FEDERAL COURT OF AUSTRALIA

Maughan Thiem Auto Sales Pty Ltd v Cooper [2013] FCAFC 145

THE COURT ORDERS THAT:

1.    The appeal be dismissed as incompetent.

2.    Any application for costs be made by letter within seven days, supported by written submissions and, if appropriate, affidavit evidence.

3.    Any response (including, if appropriate, any affidavit evidence) be served and forwarded to the Court within seven days after receipt of the other party’s documents.

4.    Any costs application be determined on the papers.

5.    In the event that no application for costs is brought within the time referred to in order 2, there be no order as to costs.

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

REASONS FOR JUDGMENT

GREENWOOD AND BESANKO JJ:

1        We have had the advantage of reading the reasons for judgment of Katzmann J. We agree with those reasons. We add the following brief observations.

2        The word “decision” may be read widely so as to include the conclusions reached by the industrial magistrate in this case. For example, the industrial magistrate said that he concluded that there were no “applicable award-derived long service leave terms” as defined, at the “test time”. He also said (at [50]):

It therefore follows that Mr Cooper’s long service leave claim is governed by the State Act. This Act entitles Mr Cooper to pay in lieu of pro-rata long service leave in respect of eight full years of service, which is a total of 10.4 weeks pay.

(Our emphasis).

3        There is nothing provisional about these conclusions and in one sense they represent a decision. But is it a decision within s 565(1) of the Fair Work Act 2009 (Cth)? The point is not an easy one, but in the end we have concluded that it is not a decision within that subsection.

4        Historically, the acts of a Court have been reflected in judgments, decrees, orders or sentences (see for example, s 73 of the Constitution, s 4 of the Federal Court of Australia Act 1976 (Cth)). Interlocutory judgments or orders could only be the subject of an appeal if the leave of the Court was obtained and putting the matter somewhat broadly, the requirement of leave enabled the Court to control challenges which distracted attention away from the principal purpose of the proceeding which was to determine the applicant’s claims for relief. In this case, the industrial magistrate’s conclusions did not result in a judgment, order or decree even accepting that the formalities (or previous formalities) associated with the entry of judgments in superior courts, do not apply to the Industrial Relations Court of South Australia. Section 565(2) provides that it is not necessary to obtain the leave of the Federal Court in relation to an appeal under sub-s (1) so that the broader the scope of the word “decision”, the greater the number of appeals which could be brought as a right. This could lead to multiple appeals in the one proceeding. Sometimes the ability to appeal against the first step in a decision-making process will lead to greater efficiency but, on other occasions, it will give rise to the very sort of problems that have led to the requirement in other statutory contexts that the Court’s leave be obtained before there is an appeal in the case of interlocutory judgments or orders. In our opinion, another consideration is the need for as much certainty as possible as to when a party’s right of appeal has arisen. Whilst we do not suggest that it would happen very often, we think it undesirable to have such a broad test of what constituted a decision that the Court could be faced with arguments about the construction of reasons in the context of whether a party has a right of appeal or has lost a right of appeal. Finally, although not a decisive factor, we are influenced by the nature of the respondent’s claim. It is a money claim, that is to say, a claim for particular sums of money. As a matter of legal analysis, the industrial magistrate has not determined that claim. We would not wish to overemphasise any one of these matters. It is their collective force which persuades us that there is insufficient for us to conclude that Parliament’s intention was to adopt the expanded meaning of the word “decision” for which the appellant contends.

5        The Court heard full argument on the merits of the claims under challenge and we have given them the consideration necessary to determine the challenges. In fact, for a time we considered that we should do so. However, we have concluded that we should not express views on the merits which would inevitably be obiter observations. The difficulty is that if we were to do so and then there was an appeal after quantum had been determined which did not come back to the Court as presently constituted, there is potential for embarrassment on the hearing of such an appeal. We are mindful of the observations of the High Court in Kuru v New South Wales (2008) 82 ALJR 1021; 246 ALR 260, but the difference in this case is that it is not a matter of dealing with the remaining grounds of appeal because the “appeal” in this case is, as we have held, incompetent.

6        We agree with the orders proposed by Katzmann J.

Associate:

Dated:    29 November 2013

REASONS FOR JUDGMENT

KATZMANN J:

7        This appeal is concerned with alleged errors in a judgment of the Industrial Relations Court of South Australia (“IRCSA”) relating to an employee’s entitlements on the termination of his employment. The appeal is brought under s 565(1) of the Fair Work Act 2009 (Cth) (“FW Act”), which provides for appeals to this Court from decisions of an eligible State or Territory court exercising jurisdiction under that Act. The IRCSA is such a court.

8        The employee is Adam Cooper. Mr Cooper is a motor mechanic. He was employed by Maughan Thiem Auto Sales Pty Ltd (“Maughan”) from 28 October 2002 until 7 September 2011. Mr Cooper sued Maughan for redundancy pay, pay in lieu of notice and pro-rata long service leave. Maughan denied he was entitled to redundancy pay or to payment in lieu of notice on the ground that he had not been made redundant but had resigned his employment. Maughan denied that he was entitled to long service leave because the federal award did not provide for pro-rata long service leave within ten years of service and the Long Service Leave Act 1987 (SA) (“the State Act”), which did, was not applicable.

9        In the court below Mr Cooper prevailed in all relevant respects. The industrial magistrate held that he had been made redundant and was entitled to 14 weeks’ redundancy pay and three weeks’ pay in lieu of notice in accordance with ss 119 and 117 of the FW Act respectively. The industrial magistrate also held that Mr Cooper was entitled to pro-rata long service leave payments under the State Act.

10        Maughan does not challenge the findings as to redundancy, redundancy pay or pay in lieu of notice. The appeal raises two broad issues:

(a)        Should Mr Cooper’s weekly salary as at the date of termination be used as the base rate for calculating his redundancy entitlement (as the industrial magistrate determined) or should his entitlement be measured by his weekly salary minus the shift premium (as Maughan contended)?; and

(b)        Was Mr Cooper entitled to long service leave under the State Act and, if so, at what rate?

11        Although no notice of objection to competency was filed as required by the Federal Court Rules (Cth) (r 36.72), there is also a preliminary question about whether the appeal is competent. Logically, that question should be considered first. In my opinion, for the reasons that follow, the answer is that the appeal is not competent.

12        The industrial magistrate concluded his reasons with these words:

I will hear from the parties as to final orders and interest.

13        The mere fact that final orders had not been made would not render the appeal incompetent. Section 565 of the FW Act relevantly provides:

Appeals from original decisions of eligible State or Territory courts

(1)    An appeal lies to the Federal Court from a decision of an eligible State or Territory court exercising jurisdiction under this Act.

…

Leave to appeal not required

(2)    It is not necessary to obtain the leave of the Federal Court, or the court appealed from, in relation to an appeal under subsection (1) …

14        The section envisages appeals from interlocutory orders: cf. ECH Incorporated v Halliday (2011) 192 FCR 281 (“Halliday”). But it is not in issue that appeals may lie from interlocutory orders. The issue is whether the industrial magistrate made a “decision” within the meaning of s 565.

15        The decision is said to be found in [30] and [50]-[51] of the industrial magistrate’s reasons for judgment. It is convenient to set out these paragraphs in full.

30    For these reasons I conclude that Mr Cooper was entitled to be paid redundancy pay as his employment was terminated at the initiative of the respondent which no longer required the job done by Mr Cooper to be done by anyone after 16 September 2011. Mr Cooper is entitled to fourteen week’s redundancy pay. The rate of a week’s pay for this purpose is the “base rate” for his “ordinary hours of work” per s 119(2), which is Mr Cooper’s weekly salary as of 16 September 2011.

…

50    It therefore follows that Mr Cooper’s long service leave claim is governed by the State Act. This Act entitles Mr Cooper to pay in lieu of pro-rata long service leave in respect of eight full years of service, which is a total of 10.4 weeks pay (sic).

51    A weeks pay (sic) is defined by s 3(2) of the State Act to be “the worker’s weekly rate of pay as at the relevant date exclusive of overtime, shift premiums and penalty rates …”. Whilst a permanent “shift premium” was notionally included in Mr Cooper’s stated annual remuneration in accordance with the written agreement of 2 January 2008, no specific shift loading or premium was calculated and paid on top of a set weekly wage. Mr Cooper was not therefore in receipt of any separate “shift premium”. In my opinion the provision does not require an artificial dissection of the stated annual remuneration. It follows that the annual remuneration rate is the relevant rate for determining the applicant’s weekly rate of pay.

16        Is this a decision within the meaning of s 565 of the FW Act?

17        There is no definition of “decision” in the Act.

18        It has been said that “the natural obvious and prima facie meaning of the word ‘decision’ is decision of the suit by the court”: Rajah Tasadduq Rasul Khan v Manik Chand (1902) LR 30 Ind App 35. In that case, as the Privy Council explained in Commonwealth v Bank of New South Wales (1949) 79 CLR 497 (“Commonwealth v Bank of New South Wales”) at 625, the question was whether “decision” in the Indian Civil Procedure Code referred to the formal expression of an adjudication in a suit or the statement given by the judge of the grounds of an order.

19        In Director-General of Social Services v Chaney (1980) 3 ALD 161 (“Chaney”) at 178 Deane J called it “a word of indeterminate meaning”. His Honour explained:

In some contexts, [“decision”] can refer to the mental process of making up one’s mind. In the context of judicial or administrative proceedings, the word will ordinarily refer to an announced or published ruling or adjudication. In such a context, the word “decision” may be apt to include the determination of any question of substance or procedure, including, for example, rulings on procedural questions such as whether particular evidence should be received, or the meaning of the word may be limited to a determination effectively resolving an actual substantive issue. When the word “decision” has the last-mentioned limited meaning, it can refer to any such determination whether final or intermediate (see, eg, Registrar of Workers’ Compensation Commission v FAI Insurances Ltd [1977] 1 NSWLR 422 at 448) or be limited to referring only to a determination which effectively disposes of the matter in hand (see, eg Winter v Winter [1933] NZLR 289 at 295; Penniel v Driffill [1980] WAR 30 at 32).

20        Consequently, the meaning of “decision” must be determined “by reference to the context which the sub-section and the Act provide” (Chaney at 178).

21        Chaney was concerned with the meaning of “decision” in s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”). In a split decision (Northrop  J dissenting), the Full Court, by reference to the context, held that, with certain qualifications, an appeal under s 44(1) lies only from a decision of the tribunal “which constitutes the effective decision or determination of the application for review” (per Deane J at 181). Ordinarily, his Honour said, such a decision will be the final decision.

22        On the other hand, in Legal Practitioners Conduct Board v Colton (2012) 113 SASR 467, in the context of an appeal under s 86 of the Legal Practitioners Act 1981 (SA), Stanley J held that where the Legal Practitioners Disciplinary Tribunal had made findings of unprofessional and unsatisfactory conduct but had not determined an appropriate penalty it was open to the Board to appeal the tribunal’s failure to uphold three complaints of unprofessional conduct. His Honour emphasised (at [15]) that the character of any appeal must be determined by construing the provisions which confer the right to appeal. His Honour distinguished Chaney based on “considerations of the particular context and purpose of the provisions conferring the right of appeal” in each case (at [16]). His Honour referred (at [18]) to the analysis of the history of the section by Blue J in Legal Practitioners Conduct Board v Viscariello [2012] SASC 92 and concluded (at [19]) that it pointed to “a clear legislative intention that the Parliament intended by substituting ‘decision’ for ‘reprimand or order’ in s 86(1)” that a finding of unprofessional or unsatisfactory conduct was intended to be a decision subject to a right of appeal. His Honour said (at [28]) that the use of the indefinite article as well as “the protean nature of the term ‘decision’” indicated a legislative intention that, in that context, “decision” was to be given a wider meaning than the words it replaced.

23        Barrett JA took a similar approach in Fitzsimons v Council of the Law Society of New South Wales [2013] NSWCA 95. That was an appeal from a finding of professional misconduct made by the Administrative Decisions Tribunal of New South Wales. The appeal was instituted under s 729A of the Legal Profession Act 2004 (NSW) which permitted appeals from orders or other decisions. Admittedly, his Honour noted that the Tribunal had actually said that its decision was that the solicitor was guilty of professional misconduct. But the question of whether a decision is made cannot depend on whether the original decision-maker calls it a decision. The resolution of the question in this case does not turn on the industrial magistrate’s choice of words.

24        In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335 Mason CJ also emphasised the importance of context in determining the meaning to be given to the same word in the context of applications for judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth). His Honour examined the text, scope and purpose of the statute. In that context he concluded (at 337) that a reviewable decision was one for which provision is made by or under a statute and will generally, though not always, entail a final or “operative and determinative” decision, “at least in a practical sense, of the issue of fact falling for consideration”. He also held that it was an essential quality of a reviewable decision that it be substantive, rather than procedural.

25        So what does the legislative context indicate in the present case? There are two aspects of context that must be considered. One is the Act as a whole, for s 565 must not be read in isolation from the Act of which it is part. The other is the legislative history, for it may reveal something of the legislative intention or purpose.

26        The FW Act contains a number of references to “decisions”. It speaks, for example, of decisions by employers which affect employees’ conditions of employment or job security (in ss 83, 392(3), 530 and 531). It equates decisions with determinations in the context of the Fair Work Commission’s power to revoke modern enterprise awards and state reference public sector modern awards (in ss 168C and 168K). It speaks of decisions by the Commission to approve enterprise agreements (in s 201)). “Decisions” of the Fair Work Commission are given a broad meaning in Pt 5-1 of the Act (see s 598) extending (with one exception) to “any decision of the [Commission] however described”. Part 5-1 deals with the establishment and functions of the Commission and includes the right to appeal to the Full Bench but only with its permission (s 604). There is no equivalent provision in Pt 4-2, which deals with the jurisdiction and powers of courts and which includes s 565.

27        There is a presumption that words in a statute are assumed to be used consistently but the presumption is easily rebuttable: DC Pearce and RS Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011), p 121. Context may call for a different meaning.

28        Turning to the legislative history, the FW Act replaced the Workplace Relations Act 1996 (Cth) (“WRA”). The equivalent provision of that Act was s 853. It provided for appeals from judgments, not decisions. It relevantly provided as follows:

Appeals from State and Territory courts

(1)    An appeal lies to the Court from a judgment of a court of a State or Territory in a matter arising under this Act or the BCII Act.

(2)    It is not necessary to obtain the leave of the Court or the court appealed from in relation to an appeal under subsection (1).

29        “Judgment” was defined in s 4 of the WRA to mean “a judgment, decree or order, whether final or interlocutory, or a sentence”. In this respect it effectively mirrored the definition of “judgment” in s 4 of the Federal Court of Australia Act (1976) (Cth).

30        Section 853 replaced s 113 of the Conciliation and Arbitration Act 1904 (Cth). That section, which was inserted in 1956, was not relevantly different. It conferred jurisdiction on the appeals court to hear and determine an appeal from a “judgment, decree, order or sentence of a State court”.

31        The question here is whether the change in terminology from “judgment” to “decision” is of significance and, in particular, whether the change was intended to expand the potential for appeals from State and Territory courts beyond judgments, decrees and orders.

32        It is reasonable to start with the premise that the change in terminology was not accidental – that there must have been a purpose behind it. There is some difficulty, however, in discerning that purpose.

33        As I have already mentioned, not only has the FW Act done away with the old term “judgment”, but it has not included any definition of “decision”. That, in itself, might indicate an intention that the new term is not to be confined to judgments, decrees and orders. On the other hand, “decision” may simply have been introduced as “an apt compendious word to cover ‘judgments, decrees, orders and sentences’” (Commonwealth v Bank of New South Wales at 625). There is some support for this notion in the Explanatory Memorandum to the Fair Work Bill 2008 which, in para 2210 when dealing with cl 563 of the Bill (the provision requiring the jurisdiction of the Court to be exercised by the Fair Work Division), appears to make no distinction between judgment and decision.

34        The Court was referred to a number of authorities involving appeals under the Fair Work Act 1994 (SA), which provides in s 187(1) that “[a]n appeal lies from a judgment, order or decision of the Court constituted of an Industrial Magistrate to the Court constituted of a single Judge”.

35        In Renal Technologists Government Hospitals (Appeal) Case (1978) 45 SAIR 495 at 514 the Commission equated “decision” with “final determination of an issue in legal proceedings which directly determines the rights of the parties”. That position was later approved by the Full Commission in the Cement Manufacturing & Stone Quarrying Award (1994) 61 SAIR 68.

36        In Vincent Lee Consulting Services Pty Ltd t/as Fernwood Fitness Centre v Bourne [2009] SAIRC 61 (“Bourne”) the industrial magistrate had expressed his conclusion on what he described as the primary issue, which was whether the respondent’s contract of employment was governed by the provisions of the Clerks’ (SA) Award or by the Health Recreation and Fitness Award 1986 (SA). After finding that her employment was governed by the Clerks Award, the only order the industrial magistrate made was to grant liberty to the parties to apply on the amount of the underpayment “resulting from [his] published findings” and on the question of interest. The employer appealed to the IRCSA seeking orders including that the appeal be upheld and that the “reasons for decision” be quashed. The competency of the appeal was challenged and the appeal was referred to the Full Court of the IRCSA. The Full Court held (at [23]) that the industrial magistrate’s conclusion:

has the character of a decision which finally determines the question as to the applicability of the Clerks Award. If that is so, and putting to one side the effect of the appeal provisions under the WRA, an appeal against such a “decision” may be initiated and heard by the IRCSA even though issues of quantum are not yet the subject of a final enforceable order.

37        The industrial magistrate’s conclusions in the present case may be similarly characterised as final determinations of the substantive questions in the case. It must be remembered, however, that the formulation of “judgment, order or decision” in the South Australian Act is not the formulation in the FW Act. The South Australian Act distinguishes between judgments and decisions. The FW Act does not.

38        In Bourne the employer also filed an appeal in this Court against “the whole of the judgment” of the magistrate: Vincent Lee Consulting Services Pty Ltd v Bourne (2009) 183 IR 413; [2009] FCA 480 (“Vincent Lee Consulting Services v Bourne”). The employer then applied for a stay pending the hearing and determination of the appeal to the IRCSA. But on the hearing of the stay application, the appellant asked that the appeal be dismissed because, it said, there had been no “judgment”. The appeal was accordingly dismissed. The employee then applied for costs under s 824 of the WRA. That meant there had to be a determination on the reasonableness of the employer’s conduct. Mansfield J held that it was unreasonable for the employer to have filed for a stay without addressing the competency of the appeal and unreasonable to have maintained the motion until the day before the hearing. Consequently, his Honour ordered that the employer pay the costs of the stay application but not the costs of the appeal, holding that, despite the view the employer ultimately took as to the competency of the appeal, it was not unreasonable for it to have filed the appeal. In the course of those reasons his Honour expressed some views on the Court’s jurisdiction. At [27] his Honour said:

I do not wish to be taken as acceding to the appellant’s position. It has adopted that position, and has had its appeal to this court dismissed. Its view is not self-evidently correct. There is a real risk of looking to the form rather than to the substance of the Industrial Magistrate’s reasons. The Industrial Magistrate did not finally decide the rights of the parties, because the quantum of the respondent’s entitlement is not determined. However, his Honour did decide that the respondent’s employment was under the Clerks Award and then under the Clerks NAPSA. The Industrial Magistrate decided that issue, so that the parties could then endeavour to agree upon the respondent’s entitlement under those instruments. That is a common step in such disputes. The reasons for decision indicate that the real issue between the parties has been resolved.

39        Understandably, Maughan relied on these remarks.

40        His Honour’s opinion appears to have been that where there has been a decision, binding on the parties and determinative of their legal rights, there has been a judgment from which an appeal will lie regardless of whether any orders are made. His Honour considered (at [36]) that issues may be resolved by having regard to the substantive effect of the words used. Although it was unnecessary for him to do so, his Honour said that there was “at least a reasonable basis to conclude that the Industrial Magistrate intended to, and did, finally determine the issue of principle in a binding way and that his expression at the conclusion of his reasons was intended to, and did operate in that way”. Yet, his Honour’s observations were made without the benefit of argument and, as he himself acknowledged at [23], were “necessarily obiter dicta”. They also appear to be against the weight of authority.

41        The only case dealing with appeals under the FW Act to which the Court was referred was Halliday. There, the question was whether leave was required to appeal from a consent judgment of the IRCSA, a consent judgment being an interlocutory judgment. Gray J, with whom Mansfield and Besanko JJ agreed, said (at [20]):

Despite the abandonment of the four-pronged formulation ‘judgment, decree, order or sentence’, it is possible to discern a continuing intention to afford a right of appeal from any judgment of a State court, irrespective of whether that judgment is interlocutory or final, without any requirement of leave to appeal. The choice of the word ‘decision’ in the latest formulations may serve to demonstrate the continuation of that intention, it being potentially a wider term than ‘judgment’.

42        Maughan emphasised the last clause in this passage but I fail to see how it assists its position. His Honour was only suggesting that appeals could still be brought from both final and interlocutory judgments. That is not the issue here. If anything, this case supports the view that there has been no substantive change in the law. The observation that the word “decision” is potentially wider than “judgment” is question-begging for present purposes.

43        Ultimately, I have concluded that the substitution of “decision” for “judgment” in s 565 of the FW Act is a change of style, rather than substance. More likely than not it was chosen as “an apt compendious word” to replace “judgment” as previously defined in the WRA, that is “a judgment, decree or order, whether final or interlocutory, or a sentence”. In effect, this is the same conclusion the Privy Council reached in Commonwealth v Bank of New South Wales. In the present context, it may be seen as an instance where an Act has expressed an idea in a particular form of words and a later Act appears to have expressed the same idea in a different form of words for the purpose of using a clearer style. In these circumstances s 15AC of the Acts Interpretation Act 1901 (Cth) states that the ideas are not to be taken to be different merely because different forms of words are used.

44        I have come to this conclusion because there is nothing in the text or context of the FW Act to indicate that when the WRA was repealed and the FW Act introduced the Parliament intended by the change in the language to enlarge the scope for appeals from State and Territory courts. It would be a large step in the absence of such an indication to impute such an intention. It would open the door to numerous appeals from factual findings and opinions about the meaning or application of the law before any orders are made and it could limit the capacity of the trial judge to correct error so as to obviate the need for any appeal. If Parliament’s object in substituting “decision” for “judgment” were to expand the opportunities for appeals from State and Territory courts, then there would surely be some indication in the extrinsic material, if not the text. There is none.

45        In contrast to s 565, s 598, which deals with decisions of the Commission (formerly Fair Work Australia), provides in subs (1) that (with one qualification not presently relevant) a reference in Pt 5-1 to a decision of the Commission “includes any decision of the Commission however described”. Subsection (3) provides that a decision of the Commission that is described as an order must be made by order. The absence of similar language in s 565 rather tells against an expansive approach to the meaning of “decision” in that section.

46        The reasons for judgment of the industrial magistrate contain his conclusions on the substantive issues in dispute and his reasons for reaching those conclusions. It may resolve the substantive issues between the parties but it is not a judgment in the strict sense. As Mansfield J recognised in Vincent Lee Consulting Services v Bourne at [25], it is well accepted that reasons for judgment are not themselves judgments and there is no appeal against reasons (see, for example, Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 3) (1998) 86 FCR 374 at 378 per Beaumont J). For there to be a judgment there must be an order. The accepted legal meaning of judgment is “the formal order made by a court which disposes of, or deals with, the proceeding then before it” (Moller v Roy (1975) 132 CLR 622 at 639 per Mason J; Ah Toy v Registrar of Companies (1985) 10 FCR 280 at 285-6). But this is neither a final nor an interlocutory decision as it does not include any order. I appreciate that an interlocutory judgment may be reflected in a ruling. Yet, there is no ruling here either. Maughan’s appeal was premature.

47        It follows that the appeal should be dismissed as incompetent.

48        In the circumstances it is both unnecessary and inappropriate to say anything about the substantive issues.

49        Neither party foreshadowed an application for costs. I would propose that if costs are to be sought, an application should be made in writing within seven days, supported by written submissions and, if appropriate, affidavit evidence. Any response should be offered within seven days of service. The application should be determined on the papers. If no application is made within the allocated time, I would propose that there be no order as to costs.

Associate:

Dated:    29 November 2013