Roohizadegan v TechnologyOne Limited

KERR J: 1 This matter concerns an interlocutory application filed on 20 October 2020 by the Respondents to the substantive proceeding, TechnologyOne Limited and Mr Adrian Di Marco. The application is supported by an affidavit of Ms Megan Moffitt Pool. In that application, orders were sought that the hearing of the interlocutory application be expedited and that paragraphs 1 to 8 of the orders that I made on 2 October 2020 be stayed until 16 November 2020 or until further order. In response to that affidavit, the successful Applicant in the substantive proceeding - the Respondent to the interlocutory application - filed an affidavit of Mr Jacob William White dated 20 October 2020. 2 When the interlocutory application first came before the Court, after hearing argument and commending to the parties that they might take instructions as to possible consent orders, I made interlocutory orders in the following terms: 1. The execution of orders 2, 3, 4, 5, 6 and 8 of the orders made on 2 October 2020 be stayed until the further hearing of the Respondents' interlocutory application for a stay, as set down at 9:30am on Monday 26 October 2020. 3 It is appropriate now to provide some background to this matter. Rule 39.02 of the Federal Court Rules 2011 (Cth) (the Rules) provides that a sum that the Court orders to be paid must be paid with 14 days of the service of the relevant order. I gave judgment in the substantive proceeding on 2 October 2020. The First and Second Respondents therefore became liable to pay the Applicant the sums due under the orders that I made on that date on or before 16 October 2020. 4 The affidavit of Ms Moffitt Pool that is filed on the interlocutory Applicants' behalf outlines that before the filing of the interlocutory application, there had been negotiations between the parties. In those negotiations, the interlocutory Applicants had sought to secure the interlocutory Respondent's agreement to proposed consent orders that would have had substantially the same effect as the orders for which it subsequently pressed in its interlocutory application. 5 On 15 October 2016 - that is, one day before judgment sum became due and payable by the interlocutory Applicants - Mr Roohizadegan indicated that he was then minded to give his consent to orders that they were then seeking. However, it subsequently became clear that any instructions that he had given in those regards were revoked. That is the context in which this matter came before the Court. 6 When the matter first came before the Court I indicated to Mr Wood QC, appearing for the interlocutory Applicants with junior counsel Mr Jellis, that I took no issue with the fact that the interlocutory application was filed outside of the time provided for the routine payment of sums due under a money order. I indicated that I accepted there was a plausible and proper basis for the delay in that regard, being that an earlier indication had been given by the interlocutory Respondent to which his clients had been entitled to have regard in forming a view that such an application would not be required. Nonetheless, I observed that I apprehended the order now being sought to be in the nature of an order for a stay of the enforcement or execution of the orders that had been made rather than an order in the terms provided for in the interlocutory application. 7 In that regard, Mr Wood indicated that that was one way of viewing what was before the Court. However, he articulated a different premise as would support the orders sought. That premise was that the Court was being asked to make an order that would merely facilitate the interlocutory Applicants seeking further orders in due course before the Full Court to stay the operation of the judgment below. In that regard Mr Wood directed my attention to what he submits to be relevant principles established in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1 (Patrick Stevedores), referring the Court in particular to pages 32-33 and paragraph [35] of that decision. 8 I do not doubt that this Court has the power to enjoin action to protect its authority and power. However, the power that this Court has exercised was to make the orders that are now sought to be stayed. Further, the passages of Patrick Stevedores to which the Court was referred footnote a case regarding the stay of a death penalty that would otherwise have been executed the following morning. To apply those principles to the consequences that routinely follow the making of money orders in this Court, in circumstances where the prima facie position is that the successful party is entitled to receive those funds and where courts regularly have determined applications for stays on that principle, seems to me to inflate what is before the Court beyond that which is consistent with established authority. 9 Established authority, as I understand it, is that if a primary judge is asked to stay the operation of its orders they may do so. In doing so however the primary judge should have regard to the principles established in a series of cases, including principally the frequently cited decision of Maxwell J of the New South Wales Supreme Court in Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184 (Andrews) and the decision of Heerey J in Henderson v Amadio Pty Ltd (No 2) (1996) 65 FCR 66 (Henderson). When this matter first came before the Court, Mr Wood sought to distinguish those cases on the basis that they were not decisions of judges at first instance. Rather, they were decisions made in the exercise of the jurisdiction of appeal courts. Reading those decisions reveals that, self-evidently, that is not the case. 10 In Andrews, the trial judge had conducted a jury trial in respect of defamation matters. After the entry of judgment in favour of the plaintiffs, each defendant sought a stay "on the usual grounds". His Honour did not think it necessary to consider whether there were any such "usual grounds", drawing in that regard particular attention to the decision of the House of Lords in Barker v Lavery (1885) 14 QBD 769. In that case it had been held that an order would not be stayed unless evidence were adduced to show that the respondent to the appeal would be unable to pay the amount levied by execution if the appellant were to succeed. 11 His Honour then considered carefully the relevant principles. I draw attention in particular to those set out at pages 187-188. His Honour took the view that on the facts of that case an appeal on the merits had little prospect of success, but that the defendants had "reasonably arguable grounds of appeal on the issue of damages". Thus, having regard to what his Honour thought to be the possibility that a lesser amount of damages might be awarded on appeal his Honour made orders on condition that the applicant for a stay pay certain sums to the plaintiffs as a condition of the stay being granted. I take it as not being relevantly in dispute that the court has the power to make such an order conditional upon part payment. 12 In Henderson, Heerey J addressed applications that effectively sought stays of enforcement in relation to a matter in which extensions of time to seek leave to appeal had been sought and obtained. His Honour not only considered the merits of the matter as his Honour saw them, but also made remarks as to the principles that govern circumstances in which leave to stay the enforcement of a money judgment should be made with respect to individuals as against corporate parties. His Honour took the position that absent any evidence that a party would not have the means to repay funds paid out in consequence of a money order or that there would be some risk of dissipation, such an order should not be made. I take it that that principle is not relevantly subject to challenge. That is the prima facie position. It is as established in Henderson, and I do not take Mr Wood to contest that that is so; his issue is with the applicability of those principles to the present application. 13 Having regard to those cases, at the time when this matter earlier came before me I drew Mr Wood's attention to the prospect that it might be possible that his client would consent to give an undertaking as would secure to Mr Roohizadegan a partial payment of the sum he was owed. Specifically, I noted that in evidence in these interlocutory proceedings is the circumstance that TechnologyOne Limited had put aside in its own financial reserves a sum of $1.6 million in respect of these proceedings. It had given notice to the stock exchange to that effect. I indicated that although I was necessarily speaking on a conditional basis, as I was then presently advised were such an undertaking to be given I would be minded to make the orders sought. Unfortunately, no such undertaking proved possible of being secured. 14 When the matter came back before the Court this morning, Mr Wood provided different undertakings of which counsel for the interlocutory Respondent Mr Tracey (appearing with junior counsel Mr Minson) indicated he had not previously been advised. The substance of those undertakings were that the interlocutory Applicants would undertake to file by close of business on Monday 26 October 2020 a notice of appeal from the orders made by me on 2 October 2020, and an application for a stay of those orders pursuant to r 36.08 of the Rules. The interlocutory Applicants would also undertake to take all reasonable steps to enable the application for a stay to be heard and determined as soon as the business of the Full Court allowed. 15 I then heard further submissions. However, the position remained as it had been when the matter previously come before me. Mr Wood did not advance any particulars of any basis on which it might be asserted that I could conclude that there was a reasonably arguable appeal point. Nor did Mr Wood provide any evidence as to suggest that funds, if paid to Mr Roohizadegan, would be squandered or otherwise be incapable of being repaid. 16 I accept that when the interlocutory application first came before the Court, Mr Wood drew attention to certain passages in my reasons in the substantive proceeding (Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407) that went to evidence that as at the time of his termination in 2016, Mr Roohizadegan had become totally incapacitated to work. Those passages to which I was so referred were: paragraph [460], paragraphs [824]-[826], pages 262 and 263, page 264 at paragraph [833] and paragraph [1033]. I do not think it at all contentious that since that time, Mr Roohizadegan has indeed had no earning capacity. 17 I was also referred to the transcript of the hearing in the substantive proceeding, at pages 237 to 239. That part of the transcript relates to circumstances of which Mr Roohizadegan gave evidence whereby he had explained to his former CEO that he was about to incur some significant expenses about a year before he was ultimately dismissed. He then gave evidence that he had incurred financial liabilities to a builder in relation to the construction of premises with which he had contracted to proceed. However, the evidence went no further and did not suggest that he was presently impecunious. Nor did it suggest that he was under any liability as would mean that a third party would be entitled to claim any part of any funds that were paid to him. 18 Counterbalancing that, the reasons that I gave in my primary judgment establish that it was uncontentious that Mr Roohizadegan had had a significantly successful commercial career until his dismissal and that during his period of employment with TechnologyOne he had made very considerable sums of money. That, of course, ultimately fed into the scale of the award, which Mr Wood submits is large, such as bears upon the balance of convenience in these proceedings. 19 It is necessarily invidious that a judge at first instance should have to consider whether he or she may have committed appellable error and the prospects that that might be identified on appeal. That however seems to be the inevitable circumstance as faced by judges of this Court when an application for a stay of enforcement is made prior to a matter coming before a Full Court, as was the circumstance that confronted Heerey J in Henderson and Maxwell J in Andrews. In this case, the position is made more difficult by the fact that even the outline of what is asserted to be appellable error has not been particularised or condescended to by the interlocutory Applicants. 20 Doing my best, as I must and as was the case in Andrews, I would think it not likely to be the subject of contest that many of the sums awarded are truly in dispute if the primary judgment correctly attributes liability to the Respondents. 21 Nor is it suggested that the Court proceeded on a basis of a misunderstanding of the law. In respect of both the basis of the claim under the Fair Work Act 2009 (Cth) (Fair Work Act) and the contract claim, I take it to be uncontentious that the parties were substantively agreed as to the legal principles to be applied. They are the principles that I applied in the primary judgment. 22 In respect of the amounts awarded, that ordered in respect of compensation for forgone share options was an agreed sum. So too was the sum to be awarded in respect of damages for breach of contract. What appears to me more likely to be the subject of possible contention on any appeal is the amount that the First Respondent was ordered to pay to the Applicant for future economic loss. Given that, inevitably, such awards are matters of judgment it cannot be gainsaid that a ground of appeal might be advanced as would put that sum in issue: albeit that the accountants who provided the basis for the calculation of that sum ultimately did so on an agreed basis. The degree to which that sum should be reduced for contingencies would be, I anticipate, a matter open to contention. 23 As to the findings of fact that the Court made, to a substantial degree the relevant question turned on the application of the presumption provided for by the Fair Work Act and the Court's findings in respect of the witnesses' credit. There were also findings made and inferences drawn on the basis of contemporaneous documents. I do not suggest that those findings are immune from review. I am however not provided with any basis on which to understand in what circumstances and in what particulars any claimed error in those regards might be asserted. In respect of findings made as to witnesses' credit, the observations made in Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 55 at paragraph [43] provide a reason for the Court to assume that there would be some caution in reviewing such findings. That, of course, is not the case with respect to findings or inferences drawn in respect of contemporaneous documents. 24 I proceed on the basis that where an appeal lies as of right, consideration going to the prospects of success necessarily must be limited: see the decision of Besanko J in Huang v Deputy Commissioner of Taxation [2020] FCA 1518 at [12]. It would be invidious for me to suggest that the prospective appellants have no reasonable prospects of success beyond those to which I have given attention in the preceding paragraphs, and I proceed on the basis that I assume that the prospective appellants may have some reasonable prospects of success: while also having regard to the fact that the successful Applicant has a prima facie entitlement to have access to monies ordered to be paid to him. 25 After I heard further from respective counsel this morning, I facilitated a further adjournment to enquire as to whether there might be some prospect of agreement as would avoid the Court being required to make an all-or-nothing decision in relation to this application. I invited the parties to consider whether an undertaking might be given and accepted as to the provision of funds into the interlocutory Respondent's hands on condition that they be set aside on the basis that the relevant account would be accessed only for the amounts earnt by way of interest upon that sum: subject of course to any further orders that might be made by a Full Court. Again however, negotiations proved unsuccessful. 26 After the adjournment, I was therefore presented with parties that were determined to press their respective interests. In those circumstances, in addition to the undertakings that Mr Wood gave to the Court this morning, upon resuming in the afternoon Mr Wood offered a further undertaking on behalf of the prospective appellants. He undertook that by close of business tomorrow the First Respondent would pay into an interest-bearing trust account the sums due and payable to the Applicant. I accept that that is, on its face, a material consideration going to the balance of convenience. However, that undertaking would do nothing as would displace the prima facie position that it is the Applicant in the primary proceeding that is entitled to the benefit of those funds: subject to any contrary order that is made. 27 The parties being unable to find a way forward by consent it seems to me on the basis of established authority that I should dismiss the interlocutory application, there not being established on the evidence before me anything that would entitle me to evaluate what is asserted to be the likelihood of success in any appeal that might be advanced beyond the matters to which I have referred myself above, and in the absence of any evidence - notwithstanding the opportunity that has been available through time to put on any such evidence - that the successful Applicant would squander any funds provided to him as are his present entitlement or be unable to repay them should an appeal brought by the Respondents be ultimately successful. 28 I regret that the parties between them have had an incapacity to find a common-sense commercial solution to this matter. In the end however, I am not persuaded that the position that Mr Wood submits applies when a party applies for a stay pending determination of an application it would wish to make before a Full Court has any different character to that which applies in the generality of cases where a party is awarded a money sum by way of damages and payment is resisted and orders are sought to restrain the requirement of payment pending appeal. 29 The Rules envisage that a further application for a stay can be made to the Full Court. However, they do so in terms that identify that such an application may be made notwithstanding an order to the contrary having been made by the court below. That will be the circumstance facing the Full Court if I dismiss this interlocutory application, and the foreshadowed application is brought. 30 I accept that a proceeding to review my interlocutory decision of today (if available) or an application before a Full Court once an appeal has been filed is in prospect of being brought on with some urgency. However, as Mr Minson said in submissions when the interlocutory application first came before the Court, such a prospect is inherent in the manner in which the Rules are structured. For that reason, I delivered oral reasons and have provided reasons revised from the transcript as soon as conveniently possible. 31 Accordingly, I dismiss the interlocutory application before me. I will order that the costs of the application be the subject of submissions to be provided in accordance with the timetable that has been set for the costs submissions in relation to the substantive proceeding. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kerr.