Sutton, Construction, Forestry, Mining and Energy Union v Sharp, the State of Victoria, Atkinson, Ferguson and Young

[1995] IRCA 579

IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA  )        No. VI 95/4820
NEW SOUTH WALES DISTRICT REGISTRY)

BETWEEN:JOHN DAVIS SUTTON

First Applicant

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Applicant

AND:IAN GORDON SHARP

First Respondent

THE STATE OF VICTORIA

Second Respondent

JOHN ATKINSON & ORS

Third Respondents

JOSEPH FERGUSON & ORS

Fourth Respondents

and

MICK YOUNG & ORS

Fifth Respondents

No. VI 95/4819

BETWEEN:JOHN DAVIS SUTTON

First Applicant

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Applicant

AND:IAN GORDON SHARP

First Respondent

THE STATE OF VICTORIA

Second Respondent

JOHN ATKINSON & ORS

Third Respondents

JOSEPH FERGUSON & ORS

Fourth Respondents

and

MICK YOUNG & ORS

Fifth Respondents

CORAM:    WILCOX CJ
PLACE:    SYDNEY
DATE:     28 SEPTEMBER 1995

EXTEMPORE REASONS FOR JUDGMENT

WILCOX CJ:  The matter before the Court is an application on behalf of some respondents to the proceeding for a stay of order 4 of the orders made by me on 24 August 1994 pending the determination of appeals filed by the respondents.  It is likely that the appeals can be heard early in 1996, if not before.  Notwithstanding that, there may be delay in disposition of the appeal, or as a result of any subsequent application for special leave to appeal to the High Court of Australia.

The relevant assets, the subject of the order, fall into two categories.  The first category consists of real estate, being three properties at Carlton in the State of Victoria.  The other category consists of personal property, predominantly in the form of bills of exchange with the Commonwealth Bank of Australia; but, in addition, there are small sums of money in bank accounts.  The total amount involved, in relation to personal property, would appear to be of the order of $900,000.

In Commissioner of Taxation v Myer Emporium Limited (1986) 60 ALJR 300 at 301, Dawson J of the High Court of Australia referred to the principles that apply where an application is made for a stay of an order made at first instance. He said there that the discretion conferred by the High Court Rules; and I interpolate that the discretion is much the same under the Industrial Relations Court Rules:

"...is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal.

Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory.  Generally that will occur when, because of the respondent's financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance.  However, special circumstances are not limited to that situation and will, I think, exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed."

I think this is appropriate guidance for the present case, although a somewhat different approach has been taken in the New South Wales Court of Appeal as exemplified by the decision in Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 at 693-695. The nature of the appeal to the Court of Appeal is different to that of an appeal that applies in this Court where the appeal is an appeal stricto sensu. However, in a practical sense, it would make very little difference if I followed the approach taken in Alexander's case.  The court there said that the onus is on an applicant for a stay "to demonstrate a proper basis for a stay that would be fair to all parties".  The view I have formed would be the same, even if I adopted that approach rather than the approach taken in Myer Emporium.

It seems to me that, from a practical point of view, it makes no difference whatever whether or not the real estate is transferred by Dr Sharp, or perhaps I should more accurately say by the trustees in whose name the real estate is currently vested, to CFMEU pending the ultimate determination of the appeal. Counsel for CFMEU have indicated that their client would be prepared to give an undertaking, if the real estate was transferred, that it would not dispose of the three properties until determination of the appeals.  Consequently, whichever course is taken, the properties will be held pending the outcome of the appeal.  This is as it should be.  In relation to possession, it makes no difference whether or not a stay is granted.  CFMEU presently has the benefit of possession of the properties, so there is no practical advantage one way or the other.  The only practical matter that occurs to me is that, if the appeals succeed, then unnecessary work and probably unnecessary expense would have been incurred in transferring the properties to the CFMEU at this stage and subsequently transferring them back to the present title holders or Dr Sharp, as the case might be.  This is a disadvantage and I think it constitutes sufficient special circumstances for me to exercise my discretion in favour of an extension of the stay, in relation to the real estate, until the final determination of the proceeding or earlier order in case the situation changes. 

In regard to the personal property, the situation is quite different.  Dr Sharp very properly has invested the funds under his control in secure investments, but this has the disadvantage that the return is comparatively low.  It appears that the average rate of interest currently being earned on bills of exchange with the Commonwealth Bank of Australia is about 7.55 per cent.  CFMEU is presently paying more than this on moneys owed by it in respect of a property which it purchased in Swanson Street, Carlton South, for which it borrowed $2.1 million.  It seems undesirable that CFMEU should be put in the position of lacking access to funds that have been held properly to belong to it whilst those funds earn a smaller return than the interest it is paying to its own creditor.

Of course, if there was reason for concern as to the ability of CFMEU to repay the money in the event of the appeals succeeding, this would be a powerful - no doubt critical - factor in favour of extending the time for compliance with the order.  But I am satisfied that there is no reason for concern on that score.  Evidence of the assets of CFMEU has been filed and is not in contest.  I have no doubt that CFMEU would be in a position to repay the money, if eventually unsuccessful in the litigation.

Mr Sutherland has raised the point, I think quite reasonably, that interest would be lost to Dr Sharp if the amount handed over now was repaid without interest.  This point can be met by an appropriate undertaking being given in relation to the payment of such interest as the Court may specify.  Unfortunately, it is not possible for the undertaking to be given immediately.  The relevant officer, the national secretary of CFMEU, is attending the ACTU Congress.  But I have no doubt that a document can be filed that will meet the situation.

Accordingly, the order that I make is as follows.  Insofar as it relates to real estate, I extend until the final determination of the appeals, or earlier order of a judge, the operation of order 4 made by me on 24 August 1995.  In relation to assets other than real estate, subject to the filing within seven days of an undertaking in the form to be mentioned in a moment, I refuse the applications for extension of the stay.  I reserve liberty to apply in relation to those assets if no such undertaking is filed.

The undertaking to which I refer is an undertaking signed by the national secretary of CFMEU undertaking to the Court on behalf of CFMEU to abide by any order of the Court for the repayment or retransfer to the first respondent, Dr Sharp, of the assets transferred to CFMEU pursuant to order 4 of 24 August 1995 and for the payment of such interest on the use of those assets as the Court may specify.

I certify that this and the preceding six (6) pages
are a true copy of the Reasons for Judgment
of Chief Justice Wilcox.

Associate:

Dated:     28 September 1995

APPEARANCES

Counsel for the Applicant:          S Rothman and M Borenstein

Solicitors for the Applicant:             Geoffrey Edwards & Co

Counsel for the First and

Second Respondents:  I G Sutherland QC

Solicitors for the First

and Second Respondents:                   Victorian Government Solicitor

Counsel for the Third               Ms O Robson

Respondent:  

Solicitors for the Third
Respondent:  Best Hooper

Counsel for the Fourth
Respondent:  A S Kostopoulos

Solicitors for the Fourth
Respondent:  Athena Tourki

Fifth Respondents:  M Young, R Dalton, M  Greany - appeared for themselves;

Mr Zigouras appeared for J McKeown

Date of hearing:  28 September 1995