Visscher v Teekay Shipping (Australia) Pty Ltd [2011] FCA 1 (4 January 2011)

Last Updated: 11 January 2011

FEDERAL COURT OF AUSTRALIA

Visscher v Teekay Shipping (Australia) Pty Ltd [2011] FCA 1

Citation:	Visscher v Teekay Shipping (Australia) Pty Ltd [2011] FCA 1
Parties:	TIMOTHY VISSCHER v TEEKAY SHIPPING (AUSTRALIA) PTY LTD
File number:	NSD 308 of 2007
Judge:	KATZMANN J
Date of judgment:	4 January 2011
Catchwords:	PRACTICE AND PROCEDURE – motion for summary judgment – circumstances when power to give summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) may be exercised – whether applicant has no reasonable prospect of success in proceedings under s 78 of the Navigation Act 1912 (Cth) – whether reasonable dispute as to liability for wages within meaning of s 78 of the Navigation Act
Legislation:	Federal Court of Australia Act 1976 (Cth) s 31A Federal Court Rules 1979 (Cth) O 20 r 5 Navigation Act 1912 (Cth) ss 6, 75, 76, 78
Cases cited:	Dey v Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60, 167 FCR 372 Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117, 178 FCR 401 Spencer v Commonwealth [2009] FCAFC 38 Spencer v Commonwealth [2010] HCA 28 Visscher v The Honourable President Justice Giudice [2009] HCA 34, 239 CLR 361
Date of hearing:	30 August - 1 September 2010
Date of last submissions:	2 September 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	75
Counsel for the Applicant:	The applicant appeared in person
Counsel for the Respondent:	Mr G Hatcher SC with Mr B Cross
Solicitor for the Respondent:	Norton Rose Australia

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 308 of 2007

BETWEEN:	TIMOTHY VISSCHER Applicant
AND:	TEEKAY SHIPPING (AUSTRALIA) PTY LTD ACN 079 641 580 Respondent

JUDGE:	KATZMANN J
DATE OF ORDER:	4 JANUARY 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application is dismissed.
2. The applicant pay the respondent’s costs.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules 1979.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 308 of 2007

BETWEEN:	TIMOTHY VISSCHER Applicant
AND:	TEEKAY SHIPPING (AUSTRALIA) PTY LTD ACN 079 641 580 Respondent

JUDGE:	KATZMANN J
DATE:	4 JANUARY 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The respondent is a shipping company which owns and operates a fleet of ships mainly used to transport oil for oil companies, refiners and traders. The applicant is a merchant seaman. Between 2001 and 2004 he was employed by the respondent on two ships, the Samar Spirit and the Broadwater, both of which at the relevant time were chartered or leased to Caltex. In a statement of claim filed on 2 March 2007 and amended twice since, the applicant pleads that he is owed “wages” from two “tours of duty” on the Broadwater. The central allegation is that he was not paid what he maintains were his full entitlements when he was discharged from the vessel on 3 March 2004 and again on 26 May 2004, and that the respondent is, and continues to be, liable to pay them at double their rate from the time of his discharge from the vessel. The amount of the claim is in excess of $2.5 million. The respondent disputes the claim in its entirety.
2. This proceeding is a motion for summary judgment. Unusually, it was brought after both parties had filed their evidence and within days of the date upon which the hearing of the proceeding was due to start.

Legislative background

3. The magnitude of the claim may be explained by the terms of s 78 of the Navigation Act 1912 (Cth) upon which it is founded.
4. Section 78 provides:

78 Wages to run on in certain cases

If a seaman’s wages are not paid in accordance with section 75 before or at the time the seaman is given his or her discharge from a ship, the seaman’s wages shall continue to run until the time of the final settlement of his or her wages (and shall be payable at double rates for any period after the time the seaman is given his or her discharge from the ship) unless the delay is due to the seaman’s act or default, to a reasonable dispute as to liability for the wages or to any other cause not attributable to the wrongful act or default of the owner or master of the ship.

5. Section 75(1) requires that before or at the time of discharge a seaman be paid all wages that are due less any deductions specified in the account of wages, which s 76(1) obliges the master to deliver to him or her. In the case of breach the section imposes on both the owner and the master of the ship a penalty of a $1,000 fine. The failure to deliver an account is also an offence punishable by a $1,000 fine. Section 75(3) creates defences to a prosecution under subsection (1) in similar, but not identical terms, to the circumstances in s 78 under which the liability to pay unpaid wages at double rates is avoided.
6. “Discharge” is defined in s 6 of the Navigation Act to mean “the certificate of discharge given to a seaman upon his or her discharge from a ship”. The Act does not define “wages” except to say that it includes “emoluments”.

The claim in the principal proceeding

7. The applicant’s claim relates to a time when he sailed on or “belonged to” the Broadwater. It covers two periods: from 13 January 2004 until 3 March 2004 (“the first voyage”) and from 8 April 2004 until 26 May 2004 (“the second voyage”). With respect to the first voyage, the applicant alleges that at all material times he was employed as Chief Mate, Grade 1 (a rank also known as Chief Officer) but that in January 2004, before joining the ship, the respondent “evinced an intention no longer to be bound by the C/O [Chief Officer] contract of service thus repudiating it by anticipatory breach”. The repudiatory conduct is said to consist of informing him that after the first voyage on the Broadwater he would be required to sail as Second Mate. He further alleges that in February 2004 he accepted the repudiation, thus terminating the contract. Although his claim is not pleaded in precisely this way, the applicant submitted that, upon his discharge from the Broadwater on 3 March 2004, his contract of employment was terminated, his employment relationship with the respondent came to an end, and, he alleged, the respondent was then bound to pay him “wages” within the meaning of the Navigation Act, including paying out his accrued leave entitlements.
8. With respect to the second voyage, the applicant alleges he entered into a second contract under which he was employed as a casual for a period of approximately six weeks, again sailing on the Broadwater as Chief Officer. His entitlement to casual loading is said to arise under clause 24.1 of the Teekay Shipping Australia/Australian Maritime Officers Union (Deck Officers) Sea-Going Officers Agreement 2001 (“the 2001 Certified Agreement”). In his written submissions he argued that, when he was discharged from the vessel on 26 May 2004, this contract also came to an end and he became entitled to “wages”. In his further amended statement of claim he claims a gross amount of about $13,874 in wages “based on 48 days leave pay” and an amount of $1,859 representing the casual loading for the period of the second voyage “with accrued leave”. But on the second day of the hearing the applicant tendered a document providing particulars of the sums he claims and setting out his method of calculation, which he said superseded the calculations in the further amended statement of claim (“the amended particulars”). The respondent agreed to accept this as particulars of his claim, without the need for a formal amendment of the applicant’s pleading. In the amended particulars he appears to claim only an amount of $1,820, reflecting unpaid casual loading. This is also the only amount owing from the second voyage to which he refers in his written submissions. It therefore seems that now only the claim for unpaid casual loading is pressed, although the position is not entirely clear. But nothing turns on it for the purpose of this motion.
9. It is common ground that on 4 June 2004 the applicant was paid a gross sum of $43,997.38 (net $24,246.91), which on the applicant’s own evidence included payment for an outstanding accumulated leave balance of about 100 days. It appears from the applicant’s written submissions that the applicant’s grievance is that it “did not include the casual loading and it did not include a payment at double rates from 26 May 2004”. In other words, his case appears to be that, unless and until he receives payment in full of the amount he says is owed to him, including the penalty rate prescribed by s 78, the provision continues to operate and the respondent’s liability continues to increase as there has been no “final settlement” within the meaning of that provision. As at 31 August 2010 he says the respondent’s liability was $2,785,272. It appears from the amended particulars the applicant does not bring into account the respondent’s payment on 4 June.
10. The respondent denies that s 78 has any operation in this case. Its main argument is that the section is concerned with wages paid under articles of agreement and the applicant’s wages were not paid under articles of agreement but pursuant to the 2001 Certified Agreement. The result is that the applicant cannot rely on s 78 and his claim cannot succeed. In the alternative, if it were found that the applicant’s wages under the 2001 Certified Agreement count as “wages” for the purpose of s 78, the respondent argues that the 2001 Certified Agreement, to which the Workplace Relations Act 1996 (Cth) gives effect, is inconsistent with the terms of the Navigation Act and the conflict between the two pieces of legislation should be resolved in favour of the later Act. Either way, the respondent argues, the applicant’s claim must fail.
11. The respondent further argues that, on its proper construction, s 78 requires a claim to be made to trigger its operation, and that provisions in the nature of s 78 do not apply to disputes about entitlements as opposed to a failure to pay ordinary wages when due. In the alternative, it submits that, even if “wages” for the purpose of s 78 includes entitlements and these were not paid in accordance with s 78 before or at the time of discharge, the delay was due to a reasonable dispute as to liability for the wages or to another cause not attributable to the wrongful act or default of the owner or master of the ship, in particular, in this case, the applicant’s failure to make a claim until more than two years after he left its employ (“the defence”). The motion is based on the terms of the defence that the delay was due to a reasonable dispute as to liability for the wages.

Factual background

12. The parties have been engaged in a longstanding industrial dispute. On 11 March 2004 the applicant applied to the Australian Industrial Relations Commission (“AIRC”) for reinstatement based on his allegation that he had been constructively dismissed in February 2004. A Commissioner refused his application, a decision which was upheld by the Full Bench, and an application for review by the Full Court also failed. But in September last year the High Court granted the applicant constitutional writs quashing the decisions of the Full Bench and the Commissioner and directing the AIRC (now Fair Work Australia) to hear and determine the matter in accordance with law: Visscher v The Honourable President Justice Giudice [2009] HCA 34, 239 CLR 361 (“Visscher”). The AIRC has yet to reconsider the matter.
13. The facts in that case provide a convenient summary of the background to the present proceeding. The following account of them appears in the judgment of the majority in the High Court at [40]-[47] (footnotes omitted):

[40] Mr Visscher commenced casual employment with Teekay in March 2000. In March 2001 he accepted an offer of permanent employment as a Third Mate. It was found by Commissioner Redmond that in August 2001 Mr Visscher was offered a promotion to the position of a Chief Mate, which he accepted on 7 September 2001. It does not appear to have been disputed that Mr Visscher satisfied the requirements of the Certified Agreement of 1998, then in force, for promotion to such a position.

[41] An industrial dispute arose between Teekay and the AMOU concerning, relevantly, the promotion. The AMOU demanded that Teekay hold open vacancies for permanent positions as Chief Officer in order to allow employees with longer service to obtain the necessary qualifications. The Commissioner who dealt with the dispute recommended, on 11 September 2001, that “promotions recently made” be rescinded. Teekay notified Mr Visscher on 20 September 2001 that it intended to comply with the recommendation and that his “recent promotion to permanent 1st Mate is unfortunately rescinded”. Mr Visscher did not accept the rescission. The Full Bench of the AIRC observed that he “thereafter maintained that it was of no legal effect” However he remained in Teekay’s employ, continuing to undertake the role and duties of a Chief Officer and receiving an amount equal to the salary of a Chief Officer, as earlier mentioned.

[42] On 5 March 2002 the AIRC certified the Certified Agreement. It was to take effect from 5 May 2002 and remain in force until 1 July 2004. It was expressed to be binding on employees of Teekay who were members of the AMOU and engaged as Masters or Deck Officers on vessels defined as the “fleet” operated or managed by Teekay. It dealt with a number of subjects including “Employee Performance & Career Progression”. Clause 23.4 provided that the “grading (or rank/service) list attached will be the basis for future promotions/transfers etc”. That was a reference to Appendix A to the Agreement, which comprised a “Deck Officers Grading List”, and which was stated to be: “As at 15th February 2002.” Mr Visscher was there listed as a “Third Officer”, that is Third Mate. The Commissioner found that the gradings list was available to employees on a monthly basis. It may be assumed that Teekay updated the list when changes to staff or gradings occurred.

[43] On 5 July 2002 Teekay wrote to Mr Visscher and offered him a permanent position as a Second Mate. His evidence was that he rejected the offer as unnecessary, given his existing contract of employment as a Chief Officer. Subsequent to this letter Mr Visscher appeared in the gradings list as a Second Mate.

[44] At the time of his promotion to a Chief Officer Mr Visscher was engaged on the “Samar Spirit” and he continued to perform the duties of a Chief Officer on that vessel until early January 2004. The evidence before the Commissioner was that, from the time of the AIRC’s recommendation that promotions be rescinded, Mr Visscher’s payslips showed that he was paid a higher duties allowance, in addition to his pay which was at the rate of a Third Mate and later as a Second Mate.

[45] On 8 and 9 January 2004 Mr Visscher had conversations with another employee of Teekay, Mr Bray. They concerned the position in which Mr Visscher would work after the conclusion of his current tour of duty on the “Samar Spirit” and a further tour of duty on the “Broadwater”. Different accounts were given by Mr Visscher and Mr Bray as to what was said. In his email to Teekay of 22 February 2004, Mr Visscher claimed that Mr Bray had said that he, Mr Visscher, would be required to sail as a Second Mate. Mr Bray’s evidence was that he said Mr Visscher would have to do so if no position as a Chief Officer was available and that Mr Visscher did not react negatively to that prospect. Commissioner Redmond did not make findings as to what was said. He made a general statement that he accepted Teekay’s evidence as relevant to its belief about the employment relationship continuing but, as the Full Bench of the AIRC correctly observed, little reliance could be placed upon such a statement as findings concerning the events of 8 and 9 January 2004.

[46] In his email of 22 February 2004 to Teekay, Mr Visscher said that the requirement to sail as a Second Mate constituted a demotion and that he considered his employment as terminated by Teekay upon his leaving the “Broadwater”, the vessel upon which he was currently serving. Teekay responded by letter dated 24 February, expressing surprise at his comment about demotion. It said that he was currently graded as a Second Mate and had never been graded as a Chief Officer. It also said that it did not consider a demotion in rank for any officer to constitute constructive dismissal. Mr Visscher filed his application with the AIRC on 11 March 2004.

[47] Mr Visscher undertook further work for Teekay for some months after his claim of termination of employment. The basis upon which he did so has not been the subject of findings in the AIRC. Teekay raised an issue before the Commissioner as to whether Mr Visscher’s employment was terminated, or whether he resigned in June 2004, but the Commissioner made no determination and the issue does not appear to have been pursued in the following appeals.

The motion

14. On 24 August 2010, six days before the hearing in this Court was due to start, the respondent filed a notice of motion for summary dismissal pursuant to O 20 r 5 of the Federal Court Rules 1979 (Cth). This rule permits the Court to stay or dismiss a proceeding or claim where it is frivolous or vexatious or an abuse of the Court’s process. On the second day of the hearing the applicant was granted leave by consent to amend the notice of motion to enable it to rely on s 31A of the Federal Court of Australia Act 1976 (Cth) as well, and an amended notice of motion was filed in court the next day.
15. The notice of motion was supported by an affidavit affirmed by Nico Burmeister, a solicitor employed by Norton Rose Australia, the respondent’s solicitors. The affidavit annexed a letter dated 24 August 2010 from the respondent’s solicitors to the applicant which included the following declaration:

The Respondent intends, in support of its Motion, to submit to the Court that the pleadings and evidence filed by you reasonably exclude the possibility that facts essential to the success of the claim will be able to be established.

16. No indication was given of the allegedly missing ingredients.
17. Despite the late notice and the lack of particularity, the applicant consented to the Court hearing the motion, the basis of which was elucidated in oral argument.
18. Notwithstanding its continuing reference to O 20 r 5 the motion was fought under s 31A. Section 31A relevantly provides:

(1) ....

(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a) hopeless; or
(b) bound to fail;

for it to have no reasonable prospect of success.

(4) This section does not limit any powers that the Court has apart from this section.

19. The respondent’s argument rested on the applicant’s evidence taken at its highest, allowing for all reasonable (but not merely plausible) inferences arising from it (see Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60, 167 FCR 372 (“Jefferson Ford”) at [132] per Gordon J). The applicant’s evidence was contained in two affidavits sworn on 17 April 2007 and 29 August 2010 and a number of documents, some of which were annexed to the affidavits, some of which were separately tendered, and some short oral evidence upon which the respondent did not cross-examine, it being unnecessary to do so for the purpose of the motion.
20. In Jefferson Ford Rares J explained (at [45]):

By enacting s 31A, the Parliament broadened the categories of case in which the power summarily to determine proceedings could be exercised. It is inherent in the power conferred by s 31A that the Court need not, and does not ordinarily determine the proceedings on their merits after a full trial. A decision under s 31A is that the claim or defence has “no reasonable prospect of success”. It is not that the claim or defence has been proved so that the right or cause of action or defence merges into judgment and loses its independent existence: Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at 531–532 per Dixon J. Rather, the power conferred by the section authorises the Court to make a decision summarily that there is no reasonable prospect that if a trial were to take place the claim or defence would succeed. The section requires a prediction of the outcome of a trial on the merits but is not an actual adjudication of those merits.

21. The applicant properly accepted that s 31A “lowered the bar” erected by cases like Dey v Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. That much is plain from the terms of subsection (3). It is also a construction reaffirmed on the last day of this hearing by the High Court in Spencer v Commonwealth [2010] HCA 28, 269 ALR 233 (“Spencer”).
22. In Spencer the plurality stressed (at [52]-[60]) that the relevant enquiry was whether there is a reasonable prospect of successfully prosecuting the proceeding, not “whether a certain and concluded determination could be made that the proceeding would necessarily fail”, and it was dangerous to paraphrase the statutory expression or to look for the meaning of the expression in what was said in earlier cases applying different statutory tests. Although “the power to dismiss an action summarily is not to be exercised lightly”, “full weight” must be given to the expression “no reasonable prospect” as a whole. As their Honours explained at [59]:

In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous", "untenable", "groundless" or "faulty". But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word "reasonable", in the phrase "no reasonable prospect", be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a "frivolous", "untenable", "groundless" or "faulty" claim.

23. This case raises complex questions of law and fact. For one thing it concerns apparently untested provisions in a very old piece of legislation, which (as the respondent’s arguments indicate) sits uncomfortably with current general industrial legislation. Generally speaking, the power is not designed to deal with such cases. See Spencer at [21] and [26] per French CJ and Gummow J. The respondent sought to avoid the complexities of the case, however, by focussing on its defence, which, it argued, on the face of the applicant’s own evidence, provides a complete answer to his claim. For the reasons set out below, I am persuaded that the respondent is right.

The respondent’s argument

24. The respondent’s case on the motion assumed that s 78 of the Navigation Act was applicable and therefore also the defence contained within it. Its position was that the applicant’s evidence establishes beyond argument that there is a bona fide and reasonable dispute between the parties as to whether he has any entitlement to “wages,” even assuming that “wages” includes the entitlements claimed. Therefore, on the applicant’s own case, the respondent has an unassailable defence under s 78.
25. Later, however, the respondent went further, arguing there was also no evidence of any entitlement to payment for accrued leave for the two voyages or to a casual loading for the second voyage.
26. The applicant submitted that there were issues of fact to be determined requiring evidence and findings as to those facts and how they relate to the law and that the motion should therefore be dismissed. But the respondent is content to have the motion determined on the basis that there is no issue of fact, that is, on the basis of the applicant’s evidence, unchallenged. For the motion to be upheld the respondent must show that there is no reasonable prospect the applicant will succeed because the only conclusion reasonably open on his own evidence is that the respondent’s defence will prevail.

Evidence as to entitlements

27. There is no reference in the Navigation Act to payment for accrued leave or a casual loading. But the motion was fought on the assumption in the applicant’s favour that “wages” in s 78 extends to the payment of such benefits.
28. Beginning with the entitlement to payment for accrued leave, the respondent pointed out that the Navigation Act is not the source of any such entitlement and neither is the 2001 Certified Agreement. Nor is it to be found in the applicant’s contract of employment as a permanent employee entered into in March 2001 (“the contract of employment”).
29. The offer of permanent employment, which the applicant accepted on 30 March 2001, provided that the terms and conditions of his employment were contained in the Teekay Australia/AMOU (Deck Officers) Agreement 1998 and the Maritime Industry Seagoing Award 1998 as varied. It is common ground that this certified agreement was replaced by the 2001 Certified Agreement which came into force on 5 May 2002 and was in force at the relevant time.
30. Part 5 of the 2001 Certified Agreement deals with leave and clause 26 with “accrued leave”. Nothing in clause 26 creates a right to payment of money for accrued leave on discharge from a ship. Indeed, the opening words of clause 26.1 are that the “swing arrangements” (where officers “swing” on and off a ship on a six week cycle) are designed to provide the officer with a “regular duty and leave cycle”. Subclauses 26.2 and 26.3, which are concerned with leave balances, also do not contemplate a right to payment where an officer has unused leave at the time of discharge.
31. Clause 28 is entitled “leave accrual” but is silent as to payment of monies.
32. Clause 13 relates to salaries but makes no provision for payment of accrued leave.
33. Unlike long service leave (see clause 29.3), there is no provision in the 2001 Certified Agreement for accrued leave to be paid out when an officer leaves the respondent’s employment. As the respondent submitted, the 2001 Certified Agreement envisages that there will be periods of leave, and that leave will accrue, but that the roster will be arranged in such a way that the leave is taken when the officer swings off the ship. It does not deal with the situation where there is unused leave at the time an officer leaves the respondent’s employment.
34. I am therefore satisfied that on no reasonable interpretation of the 2001 Certified Agreement can it be said that there is a provision in it for an officer to become entitled to payment for accrued leave.
35. The contract of employment is also silent about leave other than long service leave, and even in that case deals only with its rate of accrual. At this point, I pause to note clause 7 of the contract, to which the respondent referred in its submissions. It provides that employment continues even when someone leaves a ship, so that the applicant’s contract of employment does not end when he leaves the ship. The applicant’s case was that the entitlement to be paid for accrued leave arose when his employment came to an end, rather than on discharge from a ship, but he argued that in this case the two events coincided on each of the occasions when he was discharged from the Broadwater.
36. The only reference to accrued entitlements in the contract appears in clause 15, which stipulates that “any accrued entitlement will be paid out when leaving the Company”. That provision could only be relevant if the applicant had a right to accrue leave entitlements, but whether there is such a right does not appear from the contract.
37. Nevertheless, counsel for the respondent, Mr Hatcher SC, did not submit that there was no entitlement to be paid out for accrued leave. His submission went no further than saying that the applicant’s case rested on the Navigation Act and the 2001 Certified Agreement, neither of which was the source of such an entitlement. He also conceded that the respondent does in fact pay out accrued leave to its employees on the termination of their employment. Indeed, that is precisely what occurred here after the second voyage. Presumably, those payments are not made purely as an act of grace. I therefore propose to proceed on the basis that the applicant has an entitlement to accrued annual leave on termination.
38. The claim for a casual loading self-evidently depends on the applicant being employed as a casual. The respondent contended that the applicant had not proved that he was so employed. Rather, taken at its highest, it submitted, the evidence shows an agreement to work a specified period (one voyage) on a particular vessel.
39. The evidence does not clearly establish the basis upon which the applicant undertook work for the respondent after the point in February 2004 when he informed the respondent that he considered his employment terminated. This is not least because, from that point on, the parties remained at odds about whether his existing contract had been terminated. I was not taken to any of the authorities on the meaning of casual employment.
40. In the circumstances, it would not be appropriate to dispose of this question on a motion for summary judgment.

A reasonable dispute about liability for wages

41. The evidence undoubtedly establishes the existence of a dispute. But was it a dispute about liability for wages? If so, has the respondent proved, based on the applicant’s evidence alone, that it was a reasonable dispute so that the applicant has no reasonable prospect of successfully prosecuting the proceeding on that account?
42. The respondent’s argument for such a dispute, put shortly, was that the applicant’s case that he should have been paid his entitlements at the time he was discharged from the Broadwater depended on his employment being terminated at the time of discharge. The applicant confirmed that was so when he told the Court “unless my contract of employment was terminated on 3 March 2004, I have no entitlement”.
43. As there was a genuine and reasonable dispute about that issue, the respondent submits it necessarily follows that there was a genuine and reasonable dispute about its liability to pay any entitlements payable on termination. If the respondent is correct, the argument disposes not only of the accrued leave claim but also the claim for a casual loading, because it, too, hinges on whether the applicant’s employment had been terminated when he was discharged from the Broadwater on 3 March 2004.
44. The applicant’s evidence was that on 9 January 2004 he accepted an offer of a position on the Broadwater from Mr Phil Bray, an employee of the respondent, which he understood to be an offer to sail as Chief Officer for a single tour of duty. He also gave evidence that in the same conversation he was told that he would be sailing as Second Mate after that tour of duty. His response, he said, was: “Like I said Phil, I’ll join the Broadwater on Monday”.
45. On 22 February 2004, while on the Broadwater, the applicant sent an email to Mr Vince Scott, the respondent’s vessel manager, in these terms (this is the email the High Court referred to in Visscher at [46]):

In January 2004 I was advised by Mr Phil Bray of Teekay Shipping (Australia) Pty Ltd (Teekay), that subsequent to my current posting as Chief Officer on the MT Broadwater, I would be required to sail as Second Mate.

This constitutes a demotion from my position of Chief Officer and it is unacceptable. Demotion is a constructive termination of our contract of employment by Teekay. I will therefore consider my employment as being terminated by Teekay upon leaving the MT Broadwater on or about 26 February 2004.

At your earliest convenience please pay into my bank account all my entitlements.

46. By “entitlements” it seems fairly clear that the applicant was referring to the kind of pay out of all entitlements one would expect on termination of one’s employment.
47. Mr Scott replied by letter dated 24 February 2004, denying there had been any demotion or that a demotion would amount to constructive dismissal, and informing the applicant that the respondent would be treating his email of 22 February 2004 as notice of his resignation. He concluded by inviting the applicant to “confirm acceptance and receipt of this letter by signing and returning” a copy. The applicant did not do so.
48. Mr Scott’s letter does not explicitly respond to the applicant’s request to be paid his entitlements but, in my view, it plainly does so implicitly by asserting that, as there had been no demotion, his employment had not been terminated, and so there was no occasion for a pay out of his entitlements (until, from the respondent’s perspective, his resignation took effect).
49. Later correspondence confirms that the question of whether the applicant’s employment had been terminated and, consequently, the basis of his continuing employment remained vexed.
50. On 8 March 2004 the applicant faxed a response to Mr Scott’s letter in which he reasserted his view that there has been a demotion amounting to a “constructive termination of employment” and that he “[did] not take seriously [Mr Scott’s] reference to “resignation””. He also suggested – in what seems to me to clearly acknowledge that the parties had conflicting positions on what had taken place – “that an informal conference be urgently convened to reach a resolution”.
51. Shortly after this the applicant lodged his application for relief against termination with the AIRC.
52. On 29 March 2004 the applicant sent another fax. This referred to a “‘without prejudice’ discussion” three days earlier. There he indicated a willingness to withdraw his application to the AIRC and appeared to resile from his earlier view that his employment had been terminated by demotion, saying:

My understanding now is that at 3 March 2004, the day I deemed my employment to be terminated, I was listed as continuing sailing as Chief Officer, which of course does away with any question of my employment being terminated by reason of a demotion. I think that it would have been better for all concerned if I had been told about that earlier in the piece, but the Company remained silent on the point and I knew nothing different”.

It seems to me that we ought to handle this matter in a very informal way, namely by me submitting a Rule 43 notice of discontinuance to the Commission, my rights thereby being preserved and me continuing to sail as Chief Officer...

Would you please confirm that you agree with the above steps...

53. Mr Parmeter, the respondent’s director of human resources at the time, then wrote to the applicant in a letter dated 5 April 2004 indicating that the respondent was “happy for [the applicant] to continue in employment as a Deck Officer” and stating the respondent’s position that “there has been no interruption in your employment as a Deck Officer”. The letter then went on, however, to reassert the respondent’s position, including that the applicant’s “permanent grading with [the respondent] is as Second Mate” and that it “[reserved] the right to appoint [him] to a vessel as Second Mate”.
54. The applicant replied immediately by fax reasserting that “I was by contract appointed as Chief Officer (First Mate)...I cannot now in this summary fashion be reduced from that appointment” and “I cannot, however, be expected simply to standby while I am wrongfully demoted without good reason or explanation”.
55. On 6 April 2004 the respondent offered him what it called “a temporary promotion to the position of Chief Mate Grate 1 for [his] next swing period on the Broadwater” at a higher salary. The applicant replied by fax to Mr Parmeter the next day in the following terms (without alteration):
    

I have not received a reply to my fax message to you dated 5/4/04.

I suggest the following compromise between the Company and me.

1. I take up the appointment on the Broadwater tomorrow, as Chief Officer, and complete the ensuing tour of duty of about 6 weeks duratioin.

2. I do this on the basis that the Company requires someone to undertake the work urgently.

3. By taking up the position outlined in (l.) above, it is not an admission that my contention that I have validly been oppointed to the position of Chief Officer and connot be demoted is incorrect. I maintain that is correct.

4. Similarly, by taking up the position it is not an admission by the Company that its contention is incorrect, namely that it had the right to, ineffect, change my status from Chief Officer.

5. We are both undertaking these steps simply as a compromise and without prejudice to the position of either of us.

Obviously you should let me know urgently whether you agree with this.

If you do agree a simple way of finalising this aspect will be for you, or someone, to sign a copy of this letter, writing under their name as duely orthorised agent of Teekay Shipping (Australia) Pty Ltd, and sending it to me by fax. I will, in turn, sign a copy of what you fax to me, and send it to you by fax.

56. Mr Parmeter replied by fax the same day agreeing to the suggested course of action:

I am writing in response to your fax message of today’s date, copy attached.

I agree with your suggested course of action on the basis:

1) it is the best way forward in the current circumstances;
2) the parties “agree to disagree” and their respective positions still stand; and

3. your joining of the Broadwater tomorrow as Chief Officer is without prejudice to either party’s position....
   
57. It is clear from this correspondence that the applicant agreed to sail on the second voyage as part of a temporary settlement of his ongoing dispute.
58. I accept the respondent’s submission that the parties were in a dispute about whether the applicant’s employment had been terminated at the end of the first voyage. No other conclusion is reasonably open on the applicant’s evidence. Throughout its correspondence, the respondent maintained the position that there had been no interruption to his employment in this period. The applicant maintained he had been dismissed, lodged an application with respect to termination with the AIRC, but later seemed to resile from that position, although he undertook the second voyage continuing to dispute whether or not he was a Chief Officer and the respondent’s right to demote him from that position.
59. In the case of the second voyage, the applicant first requested that his entitlements be paid on 27 May 2004, the day after he was discharged from the Broadwater. On that day the evidence is that he sent a fax to John Brecht, from the respondent’s human resources department, copied to Doug Craig, the vessel manager, confirming that he left the ship in Westernport the day before and was given his discharge from the ship, and asking for the payment of “all entitlements”, drawing his attention to s 75 of the Navigation Act.
60. He also received a phone call at home from Mr Brecht. There is no direct evidence about the terms of that conversation. But on 31 May Mr Brecht wrote to the applicant in the following terms (omitting formal parts):

We refer to your fax of 27th May 2004, and our subsequent telephone conversation, regarding your request for payment of your entitlements.

We have clarified with you that this request relates to your outstanding leave balance, as a consequence of what you claim to be your “constructive dismissal” from Teekay.

Teekay rejects any assertion that you have been dismissed from our employ, “constructively” or otherwise. We regard you as having commenced a period of regular leave, and have you scheduled to rejoin the vessel “Broadwater” as Chief Officer at the completion of your current period of leave.

As such, your accrued leave will continue to be paid to you on a monthly basis, rather than as a lump sum.

61. In other words, the applicant’s evidence is that the respondent believed he had done no more than “swing off” the vessel and, under the usual arrangements, would continue to be paid monthly during that time. The respondent’s belief is unsurprising. It was well founded. The applicant’s articles, which were annexed to his affidavit of 27 April 2007, record his reason for leaving the ship in Westernport as “leave” and the applicant himself gave oral evidence that he told the master of the ship words to the effect of: “I am to attend an AIRC hearing for termination of employment against Teekay Shipping, and if we carry on to Indonesia I will not be able to attend the hearing, and I request to go on leave”.
62. On 1 June 2004, however, the applicant sent a fax to Mr Brecht, again copied to Mr Craig, stating that he had accepted “casual maritime employment” with another company, commencing 10 June 2004, and declaring that “[m]y previous position on the Broadwater [is] no longer tenable”. Apparently, after he received that fax, Mr Brecht had a further telephone conversation with the applicant and on 2 June 2004 Mr Brecht sent him another letter:

We refer to your further fax of 1st June 2004, and our subsequent telephone conversation.

You have confirmed to me that you have chosen not to return to the Broadwater as Chief Officer at the conclusion of your period of leave, having accepted alternate employment.

On this basis, we will process your outstanding entitlements no later than Friday 4th June 2004, with payment being made into your nominated bank account.

The Company regards you as having resigned from employment, with effect from 1st June 2004.

63. It is clear that, by 2 June 2004 – but not before – it was now common ground that the applicant’s employment with the respondent was at an end (although there was still no agreement about the reason, as there is a final piece of correspondence sent by the applicant on 11 June 2004 in which he denies resigning). The respondent then undertook to pay his “outstanding entitlements’ by 4 June 2004. A payment was then duly made on 4 June but it did not include any casual loading.
64. Again – at least until the beginning of June – there is the same dispute about whether the applicant has been dismissed from employment and was therefore entitled to have his entitlements paid out. Once the parties were agreed that the employment had come to an end, however, the respondent accepted the obligation to pay out his entitlements and did so.
65. It is plain from the respondent’s refusal at the conclusion of the first voyage to accept that the applicant’s employment was terminated, that it did not accept that he had any entitlement to termination pay. That would have included any entitlement to payment for accrued leave. There was a similar stand-off after the second voyage when the issue is explicitly canvassed in correspondence, until the point arrived when the parties were in agreement that the employment had been terminated. I am fortified in this conclusion by the evidence concerning the respondent’s conduct in paying accrued entitlements after the second voyage when it was satisfied that the employment had been terminated. As I mentioned earlier, because the claim for a casual loading also depends on whether the applicant’s employment had been terminated in March 2004, the dispute about termination captures both the claim over accrued leave and the claim for a casual loading. There is, then, in my view, no reasonable prospect that the respondent will not be able to establish that there was a dispute as to liability for the “wages”.
66. The next question is whether there is any reasonable prospect that the respondent will not prove that the dispute was a reasonable one.
67. The respondent submitted that the facts pleaded by the applicant disclosed the reasonableness of the dispute. Those facts were not clearly identified in argument and I am unable to discern them from the statement of claim. But the evidence certainly does. The correspondence the applicant tendered shows that he was originally appointed as Third Mate and was promoted to Chief Officer in August 2001 but that, by letter dated 20 September 2001, the respondent rescinded (or purported to rescind) the promotion on the recommendation of the AIRC made on 11 September 2001. It also shows that the respondent promoted (or purported to promote) him to Second Mate on 5 July 2002, an appointment backdated to 1 July 2002, and there is no evidence of any further promotion, although he acted in the higher position of Chief Officer, presumably paid as such by the supplementing of his ordinary wage by a higher duties allowance as all the wages slips the applicant tendered for periods after 2001 seem to indicate and, according to the High Court judgment in Visscher, as the evidence tendered before the Commissioner also showed. It appears too, from the High Court judgment that, after the applicant was offered the permanent position of Second Mate in 2002, he rejected the offer as unnecessary (because he was already employed as Chief Officer). Nevertheless, the evidence establishes that the respondent treated him continuously as a Second Mate who was carrying out the duties of a Chief Officer. So when Mr Parmeter wrote to him on 5 April 2004 he was asserting the position (as far as the respondent understood it, at least) that had obtained since 2002. The High Court accepted in Visscher (at [81]) that the respondent repudiated the contract of employment by notifying the applicant in 2001 that his promotion was rescinded but held that his contract remained on foot until the applicant accepted the repudiation, a question yet to be determined in the AIRC. In all the circumstances, whatever the rights or wrongs of the dispute about termination by constructive dismissal in February-March 2004, on the material available thus far, it could not sensibly be suggested that the dispute was not reasonable. The applicant’s assertion that he had been “wrongfully demoted without good reason or explanation” in his fax to Mr Parmeter of 5 April 2004 is no answer. The evidence shows that the respondent rescinded the promotion because of a recommendation from the AIRC, and not peremptorily, and that its justification for reserving the right to require him to sail in the lower position of Second Mate, was that it considered that to be his permanent position. The respondent’s position (as Mr Parmenter put it in his letter of the same date) was that there had been no interruption in the employment. As the respondent was reasonably of the view that the employment was continuing, one would not reasonably expect it to accede to a demand for “wages” that the applicant claims were payable on termination or to pay a loading that was due only if the employment had been terminated and a new, casual contract entered into. I am satisfied that there was a reasonable dispute as to liability for “wages” payable on termination because there was a reasonable dispute as to whether the applicant had been terminated in the first place.

Conclusion

68. The applicant’s case was that the liability of the respondent to pay “wages” on discharge from the Broadwater was contingent upon his employment having been terminated at the same time. The evidence he adduced shows that there is no reasonable prospect the respondent will not be able to establish that there was a reasonable dispute as to that fact and consequently as to its liability to pay the “wages” which would be payable on or as a result of termination. As there is no reasonable prospect that the respondent will fail to prove its defence, it follows that there is no reasonable prospect the applicant will successfully prosecute his claim.
69. That conclusion entitles the Court to give summary judgment. The Full Court has held that the word “may” in s 31A is permissive, not mandatory: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117 at [28] (disapproving Gordon J in Jefferson Ford at [128], who thought otherwise). In the present case, there is no reason why I should exercise it in the applicant’s favour. Indeed, none was advanced in argument.
70. It follows that the motion should be upheld and the application dismissed with costs.

Postscript

71. Well after the hearing concluded, and when judgment was reserved, the applicant sought leave to file a supplementary written submission in which he advanced another basis upon which he had not been paid “all emoluments and entitlements due”. He urged me to take them into account. His submission is that

With regard to my higher duties accrued leave entitlement I have been paid $1,229.99. In other words I have been paid higher duties for 47 days, not for the 159 days owing.

With regard to higher duties payment for the month of May 2004, and one day in June 2004, I have been paid $115.74 less than my entitlement.

72. He argues that this “at least is a matter for ventilation by the Court”.
73. The applicant claimed that the submission was based on information provided in an affidavit of Stephen Bertram filed by the respondent in the proceeding, which was not read on the motion. The affidavit was filed on 5 March 2010, six months before the hearing. The applicant made submissions in writing and orally and, as I noted early in these reasons, reformulated the particulars of his claim during the course of oral argument. He had a fair opportunity to be heard. The further submissions do not, in any event, appear to address the respondent’s argument on the motion. In all the circumstances, I refuse leave to him to rely on them.

Orders

74. The application is dismissed.
75. The applicant should pay the respondent’s costs.

I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.

Associate:

Dated: 4 January 2011