WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PRESIDENT

CITATION : 2010 WAIRC 00790

DELIVERED : FRIDAY, 13 AUGUST 2010

FILE NO. : PRES 4 OF 2010

Applicant

AND

Charles Rosenthal

Respondent

CatchWords : Industrial Law (WA) - Application to stay operation of an order made by Commission - Stay of order principles considered - Order stayed in part - Industrial Relations Act 1979 (WA) s 49, s 49(11).

Result : Order made

Representation:

Applicant : Mr A Palermo, as agent

Respondent : In person

Reasons for Decision

1         The Commission has before it an application seeking an order that the operation of an order made by a single Commissioner on 13 July 2010 ([2010] WAIRC 00445; (2010) 90 WAIG 719), be stayed pending the hearing and determination of an appeal which has been filed against the order made.  The application is brought pursuant to s 49(11) of the Industrial Relations Act 1979 (WA) (the Act).  This section provides that at any time after an appeal to the Full Bench has been instituted, a person who has a sufficient interest may apply to the Commission for an order that the operation of the decision appealed against be stayed, wholly or in part, pending the hearing and determination of the appeal.

2         The decision of the Commission was made on 13 July 2010.  The terms of the order are that the Commission:

1. Declares that the applicant was harshly and unfairly dismissed from his employment by the respondent;

2. Declares that reinstatement is not practicable;

3. Orders that the respondent shall pay to the applicant the amount of:

(a) $28,362.50 gross less any taxation payable to the Commissioner of Taxation as compensation for the loss arising from the dismissal; and

(b) $3,534.37 gross less any taxation payable to the Commissioner of Taxation being salary for the period 1 December 2008 to 23 December 2008.

4. Orders that the amounts set out in Order 3 hereof are to be paid within seven days of the date hereof.

3         In support of the application to stay the order, the applicant filed written submissions on 26 July 2010.  The respondent did not file written submissions.  The respondent’s solicitors filed a notice of answer and counter-proposal on 23 July 2010 stating the respondent opposed the granting of a stay.

4         After the application was filed, I made programming orders which were served on the respondent to the application.  One of the directions given was that any evidence in support of or in opposition to the application was to be by way of affidavit filed and served by the relevant party by 11:00am on Tuesday, 27 July 2010.  An order was also made for notice of any intention to seek leave to cross-examine the deponent of any affidavit was to be provided by 11:00am on Wednesday, 28 July 2010.  However, neither party sought to provide any evidence on affidavit in support of, or in opposition to, the application for the stay.

5         The principles that should apply in deciding whether or not to order a stay are well established.  The discretionary grounds upon which a stay will be granted pending the determination of an appeal require the demonstration of special circumstances as there must be justification for departure from the ordinary rule that a successful litigant is entitled to the fruits of the judgment.  Therefore, something special or unusual is required before a stay will be granted.  The relevant principles were summarised by Acting President Ritter in John Holland Group Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers (2005) 85 WAIG 3918 as follows:

34 In Federal Commissioner of Taxation v Myer Emporium Limited (No 1) [1986] 160 CLR 220, Dawson J at 222 said that the discretion to “order a stay of proceedings is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal….  Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory….  Generally that will occur when, because of the respondent’s financial state, there is no reasonable prospect of recovering monies paid pursuant to the judgment at first instance.  However, special circumstances are not limited to that situation and will, I think, exist where for whatever reason, there is a real risk that it would not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed”.

35 These observations were cited with approval by Pullin J in Commonwealth Bank v Bouwman [2003] WASC 205 and by Anderson J, with whom Pidgeon J agreed, in Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79 at pages 89-90.  In the latter case, Anderson J said:-

“… unless a stay is necessary to preserve the subject matter or integrity of the litigation in the broader sense described above the circumstances will not be regarded as sufficiently exceptional to enliven the discretionary jurisdiction to provide a stay.  Only if the applicant can show that a stay is necessary to that end will the High Court go on to consider matters such as whether the application for special leave has a prospect of success, whether a stay will occasion hardship to the respondent, where the balance of convenience lies and so on.  I think such matters are always treated as secondary to the question whether a stay is necessary to preserve the subject matter or integrity of the litigation.  They come into play only if it appears that the refusal of a stay will substantially deprive the applicant of the benefit to be derived from the appeal.  Thus, an applicant may fail to obtain a stay even if the applicant can show that unless there is a stay the appeal would be futile.”

36 The reasons of Anderson J were cited with approval by Sharkey P in G & M Partacini t/as Bayswater Powder Coaters v SDAE (2005) 85 WAIG 51.  In that decision, Sharkey P emphasised that the jurisdiction to grant a stay should also be exercised having regard to the requirements of s26 of the Act and the “need to prevent there being any more uncertainty than is necessary, in industrial matters”.

37 In Eastland Technology Australia Pty Ltd and Others v Whisson and Others (2003) 28 WAR 308, the court (Murray and Parker JJ) at 311 distilled generally applicable principles in relation to applications for stays of orders.  These principles were set out as follows:-

“• The successful litigant at first instance will ordinarily be entitled to enforce the judgment pending the determination of any appeal.

• It is for the applicant for a stay to move the court to a favourable exercise of its discretion.

• It will not do so unless special circumstances are shown justifying the departure from the ordinary rule.

• The central issue will be whether the grant of a stay is perceived to be necessary to preserve the subject matter or the integrity of the litigation, or where refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal.  It is often put shortly that it will first and foremost be necessary to establish that without the grant of a stay, the right of appeal, whether upon the grant of leave or special leave or not, will be rendered nugatory.

• If that can be demonstrated, the stay will generally still be refused unless it can be established that the appeal process, whether upon the grant of leave or special leave or not, has ultimately reasonable prospects of success so as to result in the grant of relief to the appellant.

• If that hurdle can be overcome, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant; where, for example, the grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted.”

6         The applicant’s outline of grounds of appeal in FBA 15 of 2010 are as follows:

1. The history of this case and the way Commissioner Scott has conducted the hearing is appalling.  I request that she be dismissed, and the matter be re-heard.  She has shown continuous bias and lost total control of proceedings to the extent that at one stage during the hearing she saw fit to scream at the Applicant and advised him to 'shut up'.  I have today ordered the rest of the transcript and I will elaborate on this and other matters once the transcript is in my possession.

2. The order does not make provision for superannuation which is a deduction on the gross amount agreed to.

3. The Commissioner has failed to strike out from the reasons any references to me carrying out a mixed business of chartered accounting and farming.

4. The Commissioner has seen fit not to clarify ownership of the cattle farm.  I do not own the cattle farm.

5. Despite many requests and a previous appeal to the Full Bench, the Commissioner saw fit not to allow me to call Mr and Mrs Rosenthal Senior to give evidence, despite them having been properly served and summonsed.  Mr Rosenthal Senior had full control of my farming operations without my authority on occasions when the Applicant went on leave.  There was no formal handover and takeover.  Mr Rosenthal Senior is the only person who could verify the Applicant's statements that he was not ill despite the Applicant having previously advised me that Mr Rosenthal Senior was ill.  This would have an extreme bearing on the outcome of the case, not only on the credibility of the Applicant but also on cattle marking and missing cattle numbers.  Mr Rosenthal Senior would also be able to verify and confirm dates, events and what transpired in the period when the Applicant had resigned from his position.

6. As a result of the above Mr Macri, who was to be my chief witness, having passed away during the course of the hearing, it was even more imperative, that Mr and Mrs Rosenthal Senior be called to give evidence as Mr Macri was the only other witness present when the Applicant resigned.

7. Due to the way the Commissioner conducted the case, it left no time for further witnesses and for my agent and/or myself to give further evidence.  The comments by my agent about the fact that nothing further could be added was based on time management issues only.  The Commissioner saw fit as a result of losing control of the matter to implement strict time guidelines in order to conclude the case early as there were other cases pending to be heard.  Natural justice is not about timing or other cases.  Whilst timing and costs are relevant, in the interests of natural justice, it is not up to the Commissioner to advise any respondent on how to conduct a case.  For example, I stated that my agent's testimony could range from a period of 1 to 8 days.  The reason why there was such a range in time was based on the documentation that the Applicant stole as a servant and the way that the Applicant refused to answer questions, despite having been requested to do so on many occasions by the Commissioner.  If for instance the diaries and other records which were my property, had been produced much of the hearing time would not have been necessary.  By way of further example, the question of theft of cattle did not come into contention as until further evidence was provided I could not see how I could make an allegation of theft against anyone.  However, it was hoped that during the course of the hearing, the Applicant would in some way attempt (or be directed by the Commissioner) to produce records to reconcile stock numbers.  Mere diary entries which were inadequate and inconclusive are not adequate when dealing with stock values in excess of half a million dollars.  His continuous refusal during his evidence to produce records on stock numbers could only lead me to conclude that the missing stock was stolen by him.

8. The fact is that the Applicant had resigned, changed his mind, and attempted to rectify the position.  As his departure time drew closer, the damage, destruction and theft were put in process.

9. The reason for the delay in the hearing could not in any way be attributed to me, as I am not responsible for setting hearing dates.  Unlike the Applicant, I have a busy work schedule, and I have attempted on all situations to adhere to reasonable times and hearing dates.

10. In my view, the Commissioner has not seen fit to hear and rule in accordance with the spirit of the Industrial Relations Act, and has taken opportunity to side with the Applicant on every possible occasion.  The fact that the Applicant was represented by a legal practitioner and incurring costs is not for my concern or care, as if the Applicant had answered the questions put to him, the whole hearing in my view should have concluded in 3 to 5 days maximum.

11. The Commissioner has erred in her calculations of the 6 months by not deducting from her calculations the receipt of some funds by the Applicant and the valuing of time the Applicant spent working on his farm during my paid time.  Moonlighting was never requested for or approved.  The Applicant has carelessly and unwillingly made poor attempts to mitigate his losses by stating that he would not travel to work if it involved more than a certain time or kilometre.  Given low unemployment rates of under 4%, I find it extremely difficult that the Applicant could not find other work.  I now know the reason.  Working on his own farm.

12. The Commissioner has seen fit to punish me, the employer, with total lack of care and regard, not only to proceedings, but events and employer rights.

13. The Commissioner has seen fit to calculate the Applicant's loss by ending it on the last day of the hearing.  This is completely contrary to the spirit of the Act, and again proves the Commissioner's bias in favour of the Applicant and against the employer.

14. The Commissioner has erred on many occasions, some of which were highlighted at the previous appeal before the Full Bench.  By way of another example, in the order, her first paragraph states ‘Having heard Ms R Cosentino on behalf of the applicant …’.  This is completely incorrect.  Ms Cosentino was not at the speaking of the minutes hearing.  It was her associate, Ms Billich [sic] was at the hearing.  If the Commissioner does not even know who appeared before her, what hope is there for a fair outcome.

7         The respondent’s answer and counter-proposal states that the stay should not be granted on the following grounds:

1 A stay of an Order of the Commission under s49(1l) ought only be made where ‘special circumstances’ justify doing so.  The fact that an appeal from the Order has been lodged does not on its own amount to special circumstances justifying a stay.

2 The relevant ordinary principles applicable to an application for a stay of execution are:

2.1 The successful party is ordinary entitled to have the Order carried out pending the determination of any appeal.

2.2 It is for the applicant for a stay to satisfy the Commission that circumstances exist which favour the exercise of the discretion.

2.4 Special circumstances must be shown justifying a departure from the general rule.

2.5 The central issue will be whether a stay is necessary to preserve the subject matter or integrity of the litigation, in other words, that the absence of a stay will render the appeal nugatory.

2.6 If that is demonstrated a stay will generally still be refused unless it can be established that the appeal has reasonable prospects of success so as to result in the grant of relief to the appellant.

2.7 If that hurdle can be overcome then the stay may still be refused if the balance of convenience does not lie in favour of the applicant for the stay.

3 These principles are set out in Eastland Technology Australia Pty Ltd and Others v Whisson and Others (2003) 28 WAR 308, adopted by the President in John Holland Group Pty Ltd v CFMEU 2005 WAIRC 02983.

4 There is no reason for departure from the general rule. The Appellant has not cited or established any special circumstances which might justify a stay.  The Appeal is manifestly unmeritorious.

8         The applicant in his written submissions says that the reasons a stay should be granted are as follows:

A. Reason for seeking the stay

I have filed an appeal in relation to Commissioner Scott's final orders.  I will be materially prejudiced if I am required to comply with her final orders prior to having this matter heard on appeal.

B. Consequences of stay not being granted

If the stay is not granted, it would deny me procedural fairness, equity and natural justice.  If the money is paid and I am successful in the appeal to the Full Bench, or failing that, successful in an appeal to the Industrial Court at the Supreme Court, there is little likelihood of regaining that money, given that the original Applicant has stated under oath that he has no assets, lives on the family farm, and appears to be supported by his parents.  Given that the original Applicant is also in his mid-30's, and to date, has not been able to even afford to purchase a house, it is likely that if the money is paid, it will either be squandered or paid to his lawyers.  I would then have to pursue recovery against him, with possible bankruptcy.  This is not in his interest.

C. Anything else which affects the balance of convenience if the stay is not granted

A delay in the appeal is not going to inconvenience any party.  The appeal should be a right, not a discretion.  Given that the case has gone on for some time, and given that the original Applicant has seen fit to engage lawyers at great cost, I do not consider that he is inconvenienced in any way.  He is obviously in a position where, if he does not have means, his solicitor's fees are either being paid by his parents, or is waiting for this payout to pay those fees.  In my view, the delay in this matter has been solicitor-driven.

D. Whether the appeal has a reasonable prospect of success

Every appeal should be in the first instance looked at as having a reasonable prospect of success.  This appeal is not lodged to inconvenience, frustrate or add cost to the process.  I feel the Commissioner has simply got it wrong.  As mentioned above, it is my right to take this matter to appeal.

E. Other special circumstances that support the grant of the stay

Commissioner Scott's finding is not only flawed, but also is incorrect in calculation of the quantum of the award.  She has shown extreme bias throughout the hearing, and had lost total control of the proceedings.  At one point, she screamed at the original Applicant when he refused to answer questions put to him, and told him: 'Shut up Mr Rosenthal' or words to that effect.  Her bias was evident in this, as he constant [sic] refused to answer questions, and she constantly showed weakness in not requiring him to do so.

Her bias even extended to not allowing me to run my case in the way that it was planned.  She refused to allow me to call Mr and Mrs Rosenthal Senior to give evidence, notwithstanding they had been properly summoned.  This was critical because Mr Rosenthal Senior, without authority, was handed over total control of my farming operations by the original Applicant when he went on leave.  Mr Rosenthal Senior therefore has access to all the means available to him to misappropriate stock.

Given that my principal witness Mr Macri passed away during the hearing, and given that Mr Macri was the only other person present when Mr Rosenthal resigned, it was imperative that Mr Rosenthal Senior be allowed to be examined.  The original Applicant was not unfairly dismissed.  He had resigned because his father was ill, and Mr Rosenthal Senior is the only person who could verify this.

Once the original Applicant had resigned, he took the opportunity between the resignation date and dismissal date to enter into a series of deceitful and fraudulent activities, worked on his own family farm and refused to attend to duties to please his own means.  Mrs Rosenthal Senior should have been allowed to be examined, but only on the question of the computer, as the original Applicant simply refused to produce the computer that was used to generate some so-called documents which purported to be letters to me and stock records. Commissioner Scott failed to allow the production of the books and records of the original Applicant's company which trades in the same breed of stock as what I do.

9         The first requirement of s 49(11) of the Act is that an appeal must be instituted to the Full Bench under s 49.  I am satisfied that this has occurred.  Secondly, the stay application must be filed by a person who has a sufficient interest to make the application.  Again, I am satisfied that the applicant as the party against whom the order to pay was made, has sufficient interest to make the application for the stay.

10      As to whether a stay ought to be granted or not, it would not be appropriate for me to reach any conclusion about the strength of the case as that is to be put forward by the appellant in the appeal.  I am only required to be satisfied that there is some issue of substance to be raised.  There is some difficulty involved in examining the substance and import of the grounds raised in an appeal because this application is an interlocutory matter and the appeal is to be heard by a Full Bench comprised of two other Commissioners and not just myself.  Further, on a hearing for a stay it is not appropriate for the parties to address all of the grounds of appeal in any complete way.  Having said that and having reviewed the grounds of appeal it is my view that although many of the grounds of appeal have real difficulties, grounds 5, 6, parts of grounds 7 and 11 appear reasonably arguable.  Grounds 5, 6 and 7 raise the issue whether the applicant was denied procedural fairness and whether the principles of case management that apply in courts of pleadings should apply to industrial matters heard and determined by the Commission.  Ground 11 raises an issue whether the respondent mitigated his loss after his employment was terminated.  These grounds raise issues which arise in respect of the claim in U 10 of 2009 by the respondent that he was harshly, oppressively and unfairly dismissed and do not appear to relate to the respondent’s claim in B 101 of 2009 for contractual benefits.  Consequently I am not satisfied that the grounds of appeal disclose an arguable case that the Commission erred in finding that the respondent is owed by the applicant $3,534.37 gross in wages and I will not issue an order to stay order 3(b) of the order.  Whether I should make an order to stay order 3(a) (which requires payment of compensation to the respondent for the loss caused by the unfair dismissal) requires an exercise of discretion.  Before exercising that discretion the applicant must satisfy me that there are special circumstances that exist which justify my making an order to stay order 3(a) of the order and the balance of convenience favours the making of such an order.

11      In this matter the substantive ground of special circumstance is the applicant’s contention that there is a real risk that it would not be possible to restore him substantially to his former position if a stay were not granted as the respondent’s financial position is such that it is likely that if the order is complied with and the monetary amounts paid to the respondent the respondent would not be in a position to repay those amounts to the applicant if the appeal is successful.

12      The applicant’s financial position at the time he gave evidence in May 2010 was set out in the Acting Senior Commissioner’s reasons for decision ([2010] WAIRC 00401; (2010) 90 WAIG 709) as follows:

84 The applicant’s remuneration at the time of dismissal was a salary of $52,000 per annum plus superannuation of $1,181.25 per quarter which equals $4,725 per annum (Exhibit A21).  Therefore the total remuneration was $56,725 per annum giving a weekly rate of $1,087.50.

85 The period over which the applicant suffered the loss was from 23 December 2008 to the last day of hearing, being 14 May 2010 which is 72.3 weeks.  72.3 weeks at $1,087.50 per week equals $78,626.25.

86 The applicant was employed by Flexi Staff from 27 January 2009 to 15 August 2009, being 28 weeks and 4 days.  He received wages of $17,710 plus superannuation of $1,510.65 totalling $19,220.65.  This brings an average remuneration over that 28 and a half week period of $676.78 per week.

87 There is no evidence that this situation, on average, changed after 15 August 2009.  Therefore the applicant’s weekly loss has been $1,087.50 less $676.78 being $410.72.

13      The respondent gave evidence in the hearing before the Acting Senior Commissioner that the amount he received from his casual employment just covered food bills and that he received very little financial assistance from Centrelink during the periods set out above.  The respondent conceded that he owns no real estate.  His only asset is a motor vehicle that is 10 years old which he says would be valued at $8,000 to $10,000.  At the hearing of this matter he stated he does have the capacity to repay the judgment sums in the event of successful appeal as his financial position has recently improved.  The respondent stated without objection from the bar table that he has recently been employed as a truck driver for a period of three months and that it is anticipated that he will earn $1,200 each week.  He also stated that he will be paid shift allowance for working shift work. 

14      Although the respondent contends that he would be able to repay the money, the applicant has provided no information to the Commission as to whether the cost of litigating his claim in the Commission is outstanding and owing to his solicitors.  Nor is it known whether the judgment sums are intended to be applied by him to any outstanding costs or if such costs are outstanding.  Whilst the respondent appeared in person at the hearing of the application for a stay, his solicitors remain on the record. 

15      The applicant contends there is a real risk that he will not be able to recover the money paid pursuant to the terms of the order if the appeal is successful.  The applicant argues that the respondent will not suffer any prejudice if the order is stayed as the applicant is ready for the appeal to be heard expeditiously.  The applicant undertook to file the appeal books and an application to extend time for filing the appeal books after the hearing of this application was concluded on 10 August 2010.  However, where on an application for a stay an appeal is arguable, special circumstances do not arise where neither party might suffer prejudice and expeditious steps have been taken to have the appeal heard in the near future (Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79, 80, 88).  Whilst the undertaking given by the applicant by his agent is not sufficient to constitute special circumstances, the undertaking to prosecute the appeal expeditiously is noted.

16      Having considered the submissions made by the parties, I am persuaded that the balance of convenience favours that I make an order that order 3(a) of the order be stayed.  In the circumstances:

(a) where it is not known how the monies payable pursuant to the terms of order 3(a) are to be applied;

(b) where the respondent is not the owner of real property and the one asset he owns would be insufficient to satisfy a judgment debt for the amount of $28,362.50; and

(c) the respondent has not secured permanent employment;

I am satisfied that there is a real risk that if the money required to be paid pursuant to order 3(a) of the order is paid, the monies may be irrecoverable if the appeal is successful.

17      I am also of the opinion that the applicant should take steps to ensure that the appeal is heard expeditiously and in particular should take steps to ensure that the hearing of the appeal is heard without delay.  This will include an obligation on the applicant to make himself or his agent available to attend any date set by the Full Bench for the hearing of the appeal.  If in the event that the appeal is delayed, it will be open to the respondent to apply to discharge the order staying order 3(a) of the order made on 13 July 2010.

18      For these reasons the order which I will make is that:

1. Order 3(a) of the order made by the Commission on 13 July 2010 in matters U 10 of 2009 and B 101 of 2009 ([2010] WAIRC 00445) is stayed pending the hearing and determination of appeal FBA 15 of 2010 until further order.

2. The parties have liberty to apply on 48 hours’ notice for the purpose of seeking any variation of or revocation of order 1 of this order.