FEDERAL COURT OF AUSTRALIA Australian Municipal Administrative Clerical Service Union v Greater Dandenong City Council [2000] FCA 1638 INDUSTRIAL RELATIONS – application for stay of orders pending appeal. Australian Workers' Union & Ors v Pilkington (Australia) Ltd & Anor [2000] FCA 1169 referred to Norman v Besser Industries (NT) Pty Ltd (1996) 73 IR 355 referred to AUSTRALIAN MUNICIPAL ADMINISTRATIVE CLERICAL SERVICES UNION & ANOR v GREATER DANDENONG CITY COUNCIL V248 of 1999 MADGWICK J SYDNEY 10 NOVEMBER 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY V248 of 1999 BETWEEN: AUSTRALIAN MUNICIPAL ADMINISTRATIVE CLERICAL SERVICES UNION FIRST APPLICANT WENDY PHILLIPS SECOND APPLICANT AND: GREATER DANDENONG CITY COUNCIL RESPONDENT JUDGE: MADGWICK J DATE OF ORDER: 10 NOVEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent's application for a stay be refused. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY V248 OF 1999 BETWEEN: AUSTRALIAN MUNICIPAL ADMINISTRATIVE CLERICAL SERVICES UNION FIRST APPLICANT WENDY PHILLIPS SECOND APPLICANT AND: GREATER DANDENONG CITY COUNCIL RESPONDENT JUDGE: MADGWICK J DATE: 10 NOVEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT (revised from transcript) HIS HONOUR: 1 The substantial matter debated before the Court today was whether there should be a stay of the final orders made earlier today, pending the determination of the unsuccessful respondent's appeal. It was properly conceded by the applicants in the principal proceedings that the respondent's appeal is bona fide arguable. Submissions for the respondent 2 The case put by the respondent is of two kinds. It is said that the Council is faced in substance with two choices. The first is to reinstate the employees concerned but, in order to adhere to the Council's present policy that home care services in the council area should be outsourced, to exercise forthwith its rights lawfully to retrench the employees concerned. It is pointed out that this could not happen immediately because of requirements to consult with the first applicant. Even if the approximate cost of doing this of about $800,000, as contended for in the evidence, is not supportable, there would be a substantial cost which it is reasonable to estimate is in the hundreds of thousands of dollars. This would be by way of bringing retrenchment pay-out entitlements of all kinds up to what they would now be, having regard to the deemed continuity of employment that I have ordered should apply, and to wage inflation since the termination of the group members' services. 3 It is pointed out that such a course of action would be disturbing, without ultimate benefit, for the employees and for the clients of the home care services, whether provided by the Council or by their present supplier, Glad Pty Limited trading as Silver Circle. It is, however, properly conceded on behalf of the Council that, if this choice were pursued and the Council won on appeal, the Council could get back from the employees concerned the excess amounts of the updated retrenchment benefits over the sums previously paid to them. 4 The second choice of the Council would be to spend significant amounts of money, time, and effort in not just reinstating the employees but also, the organisation of the home care service itself within the Council. If this were done, there would be the expenditure of time and effort referred to. The Council would be, at best, in an uncertain legal position as against Silver Circle and potentially might have to pay substantial damages, albeit perhaps less than the amount allowed for in the calculations put before the Court. There would also be the necessity for another change of arrangements in relation to the people in need of home care services. Additionally, there would be no way of getting back from the employees the money that would have been expended if the Council should succeed with its appeal. 5 It is acknowledged that the employees have been kept out of the fruits of their victory for a considerable time but there is no evidence that any of them is suffering hardship on that account and it is claimed by counsel for the applicants that only a small number have suffered any significant period of unemployment. The likelihood, in these circumstances, is that if the Council pursued the course of re-engaging the employees in a functioning home care service operated directly by it, then even if the Council won the appeal it would opt not to waste the money, time, and effort, that would have been thereby expended and would act no further to disturb the clients of the service by doing what it would be entitled to, as a result of its anticipated appellate victory. The principles governing stays pending appeals 6 The modern tendency, I think, is to exercise a broad discretion about staying proceedings on judgments pending the hearing of appeals from them. As Goldberg and Weinberg JJ put it in Australian Workers' Union & Ors v Pilkington (Australia) Ltd & Anor [2000] FCA 1169 at para [9] and following: "…A party seeking such a stay is not entitled to the stay as of right. It is clear from O 52 r 17 that the filing of a notice of appeal, of itself, does not warrant or justify the grant of a stay. See also Alexander v Cambridge Credit Corporation Ltd (1985) 2NSWLR 685 at 694. The Court is given a discretion which is only circumscribed by the need to be satisfied that there be a reason sufficient in the circumstances to warrant the exercise of the discretion in favour of the grant of the stay. In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 Burchett J delivering the reasons of the Full Court (Burchett, Heerey and Whitlam JJ) followed the Court of Appeal in New South Wales in Alexander v Cambridge Credit Corporation Ltd (supra),concluding that special circumstances did not have to be shown. The Court did not follow what it would regard as a more stringent test applied in the Supreme Court of Victoria… In Philip Morris (Australia) Limited v Nixon [1999] FCA 1281 the Full Court of the Federal Court (Sackville, Hely and Gyles JJ) said at [17]: 'The Court has a discretion whether or not to grant the stay, and if so, as to the terms that will be fair. In the exercise of the Court's discretion, it weighs considerations such as the balance of convenience and the competing rights of the parties, in particular whether prejudice will be caused by reason of the grant or withholding of a stay.' Although special circumstances do not have to be shown it is important to recognise that a sufficient reason for the stay must be established. An important factor in considering whether a stay should be granted pending an appeal, especially when the granting of the stay will be to deny the parties seeking the injunction the benefit of the primary order in part, is whether the stay is necessary to preserve the subject-matter of the litigation." The Court went on to describe itself in that case as, "involved in a balancing exercise". 7 In Norman v Besser Industries (NT) Pty Ltd (1996) 73 IR 355, in the Industrial Relations Court of Australia, the Full Court, comprised of Moore, Marshall JJ and myself, followed the approach of the Federal Court in Powerflex Services. Conclusions 8 It seems to me that the respondent should not have a stay beyond what is necessary to implement, in an orderly way, the intended reinstatement orders of the Court. Despite claims that three months would be necessary, I do not accept this, and I think that a capably managed public authority of the size of this Council, anxious to abide the orders of the Court, could well implement the orders in an orderly fashion within 28 days, hence the orders that I have made. 9 I do not accept that the only choices facing the Council are the two which have been outlined. Even allowing that the applicants are presently holding a first instance victory, they are capably legally advised and I cannot imagine that their forceful legal advice would not at least be that all litigation has its vagaries and that compromise and flexibility in a difficult situation which has arisen would be wise. On the material before me, it is by no means clear that the Council has anything at all to fear from possible legal action by the Silver Circle interests. Having regard to the location of that company in the industry and to the fact that the Court is aware that it has chosen not to seek to exhaust appellate legal processes in relation to related litigation, it seems to me likely that the prospects of flexibility and compromise on the part of Silver Circle are not slender either. There is no reason that the Council could not seek some modification of the strict orders, by consent, from the applicants and achieve a three way settlement including Silver Circle. 10 The Council has certainly put its best foot forward with its evidence in relation to the stay but, frankly, a good deal of it appears exaggerated. Through some misunderstanding, the apparent author of what looks like exaggerated material was not present to be cross-examined upon it. Nobody is to blame for that but the fact is that, on its face, much of the material does not appear to make sense. In particular the approach to the costs analysis by counsel for the applicants seems to me to have much to commend it. 11 On the other hand it is true that if the Council is to take back the home care service there will be some substantial "restart-up" costs in relation to that. Further, although the number of home care service clients who might be regarded as emotionally frail and apt to suffer a degree of disturbance by changes in arrangements as to their carers is unknown, it is likely that there would be some. The Council might well take the view that it would not wish to disturb those people by taking the benefit of rights which may be vindicated on appeal. There is therefore an element of potential detriment to the Council. It is, however an element which might have been considerably reduced by timely attention to strategies for its reduction to date, and there is no evidence of any effort in this regard by the Council. 12 It remains an important principle that the party seeking the stay must make out a sufficient reason for it. The effect of granting of the stay would be to deny to the parties, who have won at first instance, the benefit of their victory. The Court has found that a legal wrong was done to these employees and they have suffered disturbance and uncertainty on account of it. 13 I think that there is a balancing exercise involved, and I do not think that the respondent, which seeks a stay, has tipped the balance. 14 As a practical matter it may well be possible to have an appeal heard, if not finally determined, before my orders come into operation and, as I indicated to the parties, I will try to make arrangements to have this done or, if that is not possible, to give effect to my firm view, and I hope valid order, that the appellate proceedings should be expedited. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 16 November 2000 Counsel for the Applicant: R Doyle Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the Respondent: B Lacy Solicitor for the Respondent: Maddox Lonie & Chisholm Date of Hearing: 10 November 2000 Date of Judgment: 10 November 2000