Vision Australia Ltd v Elisha

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0018

VISION AUSTRALIA LTD	Applicant
v
ADAM ELISHA	Respondent

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JUDGES:	EMERTON P and KENNEDY JA
WHERE HELD:	Melbourne
DATE OF HEARING:	29 March 2023
DATE OF JUDGMENT:	31 March 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 70
JUDGMENT APPEALED FROM:	[2022] VSC 754 (O’Meara J)

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PRACTICE AND PROCEDURE – Stay – Application for stay of orders requiring payment of judgment sum pending appeal – Whether special or exceptional circumstances exist – Whether risk that proposed appeal would be rendered nugatory because applicant may not be restored substantially to former position if stay not granted – Application for stay dismissed.

Supreme Court (General Civil Procedure) Rules 2015 rr 64.39, 66.16.

Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2020] VSCA 269; Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653; Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220; Maher v Commonwealth Bank of Australia [2008] VSCA 122.

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Counsel
Applicant:		Mr G Worth
Respondent:		Mr J Brett with Mr E Makowski
Solicitors
Applicant:	IDP Lawyers
Respondent:	Arnold Thomas & Becker

EMERTON P
KENNEDY JA:

Introduction

On 10 February 2023, Vision Australia Ltd (‘Vision’) applied for a stay of orders made on 15 December 2022 by a judge of the Trial Division. Pursuant to those orders, Vision was required to pay damages in the sum of $1,442,404.50 to Adam Elisha, the successful plaintiff. The orders were temporarily stayed pending an application for leave to appeal, which has now been made.
On 29 March 2023, we heard argument on the stay application and determined that it should not be granted, as special or exceptional circumstances had not been established. We made orders dismissing the stay application and requiring Vision to pay Mr Elisha’s costs of the application.
These are our reasons for dismissing the stay application.

Background

Vision is a not-for-profit organisation which carries on a business by which it provides services to persons with impaired vision.
On 27 September 2006, Mr Elisha was employed by Vision as an ‘adaptive technology consultant’ at 25 years of age. His work involved setting up or assisting with software and hardware systems for Vision’s customers. This required him to visit homes and workplaces throughout Victoria (among other locations).[1]
[1]Elisha v Vision Australia Ltd [2022] VSC 754, [1]–[4] (‘Reasons’).
On 23 March 2015, Mr Elisha went to Bairnsdale for work where he stayed at the Bairnsdale International Hotel (the ‘Bairnsdale Hotel’). During his stay, Mr Elisha interacted with an employee of the hotel, having complained of a noise outside his room. The events of that evening were the subject of major controversy between the parties.
In early May 2015, two other Vision staff members attended the Bairnsdale Hotel and learned of the hotel employee’s account of the earlier events involving Mr Elisha. The incident was subsequently reported to a manager at Vision.[2] The matter was then elevated to a human resources manager and a member of Vision’s ‘People and Culture’ department. These individuals began to investigate the incident, including by interviewing the Bairnsdale Hotel employee and exchanging observations about Mr Elisha’s general behaviour in the workplace.
[2]Reasons, [21]–[27].
On 18 May 2015, Mr Elisha received a letter from Vision (the ‘stand down letter’). The stand down letter required Mr Elisha to attend a meeting in response to a complaint and alleged that he had engaged in ‘serious misconduct’ in breach of various policies of Vision.[3]
[3]Reasons, [28]–[30].
The stand down letter recounted the events occurring at the Bairnsdale Hotel.[4] It concluded by demanding that Mr Elisha attend the meeting and that he not speak with any staff member regarding the matter. It stated that ‘[d]ue to the serious nature of the complaint, the decision has been made to stand you down from your duties at [Vision] (on full pay) until this matter is concluded’.
[4]Reasons, [29].
On 26 May 2015, Mr Elisha attended the meeting referred to in the stand down letter, accompanied by a branch organiser of the Australian Services Union. In advance of the meeting, Mr Elisha prepared a written response to the stand down letter in which he ‘vigorously’ denied any misconduct.[5]
[5]Reasons, [32]–[33].
On 29 May 2015, Vision sent a further letter to Mr Elisha purporting to terminate his contract of employment ( the ‘termination letter’).[6] The termination letter stated that Mr Elisha engaged in serious misconduct damaging Vision’s reputation within the Bairnsdale community and causing a risk to the health and safety of another, among other things. The termination letter stated that Mr Elisha’s employment was terminated immediately and that ‘[i]n accordance with Clause 47.25 of the Vision Australia Unified Enterprise Agreement 2013 payment in lieu of notice will not apply’.
[6]Reasons, [39].
On 19 June 2015, Mr Elisha commenced an unfair dismissal proceeding before the Fair Work Commission. On 9 July 2015, the parties entered into a deed of settlement resolving the proceeding. Pursuant to the deed, Vision was required to make a net payment to Mr Elisha in the sum of $27,248.68 (said to be equivalent to 26 weeks of pay).[7]
[7]Reasons, [42]–[43].
On 27 August 2020, Mr Elisha commenced a proceeding in the Trial Division.[8]
[8]Reasons, [46].
By a statement of claim filed on 11 September 2020 (and subsequently amended on 8 June 2020), Mr Elisha alleged that Vision was liable to pay substantial damages by reason of breach of contract and, further or alternatively, negligence.[9] He claimed that Vision wrongfully terminated his contract of employment. In his submission, his contract of employment incorporated certain provisions imposing obligations on Vision to ensure ‘due process’ when exercising the right to terminate and to provide a safe work environment.[10] Those obligations were to be found in the Vision Australia Unified Enterprise Agreement 2013 (‘Vision EA’) and Vision’s disciplinary policies, including a ‘disciplinary procedure’ dated April 2015 (the ‘2015 Disciplinary Procedure’).[11] Mr Elisha also alleged that Vision owed a non-delegable duty to take reasonable care for his safety while performing work in the course of his employment. He asserted that it was reasonably foreseeable to Vision that a failure to take reasonable care might expose Mr Elisha to a risk of psychiatric injury.[12]
[9]Reasons, [48].
[10]Reasons, [49]–[51].
[11]Reasons, [49], [56(b)].
[12]Reasons, [52].
By an amended defence dated 15 June 2022, Vision denied the allegations and took issue with every substantive element of the case against it.[13] Additionally, it contended that the damages sought were either not recoverable or too remote and that Mr Elisha’s claim was estopped by reason of the deed of settlement referred to in [12] above.
[13]Reasons, [55], [58].
The trial of the proceeding was conducted over 17 sitting days between 6 June and 7 October 2022.
On 13 December 2022, the trial judge delivered his reasons for judgment, finding in favour of Mr Elisha, who he said was treated appallingly by Vision and consequently suffered very serious and enduring psychiatric injury.[14]
[14]Reasons, [644]–[646].
The trial judge upheld the claim in contract.[15] His Honour concluded that Vision was obliged to comply with the terms which Mr Elisha alleged were incorporated into the employment contract (including cl 47.5 of the Vision EA).[16] Those obligations were contractual and not merely discretionary or aspirational. Vision had breached those terms by engaging in the conduct resulting in Mr Elisha’s dismissal (which included the failures to inform Mr Elisha of all of the allegations against him and to afford him the opportunity to respond to those allegations).[17]
[15]Reasons, [432].
[16]Reasons, [427]–[428].
[17]Reasons, [429]–[430].
While it was unnecessary to determine the negligence allegations, the trial judge said that he would have found that the alleged duty of care was not presently recognised at common law and he rejected Mr Elisha’s claim in this respect.[18]
[18]Reasons, [529]. Although the trial judge expressed the view that the dismissal was prima facie negligent, he was ultimately bound to follow the principle in Aldersea v Public Transport Corporation (2001) 3 VR 499 (‘Aldersea’): ibid [515]–[515], [529]–[532]. In Aldersea, Ashley J concluded at [117] that the common law does not yet recognise an entitlement to damages for personal injury resulting from wrongful termination of employment.
On 15 December 2022, the trial judge made orders requiring Vision to pay to Mr Elisha damages in the sum of $1,442,404.50 (comprising damages for pain and suffering and pecuniary loss, including loss of earnings and superannuation) together with costs. An order was also made that there be a stay of 21 days on payment of the judgment sum.
On 18 January 2023, Vision filed a summons by which it made application to extend the stay ordered by the trial judge. It filed written submissions in support of the application which stated that the last date by which Vision could file any application for leave to appeal was 13 February 2023, but that the original stay ordered by the trial judge lapsed on 6 January 2023.
Vision also filed an affidavit sworn by its solicitor, Wayne Morphett, who deposed that, although the parties had exchanged a series of correspondence in which Vision sought Mr Elisha’s consent to the extending of the stay, Mr Elisha did not consent to a further stay.
On 31 January 2023, the stay was extended until 10 February 2023 to allow time for Vision to file an application for leave to appeal.
On 8 February 2023, Vision filed an application for leave to appeal the decision and orders of the trial judge, together with a written case in support. The application advances three proposed grounds of appeal:
Ground 1: The trial judge erred in finding that clause 47.5 of the [Vision EA] and the 2015 Disciplinary Procedure formed part of [Mr Elisha’s] contract of employment.
Ground 2: The trial judge erred in finding that [Vision] breached [Mr Elisha’s] contract of employment (either clause 47.5 of the Vision EA or the 2015 Disciplinary Procedure).
Ground 3: The trial judge erred in failing to conclude that, if [Vision] breached [Mr Elisha’s] contract of employment:
(a)    damages, properly assessed, would be a maximum of one month’s pay;
(b)   damages were not available at law for any psychiatric harm suffered [by


Mr Elisha]; and
(c)    damages for psychiatric harm suffered by [Mr Elisha] were too remote.
Vision also applies to this Court for an order further extending the stay ordered by the trial judge pending the hearing and determination of its application for leave to appeal (and, if leave is granted, the appeal). The application for a further stay is opposed by Mr Elisha.

Relevant legal principles

The application for a stay is made under rr 64.39 and 66.16 of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’) and/or the inherent jurisdiction of the Court.
In Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd, the Court said that:
As the authorities hereinafter referred to demonstrate, an applicant for a stay must demonstrate the existence of special or exceptional circumstances. Special circumstances may exist where there is a real risk that an appeal, if successful, would be rendered nugatory in the absence of the grant of a stay. In such a case, the Court will be required to balance the prospect that an appeal may be rendered nugatory in the absence of a stay, against the principle that the successful party in the proceeding should be entitled to the fruits of the judgment. Further, a stay should not be granted unless the applicant has demonstrated at least an arguable ground of appeal.[19]
[19][2020] VSCA 269, [23] (McLeish, Niall and Sifris JJA).
As to whether there is an arguable ground of appeal, the Court usually does not have sufficient materials before it to consider the merits of the proposed grounds of appeal. In such cases, ‘the court ordinarily will focus on matters relevant to the enforcement of the judgment, rather than matters that are relevant to its validity or correctness’.[20]
[20]Loftus v Australia and New Zealand Banking Group Ltd [2016] VSCA 114, [8] (Whelan and Kaye JJA).
These principles are well established and are not in dispute.[21] They apply whether or not application is made under the Rules or pursuant to the Court’s inherent jurisdiction to stay execution of judgments and orders.[22]
[21]See Castaway Avenue Pty Ltd v CSC1957 Investments Pty Ltd [2022] VSCA 238, [17] (Beach JA and J Forrest AJA); V601 Developments Pty Ltd v Probuild Constructions (Aust) Pty Ltd [2022] VSCA 77, [36] (Sifris and Macaulay JJA); Amcor Ltd v Barnes [2020] VSCA 57, [10] (Ferguson CJ and Beach JA); Michos v Eastbrooke Medical Centre Pty Ltd [2019] VSCA 140 , [29] (Kyrou and T Forrest JJA).
[22]Phillips v Southage Pty Ltd [2014] VSCA 17, [26]–[27] (Whelan JA, Santamaria JA agreeing at [79]). See also R v Independent Broad-Based Anti-Corruption Commissioner (No 2) [2015] VSCA 280, [8] (Priest and Kaye JJA); Palmer v Permanent Custodians Ltd [2009] VSCA 164, [38], [56] (Dodds-Streeton JA, Beach JA agreeing at [69]).

Submissions

Vision’s application for a stay is supported by an affidavit sworn by Wayne Morphett on 10 February 2023 in which he deposes to matters concerning the proceeding in the Trial Division. Exhibited to the affidavit is material filed in that proceeding together with the application for leave to appeal.
Vision effectively repeats the submissions in support of the stay application referred to in [21] above. It submits that the appeal may be rendered nugatory because there is a real risk it will not be restored ‘substantially’ to its former position should it be required to pay the judgment debt — which it describes as a ‘very considerable sum’— prior to the determination of its application for leave to appeal (and any appeal).
In support of its submission that an appeal may be rendered nugatory where there is a real risk that the appellant may not be restored ‘substantially’ to its former position should it be required to pay the judgment debt, Vision relies on the decision of this Court in Cellante v G Kallis Industries Pty Ltd (‘Cellante’).[23]
[23][1991] 2 VR 653.
In that case, Young CJ (with whom Brooking J agreed) quoted the following passage of Dawson J in Federal Commissioner of Taxation v MyerEmporium Ltd (No 1):[24]
It is well established by authority that the discretion which it confers to order a stay of proceedings 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.[25]
[24](1986) 160 CLR 220.
[25]Ibid 222–3 quoted in Cellante [1991] 2 VR 653, 657 (citations omitted).
The holding that special circumstances justifying the grant of a stay will exist where there is a real risk that the successful appellant will not be to be restored substantially to their former position was adopted by this Court in Maher v Commonwealth Bank of Australia (‘Maher’).[26]
[26][2008] VSCA 122, [25] (Dodds-Streeton JA, Redlich JA agreeing at [1]).
In its written submissions, Vision argued that it is inevitable that the totality of the damages paid to Mr Elisha will not be recoverable because the appeal will take several months, during which time Mr Elisha will have to rely upon that money and will inevitably spend some of it. In oral submissions, Vision emphasised that Mr Elisha will have to use the judgment sum for his living expenses. Depending on how long it takes to resolve the appeal, Mr Elisha may be dipping into the judgment sum for his living expenses for several months.
Vision submitted that it was also possible that, if the damages award was paid now, a significant portion of it would be disbursed in payment of legal costs, but did not seek to elaborate how that might occur. It was not disputed that Mr Elisha was liable to his lawyers for legal costs only on a ‘no win/no fee’ basis.
According to Vision, this means that even if it is successful on appeal, it will not be ‘substantially’ restored to its previous position because some of the judgment sum will have been dissipated. It conceded that whether the circumstances in the present case constitute special circumstances will depend on what this Court makes of the term ‘substantially’ as used in Cellante.
Additionally, Vision asserts that granting a stay will result in ‘a no-disadvantage outcome’ for Mr Elisha. Currently, Mr Elisha is receiving compensation in the form of weekly payments from Vision pursuant to s 347 of the Workplace Injury Rehabilitation and Compensation Act 2013.[27] If the application for a stay is granted, Vision will continue making the weekly payments to Mr Elisha to ensure that he receives an income while the appeal is pending. During this time, penalty interest will continue to accrue. If Vision is unsuccessful on the appeal, these sums will be deducted from any ‘damages award’.
[27]Section 347 provides for when an employer ceases to be liable to pay compensation in respect of an injury by way of weekly payments.
Mr Elisha has filed a notice of opposition to the application for a stay, written submissions in support of that notice, and two affidavits sworn by his solicitor, Nick Korkliniewski.
Mr Korkliniewski has deposed that he believes that Mr Elisha ‘has no intention of disbursing the substantial amount of the judgment’. Mr Elisha has been advised and understands that upon payment of the judgment sum, he will no longer be entitled to WorkCover payments which will immediately cease. There will be a period of 20 years during which he will be precluded from receiving social security payments.
Mr Korkliniewski deposed further as follows:
(b)      In the event that the appeal is successful and judgment set aside, then


the WorkCover payments to which [Mr Elisha] has been entitled to date,


and which would cease upon payment of the judgment amount, would


automatically resume as the basis for their termination would not exist.


He would then be entitled to a lump sum payment, backdated to the date


on which payments stopped, and this would very likely fully


recompense him for any amounts that he has spent, from the judgment


sum, on living expenses, and would thus restore the judgment amount.
(c)      the arrangement with his solicitors has been on a contingency basis and


that therefore, in the event that the appeal is successful and judgment is


set aside, any monies which have been paid in respect of legal expenses


will be refundable by his solicitors, and will reestablish [sic] the full


capital amount of the judgment.

In the course of oral argument, counsel for Mr Elisha accepted that Vision’s proposed grounds of appeal were at least arguable, observing that the trial judge was concerned with a difficult area of law.
However, in Mr Elisha’s submission, Mr Morphett’s affidavit does not contain anything capable of displacing the prima facie position that a successful party is entitled to the benefit of the judgment below. An appeal may be rendered nugatory where there is a real risk that the plaintiff would remove the proceeds of the judgment from the jurisdiction. However, Vision has made no allegations of this kind — indeed, ‘there is nothing in [Vision’s] submissions which would not apply to any appeal from a judgment in a personal injuries case’. Vision makes only ‘bold assertions’ that the judgment debt, if paid, might be dissipated on expenses and costs, which amount Vision makes no attempt to quantify.
Mr Elisha submits that the amounts that would be disbursed for living expenses are relatively small and come nowhere near to preventing Vision from being substantially restored to its pre-trial position if the appeal is successful.

Discussion

Vision must establish that there are special circumstances warranting the grant of a stay of the judgment below. It is not sufficient that the balance of convenience may favour the grant of a stay. The ‘no-disadvantage’ proposition and the undertakings proposed to be given by Vision — that it would continue making weekly payments to Mr Elisha and pay penalty interest on the judgment sum if unsuccessful on appeal — seem to be directed to the balance of convenience, rather than to making out the required exceptional or special circumstances.
This is also not the occasion on which to make any considered appraisal of the merits of Vision’s proposed appeal. It is sufficient for us to say that, having considered all of the material, we are of the view that, consistent with the concession of Mr Elisha’s counsel, some of them raise complex questions of law and are clearly arguable.
This Court in Maher described circumstances in which an appeal may be rendered nugatory as follows:
An appeal could be rendered nugatory in that sense in a variety of ways. The test could be satisfied where a defendant appeals and there is a real risk that the plaintiff would remove the proceeds of the judgment from the jurisdiction. Similarly, special circumstances may be recognised where, for example, although the respondent is solvent, the subject matter of the appeal is, in substance, irreplaceable.[28]
[28][2008] VSCA 122, [26] (Dodds-Streeton JA, Redlich JA agreeing at [1]). See also Cellante [1991] 2 VR 653, 657 [10].
Although this is not an exhaustive description, it demonstrates the seriousness of what is required to render an appeal nugatory based on the dissipation of an award of damages.
In this case, there is no risk of the removal of proceeds from the jurisdiction. However, more relevantly, there is no suggestion that they will be dissipated to an extent that could be described as ‘substantial’. Mr Elisha has been living off WorkCover payments for some time. It may be inferred that his needs are relatively modest. We are not persuaded that his living expenses pending the hearing and determination of the appeal could give rise to a significant diminishment of the judgment proceeds and thereby prevent Vision from being substantially restored to its original position, should it succeed on appeal. Mr Elisha’s solicitor has deposed that he has no intention of making any significant expenditures. His legal costs will only be payable if he retains the damages that have been awarded. Moreover, the evidence was that, even to the extent that the judgment proceeds were drawn upon, they would be effectively restored by reason of a lump sum payment (equivalent to the value of the weekly payments foregone).
There is therefore no basis upon which to conclude that the judgment sum will be significantly reduced or otherwise compromised prior to the determination of the appeal (assuming that leave to appeal is granted). We are not satisfied that, if the judgment is not stayed, the appeal will be rendered nugatory.
In our view, Vision has failed to establish the required exceptional or special circumstances justifying an order for a stay in this case. We see no reason to deprive Mr Elisha of the fruits of the judgment below.
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[2023] VSCA 70

31 March 2023