Kerrin, D. v Leighton Contractors Pty Ltd

[1986] FCA 665

Judgement No. L& ...... I!

CATCHWORDS

Practice and procedure - appeal - stay of judgment pending gppeal

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- principles to be applied - whether change of circumstances

since judgment.

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Conciliation and Arbitration Act 1904 S . 5(1)

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Federal Court Rules 0. 52 r. 17

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Scarborouqh v. Lew’s Junction Stores Ptv. Limited C19633 V.R. 129

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DAVID KERRIN v. LEIGHTON CONTRACTORS PTY. LTD.

NO. V 7 of 1986

GRAY J.

MELBOURNE

4TH AUGUST 1986

IN THE FEDERAL COURT OF AUSTRALIA	1
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VICTORIA	DISTRICT	REGISTRY	1	No. V 7 of 4986
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DIV SION INDUSTRIAL 1

B E T W E E N :

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DAVID KERRIW

Prosecutor

AND

LEIGHTON CONTRACTORS	P m .
LTD.

Defendant

JUDGE: GRAY J.

DATE : 4TH AUGUST 1986

EX TEMPORE REASONS FOR JUDGMENT

On 24th July 1986, Leighton Contractors Pty. Limited

("the defendant") was convicted by the Court of an offence under

S . 5(l)(a) of the Conciliation and Arbitration Act 1904 ("the

Act"). The offence was that it had dismissed David Kerrin from

his employment by reason of the circumstance that he was a member

of the Australian-Build%ng ConsEructi-on Employees and Builders -

Labourers Federation ("the B.L.F."). As part of its order made

on that date, the Court ordered that Mr. Kerrin be reinstated in

his old position, or in a similar position, within seven days

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from that day.

On 31st July 1986, the seventh day after the making of

the order, the defendant filed a notice of motion seeking a stay

of the reinstatement order, pending the hearing and determination

of an appeal which had been lodged in the meantime. The matter

came on before me on the afternoon of 31st July 1986. Because of

the short time available until the defendant was liable to be

held in contempt of court by failure to comply with the order, I

granted a stay, upon an undertaking being given that in the event

that Mr. Kerrin was certified by a qualified medical practitioner

as fit to return to work, the defendant would pay him all moneys

to which he would have been entitled pursuant to the National

Buildinq and Construction Industry Labourers (On Site) Award 1986

if he had been reinstated in accordance with the order made on

24th July 1986, and if his entitlement pursuant to that award

were unchallenged. I then adjourned the matter until today.

Affidavits have been filed on both sides and they reveal

some differences between the parties as to the true state of

facts. To some extent these differences are inevitable, because

the application on behalf of the defendant requires that the

Court attempt o indulge in predicting the future. The

application for a stay is largely based on two considerations.

The first of these is that, in evidence before Keely	J.,	Mr.
Kerrin stated that he would be prepared to join the Building

Workers Industrial Union ("the B.W.I.U.") if he were to be

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reinstated in his old or a similar position.

Subsequently, when the issue of reinstatement arose, Mr.

Kerrin told a Mr. Williams, an employee of the defendant, that he

would not join the B.W.I.U. but would retain his membership of

the B.L.F. It is said, therefore, by Mr. Vickery on behalf of

the defendant, that a change of situation has occurred since the

order of Keely J. on 24th July. In fact, in the reasons for

judgment given by Keely S. there is found, in a passage in which

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I	his Honour was dealing with submissions that were made on behalf
I	of the defendant as to why there should be no reinstatement, the
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following:
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i "Third, it was said that--because th of "no ticket

I no start" practice operating on building sites, referred

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I	-	..	to earlier, the defendant would face industrial action
on the relevant site if the prosecutor, on being
I	reinstated, refused to j in the "appropriate union", the
!	Building Workers' Industrial Union of Australia (RWIU)
!	and it was submitted that that was a reason why
reinstatement should not be orderd. The initial
I	difficulty which that submission encounters is that the
I	prosecutor, during his cross-examination, was expressly
asked would he "be prepared ... to join the BWIU" and
answered "yes". On the vidence I find that no industrial action would be likely to occur on the site in relation to that issue if the prosecutor did in fact
join the BWIU - even if he retained his membership of
the BLE'.

However, the submission fails for a more

fundamental reason. Even if it were clear that

industrial action on site would be likely to occur in

. -H- "relation to the reinstatement of the -prosecutor,

pursuant to the court's order, in my opinion it would

not be a proper exercise of its discretlon for the

court, in circumstances where it would otherwise order

the reinstatement of the prosecutor, to refrain from

making such an order because of	the likelihood of any
such industrial action."

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It appears from this passage that Keely J. gave attention to the

possibility that Mr. Xerrin might refuse to join the B.W.I.U. and

indicated clearly that hie Honour would, nevertheless, have made

the order that he did make even if that event occurred.

Tied in with the change of heart of Mr. Kerrin is the

second consideration, namely the likelihood of industrial

disruption if Mr. Kerrin were to enter a building site on which

the defendant is operating, without being a member of the

B.W.I.U. It is as to these matters that there is substantial

conflict on the facts between the affidavits filed by the

respective parties. The Court, of course, is not in a position

to conduct a trial on an interlocutory basis, to determine which

version of the facts is correct. Even if it did do so, there is

always the possibility that it might be wrong, because the events

which are in dispute are events which only the future can decide.

Accordingly, I do not attempt to make any firm prediction as to

whether there will or will not be industrial action if Mr. Kerrin

comes onto a building site. At present, as the evidence

discloses, Mr. Kerrin is classified as unfit to engage in work,

by reason of injury. He has received medical certificates tr) the

effect that he will be unfit to resume work at least until 19th

August 1986. It does appear, therefore, that anything which is

likely to occur by way of his being brought onto a building site

is unlikely to occur before that date.

More relevant, it seems to me, than attempts to predict

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the future, are the principles which normally apply in

determining whether a judgment ought to be stayed pending appeal.

Order 52 r. 17 of the Federal Court Rules provides,	so far as is
relevant, as follows:

"17. (1) An appeal to the Court shall not-

(a) operate as a stay of execution or of proceedings

under the judgment appealed from;or

(b) invalidate any intermediate act or procedinq,

except so far as the Court or	a Judge or the court below
may direct.

( 2 ) The Court may vary or vacate any direction of

the Court	or the court below referred	to in sub-rule
(l).''

It was accepted by both parties that, in an application such as

this, it is necessary for the party seeking a stay of judgment to

show exceptional circumstances. Reference might conveniently be

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made to Scarborouqh v. Lew's Junction Stores Ptv. Limited C1963J

V.R. 129, at p. 130, where Adam J. u6ed the phrase "special

circumstances". I take these tests to mean that something out of

the ordinary must be shown. In the normal case of a money

judgment, the party against whom the judgment has been given is

required to pay the money on the basis that it will be refunded

if the appeal is successful. If a party in such a position can

show that there is a likelihood that repayment will not be

effected, then special circumstances are shown.

In the present case there are possibilities that either

party may be deprived of the fruits of a victory in the event

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that a stay is granted or in the event that it is not. If a stay

were not be o granted, then the order equiring the

reinstatement of Mr. Kerrin would operate immediately. In 'brder

to avoid being in contempt of court, the defendant would be

required to reinstate Mr. Kerrin. If it then succeeded on its

appeal, it would not be able to dismiss Mr. Kerrin without giving

to him whatever rights and entitlements he may have pursuant to

his contract of employment and pursuant to any award which may

cover him. In that context, I should point out that cl. 7 of the

National Buildinq Construction Industrv Labourers (On Site) Award

1986, which binds the defendant in respect of the site or sites

concerned, is expressed to be binding upon the employers which

are parties to the award in respect of their employees performing

work covered by the award, whether members of a relevant union or

not. On the other hand, if a stay were to be granted and the

defendant were to lose its appeal, Mr. Kerrin could justifiably

complain that he was not reinstated until such time as the appeal

is heard and determined and that he has lost entitlements under

the award, not only as to payment in the interim, but in respect

of matters such as annual leave, which are based upon the length

of period of service of a particular employee.

Considerable discussion took place as to how this last

mentioned alternative might be eliminated. The defendant offered

by its counsel an undertaking that, in the event that Mr. Kerrin

was certified by a qualified medical practitioner as fit to

return to work, it would pay him all monies and attribute to him

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all benefits to which he would have been entitled pursuant to the

award, and otherwise apply the said award, including all

provisions which would operate for the benefit of the empioyer,

as if he had been reinstated in accordance with the order made on

24th July. There are, m my view, some unsatisfactory matters

about this form of undertaking. I did ask counsel for the

defendant whether the defendant was prepared to give an

undertaking in more generous terms, particularly so as to avoid

the possibility that the defendant might treat Mr. Kerrin as

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having been dismissed notionally before the appeal	is heard and
determined. Indeed, it was with this possibility	in mind that

counsel for the defendant indicated that he had included in the proposed undertaking, the words "including all provisions which may operate for the benefit of the employer". The defendant

refuses to rengthen its u dertaking, in my view

inappropriately. mere a court order subsists that a person be

reinstated and it is sought to stay that order, it seems to me

that such a stay should only be on the basis that nothing is done

pending the hearing and determination of the appeal that would

have any effect on the entitlement of the person concerned to be

reinstated if the appeal is dismissed.

Further to that, it seems to me to be inappropriate to

accept an undertaking which would involve the application to a person who is not working of the terms of an award such as the

award in question here. I should say that I am not now in doubt,

as I was during argument, that the Court has power to accept

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undertakings when a stay of judgment is sought pending	an appeal.
Rather, it seems to me to be highly inappropriate that any

question as to Mr. Kerrin's entitlement under the award shohd be

capable only of being raised between the parties, by way of

proceedings for contempt of court, alleging a breach of the

undertaking in failing to pay to Mr. Kerrin all of what, by

virtue of the undertaking, would be his entitlements.

In the result where each party might be in some fashion

deprived of the fruits of an actual or potential victory,

depending upon the outcome of the appeal, it seems to me to be

appropriate that the ordinary rule should operate and that the

appeal should not be the occasion for a stay of the order of the

Court. The effect of this will be that Mr. Kerrin will be

entitled to be reinstated immediately to the same or a similar

position. If some industrial disruption does occur as a result

of that, then perhaps it might truly be said that such industrial

disruption is a consequence of what the Court can only, at

present, regard as the defendant's criminal act in dismissing Mr.

Kerrin at the time when it did.

As I have said, however, I am not able to determine

whether industrial disruption will occur. The defendant, upon

reinstating Mr. Xerrin, will have any rights available to it

which it would have in respect of an employee, although it should

be pointed out that it must be clear that the order of the Court

has been obeyed and that Mr. Kerrin has in fact been reinstated.

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For these reasons I dismiss the application for a stay of the order of Keely J. of 24th July 1984.