ORDER
Upon the undertaking of the first to thirteenth applicants inclusive to pay the Maritime Union of Australia, Peter Breukers, Jake
Haub, Kieran Coyle and the individuals referred to in paragraph 1 of the statement of claim in action VG 152 of 1998 in the Federal
Court of Australia, whom Kieran Coyle represents, to Patrick Stevedores No 1 Pty Ltd, Patrick Stevedores No 2 Pty Ltd,
Patrick Stevedores No 3 Pty Ltd and National Stevedoring Tasmania Pty Ltd, adversely affected by the stay granted by this Court,
such compensation if any as the Court thinks just in such manner as the Court directs;
1. Stay paragraphs 1, 2 and 4 of the orders made by North J in the Federal Court of Australia on 21 April 1998, until 5.00 pm,
27 April 1998 or further order.
2. Reserve costs.
3. Certify for the attendance of counsel.
2.
Representation:
R V Gyles QC with J E Middleton and M P McDonald for the applicants (instructed by Freehill Hollingdale & Page)
J W K Burnside QC with H Borenstein, M Bromberg and M G R Gronow for the first and second respondents (instructed by Maurice Blackburn
& Co)
P B Murdoch QC with J D Elliott for the third, fourth, fifth and sixth respondents (instructed by Phillips Fox)
G P Harris for the seventh and ninth respondents (instructed by Blake Dawson Waldron)
No appearance for the eighth and tenth respondents
J I Fajgenbaum QC with P M Tate for the eleventh, twelfth, thirteenth, fourteenth, fifteenth and sixteenth respondents (instructed
by Minter Ellison)
G T Pagone QC with D Chan and W A Harris for the seventeenth and eighteenth respondents (instructed by Dunhill Madden Butler)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law
Reports.
CATCHWORDS
Patrick Stevedores No 2 Pty Ltd & Ors v Maritime Union of Australia & Ors
Procedure - Stay - Stay of injunction.
- HAYNE J. The applicants seek a stay of proceedings pending the hearing of their application for special leave to appeal from the judgment
of the Full Court of the Federal Court of Australia, which gave leave to appeal, varied the orders of North J made in the Federal
Court on 21 April 1998 in ways which I do not now notice, but otherwise dismissed the appeals.
- The principles to be applied in such an application are well established. The jurisdiction to grant a stay is part of the inherent
jurisdiction of the Court and finds its most frequent use in order to preserve the subject-matter of litigation. Thus, as was mentioned
when the matter first came on before me last night, in Tait v The Queen[1], the jurisdiction was invoked to prevent the execution of sentence upon Tait. There it was exercised[2]:
"... without giving any consideration to or expressing any opinion as to the grounds upon which [the substance of the application
to the Court was] to be based, but entirely so that the authority of this Court may be maintained and we may have another opportunity
of considering it."
It is then an ample jurisdiction.
- To speak only of preserving the subject-matter of litigation may in some cases obscure the fact that the jurisdiction can be invoked,
if to grant a stay is necessary to prevent the exercise of rights of appeal being rendered futile[3] or their exercise in circumstances where restoration of the status quo cannot be achieved[4].
- The jurisdiction to grant a stay is, however, an extraordinary jurisdiction and exceptional circumstances must be shown before its
exercise is warranted[5].
- It is equally clear that it is very important to bear steadily in mind that the grant of a stay would deprive the respondents to this
application of the benefit of the orders which they obtained from North J and which were in substance upheld by the Full Court
of the Federal Court[6].
- The orders made by the primary judge as varied by the Full Court are in part orders restraining conduct, but in part are orders compelling
the performance of acts by the applicants. It is perhaps least inconvenient to refer to the parties by the designation which they
bore in the proceedings in the Full Court of the Federal Court of Australia, when I say that the first and thirteenth appellants
are restrained from acting upon or giving effect to the purported termination in April 1998 of certain labour supply agreements
which were allegedly made on 23 September 1997[7].
- The third, fourth, fifth and sixth respondents and the first appellant are restrained from terminating those agreements without first
giving the Maritime Union of Australia 14 days' written notice of that intention and the reason for the proposed termination[8]. Further, the first and thirteenth appellants are restrained from acquiring the stevedoring services which, until 7 April 1998,
they acquired from the third, fourth, fifth and sixth respondents, from any person other than those respondents.
- I was told that the labour supply agreements concerned were non-exclusive agreements; that is, the companies taking the supply of
labour were entitled to seek the provision of labour elsewhere than from the parties that in the Federal Court were the third, fourth,
fifth and sixth respondents. The applicants contend that the effect of the orders made by North J is that they are now bound
to take labour exclusively from the companies which I have referred to as the labour supply companies.
- The third, fourth, fifth and sixth respondents are restrained also from doing anything having the effect that the employment of the
employees engaged in their stevedoring businesses is or will be terminated[9]. The applicants contend that this order has the effect of compelling companies in the financial distress sufficient to warrant the
appointment of administrators to continue to incur obligations, notwithstanding that distress - obligations which would, on the winding-up
of a company, rank in priority to many other debts.
- The first to thirteenth appellants were also restrained, in effect, from dealing with their assets otherwise than in the ordinary
course of business, but as I understood it, no stay is now sought in respect of that order and its detail need not be noticed further.
Similarly, the third, fourth, fifth and sixth respondents, and the first and thirteenth appellants, are ordered to "continue to
treat the Labour Hire Agreements ... as remaining on foot and binding upon the parties to those agreements" and to "give effect to
the terms of those agreements"[10].
- All of the orders that I have mentioned were made upon certain undertakings given by the present respondents, the Maritime Union of
Australia and others, that they "will not engage in any industrial action" and that they would not "hold the administrators appointed
to the [labour hire companies] personally liable for their wages and other benefits arising from their employment with [those labour
hire companies] for which the administrators would otherwise incur personal liability as administrators during the course of their
administration".
- In the Full Court a further order was made, intended as I would understand it, to give effect to the intention lying behind the undertaking
I have just described. The Full Court ordered that Pt 5.3A of the Corporations Law should operate in relation to each of the
labour hire companies in such a way that s 443A(1) of that law is not to operate in respect of services rendered to those companies
by employees who are members of the Maritime Union of Australia. The effect of that order would be to relieve the administrators
of the companies of the personal liability which otherwise they would incur by the continued employment of persons whilst the company
was in administration. It is, however, as I would understand it at the moment, not an order which would prevent each of the companies
concerned continuing to incur the liabilities for wages to their employees.
- The applicants contend that the effect of these orders is to oblige them to use workers in their stevedoring operations other than
the workers whom now they are using. They submit, in effect, that the orders require them to give effect to agreements which, so
they contend, have been terminated, and, again so they contend, to do so otherwise than in accordance with the terms of those agreements.
They contend further that they are obliged by the orders, if the orders are to have effect, to use in the course of stevedoring
operations persons who since 7 April 1998 they have excluded from premises under their control.
- They submit that if the operation of the orders made by North J, as varied by the Full Court, is not stayed, and if their application
for special leave to appeal to this Court is granted and the appeal allowed, it will not be possible to restore them to the position
that existed before the impugned orders were made.
- No doubt as was observed in Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd[11]:
"In general, the orderly administration of justice would be impeded if this Court intervened in interlocutory proceedings in a matter
pending in a court of trial. It is the responsibility of a court of trial to determine the course of interlocutory proceedings,
subject to appeal to the relevant intermediate appellate court."
- Ordinarily, of course, the subject-matter of litigation will not be lost, or for that matter injuriously affected, if interlocutory
orders made in the action are permitted to operate according to their terms. Usually interlocutory orders are directed to the preservation
of the subject-matter of the action, not to its alteration, let alone its destruction.
- In the course of argument counsel adverted to many of the large number of reported decisions in this Court about the grant or refusal
of stay pending application for the grant of special leave. All of those decisions must be read in the light of the circumstances
of the individual cases. Nothing that is said in them is to be read as identifying immutable principles which fetter the Court's
jurisdiction to grant a stay. The jurisdiction is ample. The relevant question which falls for decision is whether it should be
exercised in this case.
- The present applicants applied to the Full Court of the Federal Court for a stay of proceedings pending their application to this
Court for special leave. That application for stay was refused. In considering whether now to grant a stay, it is important to consider
first whether there is a substantial prospect that special leave to appeal will be granted, to consider also what effects the grant
or refusal of stay would have, and to consider where lies the balance of convenience.
- Various matters were canvassed in the course of argument which were said to be possible grounds warranting the grant of special leave
to appeal to this Court. Notwithstanding that the orders which it is sought to challenge are in the first instance interlocutory
orders, I consider that the applicants' prospects of obtaining special leave are not insignificant. Since that application has yet
to be argued, it is, in my view, inappropriate to say more.
- Again, lest it be misunderstood, I emphasise that I express no concluded view that the matters which were canvassed in argument arise
in the proceeding or that it is only the matters that were mentioned in argument which might attract a grant of special leave, or
for that matter that the applicants should succeed in their application for special leave. Those are all questions that must await
full argument and upon them I express no view greater than that I am of the opinion that the applicants' prospects of obtaining leave
are not insignificant.
- What loss would the respondents to the present application suffer if a stay were granted? No contract of employment has yet been
terminated, whether by the administrators of the labour hire companies that are now in administration or by any of the applicants.
Staying the orders that were made will not change that.
- In the end, as I understood it, the respondents' principal contention in this regard was that the legitimate expectations of the respondents
to enjoy the fruits of their success in the courts below would be dashed were the stay now to go. Against that consideration, powerful
as it may be, must be balanced, among other things, what was said by the Full Court in connection with the application that had earlier
been made to that Court for a stay of the orders of North J pending the hearing of the appeal to that Court. Their Honours
in the Full Court said "We stayed those orders" [the orders of North J] "not because we had any view about their merits
- at that stage we had not even seen North J's reasons - but simply because it seemed to us undesirable to run the risk of the
chopping and changing that would occur if the orders were allowed to operate for a short time and were then set aside on appeal."
The stay which now is sought is very short. As I have already indicated to the parties, a Full Court will be assembled in Canberra
to deal with these matters at 10.15 am on Monday next.
- I am persuaded that the harm to be suffered by the respondents being kept out of the fruits of the orders which they have obtained
is outweighed by the disruption that would be caused were the position to be changed after proceedings were heard on Monday next.
Importantly, I consider that there is a real risk that it would not be possible for the present applicants, if ultimately successful
in an appeal to this Court, to be restored substantially to their former position if the orders made by North J were now to
be executed.
- Given the brevity of the period involved and the various considerations to which I have referred, I am of the opinion that if - but
only if - the undertaking as to damages which was proffered at the hearing before me last night were to be renewed in substantially
identical terms, there should then be an order staying paragraphs 1, 2 and 4 of the orders of North J made on 21 April
1998, until 5.00 pm, 27 April 1998 or further order.
- It will be noted that I have not dealt, in that proposed form of order, with the orders made by the Full Court dealing with some of
the paragraphs of the orders of North J to which I referred. I have not done so because it seems to me that the Full Court's
orders, being, as they were, stays of the operation of the orders of North J, need not be noticed in the form of order which
I propose. However, that is a matter about which counsel may care to address me.
- As I have indicated to counsel, it will be necessary to give directions about the steps that must be taken to permit the further prosecution
of the application for special leave before the Court on Monday next. Again those are matters on which I will hear counsel. No
doubt it will be necessary to make some order dealing with the costs of the present application.
[1] [1962] HCA 57; (1962) 108 CLR 620.
[2] Tait v The Queen [1962] HCA 57; (1962) 108 CLR 620 at 624 per Dixon CJ.
[3] cf Wilson v Church (No 2) (1879) 12 Ch 454; Erinford Properties Ltd v Cheshire County Council [1974] Ch 261.
[4] See, for example, Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] [1986] HCA 13; (1986) 160 CLR 220 at 224 per Dawson J.
[5] Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] [1986] HCA 84; (1986) 161 CLR 681 at 684 per Brennan J; Marconi's Wireless Telegraph Co Ltd v The Commonwealth [No 3] [1913] HCA 23; (1913) 16 CLR 384 at 386 per Barton ACJ, Isaacs J.
[6] Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1997] HCA 24; (1997) 71 ALJR 814 at 816 per McHugh J; [1997] HCA 24; 145 ALR 121 at 124 per McHugh J.
[7] par 1 of the orders of North J.
[8] par 3 of the orders of North J.
[9] par 5 of the orders of North J.
[10] par 2 of the orders of North J.
[11] [1988] HCA 53; (1988) 165 CLR 452 at 458 per Mason CJ, Brennan and Gaudron JJ.
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