Industrial Relations Commission of New South Wales in Court Session CITATION : Australian Authorised Investments Limited v Nclue Investments Pty Limited [2002] NSWIRComm 381 APPELLANT Australian Authorised Investments Limited FIRST RESPONDENT Nclue Investments Pty Limited PARTIES : SECOND RESPONDENT Glenn Christensen THIRD RESPONDENT G3 Communications Pty Limited (in liquidation) FILE NUMBER: IRC 5254 of 2002 CORAM: Wright J President; Walton J Vice-President; Marks J CATCHWORDS : Appeal - Stay - Practice and procedure - Failure of appellant to comply with terms of stay order - Terms of stay order provided that stay would lapse if terms not complied with - Stay lapsed upon default - No explanation given for default - Constitutional issues said to be raised - Public interest - Liberty to apply - Stay of appeal granted. LEGISLATION CITED : Industrial Relations Act 1996 s 106 s 188 Judiciary Act 1903 (Cth) s 78B CASES CITED : Nutshack Franchise Pty Ltd and Others v Smith and Another (1999) 90 IR 355 HEARING DATES: 12/19/2002 EXTEMPORE JUDGMENT DATE : 12/19/2002 APPELLANT/RESPONDENT IN THE MOTION Mr R W Killalea of counsel Solicitors: Ian D Graham & Associates (Mr I D Graham) LEGAL REPRESENTATIVES: FIRST AND SECOND RESPONDENTS/APPLICANTS IN THE MOTION Mr R Reitano of counsel Solicitors: Rockliffs (Mr G T Thiele) JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President MARKS J Thursday 19 December 2002 Matter No IRC 5254 of 2002 AUSTRALIAN AUTHORISED INVESTMENTS LIMITED v NCLUE INVESTMENTS PTY LIMITED AND OTHERS Application by Australian Authorised Investments Limited for leave to appeal and appeal against a decision of Justice Schmidt given on 23 August 2002 in Matter No IRC 4855 of 1999 JUDGMENT OF THE COURT (Extempore) [2002] NSWIRComm 381 1 In these proceedings, as they have developed before the Court today, the respondents have applied for a stay, until further order of the Court, of the application for leave to appeal and the appeal filed by the appellant on 13 September 2002. 2 Reference should be made to the parties before the Court. The applicants on the motion are Nclue Investments Pty Limited and Glenn Christensen and the respondent to the motion is Australian Authorised Investments Limited. The applicants are the first and second respondents to the appeal earlier referred to and the respondent is the appellant in the appeal proceedings. For convenience the parties will be referred to in their roles in the proceedings proper rather than in the motion. 3 It is necessary to set out briefly the chronology of events which led to the proceedings today. That may usefully be done by reference to the affidavit of Mr Glen Thiele, the solicitor for the first and second respondents which was filed in support of the notice of motion: (a) On 23 August 2002 Schmidt J delivered judgment in the proceedings between the parties taken under s 106 of the Industrial Relations Act 1996. Her Honour made orders in the following terms: 1. I declare the contract between the parties as relevantly unfair. 2. I order that the contract be varied ab initio to provide: 7.3 Payment of Exit Fee The Company shall pay Exit Fees to the Service Provider within 1 month after the termination of this agreement or, as the case may be, the end of the Management Period. 3. I order that the respondents pay the applicants an amount calculated by reference to: (a) the sum of $250,000; and (b) the interest on that amount calculated in accordance with the Supreme Court scale from the date of termination of the management services agreement until the date of judgment. (b) On 10 September, Mr Thiele wrote to the solicitor for the appellant seeking payment pursuant to the orders made by Schmidt J; he also requested the agreement of the appellant's solicitor to calculations of interest on the judgment sum. (c) On 11 October Mr Thiele received a facsimile from the appellant's solicitor enclosing a sealed copy of the application for leave to appeal and appeal which had been filed some four weeks earlier on 13 September 2002. The inference is that it had not been received until that date. (d) There was then a series of correspondence between the parties, detailed reference to which is unnecessary. (e) The next relevant event was the proceedings before Kavanagh J in respect of the appellant's application for stay of the orders made by Schmidt J. Those proceedings occurred on 12 and 14 November 2002 and, on the second of those days, her Honour granted a stay on terms embodied in short minutes of order which are also before the Full Bench. It is unnecessary to set out the terms of the orders other than to note that they involved, inter alia, the payment of certain moneys into a jointly administered interest bearing account under control of the solicitors for the appellant and the respondents. Such payments were to be made within 14 days of the date of Kavanagh J's orders; that is, by 28 November 2002. It was also expressly stated in those orders that the stay was granted: "On the basis that orders 1 to 3 above are adhered to in default of which the stay is revoked." (f) In due course, as it transpired, the conditions of the stay were not met and the stay lapsed or, to use the words of the orders, was "revoked". (g) The matter then came before Kavanagh J on 6 December 2002 as a result of a request from the respondents' solicitors. Her Honour ordered that in accordance with - and this is a quotation from Mr Thiel's affidavit - "a breach of her short minutes of order the stay was denied and the matter is to be referred back to the Full Bench forthwith". Apparently counsel advised her Honour that the respondents intended to file a notice of motion seeking that the application for leave to appeal and appeal be dismissed. (h) On 10 December 2002, the solicitors for the respondents sent a facsimile to the solicitor for the appellant to which no reply was received. That correspondence said inter alia: "Given that there is now no stay of the judgment when does your client propose to pay the judgment sum, interest and costs as agreed?" (i) On 11 December 2002, the respondents moved the Court by way of motion seeking orders along the lines foreshadowed before Kavanagh J. 4 On 12 December 2002, having regard to the time of the year and the difficulties in a matter of the kind filed by the respondents being listed at short notice during vacation, the notice of motion came before a judge for directions. 5 As a result of the directions hearing on 12 December, the proceedings were set down today before the Full Bench to deal with two matters. First, the application then foreshadowed by the respondents for a stay of the appeal proceedings, relying upon the judgment of the Full Bench of this Court in Nutshack Franchise Pty Ltd v Smith (1999) 90 IR 355 and, second, the earlier foreshadowed application for dismissal of the application for leave to appeal and appeal. 6 When the proceedings commenced before the Court today, Mr Reitano, counsel for the respondents, sought and was granted leave to amend the motion earlier filed by restricting it to claims for the following orders: 1. The application for leave to appeal and the appeal be stayed until further order of the Commission. 2. Costs. In support of his submissions on the amended motion, counsel relied upon the principles as elaborated in Nutshack and sought that the Court exercise its discretion in this matter in a similar way to that which had occurred in Nutshack by ordering a stay of the appeal. 7 The essence of the appellant's submissions resisting the application for the stay may be summarised as involving two essential points. First, that there is a public interest in permitting the appeal to proceed and the stay should therefore be denied. This submission referred to the public interest in a number of ways. In substance, however, it seemed that an analogy was sought to be drawn with the public interest requirement relevant to the grant of leave to appeal as referred to in s 188 of the Industrial Relations Act. It appears the purpose of the submission was to emphasise that the appeal involved possible constitutional questions; that it thus had importance and should be heard. 8 The second element, although overlapping to an extent with the first, was based on the consideration that the appeal proceedings were said to involve constitutional issues and that s 78B of the Judiciary Act 1903 (Cth) therefore precluded the Court from proceeding to deal with the application before it today. 9 Section 78B of the Judiciary Act relevantly provides: (1) Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court. (2) For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending: ... (c) may continue to hear evidence and argument concerning matters severable from any matter arising under the constitution or involving its interpretation. ... (5) Nothing in subsection (1) prevents a court from proceeding without delay to hear and determine proceedings, so far as they relate to the grant of urgent relief of an interlocutory nature, where the court thinks it necessary in the interests of justice to do so. 10 We do not consider that the application for stay before the Full Bench would involve proceeding contrary to the mandate contained in s 78B(1). In addition, it is noted that s 78(2)(c) enables a court, where a matter of the kind referred to in s 78B(1) is raised or being argued, to continue to hear that part of the case concerning matters severable from any constitutional issue. We consider that, on any view, what is sought today is severable from any constitutional issue which might arise in the proceedings. 11 The terms of s 78B(5) are also relevant. Counsel for the appellant submits that there is no evidence before the Court which would enable it to find that there is any urgency for the grant of interlocutory relief. It is pertinent, of course, that the discretion under s 78B is a wide one and its operation depends on a number of considerations which include "where the court thinks it is necessary in the interests of justice to do so". We consider that part of s 78B(5) is satisfied by reference to the evidence before the Court. The relevant evidence is set out in the affidavit of Mr Thiele earlier referred to and the material attached to it. In our view, this evidence shows that the criteria in s 78B(5) are satisfied. Any of the bases referred to which derive from the terms of s 78B would, if satisfied, enable the Court to proceed today. We consider that all of them are satisfied in the present proceedings. 12 We now return to the point raised which is based squarely on the Full Bench judgment in Nutshack. That judgment represents an important step in the development and formulation of appropriate procedures to apply in the jurisprudence of this Court and also in the associated Industrial Relations Commission. The judgment is, however, sometimes misunderstood in that the Court was said, in some way, to be laying down an invariable rule. That is not, of course, what occurred. 13 The Full Bench in Nutshack determined that, in the proper exercise of its discretion, having regard to all the circumstances of the matter before the Court, it was appropriate to exercise its discretion by granting a stay, although the Full Bench exercised its discretion by adopting and developing principles by reference to other areas of the law. 14 The Full Bench in Nutshack did formulate the principle for which the case might be considered to stand. The principle may be discerned by reference, for example, to page 361 of the report of the judgment; that is, in circumstances which involved an: ... abuse [of] the processes of the Court by disclaiming use of the stay facility in relation to a decision which is otherwise final and, it may be added, where the appeal is not even as of right but only by leave. In such a situation ... the power in the Court given by s 162(1) of the Industrial Relations Act to determine its own procedure and by s 162(2)(g) to adjourn proceedings to any time and place is appropriate to be exercised. Their Honours held: [W]here that situation occurs ... we consider the proper course to be adopted, namely to stay the proceedings until the appellant complies with its obligations, does not admit of any exception. 15 However, it should be said that, in our view, the intention of the Full Bench in Nutshack, as expressed in the final phrase of the extract cited, was not to limit the exercise of discretion, but to emphasise the seriousness of an abuse of the process of the Court in circumstances considered to be analogous to those dealt with in that case. 16 Counsel for the appellant, given the application of the principles in Nutshack and the discretion which would consequently arise by virtue of the circumstances of the present matter, referred to the public interest considerations in this matter as the reason why the order pressed by the respondents should be refused. We do not agree that the matters raised by counsel are matters which raise a relevant question of public interest or are matters which sufficiently distinguish this case from that considered in Nutshack. It is unnecessary to refer in any detail to all of the circumstances of this matter. It is, however, possible to observe that an analysis of the circumstances of the present matter could demonstrate that the circumstances here are of more serious import than those in Nutshack. 17 It is sufficient, however, for present purposes, to conclude that the present case cannot be relevantly distinguished from the circumstances in Nutshack nor can the basis for the exercise of discretion here be distinguished from that in Nutshack. 18 Finally, it is to be noted that no explanation was offered to the Court as to why the stay, once sought, was not "honoured" (in the sense that the terms of the stay were not complied with). No reference was made to any attempts to comply in any way with the conditions of the stay granted by Kavanagh J. 19 We, therefore, make the first of the orders sought in the amended notice of motion filed by the applicant today. We would also make the second order sought in the notice of motion. However, it might be more appropriate to frame the order for costs in the following way: that we order that the appellant pay the respondents' costs of the notice of motion as agreed or in default of agreement, as assessed; and we so order. 20 The first order made is in accordance with the amended notice of motion which, without referring to the terms of the order in full, involves a stay until further order of the Court. We consider that an order in those terms, of itself, entails the grant of liberty to apply available to either party if and when any appropriate circumstance occurs. However, if any party has any doubt as to that aspect we would expressly grant liberty to apply. ______________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.