Re Gerald Anthony Hennessy v Keetleys Tours Pty Limited [1988] FCA 22; 23 IR 269 (10 February 1988)

FEDERAL COURT OF AUSTRALIA

Re: GERALD ANTHONY HENNESSY
And: KEETLEYS TOURS PTY LIMITED
No. NT1 of 1985
Industrial Law
23 IR 269

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY
INDUSTRIAL DIVISION
French J.(1)

CATCHWORDS

Industrial Law - breaches of award - delay in instituting proceedings - inordinate and inexcusable delay in conduct of proceedings - power of court to stay proceedings - whether prejudice attributable to delay - relevance of limitation period - respondent's acquiesence in delay - motion to stay proceedings for abuse of process - motion dismissed.

Conciliation and Arbitration Act 1904

Federal Court of Australia Act 1976

Jackson v Sterling Industries Ltd (1986) 69 ALR 92

Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 71 ALR 457

Birkett v James (1978) AC 297

Metropolitan Bank Ltd v Pooley (1885) 10 App. Cas. 210

Herron v McGregor (1986) 6 NSWLR 246

R v Lawrence (1982) AC 510

HEARING

DARWIN
10:2:1988

ORDER

The respondent's motion for a stay of proceedings is dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Counsel for the Applicant: Mr P. Tiffin

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr C. McDonald

Solicitors for the Respondent: Cridland & Bauer

DECISION

Gerald Anthony Hennessy is an inspector appointed under the provisions of s.125 of the Conciliation and Arbitration Act 1904 for the purposes of securing the observance of the Act and the Regulations and of Awards.

2. On 12 July 1985, by an application filed in this Court, he instituted proceedings against Keetleys Tours Pty Limited for various breaches of the Transport Workers (Passenger Vehicles) Award 1978 arising in large part out of alleged underpayments to two of its adult employees, Marelyn Jeffs and Robert Thomson. The breaches were said to have occurred between December 1982 and February 1983.

3. The hearing of the application commenced on 8 February 1988, but at the outset counsel for the respondent moved to stay the proceedings indefinitely. The basis for his motion was that by reason of inordinate and inexcusable delay in the institution and conduct of the application, the respondent has suffered serious prejudice.

4. The continuance of the hearing, it was said, would be on abuse of the process of the Court. The mere fact of delay gave rise to an inference of prejudice because of the dimming of memory with the passing of time. In addition specific prejudice was alleged on the basis that the respondent no longer has in its possession a wages book which was its record of hours worked and payments made to employees at the relevant time. It was submitted that for these reasons, the respondent is no longer in a position to adduce reliable evidence on the payments made to the two employees concerned and as to their entitlements.

5. I received affidavit and oral evidence, together with some documentary exhibits in relation to the motion, which was brought on orally and at very short notice to the applicant. However, no objection was taken to it on that basis and I propose to deal with it on its merits. It is necessary first to recount some of the history of events relating to the institution and conduct of the action.

Factual Background

6. Mr Grant Keetley has been in the transport business for most of his life. As the Executive Director of the respondent, he has conducted its business since January 1974 when the company was incorporated. On 4 May 1983 he was visited at his offices by two officers from the Industrial Relations Bureau established under the Conciliation and Arbitration Act, but abolished by Act No. 33 of 1983. They informed him that they wished to discuss with him certain complaints. The meeting was acrimonious as Keetley formed the view that he had been misled as to the purpose of their visit. He was, he said, unco-operative and declined to answer any of their questions.

7. Later on the same day he was served with a notice requiring the production of his books for their inspection. On 5 May 1983 two officers again attended and on this occasion Mr R. Crowe, a Senior Industrial Advisor with the Northern Territory Confederation of Industry and Commerce was present to protect the respondent's interests. According to Keetley's oral evidence, the officers then inspected his wages book and copied extracts from it. They did so in the presence of himself and Crowe.

8. He is not sure whether they took the book with them when they left. In view of the fact that they were taking extracts, this seems unlikely. The book was a large green hard bound "Zion" book about 2' x 18". It is not the sort of document that would be swept up by mistake with other papers and although Keetley says that he was too annoyed to be taking much notice of what the officers did, it is doubtful whether the book could have been removed without either himself or Crowe noticing. In the light of these matters and a subsequent letter from the Industrial Relations Bureau suggesting that he should check the very records in question with respect to all his employees, I find on the balance of probability that the book was not removed by officers of the Bureau.

9. The letter from the Bureau to which I have referred, was dated 17 May 1983 and annexed a document entitled "Summary of Alleged Award Non-Observance". The letter invited Keetley to "attend to these matters and advise this Office in writing by 31/5/1983 of the action taken". It also invited him to examine his records in respect of both current and former employees and if necessary, to adjust the entitlement of those persons. The Summary referred to his alleged failure to keep adequate records, to display a copy of the Award in a prominent place and to post rosters. It also set out 4 categories of remuneration in respect of which the respondent had allegedly failed to pay appropriate entitlements under the Award to two casual employees, Marelyn Jeffs and Robert Thomson. They were:-

1. Failure to pay correct wage rate for a weekly

employee (casual workers working more than
50 hours in 28 days are deemed weekly workers
under the Award).

2. Failure to pay District Allowance.

3. Failure to pay overtime.

4. Failure to pay penalty rates.

10. As at 17 May 1983 therefore, it was known to the respondent that there was a possibility that action might be taken against him for failure to pay the correct wage rates, overtime, District Allowance and penalty rates to Jeffs and Thomson. By a letter dated 30 May Crowe responded to the Bureau's letter of 17 May and another letter of 18 May which is not in evidence, but which evidently referred to the need to ensure that time and wages records contained all information required by the Award. As appears from a subsequent letter of 15 June from Crowe to Keetley, the adequacy of the payments made was still in issue and the possibility of prosecution a live one. It specifically referred to the question whether work performed by the respondent for airlines at Darwin Airport qualified as charter work and was therefore covered by the Award. In this connection Crowe wrote:-

"If we cannot convince them of our argument they
will prosecute you under the terms of the
Conciliation and Arbitration Act and the argument
would need to be put to the Courts."

11. No action was then taken for any breaches of the Award. A prosecution was however instituted against Keetley for contravention of the since repealed sub-s. 126P(3) of the Act by provision of a misleading answer to a question put to Keetley at one of the May meetings. He was convicted by Gray J. on 9 August 1984. The Full Court later dismissed his appeal and in December 1985 the High Court refused special leave to appeal.

12. It was not until 12 July 1985 that the present proceedings were instituted by the filing of an application and supporting affidavit sworn by the applicant. The affidavit set out particulars of the breaches alleged in the application. In relation to the underpayments to Jeffs and Thomson it specified for each of the 17 counts, the week of work in respect of which the underpayment occurred, the nature of the work and the pay entitlement by reference to hours worked at ordinary time, time and a half and double time respectively. The actual payment made and the alleged underpayment were also set out for each count. The nature of the employment was described in each case by the phrase "driver of a charter passenger vehicle seating less than 25 passengers". The respondent filed its appearance on 15 August 1985 and a directions hearing was held on 20 August 1985. At that time directions were made by consent requiring the applicant within 28 days to give further and better particulars of counts 4 to 20 of the application, being particulars of:-

1. The times of work allegedly performed on
each relevant day.

2. The hourly rate claimed.

3. Description of the type of work performed.

4. Method of calculation of the amount claimed.

13. On 18 September 1985 Mr Richard Andruszko, an Officer of the Australian Government Solicitor's office, who had the conduct of the application, telephoned Mr Alan Lindsay of the respondent's solicitors, to say that he was then unable to meet the deadline for delivery of particulars. According to his evidence, which was not contradicted or challenged on this point, Mr Lindsay replied with words to the effect that it was "all right, it was the applicant's application and it didn't matter to the respondent's solicitors when the matter finally got on".

14. Draft particulars were sent to counsel for settling on or about 23 September 1985. The respondent's solicitors telephoned Mr Andruszko on 19 March 1986 asking about the particulars and were told that they were being settled by counsel. In the event, Mr Andruszko did not receive advice of necessary corrections to the draft until 17 September 1986. A revised draft was returned to counsel for settling on 19 May 1987. A set of particulars was evidently delivered to the respondent's solicitors on 22 May 1987, but by a letter dated 5 June they objected that the form was inappropriate. The objection related to the absence of a facing sheet, the particulars having been supplied in the form of a schedule. A facing sheet was provided and some arithmetical corrections made. The particulars as they are now before the Court, were filed on 11 August 1987 and delivered about the same date. The matter has progressed since then at what is, comparatively speaking, break neck speed. The directions hearing was relisted for 26 August and then adjourned for a month. On 24 September Sheppard J. ordered that each side give discovery within 28 days. Lists of documents were exchanged on 22 October and inspection completed in November.

15. According to Keetley, he did not instruct solicitors in relation to the allegations of breach of the award until after the present application was filed. He believed, he said, that no further action would be taken in that regard. There appears to have been no communication to him in that regard after June 1983 until the filing and service of the application and affidavit in July 1985. He did not know what had happened to the wages book after May 1983 and did not concern himself about its whereabouts until the commencement of these proceedings.

16. He then discovered that the book was missing. According to his affidavit evidence, he decided that the Bureau's officers must have taken it with them in May 1983. It was not until after the applicant gave discovery of documents in October 1987 that he concluded that the relevant records were not with the applicant. He believes, he said, that the company's employees were properly paid but without the relevant records he would be unable to adduce documentary evidence to enable him to properly defend the present application. Further, the passage of time has left him, he said, without any independent recollection of the hours any given employee might have worked on a particular day, over 5 years ago. He was unable to account for the loss of the wages book beyond raising the possibility of removal by the Bureau's officers or loss at the time the respondent's premises were rebuilt in early 1985.

17. It is necessary now to consider the Court's power to make the order which is sought.

The Power of the Court to Stay Proceedings

18. Counsel for the respondent submitted that the court has "an inherent jurisdiction" to stay its proceedings in order to prevent an abuse of process. The reference to "inherent jurisdiction" is undesirable but it is plain that the court has power to prevent abuse of its own process. As Bowen CJ said in his judgment in the Full Court in Jackson v Sterling Industries Ltd (1986) 69 ALR 92 at 97:-

"In relation to a statutory court such as the
Federal Court it is wise to avoid the use of the
words "inherent jurisdiction". Nevertheless a
statutory court which is expressly given certain
jurisdiction and powers must exercise that
jurisdiction and those powers. In doing so it
must be taken to be given by implication whatever
jurisdiction or powers may be necessary for the
exercise of those expressly conferred. The
implied power, for example, to prevent abuse of
its process, is similar to, if not identical with,
inherent power".

Woodward J. at 108 expressed similar views.

When the case went on appeal to the High Court, Deane J. with whom Mason CJ, Wilson and Dawson JJ agreed, expressly approved the above quoted passage from the judgment of Bowen CJ, but added that the power to make orders to prevent abuse of process may derive from s. 23 of the Federal Court of Australia Act as well as an implied incidental power - Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 71 ALR 457 at 464 - see also Wilson and Dawson JJ at 460-461.

19. The content of the implied incidental power is therefore substantially similar, if not identical to the inherent power of superior courts of record. Such courts clearly have a power to stay or dismiss an action for want of prosecution if delay on the part of the plaintiff or the plaintiff's advisors is so prolonged that to bring the action on for hearing would involve a substantial risk that a fair trial of the issues would not be possible. Birkett v James (1978) AC 297, 318, Metropolitan Bank Ltd v Pooley (1885) 10 App. Cas. 210 at 214, Herron v McGregor (1986) 6 NSWLR 246, 251.

Criteria Relevant to the Motion for Stay

20. A court may exercise its power to dismiss or stay an action for want of prosecution where it is satisfied either that:-

1. The default has been intentional and contumelious
e.g. disobedience to a peremptory order of the
Court for conduct amounting to an abuse of the
process of the Court; or

2. (a) That there has been inordinate and inexcusable
delay on the part of the plaintiff or his
lawyers; and

(b) That such delay will give rise to a substantial
risk that it is not possible to have a fair
trial of the issues of the action or is
such as to be likely to cause or to have
caused serious prejudice to the defendants
either as between themselves and the
plaintiff or between each other or between
them and a third party - Birkett v James
(1978) AC 297, 318.

21. The respondent in the present matter relies in substance upon inordinate and inexcusable delay on the part of the applicant in the institution and prosecution of the proceedings. The Court order made on 20 August 1985 was not complied with until August 1987. The respondent, by its solicitors, had consented to unspecified extension of time and did not seek to pursue the matter other than to make an enquiry about the particulars in March 1986.

22. The Federal Court Rules provide in O.3 for consent extensions to time limits provided by orders of the Court. In the circumstances, I am not prepared to infer that the failure to comply with the order made on 20 August 1985 was intentional or contumelious in the sense necessary to support an application to stay or dismiss the proceedings. In the circumstances of the case, however, there is evidence of inordinate, inexcusable and as yet, unexplained delay in the prosecution of the proceedings. As to the period of 2 years that elapsed between the detection of the alleged breaches and the institution of the proceedings, there is no evidence of any factor relating to the complexity of the case or the collection of evidence that explains that lapse of time. Although reference has been made to the fact that Mr Keetley was prosecuted for giving a misleading answer to the officers who interviewed him on 5 May 1983, I am not persuaded that the prosecution did or should have had any impact upon the decision to institute proceedings under s. 119. Indeed, I was told from the bar table and it appears to be common ground, that the prosecution for breach of s.126P(3) of the Act was commenced in June 1984. In the event I take the view that the delay in instituting the proceedings was inordinate and has not been justified.

23. The passage of time does not of itself constitute any prejudice to the respondent. A court is entitled to infer that as time passes, memories fade, relevant evidence, documentary or otherwise, is more likely to be lost, overlooked or forgotten and a just outcome according to law more difficult to achieve. As Lord Hailsham L.C. said in R v Lawrence (1982) AC 510 at 517:-

"Where there is delay the whole quality of justice
deteriorates."

24. In this case however, had the proceedings been instituted promptly and prosecuted with reasonable despatch, it would be unlikely that the unaided recollection of the respondent's directors or other persons on details of hours worked or payments made would have played a significant role. I cannot suppose that Mr Keetley would have been in a much better position at, say, the end of 1983 or mid 1984, to remember such details unaided by documentary records, than he is now. Insofar as the case is concerned with such detail it is most likely to stand or fall upon documentary evidence. Indeed, Mr Tiffin for the applicant, indicated that the evidence that the applicant intends to call from the drivers involves day to day written records that they kept of their work during the relevant period.

25. There may of course be broader questions of the nature of the work allocated to these employees in the relevant period and whether they were or were not caught by the award. The precise issues on which the case could be defended and the impact of delay upon the respondent's capacity to defend upon those issues has not been specified other than by reference to the hours worked and payments made.

26. I am entitled to infer prejudice from the passage of time and to that extent the onus may rest upon the applicant to persuade me that no relevant prejudice has been suffered. On the other hand, it is reasonable to expect the respondent to identify those issues in respect of which it is proper to infer that prejudice.

27. In the end therefore the critical issue and that which seems to be central to the respondent's submissions, is the unavailability of its wages record book. In that regard, attention must be focused upon the delay in instituting these proceedings. For from the date of their institution it is clear that the respondent was put upon notice of the issues in respect of which it was being sued and the importance of its records in deciding which attitude it should adopt to those proceedings. Indeed, upon Mr Keetley's evidence he made a search for the book at that time but not being able to find it, assumed that it must be in the possession of the Industrial Relations Bureau. On the basis that that assumption was justified, it would be reasonable to expect that the respondent or its advisors would have made further enquiry of the applicant with a view to determining the whereabouts of the book.

28. If the hypothesis be open that the book disappeared because the respondent was not spurred on by provision of particulars to locate it, then that is not a prejudice which I would lay at the door of the applicant notwithstanding the outrageous delay in bringing this matter to trial.

29. As to the delay in instituting these proceedings, I am not satisfied on the evidence that I should infer any causal connection between it and the disappearance of the wages records. At June 1983, the respondent was clearly warned by Crowe that the Bureau would prosecute for breach of the award unless persuaded by his arguments as to its proper interpretation. Indeed, the Bureau in its letter of 17 May expressly reserved its position with respect to possible action for contravention of the Award.

30. It is put by the applicant that I should have regard to the fact that the limitation period for proceedings under s.119 is, by virtue of sub-s.119(4), 6 years after the commission of the breach.

31. However, the fact that these proceedings were instituted within the time limited by the statute and indeed the fact that they come to trial before the expiry of that time does not deprive the court of jurisdiction to consider whether there is delay amounting to abuse of process nor the power to make orders accordingly. The relevance of the limitation period was addressed in the decision of Herron v McGregor (1986) 6 NSWLR 246 at 253 in the judgment of McHugh JA, with whom Street CJ and Priestley JA agreed:-

"In civil and summary criminal cases, therefore,
it hardly seems possible for a court to say that
an action brought within the limitation period
is oppressive because mere delay in commencing
the proceeding has prejudiced the defendant or
accused person: cf Birkett v James (at 322).
The limitation period represents the legislature's
judgment as to what the public interest requires
after taking into account the relevant factors
including the prejudice which delay may create.
In respect of criminal charges triable on indictment,
limitation periods are rarely enacted. In the
absence of legislation, the maxim nullum tempus
occurrit Regi (time never runs against the Crown)
applies: . . . . Nevertheless, in my opinion the courts
have power to stay an action, though brought
within the relevant limitation period or even
though not governed by such a period, if the conduct
of the plaintiff or prosecutor is oppressive to the
defendant or accused person."

32. I respectfully adopt that approach to the limitation period applicable in this case, but would add the following observations. The limitation period expresses a time beyond which proceedings affected by it may not be commenced under any circumstances. Further, it is a period which is applicable to all possible actions which may be brought under s.119 and those may vary considerably in their complexity and individual circumstances. Thus a serious breach may not come to light until a considerable time after it has been committed, and its prosecution may require the collection of extensive evidence. A limitation period should not, in my opinion, be regarded as a period within which it is always reasonable to institute proceedings however long the delay between the commission of the breach and their institution.

33. Though it is a relevant factor in this case, I do not give it great weight in favour of the applicant particularly having regard to the early discovery of the alleged breaches and their comparatively narrow scope and straight-forward character.

34. So far as prejudice generally arising from the delay and the conduct of the proceedings is concerned, I am of the view that I can take into account the respondent's failure to take action to enforce the court's order and bring the proceedings on with expedition. Its inaction bears upon the extent to which it suffered real prejudice by reason of that delay. While it is understandable that a respondent may not be inclined to spur the applicant on, he takes the risk associated with his acquiesence in delay. That presumably is a calculated risk and I can infer from his conduct that there was no real consciousness of prejudice accrued by reason of the passage of time from the institution of the application.

35. For the above reasons and discounting the limitation period, I am of the opinion that this is not a proper case in which I should order a stay of proceedings. In spite of the careful and comprehensive argument which was advanced by Mr McDonald for the respondent, the motion is dismissed and the application will proceed on the merits.