REASONS FOR JUDGMENT
JAGOT J:
100 There is one issue with which I have to deal in these separate reasons for judgment. The issue is the application of s 78 of the Navigation Act 1912 (Cth) (the Navigation Act) to the facts of the present case.
101 Section 78 was repealed by the Navigation Amendment Act 2011 (Cth), Sch 1, Pt 1, cl 15. However, any rights Mr Visscher might have accrued under s 78 would continue in accordance with s 8(c) of the Acts Interpretation Act 1901 (Cth).
102 Section 78 provided as follows in 2004 (the time Mr Visscher's rights under the section, if any, would have accrued):
If a seaman's wages are not paid in accordance with section 75 before or at the time the seaman is given his or her discharge from a ship, the seaman's wages shall continue to run until the time of the final settlement of his or her wages (and shall be payable at double rates for any period after the time the seaman is given his or her discharge from the ship) unless the delay is due to the seaman's act or default, to a reasonable dispute as to liability for the wages or to any other cause not attributable to the wrongful act or default of the owner or master of the ship.
103 Section 75, which remains part of the Navigation Act, is in these terms:
(1) Where a seaman is discharged, the seaman shall, before or at the time of discharge, be paid the amount of wages due up to that time, less any deductions specified in the account required to be delivered under subsection 76(1).
Penalty (on the owner and master): $1,000.
(3) It is a defence to a prosecution for an offence against subsection (1) if the person charged proves that the failure to pay to the seaman the amount of his or her wages in accordance with that subsection was due to the seaman's act or default, to a reasonable dispute as to liability for those wages or to any other cause not attributable to the wrongful act or default of the person charged or of any person acting on his or her behalf.
104 By s 6(1) "discharge" is defined as follows:
"discharge" means the certificate of discharge given to a seaman upon his or her discharge from a ship.
105 Section 6(4C) provides that:
A person who, in pursuance of articles of agreement, ceases temporarily to be a member of the crew of a ship shall not be taken to have been discharged from the ship.
106 "Articles of agreement" has the same meaning as agreement (s 6(1)) and "agreement is defined in the same section as follows:
"agreement" means:
(a) in relation to a ship - the agreement between the owner of the ship, or a representative of the owner of the ship, and the crew of the ship; and
(b) in relation to a seaman belonging to a ship - the agreement between the owner of the ship, or a representative of the owner of the ship, and the seaman.
107 The primary judge dealt with this issue at [220]-[244] of the reasons for judgment, concluding that the delay in payment of Mr Visscher's wages between 3 March 2004 (the date of his discharge from a ship) and 1 June 2004 (the date Teekay Shipping (Australia) Pty Ltd (Teekay) accepted that Mr Visscher had been discharged, with payment of his wages being made thereafter on 4 June 2004) was due to a reasonable dispute as to liability for the wages. The key basis upon which it is said that the primary judge erred is that it was not and never could be reasonable for Teekay to have acted on the basis of its apparent beliefs that: - (i) it had not constructively dismissed Mr Visscher when Teekay insisted that he had been effectively demoted from first mate to third (and later, second) mate, (ii) Mr Visscher was not entitled to treat Teekay's insistence as a constructive dismissal of him and thus Mr Visscher was not entitled to accept Teekay's repudiation of the employment contract and, in so doing, bring the employment relationship to an end, and (iii) Mr Visscher had not in fact brought the employment relationship to an end as at 3 March 2004.
108 I say "apparent" beliefs because it is clear that it was not Mr Visscher's case before the primary judge that Teekay had been engaged in a sham, in the sense that Teekay in fact knew that its purported demotion of Mr Visscher constituted a constructive dismissal of him, knew that Mr Visscher was entitled to treat it as such, and knew that Mr Visscher had effectively brought the employment contract to an end on 3 March 2004 but, for its own purposes, pretended to the contrary. No such proposition was ever put to any witness Teekay called. Nor was it put to the primary judge. Nor, indeed, did Mr Visscher suggest in this appeal that Teekay engaged in any form of sham of this kind. This is important because it precludes the appeal being approached on the basis that Teekay knew or must have known each of the three identified matters but, for its own purposes (such as to try to retain Mr Visscher's services because he was a highly regarded seaman), preferred Mr Visscher to believe otherwise. Given the conduct of the hearing before the primary judge it must be accepted that Teekay, no matter how implausible it might sound now with the benefit of time, distance and of course hindsight, genuinely believed each of the three identified matters. This reflects the fact that a mistaken belief genuinely held, viewed objectively, might fall anywhere on the scale from patently absurd to eminently sensible. Where the genuineness of a belief is in issue (as in was the belief truly held), where the belief falls on this objective scale will usually be relevant to determining the probability of the belief actually being held. But where, as here, the genuineness of the beliefs was never in issue, the appeal cannot be resolved on the basis of an assumption or inference, either express or implicit, that Teekay did not or could not have held the beliefs because they are now perceived to be or to be approaching the patently absurd. Where the beliefs fall on the objective spectrum is undoubtedly relevant to any question concerning their reasonableness, but that question must be answered in the present case without any attack, conscious or otherwise, on the common premise which informed the conduct of the hearing by the parties before the primary judge, that Teekay's beliefs as to the three matters above, each of which was identified in the contemporaneous documents and in the affidavits, were genuine.
109 This is not to say that Teekay was always scrupulous in making sure it accurately represented what it thought to be the position to Mr Visscher. There is one letter that Teekay sent, of 24 February 2004, in which Teekay said to Mr Visscher "you have never been graded Chief Officer in Teekay". This statement was wrong as Mr Visscher had indeed been graded Chief Officer (otherwise known as first mate) in Teekay, even if only briefly before Teekay's purported demotion of him to appease the relevant union which had notified an industrial dispute in response to Mr Visscher's perceived "out-of-turn" promotion. On the evidence it also would be open to infer that the statement was disingenuous because Teekay's true position was that Mr Visscher had been promoted to first mate and had then, not long after (about 11 days), been demoted back to third mate in accordance with the recommendation made by the AIRC. But, again, this possible (even probable on the evidence) lack of genuineness about Mr Visscher "never" having been first mate cannot be transformed into an assumption or inference that Teekay never genuinely held the three beliefs identified. These three beliefs are clearly exposed by the contemporaneous documents of Teekay (internal and external) and accord with the evidence of the witnesses called by Teekay. They cannot now be impugned directly or indirectly given the conduct of the hearing before the primary judge.
110 Another observation should be made at this time. It is that if Teekay's beliefs had been correct instead of mistaken then it could not have had any liability to pay Mr Visscher wages on 3 March 2004. This is because Mr Visscher would have ceased temporarily to be a member of the crew of one of Teekay's ship and, by s 6(4C) of the Navigation Act, would not be taken to have been discharged from the ship. Mr Visscher's wages were otherwise payable mid-month and, indeed, because of its mistaken belief that Mr Visscher had only ceased temporarily to be a member of the crew of one of Teekay's ships, Teekay paid Mr Visscher his usual monthly salary in March, April and May 2004. This fact too is important because s 78 operates on wages due but not paid on discharge from a ship and one of the exemptions from this operation on which Teekay relies is that, accepting for this purpose that its beliefs were mistaken, the delay in payment between 3 March and 4 June 2004 was due to "a reasonable dispute as to liability for the wages". As the liability could arise only if Mr Visscher had been discharged on 3 March 2004 and Teekay believed that Mr Visscher had not brought the employment relationship to an end and had thus not been discharged, Teekay's position was that there was no liability to pay out Mr Visscher. It is this which Teekay submitted constituted "a reasonable dispute as to liability for the wages".
111 For these reasons Teekay contended that the facts bore no resemblance to those in Palace Shipping Company Limited v Caine [1907] AC 386 (Palace Shipping) in which seamen who had refused to enter a war zone had been discharged, imprisoned and their wages used to defray their costs of imprisonment rather than being paid to them. It was said (at 392) that there was never any dispute that their wages were owed to them and thus the provision equivalent to s 178 was engaged. I accept this submission. In Palace Shipping the seamen had been discharged. The fact that the discharge was due to the wrongful act of the master and owner was in issue, but not the fact of the discharge itself. The master and owner did not assert any belief that the circumstances did not involve a discharge of the seamen. The master and owner believed and asserted only that the command to go to the port in question was lawful. As such, there could be no reasonable dispute about the liability to pay wages because, wrongly or rightly, the seamen had been discharged. In the present case Teekay believed that Mr Visscher had not been discharged. Teekay's belief, for the purposes of this debate is taken to be wrong, but if its belief had been right then, in contrast to Palace Shipping, there would have been no liability to pay wages. Palace Shipping thus does not assist Mr Visscher. The nature of Teekay's beliefs make the dispute it had with Mr Visscher about whether or not he had been discharged or was merely temporarily on leave from one of Teekay's ships involve a dispute as to liability regarding the wages in question (that is, annual leave and other entitlements payable only on discharge). The remaining questions are, first, whether the delay in payment between 3 March and 4 June 2004, in whole or part, was due to this dispute and, second, whether the dispute was "a reasonable dispute". To answer these issues it is necessary to consider why Teekay held the beliefs it did in all of the circumstances as they evolved leading up to and between 3 March and 4 June 2004.
112 Before considering those circumstances one more observation should be made. Section 78 requires the delay between the date on which the wages should have been paid, being the date of discharge other than by way of ceasing temporarily to be a member of the crew of a ship, and the date of final settlement to be due to a reasonable dispute as to liability for the wages. In the present case, for example, facts on which Teekay relied and which the primary judge accepted were relevant to the s 178 issue at [243] were that the AIRC, the Full Court of the Federal Court of Australia, and one member of the High Court concluded that Teekay was bound by the certified agreement listing Mr Visscher as third mate to treat him as such (and second mate, after his promotion) (Visscher v Australian Industrial Relations Commission (2007) 170 IR 419; [2007] FCAFC 206, Visscher v The Honourable President Justice Giudice (2009) 239 CLR 361; [2009] HCA 34).
113 Given that these decisions were made three to five years after the events in question their potential relevance to resolution of the issues arises in a particular way. Assume, for example, that Teekay was unaware of the certified agreement listing Mr Visscher as third mate. On this assumption, Teekay's beliefs could not have been influenced in any way by the certified agreement. It is difficult to see how, in that event, subsequent judicial decisions about the operation of the certified agreement could bear upon the reasonableness or otherwise of Teekay's beliefs that Mr Visscher had not been constructively dismissed, was not entitled to treat his demotion as constructive dismissal, and thus continued to be employed by Teekay, albeit temporarily having ceased to be a member of a crew on one of Teekay's ships. Assume to the contrary that Teekay was aware of the certified agreement and believed that it meant that Teekay was bound to treat Mr Visscher as third mate. On this assumption, the fact that the AIRC, three judges of this court and a member of the High Court all concluded Teekay was right would bear upon the reasonableness or otherwise of Teekay's beliefs. This is because the characterisation of a dispute about liability to pay wages as a reasonable dispute or not is to be assessed objectively in the light of the circumstances known and knowable at the relevant time or times.
114 In the present case it is clear that Teekay was aware of the certified agreement and that it listed Mr Visscher as third mate. What Teekay's evidence did not disclose was the link, if any, between its awareness and its beliefs from time to time. There is no doubt that by the time Mr Visscher's reinstatement claim was heard in the AIRC in 2006 Teekay believed that by reason of the certified agreement it was bound to treat Mr Visscher as third mate, this being an issue which led to the dismissal of the claim and rejection of Mr Visscher's appeal by the Full Federal Court. Equally, there is no doubt that Teekay could no longer have held this belief after the majority of the High Court held to the contrary on 2 September 2009. The evidence about Teekay's state of mind in respect of this issue before 2006 is not so clear. To the extent that the reasoning of the primary judge at [243] might suggest that the fact of the subsequent judicial decisions was relevant to the characterisation of the reasonableness of the dispute irrespective of Teekay's state of mind about this issue, I would not agree. But it is not clear from [243] that the primary judge was suggesting this.
115 These things said, why did Teekay hold the beliefs it did in all of the circumstances as they evolved leading up to and between 3 March and 4 June 2004?
116 One relevant fact, which was not in dispute, is that Teekay always considered Mr Visscher to be a very good employee. Teekay wanted Mr Visscher on its ships. It was Mr Visscher's competence and experience that caused Teekay to promote him to first mate out of turn, thereby triggering the industrial dispute with the relevant union. Accordingly, there can be no doubt that Teekay genuinely wanted Mr Visscher to continue in its employ at all times.
117 Mr Visscher was employed as third mate between 30 March 2001 and 4 August 2001 (at [10]-[13]). Teekay offered Mr Visscher the position of first mate by a letter he received on 7 September 2001, the promotion being back-dated to 4 August 2001. Mr Visscher accepted the promotion on 7 September 2001 and was thus employed as first mate (at [13]). At the same time as the promotion was offered and accepted the relevant union, of which Mr Visscher was a member, threatened strike action over out-of-turn promotions including the promotion of Mr Visscher. Teekay thus notified the AIRC of the dispute on 7 September 2006. On 11 September 2001 the AIRC recommended that all of the promotions be rescinded (at [14]). The AIRC had the power to make recommendations (s 111AA of the Workplace Relations Act 1996 (Cth)). Failure to comply with a recommendation had potentially serious consequences for Teekay, being the fact that the AIRC could refrain from hearing and determining an industrial dispute if either party contravened the recommendation (s 111(g)(v)(C)). Unsurprisingly, Teekay acted on the AIRC's recommendation and by letter dated 20 September 2001 told Mr Visscher it was rescinding his promotion and that he was graded third mate (at [15]).
118 Mr Visscher thus knew from 20 September 2001 that Teekay had purported to rescind the promotion and that as far as Teekay was concerned Mr Visscher was graded third mate. In addition, Mr Visscher knew that the period during which he had formally held the rank of first mate, from Teekay's point of view, was between 7 September 2001 (back-dated to 4 August 2001) and 20 September 2001, some 13 days. This is not to say Mr Visscher accepted that Teekay was entitled to rescind the promotion. He did not. Instead, Mr Visscher asked Teekay whether he was being sacked. The issue appears to have been resolved in 2001 in a practical way. Mr Visscher knew that Teekay had purported to do so and was treating him as formally ranked third mate. I say "formally ranked" because what is also clear is that Mr Visscher was on board a Teekay ship at the time as first mate and, as far as his then captain was concerned, Mr Visscher was first mate. Mr Visscher remained as first mate on this ship, being paid as such, for another two years or so. Neither Teekay nor Mr Vischer sought to bring to a head and thus resolve the issue of Mr Visscher's formal status during this period. But this does not alter the fact that just as Teekay knew Mr Visscher did not accept that his promotion had been validly rescinded, Mr Visscher knew that Teekay had purported to rescind his promotion and had never accepted that, by so doing, it had also constructively dismissed Mr Visscher. Each was content to leave the issue of Mr Visscher's formal status unresolved - Mr Visscher because he was in fact acting and being paid as first mate and Teekay because paying Mr Visscher to act as first mate whilst formally being ranked third mate enabled Teekay to have the benefit of Mr Visscher's services but avoid any further industrial dispute with the union.
119 Teekay relied on its pay slips from July 2003 to support its case that Mr Visscher must have known that he was formally ranked third mate as these showed a normal and a higher duties rate (whereas the earlier pay slips did not). Reliance on the pay slips for this purpose is unnecessary. Mr Visscher received the letter by which Teekay purported to rescind his promotion. Before the promotion he was ranked third mate. It must have been obvious to Mr Visscher that the rescission of the promotion, if it had been valid, was to reinstate him to the rank of third mate. That Mr Visscher never accepted that Teekay could demote him without repudiating the employment contract and thus constructively dismissing Mr Visscher (which has turned out be the correct view) does not negate his awareness of both the purported demotion and the lack of resolution of his formal status at least from Teekay's point of view.
120 These circumstances are important contextually because they disclose that despite the issue between them as to his formal status, culminating in Mr Visscher asking Teekay in writing whether Teekay was terminating his employment on 26 September 2001, Teekay and Mr Visscher found a practical way forward which enabled his employment to continue to the mutual satisfaction of Mr Visscher and Teekay. The circumstances disclose also that both Teekay and Mr Visscher were content to let the issue of his formal status remain unresolved, at least so long as Teekay could arrange things so that Mr Visscher could act and be paid as first mate. Finally, the circumstances disclose that, whatever the issue about his formal status, Mr Visscher was willing to work for Teekay as first mate and Teekay was willing for Mr Visscher to do so. The fact that the relationship continued on this basis for over two years, to the mutual satisfaction of Mr Visscher and Teekay, cannot be disregarded when assessing the reasonableness of Teekay's beliefs subsequently.
121 As I have said, given the conduct of the hearing below, it must be accepted that Teekay honestly (albeit wrongly) believed that it had effectively rescinded Mr Visscher's promotion. Nothing happened between 2001 and the events in late 2003 and early 2004 which could have affected Teekay's belief or Mr Visscher's awareness of both the purported demotion and the lack of resolution of his formal status at least from Teekay's point of view. As I have also indicated, even if Teekay's view of the law is able to be characterised as egregiously wrong, particularly given Teekay's apparent sophistication and access to and employment of industrial lawyers, the serious quality of its error cannot be used to undermine the honesty of its beliefs in the circumstances of the hearing below. Further, and as I have explained, even assuming its error may be characterised as egregious, Teekay and Mr Visscher had between themselves found a way forward which enabled Mr Visscher to remain employed by Teekay.
122 This is the background against which subsequent events have to be assessed. Those events also included the certification of the agreement between Teekay and the union (of which Mr Visscher was a member) on 5 March 2002 (at [16]). The certified agreement contemplated that employees could "act up" in rank if a suitably ranked seaman was not available to fill the role (cl 23.1.5) and identified the rank of all employees as the basis for future promotions (cl 23.4). In the attached list referred to in cl 23.4 Mr Visscher was ranked "third officer" (or third mate). This is consistent with Teekay holding the belief that it had effectively rescinded Mr Visscher's promotion and that he was "acting up" as first mate. So too is Teekay's letter to Mr Visscher of 5 July 2002 to the effect that Mr Visscher had been promoted from third mate to second mate effective from 1 July 2002. Again, although Mr Visscher told Teekay on 24 July 2002 that he did not accept the promotion as he was already first mate, the issue of Mr Visscher's formal status was not brought to a head and resolved (at [17]). Mr Visscher continued in his role acting as first mate to the mutual satisfaction of Mr Visscher and Teekay until 4 January 2004 (at [18]).
123 Otherwise in respect of the certified agreement, I accept that there was no evidence that Teekay believed at this time, or before some time in 2006, that the listing of Mr Visscher as third mate in the agreement had some legal effect on his status over and above the purported rescission of his promotion. That is to say, it should not be inferred on the evidence that Teekay had in its mind at this time or in 2004 the legal argument that persuaded the Full Court and one member of the High Court about Mr Visscher's status. But this does not mean the certified agreement is irrelevant. The fact that Teekay did not apparently have this in mind before 2006 is explicable on the basis of its honest, albeit incorrect, belief that its purported rescission of the promotion, as recommended by the AIRC, was valid. Moreover, Teekay certainly knew that Mr Visscher was listed as third mate in the certified agreement (a public document) and must be inferred to have believed the listing was accurate given the purported rescission of the promotion.
124 On 4 January 2004 Mr Visscher was told that while Teekay had proposed to keep him on the Samar Spirit as first mate, because he no longer wished to sail on that ship due to a disagreement with the Master, Teekay would sail him as a second mate on another ship (at [19]). Consistent with his earlier conduct, Mr Visscher was prepared not to bring the issue to ahead saying only "We'll cross that bridge when we come to it" (at [19]). The bridge did not have to be crossed then because Teekay found him a role on the Broadwater acting as first mate. Again, consistent with his previous willingness to remain in Teekay's employ despite the issue about his formal ranking, Mr Visscher was happy to sign onto the Broadwater as first mate (at [20]). Even when again told before doing so that he would thereafter be sailing as second mate, Mr Visscher was willing to continue his employment with Teekay saying only that he would join the Broadwater on the Monday, which he did (at [21]).
125 Mr Visscher sought to bring the issue of his formal status to a head on 22 February 2004. In his email of 22 February 2004 to Teekay Mr Visscher said that as he had been told he would be required to sail as second mate after leaving the Broadwater he treated this as a constructive termination of his employment "upon leaving the MT Broadwater on or about 26 February 2004" and asked to be paid all of his entitlements at Teekay's "earliest convenience" (at [22]). In the event, the Broadwater did not dock until 3 March 2004. Although Mr Visscher maintained that his acceptance of Teekay's repudiation was irrevocable from 22 February 2004 I am unable to accept this proposition. By its own terms Mr Visscher's acceptance of the repudiation was effective on and from the date he left the Broadwater. At any time before that date Mr Visscher could have changed his mind.
126 Further, although Mr Visscher submitted that there were two written communications from Teekay in response, only one is in evidence. The evidence on which Mr Visscher relied to support the existence of another communication is unpersuasive. I am not satisfied there was any such additional communication. That said, for its part, Teekay treated the email as Mr Visscher resigning from his employment. Mr Scott of Teekay told Captain McLellan that he "would accept" Mr Visscher's resignation. Captain McLellan told Mr Scott, as he had been told by Mr Visscher, that Mr Visscher did not see the email as a resignation. In any event, one thing is clear - Teekay could not accept Mr Visscher's resignation, other than in a prospective and thus contingent sense, while the Broadwater was still at sea. Accordingly, Mr Scott's oral communication to Captain McLellan, at best, is confirmation that if Mr Visscher still wanted to resign when he left the Broadwater, Teekay would accept the resignation. Leaving aside the incorrect statement that Mr Visscher had never been graded first mate, this is the best explanation for the terms of the letter from Mr Scott to Mr Visscher on 24 February 2004 (at [24]).
127 The letter of 24 February 2004 ended with these two paragraphs:
3) On this basis Teekay is treating your email as a resignation.
Please confirm acceptance and receipt of this letter by signing and returning, in the pre-paid envelope the enclosed copy of this letter.
128 It is easy to criticise the drafting of this letter. First, hindsight shows that Teekay was not entitled to treat Mr Visscher as having resigned. To the contrary, Mr Visscher was right that Teekay had repudiated its contract of employment and Mr Visscher thus could elect to accept or waive the repudiation. Second, Mr Visscher had elected to accept the repudiation albeit, as I have said, his acceptance was not effectively immediately but was to become effective on leaving the Broadwater, with the consequence that Mr Visscher was free to change his mind before doing so. Third, if Mr Visscher had signed the letter he would be at risk of being treated as if he had resigned rather than been constructively dismissed which would undermine his capacity to seek various remedies. Fourth, the letter could have put it beyond doubt that Teekay considered that the employment contract would continue after Mr Visscher left the Broadwater until Mr Visscher took some other irrevocable act to bring the relationship to an end. All these things said, it is reasonably clear from the letter that Teekay did not consider that Mr Visscher had committed any irrevocable act by reason of his email of 22 February 2004. The letter signalled that as far as Teekay was concerned it was willing for the employment relationship to continue, presumably, as it had done for the past three years and irrespective of the issue about Mr Visscher's formal status. At all times during that period Teekay had managed to arrange things so Mr Visscher sailed as first mate, just as it had done so in January 2004 when it had first said to Mr Visscher he would have to sail as second mate.
129 Given the circumstances of its employment relationship with Mr Visscher since late 2001 it is hardly surprising that Teekay wanted to leave open the prospect of the issue with Mr Visscher being resolved satisfactorily as it had been for more than three years. In context, it was reasonable of Teekay to wish to do so and to believe it had done so by the terms of its letter of 24 February 2004. Mr Visscher's response to Captain McLellan that he had not resigned and would deal with it in his own way (at [25]) did not resolve the ambiguity. The primary judge did not accept Mr Visscher's evidence that he had told Captain McLellan his employment was at and end (at [145]-[158]). Nothing has been put in this appeal which would lead to a different view of the evidence. The reference to Captain McLellan's evidence that Mr Visscher had told him Teekay had terminated his employment has to be considered in the light of the whole of Captain McLellan's evidence including, in particular, his discharge of Mr Visscher from the Broadwater on the basis of "leave". It is difficult to accept that Captain McLellan would have made this written entry had he truly believed either that Teekay had terminated Mr Visscher's employment or that Mr Visscher had resigned. Moreover, the fact that Mr Visscher signed his discharge, whether he was bound to or not, is consistent with Mr Visscher also, at least at that time, wanting to leave the door open. After all, Mr Visscher had happily sailed as first mate with Teekay knowing his formal status was in issue for more than three years. Teekay had always managed to find Mr Visscher a ship where he could act and be paid as first mate irrespective of the issue about his formal status. It is almost inconceivable that Mr Visscher did not hold out some hope when he left the Broadwater on 3 March 2004 that Teekay would be able to find another ship on which he could sail as first mate. In other words, in common with Teekay, Mr Visscher (at least as at 3 March 2004) was happy to leave things somewhat ambiguous whilst also attempting to force the other party's hand (Mr Visscher by insisting that Teekay had constructively dismissed him and Teekay by insisting that Mr Visscher had resigned).
130 It should be apparent from this that I consider that both Teekay and Mr Visscher were involved in a bit of brinksmanship on and around 3 March 2004 on an assumption that, irrespective of the true legal position, they might be able to sort something out between them. Had either wished to close the door finally and irrevocably on or immediately after 3 March 2004 they could have done so. Teekay could have said it accepted Mr Visscher's resignation with the consequence that the employment relationship was at an end without trying to get Mr Visscher to acknowledge this by signing and returning a letter. Mr Visscher could have said he accepted Teekay's constructive dismissal with the consequence that the employment relationship was at an end. Neither did anything of this kind. Mr Visscher signed off the Broadwater on the basis of "leave". While he then arranged to sail on another company's ship, on 8 March 2004 Mr Visscher also wrote to Teekay (at [27]) saying:
I have enjoyed excellent relations with Teekay. I have performed well above the standard it might have expected and it has expressed its satisfaction with my work. It will be a great shame if we are now to descend to litigation. I suggest that an informal conference be urgently convened to reach a resolution.
131 At the same time he informed Mr Scott that he would be travelling overseas "for an imprecise time" (presumably to take up his role with the other ship) and had lodged an application in the AIRC for relief in relation to the termination of his employment.
132 As Teekay submitted, both the letter of 8 March 2004 and the AIRC application are in fact indicative of Mr Visscher wanting to remain employed with Teekay. Given it believed it had not dismissed Mr Visscher it is easy to see why Teekay would have seen both actions as consistent with Mr Visscher not having brought the employment relationship to an end. The letter referred, accurately, to the excellent working relationship between Teekay and Mr Visscher and expressed a desire for a meeting to resolve the issues between them, whereas the AIRC application was intended to ensure that Mr Visscher did in fact keep working for Teekay. As before the only issue was one of formal status which the parties had managed to avoid in the past in a mutually satisfactory way. As at 26 March 2004 Mr Visscher had been paid by Teekay for March as if he were a continuing employee on temporary leave only from a Teekay ship, there being no indication of him returning the payment on the basis that he was not a continuing employee. Instead, Mr Visscher attended a meeting with Teekay on that day to see if a resolution could be reached. That Teekay considered that Mr Visscher had not made any binding decision is clear from the statement at that meeting of Mr Parmeter that Mr Visscher's email was "effectively notice of resignation from Teekay. However, if you change your mind, Teekay would have no objection to you withdrawing your resignation and continuing to sail with Teekay" (at [31]). Whatever the legal niceties about the effectiveness of a resignation immediately or on notice or otherwise, the real point is that Teekay did not see Mr Visscher as having done anything irrevocable. Teekay had paid Mr Visscher as a continuing employee for March and was effectively letting him know it considered that the employment relationship would continue. It does not matter, for this purpose, that Teekay had in law constructively dismissed Mr Visscher with effect from 3 March 2004 because on that date Mr Visscher had done all he needed to in order to accept the repudiation unequivocally and irrevocably. The point is that this is a legal conclusion apparent only by way of hindsight. The conduct of the parties at the time suggests that it was convenient for them both to proceed on the basis that nothing irrevocable had been done. If Mr Visscher truly believed that he no longer an employee of Teekay then numerous questions arise. For example why did he not demand the payment of his entitlements some time in March and April 2004? Why did he not return the money paid to him in March and April 2004 by way of monthly salary or offer to do so in exchange for the payment of entitlements on ceasing employment? Why was he seeking a meeting and willing to meet on 26 March 2004 despite having taken a position on another ship? Why at the end of the meeting on 26 March 2004 did he say "if they could sort out their differences he was even prepared to sail on the Samar Spirit when the master left"? (at [33]). Why did he write on 29 March 2004 offering to withdraw his AIRC application on the basis that (at [34]):
My understanding now is that at 3 March 2004, the day I deemed my employment to be terminated, I was listed as continuing sailing as Chief Officer, which of course does away with any question of my employment being terminated by reason of a demotion. I think that it would have been better for all concerned if I had been told about that earlier in the piece, but the Company remained silent on the point and I knew nothing different.
133 It is convenient for Mr Visscher now to insist that he had unequivocally and irrevocably accepted Teekay's repudiation of his employment contract on 22 February 2004 and that everything that happened later was an attempt to see if a new employment relationship could be established but that is not how it appeared at the time. Mr Visscher's conduct, in context, was such as to allow and encourage Teekay to believe that Mr Visscher remained in its employ after 3 March 2004. The subsequent correspondence resulting in the "without prejudice" arrangement into which the parties entered on 7 April 2004 was nothing more than the culmination of a course of dealing which was, first, consistent with the parties having managed to reach mutually satisfactory solutions to the problem of Mr Visscher's formal status since September 2001 and, second, consistent with the brinksmanship in which they were both involved since Mr Visscher told Teekay he would no longer sail as first mate on the Samar Spirit.
134 It is for these reasons that I consider that Teekay has established that there was as at 3 March 2004 and until 1 June 2004 a reasonable dispute as to its liability to pay Mr Visscher his full entitlements on discharge. Teekay reasonable believed that Mr Visscher had not in fact been discharged on 3 March 2004. It reasonably believed that Mr Visscher was temporarily on leave from one of its ships. As such, Teekay reasonably believed it had no obligation to pay Mr Visscher his entitlements on discharge under s 75 of the Navigation Act. Mr Visscher's conduct on and from 22 February 2004 contributed to Teekay's belief and thus contributed to it being a reasonable belief.
135 I am not persuaded that the dispute only became reasonable on 7 April 2004 when Teekay and Mr Visscher entered into the "without prejudice" arrangement. Everything that happened after 22 February 2004 was leading up to that kind of arrangement and both parties were obviously hoping that just such an arrangement could be reached. In these circumstances, I consider that the dispute was reasonable from the outset. The hoped-for arrangement became impossible on 1 June 2004 when Mr Visscher told Teekay he had accepted employment elsewhere. Even then, Teekay (consistent with all of its earlier conduct) took it upon itself to check with Mr Visscher that he truly would not be returning to the Broadwater. Once Mr Visscher gave that confirmation Teekay thereafter arranged to pay Mr Visscher his full entitlements on discharge which was done on 4 June 2004. It is also relevant that Teekay had no reason not to pay out Mr Visscher had it truly believed his employment was at an end on 3 March 2004. Equally, it had no reason to continue to pay Mr Visscher's monthly salary when he was not actually working in March and April 2004 unless it truly believed he was still employed at that time. All of the circumstances to which I have referred make its belief a reasonable one, with the consequence that at all times between 3 March 2004 and 4 June 2004 Teekay reasonably believed it had no liability to pay anything to Mr Visscher other than what it in fact paid. It necessarily follows that the delay in payment between 3 March 2004 and 4 June 2004 was due to a reasonable dispute as to liability for wages.
136 It follows from this that the conclusions the primary judge were right and the appeal must be dismissed. Mr Visscher should pay Teekay's costs of the appeal.
137 I otherwise agree with the reasons for judgment of Rares J concerning the balance of the issues in the appeal. Further, if my conclusion that any delay in the payment of Mr Visscher's wages was due to a reasonable dispute as to liability for the wages which existed from 3 March 2004 is incorrect then, consistent with the reasoning above and the conclusions of Rares J, I am satisfied that any delay in the payment of Mr Visscher's wages thereafter was due to a reasonable dispute as to liability for the wages which existed from 7 April 2004. I agree also with the conclusions of Rares J consequential on this finding including his Honour's calculations of the amount owed to Mr Visscher and the limitation on pre-judgment interest which his Honour proposes, as well as the proposed orders as to costs.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.