Jackson v Health Services Union

Case [2015] FCAFC 188

FEDERAL COURT OF AUSTRALIA

Jackson v Health Services Union [2015] FCAFC 188

Citation: Jackson v Health Services Union [2015] FCAFC 188
Appeal from: Health Services Union v Jackson (No 4) [2015] FCA 865
Parties: KATHERINE JACKSON v HEALTH SERVICES UNION
File numbers: VID 515 of 2015
VID 516 of 2015
Judges: JESSUP, GRIFFITHS AND WHITE JJ
Date of judgment: 17 December 2015
Catchwords:

INDUSTRIAL LAW – objections to competency to appeals from interlocutory judgments of the Federal Court of Australia (‘FCA’) – where appellant is a bankrupt – where appellant had not sought leave to appeal under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) – appellant’s standing to initiate appeals

PRACTICE AND PROCEDURE – application for adjournment
Legislation: Bankruptcy Act 1966 (Cth) ss 55, 58(3), 82(1), 178
Federal Court of Australia Act 1976 (Cth) ss 24(1A), 24(1E)
Federal Court Rules 2011 rr 36.01, 36.72(2)
Cases cited: Bagshaw v Scott [2002] FCAFC 362; (2002) 146 FCR 27
Bourke v State Bank of New South Wales [1995] FCA 1122
Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124
Health Services Union v Jackson (No 2) [2015] FCA 670
Health Services Union v Jackson (No 3) [2015] FCA 6
Health Services Union v Jackson (No 4) [2015] FCA 865
Shannon v Commonwealth Bank of Australia [2014] FCAFC 108
Date of hearing: 19 November 2015
Place: Melbourne
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 55
Counsel for the Appellant: There was no appearance by the appellant
Counsel for the Respondent: Mr M Irving
Solicitor for the Respondent: Holding Redlich
Table of Corrections
21 December 2015 In paragraph 7, “1.34m” has been replaced with “927,000”.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 515 of 2015
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

KATHERINE JACKSON
Appellant
AND:

HEALTH SERVICES UNION
Respondent

JUDGES:

JESSUP, GRIFFITHS AND WHITE JJ

DATE OF ORDER:

17 DECEMBER 2015

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The objection to competency be upheld.

2.The appeal be dismissed. 

3.There be no order as to costs. 

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 516 of 2015
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

KATHERINE JACKSON
Appellant
AND:

HEALTH SERVICES UNION
Respondent

JUDGES:

JESSUP, GRIFFITHS AND WHITE JJ

DATE OF ORDER:

17 DECEMBER 2015

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The objection to competency be upheld.

2.The appeal be dismissed. 

3.There be no order as to costs. 

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 515 of 2015
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

KATHERINE JACKSON
Appellant
AND:

HEALTH SERVICES UNION
Respondent

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 516…

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AGLC
Jackson v Health Services Union [2015] FCAFC 188
Case
[2015] FCAFC 188
Decision Date

CaseChat Overview and Summary

Jackson v Health Services Union was a case heard by the Full Court of the Federal Court of Australia, where the Health Services Union (HSU) objected to the competency of an appeal filed by Ms Jackson. The appeal was against the judgment and orders made by the primary judge in two proceedings brought by the HSU against Ms Jackson, as well as against certain interlocutory orders made by the primary judge in the proceedings. Ms Jackson, who had been declared bankrupt, argued that she had standing to bring the appeals as the findings of the primary judge had affected her personal reputation. The HSU objected to the competency of the appeal on the basis that Ms Jackson had no financial interest in the proceedings and that any right of appeal had vested in her trustee in bankruptcy.

The primary legal issue the court had to decide was whether Ms Jackson had standing to bring the appeals in her own name, given that she was a bankrupt and had no financial interest in the proceedings. The court considered whether Ms Jackson had discharged the burden of establishing the competency of her appeals, and whether she had standing to challenge the interlocutory orders made in the proceedings. The court noted that, in Cummings and Bagshaw, it was held that a bankrupt has no financial interest which would confer locus standi to appeal in their own name against a judgment. The court also considered whether Ms Jackson had standing to bring the appeals on the basis of the effect of the primary judge's findings on her personal reputation, and rejected this contention.

The court held that the objections to competency should be upheld, as Ms Jackson had not discharged the burden of establishing the competency of her appeals. The court found that, having regard to authorities such as Cummings and Bagshaw, Ms Jackson had no financial interest which gave her standing to appeal in her own name. Additionally, the court held that any right of appeal in respect of the interlocutory orders had vested in her trustee in bankruptcy, and Ms Jackson had no standing to bring the appeals. The court rejected Ms Jackson's contention that she had standing to bring the appeals on the basis of the effect of the primary judge's findings on her personal reputation.

The court dismissed the appeal and made no order as to costs. The Full Court's decision in Jackson v Health Services Union is an important reminder that a bankrupt has no financial interest which would confer locus standi to appeal in their own name, and that any right of appeal in respect of interlocutory orders vests in the trustee in bankruptcy. The decision also highlights the importance of establishing the competency of an appeal, and the potential consequences for an appellant who fails to do so.

Orders

Orders of the court

1. The objection to competency be upheld.

2. The appeal be dismissed.

3. There be no order as to costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the following reasons the objections to competency will be upheld. Background to the appeals The appeals arise from two proceedings at first instance. The first of those proceedings (VID 1042 of 2013) was referred to by the primary judge as the “Victorian proceeding”. The second proceeding (NSD 1501 of 2013) was referred to by his Honour as the “NSW proceeding”. The Victorian proceeding involved multiple claims by the HSU against Ms Jackson which included inter alia that she had contravened relevant provisions of the Workplace Relations Act 1996 (Cth) (the WR Act) and the Fair Work (Registered Organisations) Act 2009 (Cth) (the FWRO Act). It is not necessary to set out the details of these claims. The NSW proceeding was brought not by the HSU but by Mr Robert Elliott, who was National Secretary of the HSU from 1996 to 2002. Mr Elliott sought various orders in respect of his employment with the HSU. The HSU cross-claimed against the former President of the HSU, Mr Michael Williamson, as well as against Ms Jackson. The HSU alleged that, without authority and in breach of duty, Mr Williamson and Ms Jackson had caused the HSU to enter into an agreement with Mr Elliott pursuant to which he was paid benefits totalling approximately $400,000 to which he was not entitled. In April 2014, Mr Elliott discontinued his claim against the HSU and his cross-claim against Mr Williamson was stayed by Court order. This meant that in the NSW proceeding, the only remaining claim was the HSU’s cross-claim against Ms Jackson. The two proceedings were heard below concurrently. The HSU filed a consolidated statement of claim and Ms Jackson filed a defence. She also filed a lengthy affidavit. Ms Jackson did not appear at the final hearing of the substantive proceedings below. Shortly before the commencement of the trial below, Ms Jackson was declared bankrupt under s 55 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act), after she filed a debtor’s petition. Subsequently, the HSU applied for and was granted leave under s 58(3) of the Bankruptcy Act to take further steps and continue the proceedings against Ms Jackson. On 19 August 2015, the primary judge gave reasons for judgment in the substantive proceeding (Health Services Union v Jackson (No 4) [2015] FCA 865) (the primary judgment). In the Victorian proceeding, the primary judge ordered Ms Jackson to pay a total of approximately $927,000 as compensation for damage suffered by the HSU resulting from her contraventions of relevant provisions of both the WR Act and the FWRO Act. Ms Jackson was also ordered to pay the HSU an amount of approximately $68,000 as money had and received by her for the use of the HSU. In the NSW proceeding, Ms Jackson was ordered to pay the HSU compensation in the amount of approximately $410,000 for her contraventions of relevant provisions of both the WR Act and the FWRO Act. The primary judge also made orders requiring the parties to file submissions on the issues of costs and interest in both proceedings.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On 19 August 2015, the primary judge gave reasons for judgment in the substantive proceeding (Health Services Union v Jackson (No 4) [2015] FCA 865) (the primary judgment). In the Victorian proceeding, the primary judge ordered Ms Jackson to pay a total of approximately $927,000 as compensation for damage suffered by the HSU resulting from her contraventions of relevant provisions of both the WR Act and the FWRO Act. Ms Jackson was also ordered to pay the HSU an amount of approximately $68,000 as money had and received by her for the use of the HSU. In the NSW proceeding, Ms Jackson was ordered to pay the HSU compensation in the amount of approximately $410,000 for her contraventions of relevant provisions of both the WR Act and the FWRO Act. The primary judge also made orders requiring the parties to file submissions on the issues of costs and interest in both proceedings. It is now convenient to say a little more about some relevant aspects of the proceedings at first instance. First, on 22 June 2015, the primary judge dismissed an application by Ms Jackson for a permanent stay of the proceedings. Ms Jackson had legal representation at the hearing of her interlocutory application. Her counsel argued unsuccessfully that the proceedings should be permanently stayed on the basis inter alia that the proceedings were brought by the HSU for an improper purpose. His Honour gave reasons for rejecting Ms Jackson’s application (see Health Services Union v Jackson (No 2) [2015] FCA 670 (Jackson (No 2)) and made a formal order dismissing Ms Jackson’s stay application. As will be discussed further below, part of both of Mr Jackson’s appeals is directed to that interlocutory order. Secondly, in the Victorian proceeding below, Ms Jackson filed a cross-claim for wages which she said were owing to her by the HSU. This cross-claim was dismissed on 15 August 2014 by operation of a self-executing order which was triggered when Ms Jackson failed to comply with certain orders made by the primary judge concerning preparation for the trial. Ms Jackson was represented by counsel when the primary judge made the order dismissing her cross-claim. No objection was raised on her behalf at that time to the making of that order. For reasons which will be developed below, that order was of an interlocutory nature. Part of both of Ms Jackson’s appeals are directed to that order. Thirdly, as noted above, on 3 July 2015, the primary judge granted an application made by the HSU under s 58(3) of the Bankruptcy Act for leave to take fresh steps and continue the proceedings against Ms Jackson despite her bankruptcy. His Honour gave reasons for that decision (Health Services Union v Jackson (No 3) [2015] FCA 694 (Jackson (No 3)). Part of Ms Jackson’s appeals are directed to that order. The notices of appeal The notice of appeal in VID 515 of 2015 describes the matters which are the subject of that appeal as follows:The Appellant appeals from the whole of the judgment and of the orders of the Federal Court in proceedings numbered VID 1042 of 2013 given on 19 August 2015 at Melbourne in Health Services Health Services Union (sic) v Jackson (No 4) [2015] FCA 865 (Tracey J) and, further, from:(a)the interlocutory order made by Tracey J dismissing the Appellant’s cross-claim;(b)the interlocutory judgment and orders made by Tracey J on 3 July 2015 at Melbourne in Health Services Health Services Union (sic) v Jackson (No 2) [2015] FCA 670 (Application for Abuse of Process Stay);(c)the interlocutory judgment and orders made by Tracey J on 3 July 2015 at Melbourne in Health Services Health Services Union (sic) v Jackson (No 3) [2015] FCA 694 (s 58(3) leave to proceed).

Ratio Decidendi

Legal Principle Established

Secondly, Ms Jackson submitted that the primary judge’s findings reflected adversely on her personal reputation, and that those matters did not vest in her trustee in bankruptcy; however, she submitted that she had standing to challenge those “underlying factual findings”. Consideration and disposition of the objections to competency For the following reasons, HSU’s objections to competency must be upheld. First, it is incontrovertible that Ms Jackson has the burden of establishing the competency of her appeals (see r 36.72(2) of the FCRs). The HSU submitted that the Court should find that this burden was not discharged simply because Ms Jackson did not file her written submissions by the appointed time. That submission should not be accepted in circumstances where the Court subsequently extended the time within which that was to occur. There are other reasons, however, why Ms Jackson has failed to discharge her burden. Secondly, as noted above, Ms Jackson did not contest the HSU’s primary submission that, having regard to authorities such as Cummings and Bagshaw, she had no financial interest which gave her standing to appeal in her own name. As the plurality observed in Cummings at [13] (footnotes omitted):So far as a judgment entered in an action against a bankrupt creates or evidences a provable debt, we respectfully agree that the bankrupt has no financial interest which would confer locus standi to appeal in his own name against the judgment. That is because it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts. It may be noted that Cummings involved appeals against a judgment which had been entered against the appellants. In the proceedings here, the orders made by the primary judge on 19 August 2015 were entered on 19 November 2015. Thus Cummings is directly in point. In any event, having regard to the definition of “provable debt” in s 82(1) of the Bankruptcy Act we strongly doubt that it would have made any difference to the outcome of the HSU’s objections to competency if, final orders having been made by the primary judge, they had not formally been entered. Thirdly, as to that part of the appeals which relates to the dismissal of Ms Jackson’s cross-claim, we accept the HSU’s submission that this claim was part of Ms Jackson’s property and vested in her trustee when she became a bankrupt. Any right of appeal in respect of that self-executing order also vested in the trustee and Ms Jackson has no standing (see Cummings at [13]-[14] and Bagshaw at [26]-[32]). Fourthly, Ms Jackson’s contention that she had standing to bring these appeals because the primary judge made adverse findings which affected her personal reputation should not be accepted for the following reasons. The first reason is that her contention is inconsistent with Cummings. In that case, the appellants made a similar submission to the effect that, independently of the trustee’s interests, the effect on their personal reputation of the trial judge’s findings that they had been involved in conspiracy to defraud, deceit and contraventions of statutory obligations not to engage in misleading or deceptive conduct gave them standing to appeal. Both the plurality and the minority in Cummings rejected that submission, albeit on different grounds: (a)at [14] of Cummings, the plurality observed that if a trustee declined to sue or appeal against such a judgment, the appropriate relief for the bankrupt was to make an application under s 178 of the Bankruptcy Act and the Court could make an order “as it thinks just and equitable”. The plurality did not consider that a bankrupt’s personal reputation provided a sufficient basis for standing independently of an order made under s 178; and(b)at [29], the minority in Cummings (Dawson and Toohey JJ) stated that findings of conspiracy to defraud, deceit and contraventions of such statutory obligation could affect the appellants’ reputations, but such findings were made in the course of arriving at orders to be made and (footnotes omitted):Although they affect reputation, they are not themselves a “personal injury or wrong done to the bankrupt” which could form the basis for a separate cause of action”.