their costs of the proceedings generally from the Ombudsman) which would, on my part, be little more than speculation about the actual costs. I certify that the preceding two hundred and fifteen (216) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

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Judgment (114 paragraphs)

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Legislation Cited (3)

Cases Cited (17)