Transport Workers' Union of Australia v Registered Organisations Commissioner

THAWLEY J: 1 On 2 February 2018, Perram J made two declarations and an order in the following terms: THE COURT: 1. DECLARES that in contravention of subsection 231(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) ('RO Act'), the Respondent failed to keep a copy of the register of members as it stood on each of the following dates: (a) 31 December 2009 in respect of the New South Wales Branch of the Respondent (the NSW Branch); (b) 31 December 2010 in respect of the NSW Branch; (c) 31 December 2011 in respect of the NSW Branch; (d) 31 December 2012 in respect of the NSW Branch; and (e) 31 December 2013 in respect of the Western Australia Branch of the Respondent. 2. DECLARES that in contravention of subsection 172(1) of the RO Act (and equivalent provisions of the predecessor legislation), on each of 20,907 occasions, the Respondent failed to remove from its register of members the names and postal addresses of each of 20,907 persons who had not paid their membership dues for a continuous period of 24 month since the amount became payable, within the ensuing 12 months. 3. ORDERS the Respondent to pay a civil penalty of $271,362.36 to the Commonwealth within 21 days hereof. 2 Order 3, namely that the respondent pay a civil penalty to the Commonwealth of $271,362.36 within 21 days of the date of his order, expired on 23 February 2018 - see: r 1.61 of the Federal Court Rules 2011 (Cth) (Rules). 3 On 23 February 2018, a notice of appeal from the judgment of Perram J was accepted for filing. The notice of appeal, which was dated 22 February 2018, contained the following grounds: 1. The Appellant was denied procedural fairness by reason of the Court below not disclosing that it proposed to depart from the position of both parties that a single penalty should be imposed for the contraventions of s 172(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) (and the equivalent provisions of preceding legislation) by the Appellant. 2. The Appellant was denied procedural fairness by reason of the Court below not disclosing that it proposed to depart from the position of both parties that a single penalty should be imposed for the five contraventions of s 231(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) by the Appellant. 3. The Court below erred in not accepting the position of the parties that a single penalty should be imposed for the contraventions of s 172(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) (and the equivalent provisions of preceding legislation) in circumstances in which it was found that legal and factual elements of the contraventions were interrelated, the contraventions did not involve conscious disobedience, the record-keeping deficiencies had been remedied and the consequences of the contraventions were no more than neutral. 4. The Court below erred in not accepting the position of the parties that a single penalty should be imposed for the four contraventions of s 231(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) in New South Wales in circumstances in which it was found that legal and factual elements of the contraventions were interrelated, the contraventions arose by reason of oversight, the record-keeping deficiencies had been remedied and no adverse consequences of the contraventions had been identified. 5. The Court below erred in failing to reduce the total penalty to be imposed with respect to the contraventions of ss 231(1) and 172(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) by application of the totality principle. 6. The total penalty imposed of $271,362.36 is manifestly excessive in light of findings made by the Court below. 4 In the notice of appeal, the appellant sought the following orders: 1. Order 3 of the Federal Court be stayed until such time as this appeal is heard and determined. 2. Appeal be allowed. 3. Order 3 of the Federal Court made on 2 February 2018 be set aside. 4. In lieu thereof, the Full Court assess the penalty to be imposed or, in the alternative, the determination of penalty be remitted to the Court below. 5. Any further or other orders that the Court considers necessary or appropriate. 5 No action was apparently taken at or around that time to prosecute a stay application in relation to order 3 of the orders made by Perram J. 6 Rule 36.08 of the Rules provides: (1) An appeal does not: (a) operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or (b) invalidate any proceedings already taken. (2) However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined. 7 On 10 April 2018, a Registrar of the Court sent an email to the legal representatives of the parties. That email indicated that it was anticipated the appeal would be listed for hearing in the August 2018 Full Court Appellate Sitting Period. The email was in standard form and included a request that the parties notify the Court if any party proposed to file an interlocutory application prior to the hearing of the appeal. 8 On 19 April 2018, the solicitor for the appellant responded to the Registrar's email indicating that the "applicant [sic] proposes to file an interlocutory application seeking a stay of the orders of the Court below" and that the application would be filed within seven days. At this time, the appellant was almost eight weeks in default of Perram J's order. 9 The Registrar responded to this email a few hours later. The Registrar's email included the following: In relation [to the] interlocutory application seeking a stay of the orders of the court below, if the interlocutory application is unopposed, consent orders can be provided for the Court's consideration. If the interlocutory application is urgent, the appellant can approach the NSW General Duty Judge (relevant contact details are available each day on the Daily Court Lists), and if the interlocutory application is not urgent and opposed, the matter will be referred to a judge for case management, and consideration of the interlocutory application. 10 On 23 April 2018, the solicitor for the respondent sent an email to the solicitor for the appellant and to the Registrar indicating that the respondent did not consent to the appellant's proposed interlocutory application for a stay. 11 In a second email of 23 April 2018, the solicitor for the respondent asked the Registrar "whether you are able to give the parties any indication as to the range of dates when the interlocutory application for a stay might be heard, noting that [the solicitor for the appellant] proposes to file the application within 7 days of his email below [dated 19 April 2018]". 12 The Registrar responded on 24 April 2018 in an email copied to the appellant's solicitor indicating that once the appellant's interlocutory application for a stay and any supporting material was filed, the matter would be referred to a judge for case management, and for the hearing of the stay application. The email continued: The Court would be assisted if [the solicitor for the appellant] could confirm, by email to me, when the stay application is filed. 13 On 27 April 2018, an interlocutory application of the same date was accepted for filing. That interlocutory application sought a stay of order 3 of Perram J's orders made on 2 February 2018. That is the interlocutory application currently before me. The interlocutory application was supported by an affidavit accepted for filing on 1 May 2018. That affidavit is of Ms Samantha Metcalf affirmed on 26 April 2018. The affidavit is to the following effect. Ms Metcalf is the Financial Controller of the Transport Workers' Union of Australia (Union) and has been so employed since October 2014. She is employed by the National Office of the Union and her duties involve the oversight of financial functionality of the National Office. 14 Ms Metcalf did not have oversight of the financial affairs of the State Branches. She stated that the State Branches have exclusive control of their own finances. Ms Metcalf stated that, as at 26 April 2018, the Union had a lump sum in a term deposit. That term deposit was then due to expire on 7 May 2018. The Union expected an amount of $50,301 in interest upon the term expiring. The Union intended to roll over the invested sum for a further period. The National Committee of Management of the Union approves an annual budget for the National Office at the end of the previous year for the following year. 15 The Union keeps a certain amount of cash in bank accounts to pay for its operating expenses. If extraordinary expenses arise, such as legal fees, the National Committee of Management approves the extraordinary expense and generally the costs are divided equally between the State Branches and the National Office, whereby the National Office pays incurred expenditure and seeks reimbursement from the State Branches. Reimbursement may take some time. As at 24 April 2018, the National Office had $66,288 in cash in transactional bank accounts. Ms Metcalf stated: "As such, we do not have sufficient money in hand to pay a civil penalty". I take this to mean that the National Office did not have sufficient money in hand to pay a civil penalty, given that Ms Metcalf was unable to speak about the financial affairs of the State Branches. 16 Ms Metcalf then said that: "Accordingly, the National Office would need to end the term deposit early in order to pay the civil penalty". She stated that if the term deposit was terminated as at the date on which she affirmed her affidavit, the Union would suffer a loss of approximately $10,060 in penalties for breaking the term deposit. Those losses could not be recovered. The term deposit was not, in fact, broken, and as I have said, on the evidence of Ms Metcalf, it matured on 7 May 2018. It was said from the bar table, and not disputed, and I accept that the term deposit has been reinvested and is now due to mature as a new term deposit on 7 September 2018. 17 There is no evidence before this Court of the financial affairs of the State Branches or of their capacity or incapacity to pay, or of any inconvenience which would be caused to them by funding the penalty. 18 A stay of orders may be granted where there is a reason or an appropriate case to warrant the exercise of the discretion in favour of a stay. An applicant for a stay does not need to point to "special" or "exceptional" circumstances. Nevertheless, the party seeking a stay needs to show some reason why the stay should be granted. A stay will not be granted unless there is at least an arguable ground of appeal. The prospects of success of an appeal is clearly one of the factors relevant to considering whether to exercise the discretion. 19 In my view this is not an appropriate case in which to order a stay. First, no adequate explanation has been provided to this court as to why the appellant did not seek a stay of Perram J's orders until, at best, the day for compliance had arrived. I say "at best", because the seeking in the notice of appeal of an order staying order 3 was not the proper way in which to seek such a stay. The filing of a notice of appeal does not operate as a stay. The appellant took no step to obtain an order staying order 3 of Perram J's orders at that time. 20 Secondly, no explanation was provided as to why a stay was not sought from Perram J when his orders were made on 2 February 2018 by application made to him then or shortly after those orders were made. His Honour was well placed to deal with any such application expeditiously and efficiently given the fact that he had just delivered judgement. 21 Thirdly, a Registrar of this Court asked on 10 April 2018 whether an interlocutory application would be made. It was not until 27 April 2018, at a time when the appellant was well in default of the orders of Perram J, that the interlocutory application was finally made. No adequate explanation has been given for why the interlocutory application was not made earlier. 22 Fourthly, the Registrar requested the solicitor for the appellant to inform the Registrar when the interlocutory application was filed so that the matter could be referred to a judge for case management and for hearing of the interlocutory application. That request was made in an email of 24 April 2018. The interlocutory application was filed on 27 April 2018. The solicitor for the appellant sent an email on 8 May 2018 to the Registrar saying that the interlocutory application was yet to be listed. No explanation has been provided as to why the Registrar was not informed, on or shortly after 27 April 2018, that the interlocutory application seeking a stay had been filed. 23 Fifthly, I do not regard the evidence of incapacity to pay (or other detriment) to be adequate or to weigh heavily in favour of a stay. In particular, it is plain that Ms Metcalf does not know the financial position of the State Branches, and no evidence has been put before the Court as to that matter. In addition, the term deposit matured on 7 May 2018, the day before the appellant's solicitor's email of 8 May 2018 to the Registrar referred to above, at a time when the appellant was already in default of the orders of Perram J. To the extent that the National Office had certain inconveniences in paying, and might have incurred additional expenditure by way of penalties because of breaking the term deposit, that inconvenience no longer applies. To the extent it does apply because of the reinvestment in full of the term deposit, such reinvestment constitutes steps taken by the appellant in full knowledge that it had no stay and that it was in default of Perram J's orders. 24 Sixthly, there is no question that the amount of the penalty, if paid, would not easily and expeditiously be recovered in the event of a successful appeal. 25 Seventhly, not ordering a stay will not stultify the appeal. 26 I accept that the grounds of appeal are arguable. Having said that, it is by no means clear to me that the grounds of appeal are strong. In my view, the conduct of the appellant in simply not obeying the court's orders without seeking urgent relief before the time for compliance arrived and the other circumstances outlined above are sufficient to outweigh the fact that the grounds of appeal are arguable. 27 In those circumstances, the interlocutory application is dismissed. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley.