. epee Judgement No. 66S, wo CATCHWORDS Practice and procedure - appeal - stay of judgment pending appeal - principles to be applied - whether change of circumstances since judgment. Conciliation and Arbitration Act 1904 s. 5{1) Federal Court Rules o. 52 r. 17 Scarborough v. Lew''s Junction Stores Pty. Limited £19633 V.R. 129 DAVID KERRIN v. LETGHTON CONTRACTORS Pry. LTD. NO. V 7 of 1986 GRAY J. MELBOURNE 4TH AUGUST 1986 RE. £ 17 442 1987 FEDERAL coy AUSTRALIA OF PRINCI REGISTRY " = _iee tf IN THE FEDERAL COURT OF AUSTRALIA ) } VICTORIA DISTRICT REGISTRY ) No. V 7 of 1986 ) s } INDUSTRIAL DIVISION BETWEEN: DAVID KERRIN Prosecutar AND LEIGHTON CONTRACTORS PTY. LTD. Defendant JUDGE: GRAY J. DATE: 4TH AUGUST 1986 EX TEMPORE REASONS FOR JUDGMENT On 24th July 1986, Leighton Contractors Pty. Limited ("the defendant") was convicted hy the Court of an offence under s. 5(1)(a) of the Conciliation and Arbitration Act 1904 ("the Act"). The offence was that it had dismissed David Kerrin from his employment by reason of the circumstance that he was a member of the Australian ~ Building Construction Employees and Builders Labourers Federation ("the B.L.F."). As part of its order made on that date, the Court ordered that Mr. Kerrin be reinstated in his old position, or in a similar position, within seven days from that day. On 31st July 1986, the seventh day after the making of the order, the defendant filed a notice of motion seeking a stay of the reinstatement order, pending the hearing and determination of an appeal which had been lodged in the meantime. The matter came on before me on the afternoon of 3ist July 1986. Because of the short time available until the defendant was liable to be held in contempt of court by failure to comply with the order, I granted a stay, upon an undertaking being given that in the event that Mr. Kerrin was certified by a qualified medical practitioner as fit to return to work, the defendant would pay him all moneys to which he would have been entitled pursuant to the National Building and Construction Industry Labourers (On Site) Award 1986 if he had been reinstated in accordance with the order made on 24th July 1986, and if his entitlement pursuant to that award were unchallenged. I then adjourned the matter until today. Affidavits have been filed on both sides and they reveal some differences between the parties as to the true state of facts. To some extent these differences are inevitable, because the application on behalf of the defendant requires that the Court attempt to indulge in predicting the future. The application for a stay is largely based on two considerations. The first of these is that, in evidence before Keely J., Mr. Kerrin stated that he would be prepared to join the Building Workers Industrial Union ("the B.W.I.U.") if he were to be " -3- reinstated in his old or a similar position. Subsequently, when the issue of reinstatement arose, Mr. Kerrin told a Mr. Williams, an employee of the defendant, that he would not join the B.W.I.U. but would retain his membership of the B.L.F. It is said, therefore, by Mr. Vickery on behalf of the defendant, that a change of situation has occurred since the order of Keely J. on 24th duly. In fact, in the reasons for judgment given by Keely J. there is found, in a passage in which his Honour was dealing with submissions that were made on behalf of the defendant as to why there should be no reinstatement, the following: "Third, it was said that-because of the "no ticket no stark" practice operating on building sites, referred ae to earlier, the defendant would face industrial action on the relevant site if the prosecutor, on hbeing reinstated, refused to join the "appropriate union", the Building Workers' Industrial Union of Australia (BWIU) and it was submitted that that was a reason why reinstatement should not be orderd. The initial difficulty which that submission encounters is that the prosecutor, during his cross-examination, was expressly asked would he "be prepared...to join the BWIU" and answered "yes". On the evidence I find that no industrial action would be likely to occur on the site in relation to that issue if the prosecutor did in fact join the BWIU - even if he retained his membership of the BLF'. However, the submission fails for a more fundamental reason. Even if it were clear that industrial action on site would be likely to occur in see tyalation to the reinstatement of the -prosecutor, pursuant to the court's order, in my opinion it would not be a proper exercise of its discretion for the court, in circumstances where it would otherwise order the reinstatement of the prosecutor, to refrain from making such an order because of the likelihood of any such industrial action." -~ 4 - It appears from this passage that Keely J. gave attention to the possibility that Mr. Kerrin might refuse to join the B.W.I.U. and indicated clearly that his Honour would, nevertheless, have made the order that he did make even if that event occurred. Tied in with the change of heart of Mr. Kerrin is the second consideration, namely the likelihood of industrial disruption if Mr. Kerrin were to enter a building site on which the defendant is operating, without being a member of the B.W.I.U. It is as to these matters that there is substantial conflict on the facts between the affidavits filed by the respective parties. The Court, of course, is not in a position to conduct a trial on an interlocutory basis, to determine which version of the facts is correct. Even if it did do so, there is always the possibility that it might be wrong, because the events which are in dispute are events which only the future can decide. Accordingly, I do not attempt to make any firm prediction as to whether there will or will not be industrial action if Mr. Kerrin comes onto a building site. At present, as the evidence discloses, Mr. Kerrin is classified as unfit to engage in work, by reason of injury. He has received medical certificates to the effect that he will be unfit to resume work at least until 19th August 1986. It does appear, therefore, that anything which is likely to occur by way of his being brought onto a building site is unlikely to occur before that date. More relevant, it seems to me, than attempts to predict - 5 - the future, are the principles which normally apply in determining whether a judgment ought to be stayed pending appeal. . Order 52 yr. 17 of the Federal Court Rules provides, so far as is relevant, as follows: "17. (1) An appeal to the Court shall not- (a) operate as a stay of execution or of proceedings under the judgment appealed from;or (b) invalidate any intermediate act or proceding, except so far as the Court or a dudge or the court below may direct. {2) The Court may vary or vacate any direction of the Court or the court below referred to in sub-rule (1)." Tt was accepted by both parties that, in an application such as this, it is mecessary for the party seeking a stay of judgment to show exceptional circumstances. Reference might conveniently be made to Scarborough v. Lew's Junction Stores Pty. Limited £19631 V.R. 129, at p. 130, where Adam J. used the phrase "special circumstances". I take these tests to mean that something out of the ordinary must be shown. In the normal case of a money judgment, the party against whom the judgment has been given is required to pay the money on the basis that it will be refunded if the appeal is successful. Tf a party in such a position can show that there is a likelihood that repayment will not he effected, then special circumstances are shown. In the present case there are possibilities that either party may be deprived of the fruits of a victory in the event -6- that a stay is granted or in the event that it is not. If a stay were not to be granted, then the order requiring the reinstatement of Mr. Kerrin would operate immediately. In "order to avoid being in contempt of court, the defendant would he required to reinstate Mr. Kerrin. If it then succeeded on its appeal, it would not be able to dismiss Mr. Kerrin without giving to him whatever rights and entitlements he may have pursuant to his contract of employment and pursuant to any award which may cover him. In that context, I should point out that cl. 7 of the National Building Construction Industry Labourers (On Site) Award 1986, which binds the defendant in respect of the site or sites concerned, is expressed to be binding upon the employers which are parties to the award in respect of their employees performing work covered by the award, whether members of a relevant union or not. On the other hand, if a stay were to be granted and the defendant were to lose its appeal, Mr. Kerrin could justifiably complain that he was not reinstated until such time as the appeal is heard and determined and that he has lost entitlements under the award, not only as to payment in the interim, but in respect of matters such as annual leave, which are based upon the length of period of service of a particular employee. Considerable discussion took place as to how this last mentioned alternative might be eliminated. The defendant offered by its counsel an undertaking that, in the event that Mr. Kerrin was certified by a qualified medical practitioner as fit to return to work, it would pay him all monies and attribute to him -7- all benefits to which he would have been entitled pursuant to the award, and otherwise apply the said award, including all provisions which would operate for the benefit of the employer, as if he had been reinstated in accordance with the order made on 24th July. There are, in my view, some unsatisfactory matters about this form of undertaking. Iodid ask counsel for the defendant whether the defendant was prepared to give an undertaking in more generous terms, particularly so as to avoid the possibility that the defendant might treat Mr. Kerrin as having been dismissed notionally before the appeal is heard and determined. Indeed, it was with this possibility in mind that counsel for the defendant indicated that he had included in the proposed undertaking, the words "including all provisions which may operate for the benefit of the employer". The defendant refuses to strengthen its undertaking, in my view inappropriately. Where a court order subsists that a person he reinstated and it is sought to stay that order, it seems to me that such a stay should only be on the basis that nothing is done pending the hearing and determination of the appeal that would have any effect on the entitlement of the person concerned to be reinstated if the appeal is dismissed. Further to that, it seems to me to be inappropriate to accept an undertaking which would involve the application to a person who is not working of the terms of an award such as the award in question here. I should say that I am not now in doubt, as I was during argument, that the Court has power to accept -B- undertakings when a stay of judgment is sought pending an appeal. Rather, it seems to me to be highly inappropriate that any question as to Mr. Kerrin's entitlement under the award should be capable only of being raised between the parties, by way of proceedings for contempt of court, alleging a breach of the undertaking in failing to pay to Mr. Kerrin all of what, by virtue of the undertaking, would be his entitlements. In the result where each party might be in some fashion deprived of the fruits of an actual or potential victory, depending upon the outcome of the appeal, it seems to me to he appropriate that the ordinary rule should operate and that the appeal should not be the occasion for a stay of the order of the Court. The effect of this will be that Mr. Kerrin will be entitled to be reinstated immediately to the same or a similar position. If some industrial disruption does occur as a result of that, then perhaps it might truly be said that such industrial disruption is a consequence of what the Court can only, at present, regard as the defendant's criminal act in dismissing Mr. Kerrin at the time when it did. As I have said, however, I am not able to determine whether industrial disruption will occur. The defendant, upon reinstating Mr. Kerrin, will have any rights available to it which it would have in respect of an employee, although it should be pointed out that it must be clear that the order of the Court has been obeyed and that Mr. Kerrin has in fact been reinstated. - 9- For these reasons I dismiss the application for order of Keely Jd. of 24th July 1984. . Pr al -3 @lt Vie Ae tee AP PY .e NM UeNS Corr of the eeey oS eee Oe a 23 2.7.1 a stay of the