Visscher v Teekay Shipping (Australia) Pty Ltd [2014] FCAFC 5
FEDERAL COURT OF AUSTRALIA
Visscher v Teekay Shipping (Australia) Pty Ltd [2014] FCAFC 5
CORRIGENDUM
1. In paragraph 13, line one, insert the word “him” after the word “informing”.
2. In paragraph 29, “Teekay Shipping Australian Maritime Officers Union (Deck Officers) Sea-Going Officers Agreement 2001” should read “Teekay Shipping Australia/Australian Maritime Officers Union (Deck Officers) Sea-Going Officers Agreement 2001”.
3. In paragraph 31, line seven, replace the word “seaman’s” with the word “seamen’s”.
4. In paragraph 60, line two, replace the word “seaman” with the word “seamen”.
5. In paragraph 72, second last line, replace the word “discharge” with “discharged”.
6. In paragraph 84, second last line, insert the word “that” after the word “discussed”.
7. In paragraph 89, second last sentence replace the word “claims” the word “claim”. In the quote, in the second line replace the words “as the completion” to read “at the completion”.
8. In paragraph 91, third last line, replace the word “seamen” with the word “seaman”.
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I certify that the preceding eight (8) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Rares. |
Associate:
Dated: 15 September 2014
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IN THE FEDERAL COURT OF AUSTRALIA IN ADMIRALTY |
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Appellant | |
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AND: |
TEEKAY SHIPPING (AUSTRALIA) PTY LTD ACN 079 641 580 Respondent |
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS THAT:
2. Order 1 made on 9 November 2012 by the primary judge be set aside and in lieu thereof it be ordered that:
1. The respondent pay the applicant $16,149.53 inclusive of $6,032.60 interest.
3. The parties file and serve written submissions on the appropriate orders for costs for each of the proceedings before the primary judge and the appeal:
(a) on or before 20 February 2014 limited to two pages; and
(b) in reply on or before 27 February 2014 limited to one page.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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IN THE FEDERAL COURT OF AUSTRALIA IN ADMIRALTY |
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NEW SOUTH WALES DISTRICT REGISTRY |
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GENERAL DIVISION |
NSD 1929 of 2012 |
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ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
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BETWEEN: |
TIMOTHY VISSCHER Appellant |
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AND: |
TEEKAY SHIPPING (AUSTRALIA) PTY LTD ACN 079 641 580 Respondent |
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JUDGES: |
RARES, JAGOT AND BROMBERG JJ |
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DATE: |
13 FEBRUARY 2014 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
RARES J:
1 The central issue in this appeal is whether there was “a reasonable dispute as to liability” for the amount of a seaman’s wages due on his discharge from his employer’s ship within the meaning of the now repealed s 78 of the Navigation Act 1912 (Cth) (the Act). That provided that if a seaman’s wages due at the time of the seaman’s discharge were not paid in accordance with s 75 before or at the time of the seaman’s discharge from the ship, the wages continued to run at double rates from then until final settlement of his or her wages, relevantly, “unless the delay is due to a reasonable dispute as to liability for the wages”.
2 In early 2004, Timothy Visscher was chief officer and a crew member of the ship Broadwater. He claimed that, in an email he sent on 22 February 2004, when he accepted a repudiation of his contract of employment by Teekay Shipping (Australia) Pty Ltd, he had asked for his discharge and payment of all entitlements upon discharging from the ship on 3 March 2004. That was because he contended Teekay had foreshadowed that he would be demoted to the rank of second officer from the time of his discharge. For its part, Teekay argued that it was entitled to treat Mr Visscher’s assertion as a resignation. It had required him on 24 February 2004 to confirm that resignation in writing and asserted that until he did so he remained employed. The primary judge dismissed Mr Visscher’s claim finding that, although Teekay had repudiated the contract, any delay in payment was due to a reasonable dispute as to liability for the wages.
3 The facts and issues between the parties are somewhat more complex. The parties made a subsequent agreement on 7 April 2004 that provided for Mr Visscher to sail a second voyage as chief officer on Broadwater and this led to a second dispute. I will deal with the detail of these matters later in these reasons.
Issues
4 Mr Visscher’s supplementary notice of appeal raised 59 grounds, some with multiple sub-grounds, and Teekay’s notice of contention raised five grounds. In essence, the following substantive issues arise for decision on appeal, namely whether the primary judge erred in finding that:
(1) the meaning of “wages” in the Act included a salary (the construction issue) (contention 2);
(2) there was a reasonable dispute as to Teekay’s liability to pay Mr Visscher his wages and all his entitlements on 3 March 2004, thus justifying it not paying him in full at that time (the reasonable dispute issue) (grounds 1-18, 35, 46);
(3) Mr Visscher had conveyed to Teekay, in his letter of 22 February 2004, that he considered its conduct as amounting to a repudiation, by an anticipatory breach of its contract, so that he was discharged and his employment ended on 3 March 2004 (the repudiation issue) (contention 1);
(4) Teekay’s delay in making any payment to Mr Visscher was due to his act or default or to another cause not attributable to its wrongful act or default (the exemption issue) (contentions 4, 5);
(5) a certified agreement between Teekay and the Australian Maritime Officers Union did not effect an implied repeal of the provisions of the Act on which Mr Visscher relied (the implied repeal issue) (contention 3);
(6) the certified agreement formed part of Mr Visscher’s contract of employment (including his entitlement to paid leave) and was not rendered void by s 83(3) of the Act (the leave issue) (grounds 45, 48-59);
(7) Mr Visscher had not been engaged as a casual for the second voyage on Broadwater (the casual issue) (grounds 33-37);
(8) Teekay paid Mr Visscher all his outstanding entitlements on 4 June 2004 after he had been discharged from the second voyage on Broadwater on 26 May 2004 and Teekay had correctly calculated the quantum of Mr Visscher’s entitlements in making the payment of 4 June 2004 (the quantum issue) (grounds 19-32, 38-44, 47).
The legislative scheme
5 The Act was repealed with effect from 1 July 2012. The version of the Act in force at all relevant times in 2004 provided that “wages includes emoluments” in s 6(1) and:
“75 Payment of wages on discharge
(1) Where a seaman is discharged, the seaman shall, before or at the time of discharge, be paid the amount of wages due up to that time, less any deductions specified in the account required to be delivered under subsection 76(1).
Penalty (on the owner and master): $1,000.
…
(3) It is a defence to a prosecution for an offence against subsection (1) if the person charged proves that the failure to pay to the seaman the amount of his or her wages in accordance with that subsection was due to the seaman’s act or default, to a reasonable dispute as to liability for those wages or to any other cause not attributable to the wrongful act or default of the person charged or of any person acting on his or her behalf.
…
78 Wages to run on in certain cases
If a seaman’s wages are not paid in accordance with section 75 before or at the time the seaman is given his or her discharge from a ship, the seaman’s wages shall continue to run until the time of the final settlement of his or her wages (and shall be payable at double rates for any period after the time the seaman is given his or her discharge from the ship) unless the delay is due to the seaman’s act or default, to a reasonable dispute as to liability for the wages or to any other cause not attributable to the wrongful act or default of the owner or master of the ship.
…
83 Recovery of wages
(1) No seaman shall, by any agreement:
(a) be deprived of any remedy for the recovery of his or her wages; or
(b) forfeit his or her lien upon the ship for his or her wages; or
(c) abandon his or her right to wages in case of the loss of the ship; or
(d) abandon any right that he or she may have or obtain in the nature of salvage.
(2) The lien for seamen’s wages shall have priority over all other liens.
(3) Every stipulation in any agreement, inconsistent with any provision of this Act, shall be void.
(4) Nothing in this section shall apply to a stipulation made by any seaman, belonging to a ship which according to the terms of the agreement is to be employed exclusively on salvage service, with respect to the remuneration to be paid to the seaman for salvage service to be rendered by that ship to any other ship.” (emphasis added)
Mr Visscher’s initial employment
6 In late March 2001, Teekay agreed with Mr Visscher that it would employ him as a third mate (or officer). That occurred after he had worked as a casual deck officer for Teekay for the preceding year. As soon as Mr Visscher had commenced work as a third officer, Teekay offered him a temporary position of chief (or first) officer (or mate) on Samar Spirit for its voyage commencing on 6 April 2001. He continued in that role until 7 September 2001 when he accepted Teekay’s offer of a permanent promotion to first officer with effect from 4 August 2001.
7 However, there was a fly in the ointment of that promotion. On 20 September 2001, Teekay wrote to Mr Visscher to inform him that it was “rescinding” his promotion to first officer in order to comply with a recommendation that it do so made by a Commissioner of the Australian Industrial Relations Commission on 11 September 2001. The Commissioner intended that his recommendation would resolve a dispute that the Union had notified to the Commission on about 7 September 2011. On receiving Teekay’s letter of 20 September 2001, Mr Visscher immediately informed his employer in writing that he did not accept that his promotion could be, or had been, “rescinded”. After this time, while Teekay continued to refer to Mr Visscher in its communications with him and others as a third officer, and after 1 July 2002 as a second officer, it posted him continuously on its vessels, and paid him, in the rank of chief officer until the events of early 2004 that spawned the present dispute.
The events of early 2004
8 Mr Visscher had sailed as chief officer on Samar Spirit since April 2001. But, on 4 January 2004, he asked Teekay to be relieved of his position on that ship because of a disagreement with her master. On 8 January 2004, Phillip Bray, a personnel officer with Teekay, phoned Mr Visscher. Mr Bray told him that Teekay had intended keeping him on Samar Spirit as “mate” (i.e. chief officer) but since he had asked to get off the ship he would sail as a second mate, probably on a products tanker. Mr Visscher replied: “We’ll cross that bridge when we come to it.” The next day, Mr Bray phoned and asked Mr Visscher if he would sail, as first officer, three days later on Broadwater to relieve another officer. He agreed. Mr Bray then said that, after that voyage, Mr Visscher would be sailing as second mate. Mr Visscher responded: “Like I said Phil, I’ll join the Broadwater on Monday.”
9 On 13 January 2004, Mr Visscher joined Broadwater as chief officer. The voyage was due to finish in Sydney on 25 February 2004. On 22 February 2004, Mr Visscher drafted an email to Teekay and showed it to Capt John McLellan, the master of Broadwater. The master told Mr Visscher that if he were a company manager he would interpret the email as a resignation and that he did not want Mr Visscher to resign. They had a very good working relationship. Mr Visscher said that his email was not a resignation and asked Capt McLellan to send it to Teekay’s vessel manager, Vince Scott, otherwise, as happened, he would do so himself from his personal email account. The email read:
“In January 2004 I was advised by Mr. Phil Bray of [Teekay] that subsequent to my current posting as Chief Officer on the MT Broadwater, I would be required to sail as Second Mate.
This constitutes a demotion from my position of Chief Officer and it is unacceptable. Demotion is a constructive termination of our contract of employment by Teekay. I will therefore consider my employment as being terminated by Teekay upon leaving the MT Broadwater on or about 25 February 2004.
At your earliest convenience please pay into my bank account all entitlements.” (emphasis added)
10 About an hour later, Mr Scott phoned Capt McLellan and told him that he had received the email and would accept Mr Visscher’s resignation. The master replied that Mr Visscher did not regard it as a resignation, but Mr Scott responded that it was and he would confirm it in writing shortly. Mr Scott had David Parmeter, who was a lawyer and Teekay’s director of human resources, vet his reply dated 24 February 2004 before sending it to Capt McLellan on 25 February 2004. The reply stated:
“It was with regret that I received your communication of 22nd February 2004 regarding your future position with Teekay Shipping (Australia).
I feel that I must bring to your attention the following points so as no future misunderstanding may arise.
1) I am surprised by your statement,
“This constitutes a demotion from my position as Chief Officer”
as you have never been graded Chief Officer in Teekay. You are currently graded Second Mate.
2) You have a contract of employment with Teekay as a Deck Officer. You were originally employed as a Third Mate. Teekay does not consider a demotion in rank for any officer to constitute constructive dismissal.
3) On this basis Teekay is treating your email as a resignation.
Please confirm acceptance and receipt of this letter by signing and returning, in the pre-paid envelope the enclosed copy of this letter.” (emphasis added)
11 The master called Mr Visscher in and gave him Mr Scott’s letter and covering email. Mr Visscher insisted to Capt McLellan that he had not resigned and would deal with the matter in his own way. He asked the master for his discharge and the master provided it to Mr Visscher on 25 February 2004. Both men signed and dated it that day. However, because the voyage only ended on 3 March 2004, the master subsequently amended the date of 25 February 2004 (that appeared twice on the discharge form) to 3 March 2004. Capt McLellan wrote “Leave” in the boxes on the discharge form that identified, first, the reason that Mr Visscher had ceased to be a member of the crew, and, secondly, the “cause of leaving ship”.
12 On 8 March 2004, Mr Visscher replied by fax to Mr Scott’s letter of 24 February 2004. He outlined the history of his employment contract and noted that his status and pay as that of chief officer had continued after Teekay’s unaccepted “rescission” of his promotion to that position in September 2001. He wrote:
“There is ample authority for the view that what Teekay has done constitutes a demotion and that such demotion constitutes constructive termination of employment. I do not take seriously your reference to “resignation”.”
He said that he had had excellent relations with Teekay and that it would be a great shame “if we are now to descend to litigation. I suggest that an informal conference be urgently convened to reach a resolution”.
13 On the same day, Mr Visscher emailed Mr Scott informing that he would be travelling overseas “for an imprecise time” and that he had lodged an application for relief in the Commission in relation to the termination of his employment. Mr Visscher filed an application for relief in relation to termination of employment in the Commission on 9 March 2004, relying on his constructive dismissal by Teekay’s assertion that he would sail as a second officer.
The events later in March 2004
14 Teekay made no response to Mr Visscher’s communications of 8 and 9 March 2004 until 15 March 2004, when Doug Craig, its assistant vessel manager, sent Mr Visscher an email asking him to telephone to arrange a meeting. Mr Visscher telephoned soon after and told Mr Craig he was just home from sea. They arranged a meeting in Sydney on 26 March 2004. Both Mr Craig and Mr Parmeter attended the meeting. Mr Parmeter said to Mr Visscher that his email of 22 February 2004 was effectively a notice of resignation. Mr Parmeter told him that if he changed his mind, Teekay would not object to him withdrawing his resignation and continuing to sail on Teekay’s ships.
15 They did not resolve matters at the meeting, but Mr Visscher went for a meal with Mr Craig afterwards. Mr Craig told Mr Visscher confidentially that the usual chief officer for the next voyage on Broadwater could not sail on medical grounds and that he could slot Mr Visscher into the position for that voyage. Mr Visscher said that Mr Craig should have told him earlier and that, if they could sort out their differences, he was even prepared to sail on Samar Spirit when her master left. Mr Visscher reiterated however that while Mr Parmeter was adamant he was a second mate, Mr Visscher was just as adamant he was a first mate. Mr Craig suggested that Mr Visscher write to Mr Parmeter.
16 On Monday 29 March 2004, Mr Visscher wrote to Mr Parmeter saying that he was prepared to withdraw his application to the Commission because he now understood that Teekay still had him listed to sail as chief officer on 3 March 2004, despite earlier having been told by Mr Bray that he would be required to sail as second mate. He said that Teekay had not told him then that he was listed as continuing to sail as chief officer. He wrote that because of that he acted on what he had been told but now understood that he had not been demoted. Mr Parmeter understood from that letter that Mr Visscher would continue in Teekay’s employment.
17 On 5 April 2004, Mr Scott phoned Mr Visscher and said that he was looking at a computer monitor that indicated he was scheduled to join Broadwater three days later. Mr Visscher enquired how that could be since he no longer worked for Teekay. Mr Scott replied that this was in dispute and “we say you still work here and you’re due to rejoin”. Mr Visscher said that he was in correspondence with Mr Parmeter and would sort things out with him. On the same day, Mr Parmeter wrote to Mr Visscher reasserting that he was employed as a second mate, but welcoming his decision to discontinue the proceedings in the Commission. Mr Parmeter wrote that due to the current shortage of chief officers, there was an ongoing need for Mr Visscher to “act up as chief mate”. Mr Visscher responded very quickly that day pointing out that Mr Parmeter’s letter was quite inconsistent with his understanding that he was employed as a first officer. He sought a quick reply.
18 On 6 April 2004, Mr Scott wrote to Mr Visscher offering him “a temporary promotion to the position” of chief officer for the next swing (voyage) of Broadwater.
19 On 7 April 2004, Mr Visscher wrote to Mr Parmeter proposing a compromise that he take up the position of chief mate on Broadwater the next day given the urgent need of Teekay, but that both parties would agree that this would be without admissions and was without prejudice to their positions.
20 Mr Parmeter wrote back later that day accepting Mr Visscher’s suggestion and asking him to contact the Commission to obtain an adjournment of a conciliation hearing listed on 19 April 2004 since he would be at sea. Mr Visscher agreed and joined Broadwater as chief officer on 8 April 2004, remaining at sea until 26 May 2004 when he was again given his discharge at Westernport, Victoria. The discharge recorded the reason as “leave”.
The events after 26 May 2004
21 On 27 May 2004, Mr Visscher wrote a letter to Teekay in the following terms:
“As you know I left the Broadwater in Westernport yesterday. I was given my discharge from the vessel.
I intend to lodge an application for the refund of monies, milage costs of travel from my home to the Company’s office, and adjustment of leave balance to compensate for time spent in the office. I will send the application to Mr Craig by fax, tomorrow.
In the meantime can you please arrange for the payment, to me, of all entitlements. With regard to the aforementioned, S75 of the Navigation Act 1912 is relevant.”
22 Teekay wrote to Mr Visscher on 31 May 2004, saying that it considered him to be on “regular leave” after which he would return to Broadwater. Mr Visscher said that he received this letter only on 25 June 2004.
23 On 1 June 2004, Mr Visscher wrote to Teekay informing it that he had accepted other casual maritime employment commencing on 10 June 2004. Later on 1 June 2004, Teekay’s Human Resources co-ordinator, John Brecht, phoned Mr Visscher and sought and obtained his confirmation that he would not be rejoining Broadwater which Mr Visscher gave. On 2 June 2004, Mr Brecht wrote to Mr Visscher advising him that it regarded him as having resigned with effect from 1 June 2004 and would process his outstanding entitlements by 4 June 2004.
24 On 4 June 2004, Teekay paid $24,246.91 into Mr Visscher’s bank account. That sum was based on the salary payable to a second officer but then adjusted to take the total to what was payable to a chief officer. Notably, Mr Visscher made no complaint about the calculation or amount of that final payment for two years.
Mr Visscher’s belated claim
25 On 5 June 2006, Mr Visscher wrote to Teekay claiming, without elaboration, that he had not been paid his full entitlements following his discharges on 3 March 2004 and 26 May 2004. He referred to s 78 of the Act. Teekay replied on 16 June 2006, but that letter was not in evidence. Her Honour inferred that Teekay had sought details of the claim. Then, on 2 August 2006, Mr Visscher wrote again, giving greater detail of his claim and raising, for the first time, his claim to casual rates for the 8 April 2004 voyage.
26 On 2 March 2007, Mr Visscher filed his originating application based on a general maritime claim for wages as a crew member of a ship under s 4(3)(t) of the Admiralty Act 1988 (Cth). That was one day before the expiry of the three year limitation period imposed by s 37(1)(b) of that Act.
The primary judge’s reasons
27 Her Honour found that Mr Visscher never accepted Teekay’s repudiation of his employment contract as a chief officer in its letter dated 20 September 2001 and that that contract remained on foot. Accordingly, she held that if Mr Visscher were required to sail as second mate, as Mr Bray and Mr Scott had told him in January and February 2004, that requirement would amount to a demotion. She found that Mr Visscher was entitled to treat those statements as an anticipatory breach of Teekay of its contract of employment.
28 The primary judge found that the master had written “Leave” on Mr Visscher’s discharge form before he signed it on 25 February 2004. But, her Honour found that Capt McLellan continued to believe that, since Mr Visscher insisted he was not resigning, “Leave” was the appropriate entry to make. He believed that the dispute between Mr Visscher and Teekay would be resolved and that he would return to Broadwater or another Teekay ship.
29 Her Honour also accepted Mr Parmeter’s evidence that he had approved the terms of Mr Scott’s letter of 24 February 2004 and, in particular, its requirement for Mr Visscher to confirm his “resignation”, because of his experience of seafarers threatening to resign but not carrying through the threat. Her Honour noted that cl 24.2 of the Teekay Shipping Australian Maritime Officers Union (Deck Officers) Sea-Going Officers Agreement 2001 (the certified agreement), required Mr Visscher to give 28 days’ notice of resignation in writing. She found that Mr Parmeter thought that because Mr Visscher had not confirmed his “resignation”, his “threat to resign” was an empty one. The primary judge then found that, despite what Mr Scott had said to Capt McLellan on 22 February 2004, Teekay did not regard its contract with Mr Visscher to be at an end.
30 Her Honour held that Mr Visscher’s employment came to an end on 3 March 2004 when he was discharged from Broadwater and that he was then entitled to be paid his accrued leave and any outstanding salary. However, Teekay did not act on Mr Visscher’s demand of 22 February 2004 that he be paid all his entitlements on his discharge from Broadwater. Instead, Teekay continued to pay Mr Visscher’s monthly salary into his bank account in March and April 2004. Her Honour found that Teekay disputed (and continued to dispute) Mr Visscher’s assertion that his employment was at an end when he left Broadwater on 3 March 2004. She found that Capt McLellan was unsure of Mr Visscher’s status when he was discharged.
31 After referring to English authorities on an analogue of s 78, her Honour also drew on authorities decided on another analogue, in Title 46 of the United States Code. She held, following The Rainbow (1885) 5 Asp MC 479 and Breslin v Maritime Overseas Corp 622 F Supp 195 (SDNY 1987), that it was necessary to look to the shipowner’s motivation in failing to make a proper payment and that no penalty would be imposed if the owner believed in good faith that payment was not due. The primary judge reasoned that “the same thinking is behind s 78”, and that its purpose was to secure prompt payment of seaman’s wages so as to protect them from the harsh consequences of arbitrary and unscrupulous actions of their employers, as held in Collie v Fergusson 281 US 52 (1930) at 55-56. Her Honour found that Teekay’s refusal to pay Mr Visscher was not arbitrary, capricious, careless or dishonest. She found that it refused to pay for sound reasons, given at the time, albeit that ultimately it turned out to be mistaken.
32 The primary judge held that after Teekay “rescinded” Mr Visscher’s promotion, it negotiated a grading list with the Union that was made a schedule to the certified agreement. The certified agreement recorded that it was binding on Teekay, the Union and the officers (who included Mr Visscher). Mr Visscher was included in the grading list as a third officer. After 2 July 2002 until 3 February 2004, Mr Visscher’s name appeared on 10 grading lists as a second officer. The primary judge found that since the Commission and a Full Court of this Court (Visscher v Australian Industrial Relations Commission (2007) 170 IR 419) had held that Teekay’s view of the contractual position was correct, its conduct was reasonable. That was unaffected by the decision of the majority of the High Court who reversed that decision in Visscher v Giudice (2009) 239 CLR 361. Thus, her Honour was satisfied that at the time of his discharge on 3 March 2004, there was a reasonable dispute as to Teekay’s liability to pay Mr Visscher his wages and that dispute continued until 1 June 2004. She found that Teekay believed that he had remained in its employ until 1 June 2004 and would have paid him out earlier had it not had that belief. Accordingly, the primary judge held that Teekay’s delay in paying Mr Visscher all of his entitlements prior to 4 June 2004 was due to a reasonable dispute as to its liability for those wages.
33 Her Honour rejected Teekay’s argument that the certified agreement impliedly repealed ss 75-78 and 83 of the Act in respect of the matters with which it dealt. She held that the certified agreement was in the nature of an award that was given force of law under the Workplace Relations Act 1996 (Cth) and that it should be read together with the Navigation Act. She held that cl 35.1 expressly provided that nothing in the certified agreement should be construed as limiting the rights of any officer under the Navigation Act. The primary judge found that, as cl 35 suggested, the certified agreement provided no remedy for recovery of unpaid salary or leave entitlements. She held that the Act provided such remedies. She also rejected Mr Visscher’s argument that the certified agreement, by providing for payment of fortnightly salary and also payment of wages and leave while a seaman was not at sea, was inconsistent with s 77 of the Act. That was because the provisions of the certified agreement were more beneficial than the Act and could work harmoniously with it. Her Honour followed the reasoning of the majority in the Federated Seamen’s Union of Australasia v The Commonwealth Steamship Owners’ Association (1922) 30 CLR 144.
34 Her Honour found that Mr Visscher’s last salary payment before 3 March 2004 occurred on 13 February 2004 and was for the month ended 28 February 2004. Thus, he was owed three days’ salary and 49 days of accrued leave in respect of his service on Broadwater at the time of his discharge on 3 March 2004. The parties agreed that at that time Mr Visscher had a total of 153 days’ accrued leave (including the 49 days in respect of his service on Broadwater). However, Mr Visscher had limited his pleaded claim under s 78 for leave that he should have been paid at the time of his discharge to the 49 days accrued while he served on Broadwater. Her Honour found that on 4 June 2004 Teekay paid Mr Visscher the value of the whole of his then agreed accrued 159 days of leave, but at the rate for a second officer for all but 47 of those days, which were paid at the higher rate for a first officer in respect of his 8 April 2004 voyage. Her Honour found that a shortfall of $1,282.33 in the payment Teekay made in respect of his 49 days leave entitlement for the first Broadwater voyage ($26.17 x 49 days).
35 Her Honour found that since Mr Visscher had not been employed by Teekay from 3 March to 8 April 2004, the value of the monthly salary it had paid him at first officer rates for that period of 35 days on 12 March and 14 April 2004 should be treated as a part payment of what was due on 3 March 2004 for the 49 days leave. Thus she held that at 14 April 2004 Mr Visscher was still owed $4,046.77 in respect of the remaining 14 days unpaid leave from the first Broadwater voyage.
36 Her Honour found that there was no discussion of Mr Visscher being paid casual rates in the negotiations prior to Mr Visscher rejoining Broadwater on 8 April 2004. Accordingly, the primary judge rejected Mr Visscher’s claim for a casual loading on that voyage.
37 Last, the primary judge found that if she were wrong in her finding that there was a reasonable dispute as to liability for Mr Visscher’s wages between 3 March 2004 and 4 June 2004, he would have been entitled to double wages only for that period of 93 days being a total of $53,764.23 (or $578.11 per day).
The construction issue
38 Teekay’s contention that “wages” as used in the Act does not include “salary” can be dismissed immediately. The Act defined “seaman” as meaning any person employed or engaged in any capacity on board a ship on the business of the ship other than the master, a pilot or a person temporarily employed on the ship in part and “wages” as including emoluments (s 6(1)).
39 The clear purpose of ss 75-78 and 83 was to protect seamen by ensuring that they had enforceable rights to payment for what they did as employees on a ship. A ship’s officer, other than the master, was a “seaman” for the purposes of the Act. The rights given to seamen in respect of wages by ss 75-78 and 83 applied to their remuneration, by whatever label, such as seaman’s “wages”. If Teekay’s argument that “wages” did not include “salary” were correct, the consequence would be that shipowners could evade the provisions of the Act, intended to protect all seamen, as defined, by calling their emoluments or rights to payment for services “salary”. The Act created rights for all seamen, including all officers, other than the master, to be paid for their service on a ship. It defined “wages” inclusively by incorporating “emoluments”, which, as the primary judge correctly noted, is a word that is defined in the Oxford English Dictionary as having the meaning, among others, of “salary”, and in the Macquarie Dictionary as “that which is paid for work or services, as by the day or week; hire; pay”.
40 Section 83 of the Navigation Act made void any agreement under which a seaman “forfeit[ed] his or her lien upon the ship for his or her wages” or gave that lien priority over all other liens. That provision operated against the background of a well developed body of maritime law, centuries old, that gives seamen a maritime lien for unpaid wages over the ship on which they served: see Ship Hako Endeavour v Programmed Total Marine Services Pty Ltd (2013) 211 FCR 369 esp at 394-399 [89]-[106] per Rares J, Siopis J agreeing at 372 [1], see too 410-411 [168]-[172] per Buchanan J. That lien could, and still can, be exercised by any member of the crew except the master. Statutory invention in the 19th century conferred maritime liens on the master of ship for his or her wages and for master’s disbursements. These separate rights to maritime liens are now reflected in s 15(2)(c) and (d) of the Admiralty Act. They do not, and have never, depended on fine distinctions between whether the crew or master were claiming “wages” as such, or “salary”.
41 The purpose of the maritime liens was to ensure that the crew (and, when the statutory rights were created, the master) would be paid for their work on the ship as members of its company. The Navigation Act picked up this well-recognised concept of maritime law when it employed an inclusive definition of the word “wages” in s 6(1) and made void any stipulation in an agreement that deprived a seaman of any remedy for the recovery of his or her wages or that forfeited the seaman’s lien for wages: s 83(1)(a) and (b), and (3); cf too Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389 per Lord Fraser of Tullybelton, giving the advice of the Privy Council, as to the correct characterisation of an employment relationship.
42 It would require very clear words in the Navigation Act and in the certified agreement to negate such a well-recognised right of seafarers to secure payment of their wages because the parties chose to call such payments “salary”. All members of a ship’s crew except her master or a pilot or a temporary port employee were included in the definition of “seaman”. Thus, all officers, except the master, were seamen for the purposes of the Navigation Act. The rights in ss 75-78 and 83 were in application and protection, and not in derogation, of those rights. Those provisions did not sit sensibly, in their ordinary and natural meaning, with the distinction Teekay urged between wages and salary. The primary judge correctly rejected Teekay’s argument.
The reasonable dispute and repudiation issues
43 In Giudice 239 CLR at 383 [64] and 384 [68], Heydon, Crennan, Kiefel and Bell JJ held that the employment relationship between Mr Visscher, as a chief officer, and Teekay continued after 20 September 2001. That was on the basis that he had not accepted Teekay’s repudiation in its letter dated 20 September 2001 and it had maintained him in the position of chief officer at a remuneration referable to it (see too the subsequent decision to the same effect in Geys v SociÉtÉ GÉnÉrale, London Branch [2013] 1 AC 523 at 536 [15] per Lord Hope of Craighead DPSC, 544 [42] per Baroness Hale of Richmond JSC, 554 [81], 561 [97] per Lord Wilson JSC, 561-562 [99]-[100] per Lord Carnwath JSC). Their Honours held that the certified agreement did not have the effect of reallocating the positions of individual officers and that the grading list, showing Mr Visscher as a third mate, did not constitute a term of his employment (239 CLR at 387-388 [78]-[79]). They concluded (239 CLR at 388 [80]-[81]) that:
“80 It follows that if Mr Visscher was employed in January 2004 as a Chief Officer under his contract of employment, nothing in the Certified Agreement was effective to alter that term.
Conclusion
81 Teekay's notice of rescission did not automatically bring the contract appointing Mr Visscher a Chief Officer to an end. It was necessary that Mr Visscher accept the repudiation before the contract could be terminated.”
44 Their Honours then said that it was necessary to decide the true contractual position between the parties as at early 2004 in order to determine whether Teekay had repudiated Mr Visscher’s contract of employment at that time, based on the continuation of his employment as a chief officer after 20 September 2001 and, regardless of the certified agreement, any subsequent dealings between the parties that affected the continuance of that relationship.
45 That appeal concerned judicial review of a decision by the Commission. The findings referred to above were essential to the majority’s determination that the Commission had made a jurisdictional error by proceeding on the basis that Mr Visscher’s employment as a chief officer had come to an end by Teekay’s unilateral act of rescission in its letter of 20 September 2001 (239 CLR at 382 [60], 388 [81]).
46 Critically, their Honours held that, if (as the primary judge subsequently found) Mr Visscher’s version of his conversation with Mr Bray on 8 and 9 January 2004 were correct, namely that Teekay would sail him as a second mate after the first Broadwater voyage (239 CLR at 385 [69]) then:
“If the contract appointing him a Chief Officer remained on foot, Teekay did not intend to continue to carry it out. That would be sufficient to constitute a repudiation without more, which Mr Visscher could accept [see Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 at 250 per Kitto J].” (emphasis added)
47 Teekay’s letter of 22 February 2004 reaffirmed that repudiatory stance. It stated that Mr Visscher had “never been graded Chief Officer in Teekay” (which was untrue) and asserted that it did “not consider a demotion in rank for any officer to constitute constructive dismissal” (which was legally unjustifiable). On 25 February 2004, when he asked Capt McLellan for his discharge, Mr Visscher’s statement that he had not resigned, in response to the master’s comment, was correct. His letter of 8 March 2004 and filing of his application in the Commission on 9 March 2004 made clear to Teekay, if it had any doubt after his accurate letter of 22 February 2004, that he had accepted Teekay’s repudiation and brought his employment contract to an end with effect from his discharge from Broadwater at the conclusion of its voyage. That occurred on 3 March 2004.
48 I am of opinion that Teekay’s conduct in the period before he began the proceedings in the Commission had no legal or reasonable basis. First, its purported demotion of Mr Visscher on 20 September 2001 was a constructive dismissal. A demotion that involved a significant reduction in the remuneration or duties of an employee amounted to a dismissal under s 170CD(1B) of the Workplace Relations Act 1996 (Cth), as the majority noted in Giudice 239 CLR at 374 [37]. Mr Visscher, having been employed as a chief officer, was not bound to, and did not, accept a subordinate position as third officer, even at the same salary: McCarthy v Windeyer (1925) 25 SR (NSW) 29 at 34 per Street CJ, Ferguson and Campbell JJ concurring: Price v Mouat (1862) 11 CB (NS) 508 at 510-511 per Erle CJ, Williams, Byles and Keating JJ; see too Automatic Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 470 per Dixon J. He remained employed thereafter as a chief officer: Giudice 239 CLR at 388 [81]. Teekay continued to employ him to perform the functions of chief officer and paid him the remuneration appropriate to that position until he left Broadwater on 3 March 2004.
49 Teekay’s letter of 24 February 2004 had no legal or factual foundation. It amounted to a repudiation. In effect, Teekay was trying to rewrite the employment relationship by ignoring its promotion of Mr Visscher that it had made in its letter of 7 September 2001. Mr Bray’s conversations of 8 and 9 January 2004 and Teekay’s letter of 24 February 2004 evinced to a reasonable person that Teekay did not intend to take the employment contract seriously and would perform its obligations only if and when it suited it. That was the objective state of affairs entitling Mr Visscher to accept the repudiation as he did: Giudice 239 CLR at 385 [69]; see too Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 at 351-352 per Fullagar J with whom Dixon CJ, Williams, Webb and Kitto JJ agreed.
50 In those circumstances, I am of opinion that there was no reasonable basis on which Teekay could raise a dispute as to its liability to pay Mr Visscher his full entitlements on his discharge on 3 March 2004. It follows that its failure to do so was not due to a reasonable dispute as to liability for that payment. Teekay had created its own problem on 20 September 2001. Mr Visscher consistently and correctly told Teekay that it could not act as it sought to then and subsequently. Nothing occurred to make Teekay’s position of asserting a “right” to demote Mr Visscher to a lesser rank “reasonable”, let alone to give rise to a reasonable dispute within the meaning of s 78 of the Act. Teekay’s stance had no, and never had any, reasonable or legal foundation.
51 Teekay’s ground of contention that Mr Visscher’s letter of 22 February 2004 amounted to a repudiation by him was untenable and must be dismissed. The contention contradicts the finding of the majority in Giudice 239 CLR at 385 [69]. That letter was his acceptance of Teekay’s repudiation by its constructive dismissal of him that brought the employment contract to an end. He did not offer to resign in his letter. Rather, Mr Visscher informed Teekay that if, as it had said, it would require him to serve as a second officer after the then current voyage, then it was constructively dismissing him from his employment as a chief officer. The reality was that Teekay had informed him that he no longer had employment as a chief officer so there was no office from which Mr Visscher could resign.
52 The primary judge was correct to find that Mr Visscher’s employment came to an end when he was discharged from Broadwater on 3 March 2004. However, I am of opinion that her Honour erred in concluding that Teekay’s view of the contractual position was reasonable or supported its contention that there was a reasonable dispute as to its liability.
53 Her Honour referred to the views in favour of Teekay taken by the Commission and the Full Court in Visscher 170 IR 419 as supporting that finding. Those views were corrected by the majority in Giudice 239 CLR 361. Her Honour reasoned that because the Full Bench of the Commission and the Full Court had come to the same conclusion as to the status of the employment relationship that Teekay asserted, Teekay’s assertion was reasonable or that those views supported its asserted defence under s 78 of the Act. However, those views were based on an erroneous view of the facts and the law that was subsequently corrected. Teekay’s central argument for its stance was its supposed entitlement to demote Mr Visscher on 20 September 2001, not the operation of the certified agreement. That argument was flawed, as explained by Heydon, Crennan, Kiefel and Bell JJ in Giudice 239 CLR at 388 [80]-[81]. Whether Teekay’s stance was reasonable or created a reasonable dispute as to its liability under s 78 depended upon the objective facts. The earlier decisions were overturned because the Commission had asked itself the wrong question that had led to a failure to consider what was the contract under which the parties continued after September 2001 (239 CLR at 388 [81]).
54 In principle, it is wrong to reason in a negligence case that because a trial judge or intermediate appellate court considered that the defendant did or did not take reasonable care, that the Court hearing the appeal can use such judicial findings as a basis for saying that the defendant, like the judge or judges below, did or did not take reasonable care. The reasonableness of the original or substituted judicial finding is not relevant to ascertaining the factual issue of whether the person took or did not take reasonable care at the relevant time.
55 The question is whether, on the facts as found in the proceeding (or appeal), the Court considers that a breach of the legal standard of reasonableness has been proved. The opinions of other courts that have been reversed on the same or a similar question between the same parties are not relevant, especially where, as here, the majority in Giudice 239 CLR 361 in reversing the Full Court of this Court, held that they and the Full Bench of the Commission had erred in identifying the contractual relationship. I agree with what Jagot J has written on this aspect in her reasons that I have had the privilege of considering.
56 Once it is found that Teekay’s stance, that it had been entitled to demote Mr Visscher, was wrong, the Court must proceed to evaluate the question of whether there was a reasonable dispute as to its liability as to wages on that basis. Indeed, for the reasons above, Teekay’s argument was untenable when considered in the correct factual context.
57 The primary judge held that the exculpatory expression “due to … a reasonable dispute as to liability for” wages in ss 75(3) and 78 of the Act entitled the master or shipowner to dispute the liability in good faith, even if later shown to be wrong. She traced some further history of that and like exculpations in both England and the United States that had not been examined by Greenwood, Rares and Foster JJ in Visscher v Teekay Shipping (Australia) Ltd (2011) 198 FCR 575 at 588-590 [50]-[58]. For example, in Collie v Ferguson 281 US at 54-55, Stone J, giving the opinion of the Court, held that the analogous expression “[e]very master or owner who refuses or neglects to make payment in the manner hereinbefore mentioned without sufficient cause” in the United States Code “connote[s], either conduct which is in some sense arbitrary or wilful, or at least a failure not attributable to impossibility of payment”. He said at 56 that liability was not incurred where the refusal to pay was “in some reasonable degree morally justified, or where the demand for wages cannot be satisfied either by the owner or his interest in the ship …”, e.g because of insolvency. Butt J held that there was “sufficient cause" and a “reasonable dispute as to liability” where a bona fide question as to liability existed: The Rainbow (1885) 5 Asp MC 479 at 482.
58 In Visscher 198 FCR at 590 [57]-[58], the Full Court held that there was an important distinction for present purposes between a dispute as to liability to the seaman for the wages that were due to him at the time of his discharge and a dispute about the way in which the parties would or might engage thereafter, as the House of Lords had decided in respect of an analogue of ss 75(3) and 78 in Palace Shipping Company Ltd v Caine [1907] AC 386 at 392-393, 395, 397.
59 Here, from September 2001, Teekay asserted a legally untenable position that it had demoted Mr Visscher without being in breach of its contract and that by adhering to that position in early 2004, it was evincing an intention not to be bound by the real contract that Mr Visscher could accept. Teekay had avoided the need to confront the legal implausibility of that assertion by continuously employing and paying Mr Visscher in the position of as chief officer on its ships over the succeeding two years since it had asserted the “demotion”. Her Honour found that Teekay disputed its liability to pay Mr Visscher’s wages in good faith and that its refusal to pay was not arbitrary nor capricious. However, that was not a finding that there was a reasonable dispute. Teekay’s insistence that Mr Visscher resign, if he refused to accept its purported demotion, was not capable of creating a reasonable dispute as to liability for his wages in the position of chief officer. That refusal was a wrongful act or default of Teekay as owner of the Broadwater.
60 Teekay could not rely on the subjective state of mind of its employee, Mr Parmeter, as to what he termed “threats” of seaman to resign and his requiring them to confirm those in writing. That reliance was a distraction from the issue of what, objectively, each of the parties conveyed to the other by what he or it said or did in their mutual dealings. The starting point for analysis of whether a reasonable dispute existed was the actual contractual position and the parties’ conduct in light of that position: Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 at 338-340 per Dixon, Williams, Webb, Fullagar and Kitto JJ.
61 In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 178-180 [36], [38], [40]-[41] Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ held that the question of whether a contract had been made is determined objectively. Accordingly, once Mr Visscher had accepted Teekay’s promotion of 7 September 2001, it had to identify an objective basis entitling it to argue that there was a “reasonable” dispute as to its liability to pay his wages after his discharge from Broadwater on 3 March 2004. Teekay chose to insist that it could demote him and to say that he was unreasonable to reject that insistence. In New Zealand Shipping Co v SocietÉ des Ateliers et Chantiers de France [1919] AC 1 at 8, Lord Finlay LC identified “the very old principle laid down by Lord Coke (Co Litt 206b) that a man shall not be allowed to take advantage of a condition which he himself has brought about”: see too Alghussein Establishment v Eton College [1988] 1 WLR 587 at 594A-D per Lord Jauncey of Tullichettle with whom Lords Bridge of Harwich, Elwyn-Jones, Ackner and Goff of Chieveley agreed. Here, Teekay sought to take advantage of its own wrong. It had created the situation late in September 2001 when it claimed to be entitled to demote Mr Visscher. It then said that the impasse, created by his refusal to accept that demotion and treating it for what it was – i.e. his constructive dismissal when Teekay reasserted that the demotion was effectual in February 2004 – somehow gave rise to a “reasonable dispute” as to its liability to pay him his wages on his discharge that was co-terminus with the time on 3 March 2004 at which he accepted that dismissal. That was not a basis on which to found the defence of reasonable dispute.
62 Accordingly, Teekay became liable to Mr Visscher under s 78 because it did not pay him his wages after he obtained his discharge on 3 March 2004.
The exemption issue
63 Teekay contended that it had another defence under s 78 of the Act because Mr Visscher, first, accepted his discharge with Capt McLellan’s notation of “Leave” as the reason for it, secondly, did not renew his claim on 3 March 2004 for wages upon his discharge, thirdly, accepted his regular salary payment made on 12 March 2004 without complaint and, fourthly, commenced proceedings on 8 March 2004 seeking reinstatement. Teekay asserted that each of those factors, or a combination of them, amounted to an act or default of Mr Visscher or another cause not attributable to Teekay’s wrongful act that justified it not paying him his full entitlement to wages on or immediately after 3 March 2004.
64 The primary judge correctly rejected Teekay’s attempt to rely on its conduct in settling its dispute with the Union in September 2001 as a cause not attributable to it. Mr Visscher’s letter of 22 February 2004 made clear what he required. He did nothing subsequently that was an act or default. Capt McLellan chose to write “Leave” on the discharge form because he understood Teekay considered that Mr Visscher had resigned. Capt McLellan explained his understanding of Mr Visscher’s status in making those notations in the following evidence:
“HER HONOUR: You understood that your employer regarded Mr Visscher as having resigned, didn’t you? --- That was my understanding.
So as at the time that Mr Visscher actually left the ship, what was your understanding of his status? --- My – understand – I was uncertain, because the company said it had accepted his resignation, but Mr Visscher told me he wasn’t resigning. So I used my best professional judgment to make an entry which could leave the door open and, hence, I used the word “leave”.” (emphasis added)
65 As Capt McLellan’s evidence made clear he knew at that time that Mr Visscher had told him that Teekay had terminated his employment. Capt McLellan said that he did not want to see Mr Visscher resign and wanted to leave the door open for Mr Visscher. The master was Teekay, for relevant purposes, when he wrote the notation. He and Mr Visscher knew that Mr Visscher considered that he had been dismissed. There was no suggestion in Mr Visscher’s conduct at that time or until late March 2004 that anything had changed so that he could have been considered as continuing in Teekay’s employ. Indeed, his application to the Commission reinforced his complaint of having been dismissed.
66 Teekay’s payment of Mr Visscher’s salary instalment on 12 March 2004 did not raise any arguable issue under s 78. It chose to make the payment after learning of Mr Visscher’s commencement of proceedings for reinstatement on 9 March 2004 and knew that he was then leaving for overseas. Teekay chose to ignore the legally correct demand made in Mr Visscher’s email of 22 February 2004 to be paid his entitlements on his discharge. It was the sole author of its failure to pay Mr Visscher in accordance with s 78 of the Act.
The implied repeal issue
67 Teekay argued that the certified agreement was given force of law by the Workplace Relations Act and so impliedly repealed any inconsistent obligations imposed on it by the Navigation Act, in particular ss 75 and 78.
68 Her Honour pointed out that cl 35.1 of the certified agreement provided that nothing in that agreement should be construed as limiting the rights of any officer under the Act. She correctly noted that cl 35.1 evinced an intention not to remove or displace rights conferred by ss 75, 76 and 78 of the Act and that the certified agreement operated alongside the Act and the rights it conferred.
69 Teekay’s argument appeared to suggest that merely because an award made, or an agreement certified, by the Commission had force of law, it could repeal or suspend a statute enacted by the Parliament. There is no doubt that the Commission could make awards or certify agreements that displaced or varied the operation of State laws because the federal statute gave those instruments force of law. That result is a consequence of s 109 of the Constitution: Jemena Asset Management (No 3) Pty Ltd v CoINVEST Ltd (2011) 244 CLR 508 at 516-517 [11] per French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ. However, Teekay did not identify any statutory provision that conferred power on the Commission to repeal or make an award expressly or impliedly inconsistent with an Act of the Parliament. Such a proposition was unanimously and roundly rejected by each of the justices in relation to the interplay of provisions for the payment of wages in s 77 of the Navigation Act and an award by the Commonwealth Court of Conciliation and Arbitration (that exercised power similar to the Commission) under the Conciliation and Arbitration Act 1904 (Cth) in Federated Seamen’s Union 30 CLR at 152 per Knox CJ and Gavan Duffy J (who dissented in the result), 159 per Isaacs J, 162 per Higgins J and 164 per Starke J. As Isaacs J said (at 159):
“The Arbitration Court can do nothing contrary to Commonwealth law, and, if once it be shown that a claim is not merely different from but inconsistent with or contrary to any Commonwealth law, that claim cannot be validly awarded.”
70 Thus, her Honour was correct to have rejected Teekay’s argument on the implied repeal issue: see too Visscher 198 FCR at 591 [59].
The leave issue
71 Mr Visscher contended that the provisions of the certified agreement concerning the payment of leave were inconsistent with the Act and so void under s 83(1)(a) of the Navigation Act. He argued that he could only earn wages while belonging to a ship and that the provisions of cl 13 of the certified agreement for regular payments of salary on leave period were void.
72 This argument did not reflect a real controversy between the parties. Mr Visscher was entitled to be paid out his full entitlements on his discharges on 3 March 2004 and 4 June 2004. How leave accrued or was paid under the certified agreement did not affect Teekay’s obligation to pay Mr Visscher his accrued entitlements when he was discharge. Thus, there is no need to address the leave issue.
The casual issue
73 Mr Visscher argued that he had been engaged as a casual in April 2004 on the second voyage because the arrangements for him to join Broadwater on that occasion were made without prejudice to the parties’ existing rights.
74 The primary judge correctly rejected this contention for the reasons she gave. There had been no discussion between the parties that Mr Visscher would sail on the ship as a casual. The without prejudice agreement was a practical means for each party to continue the relationship as if nothing had happened in the hope that they might find a resolution. That hope was not realised. But there was nothing in the objective circumstances to justify a suggestion that the parties contemplated, let alone agreed, that Mr Visscher’s rate of pay for the second voyage would vary depending on whether the parties resolved matters or he left for good on his discharge at the end of that voyage. Mr Visscher was employed on the second voyage on the agreed basis that his contract of employment immediately prior to 3 March 2004 continued in force.
The quantum issue
75 Mr Visscher became entitled to double wages under s 78 after he was not paid out on 3 March 2004. The primary judge helpfully dealt with this issue, even though her earlier findings had denied that Mr Visscher had any entitlement. As her Honour found, Teekay deposited his normal salary, at first officer rates, into his bank account on 12 March and 14 April 2004. She treated this as a part payment of his 49 days of leave for the first Broadwater voyage that had ended on 3 March 2004 in accordance with the way Mr Visscher had limited his claim under s 78 to be paid that leave. She held that his right to double wages would have continued for 93 days from 3 March 2004 to 4 June 2004.
76 Once the parties arrived at the without prejudice agreement for Mr Visscher to sail on the second Broadwater voyage on 7 April 2004, Teekay then had a reasonable basis to consider that it need not pay Mr Visscher as a seaman who, at that time, was due any unpaid wages following his discharge on 3 March 2004. If the parties subsequently arrived at a resolution, the whole question of what Mr Visscher should have been paid on 3 March 2004 would have disappeared because they would have treated his acceptance of Teekay’s repudiation as being withdrawn. And, when Teekay paid him out on 4 June 2004, he accepted that sum without raising any complaint for two years. Mr Visscher’s subsequent reliance on ss 75(3) and 78 demonstrated that any delay by Teekay after 4 June 2004 was due to Mr Visscher’s act or default or a cause not attributable to its wrongful act or default. Teekay was entitled to consider that the whole dispute had been resolved by the payment it made on 4 June 2004. That remained the position when it received Mr Visscher’s demand of 5 June 2006 and thereafter.
77 Nonetheless, there are three issues that arise in the way in which Teekay made its calculation for the payment of 4 June 2004. First, Teekay had already failed to comply with its obligations to pay Mr Visscher out between 3 March 2004 and 7 April 2004, secondly, Teekay did not pay Mr Visscher immediately on receiving his letter of 27 May 2004 demanding his full entitlements but waited until 4 June 2004 and, thirdly, it had no right to pay him accrued leave calculated at second officer rates when he was employed at all relevant times for that leave as a first officer.
78 Her Honour found that he had been short paid for the 49 days leave he accumulated on the first voyage a total of $1,282.33 (49 days x $26.17) because Teekay used the lower rate. Mr Visscher contended that he was entitled to this sum and that his entitlement to double wages began on about 3 March 2004 and continues to the present time, generating a liability for Teekay, if he be correct, of about $7 million. He argued that Teekay had failed to give him a true and full account of his wages pursuant to s 76 of the Act. He contended that Teekay had not established any exculpation under s 78 to excuse its delay in paying him between 27 May and 4 June 2004. He also contended that he should have been paid $2,931.04 more in respect of the balance of 112 days leave that was only paid at the second officer rate.
Consideration
79 In his email of 22 February 2004, Mr Visscher sought payment of all his entitlements into his bank account at Teekay’s “earliest convenience”. However, he was not paid his full entitlements to wages within the meaning of s 78 of the Act in the period following his discharge on 3 March 2004 up to when he and Teekay agreed that he would rejoin Broadwater on 7 April 2004 on the without prejudice basis referred to above. In my opinion, in all the circumstances, Teekay should have paid Mr Visscher once he had been discharged, by arranging the immediate transfer of funds on 3 March 2004. That day was a Wednesday. Teekay should have been able to calculate the correct pay out figure and arrange a bank deposit on that day. Accordingly, Mr Visscher was entitled to double wages on his daily salary of $289.055 for the period of 35 days between 3 March and 7 April 2004.
80 I consider that her Honour’s calculation of Mr Visscher’s theoretical entitlement under s 78 was erroneous. It was common ground that, first, he was not paid all entitlements on 3 March 2004, secondly, he was paid his normal wages throughout the ensuing period to 1 June 2004 and, thirdly, from 7 April 2004 the parties had agreed that their accrued rights at that date remained unaffected but would not be enforced pending the outcome of Mr Visscher sailing on Broadwater’s next voyage as first officer. Thus, at 7 April 2004, Mr Visscher was entitled to be paid his full leave entitlements and the unpaid component of double pay due for the 35 days since his discharge but he would not require that to occur until later. Her Honour treated, as the parties appeared to have suggested to her, the monthly salary payments for March and April 2004 as pro tanto discharges of Mr Visscher’s 49 days of leave entitlement that he had accrued on the first voyage on Broadwater. That agreement postponed Teekay’s obligation to pay anything Mr Visscher had claimed due to him on his earlier discharge other than his normal salary until, at least, his discharge occurred in late May 2004.
81 Accordingly, Mr Visscher was not entitled to double wages after 7 April 2004 because the parties had agreed to proceeding with the second voyage without prejudice to their rights. Teekay had a reasonable basis under s 78, from 7 April 2004, not to pay Mr Visscher anything it would otherwise have been liable to pay as an ongoing employee and to treat him in accordance with the 7 April 2004 agreement.
82 The agreement made on 7 April 2004 was intended by both parties, to hold the status quo, even though, as I have now found, he had been correct in his characterisation of Teekay’s conduct in insisting on his demotion as amounting to a constructive dismissal when he was discharged from Broadwater on 3 March 2004. Thus, Mr Visscher should only be compensated by 35 days additional pay, a total of $10,116.93, which is what was due to him as at 7 April 2004, in addition to his remaining full entitlements that her Honour found he had received on 4 June 2004.
83 Under the 7 April 2004 agreement, the parties’ accrued legal rights were held in abeyance and they agreed to proceed with Mr Visscher acting as chief officer on the forthcoming voyage, as if his employment from 3 March 2004 had continued, but without prejudice to the true antecedent legal position, if matters did not resolve. Thus, he carried forward the accrued right to the 35 days’ pay (being the unpaid half of his double wages after 3 March 2004). However, both parties overlooked this accrued right when Teekay paid Mr Visscher out on 4 June 2004. That oversight fell within the exculpation under s 78 because it was a bona fide mistake, shared by both Teekay and Mr Visscher, and was not attributable to any wrongful act or default of Teekay.
84 Mr Visscher has not shown that the primary judge’s finding, that Teekay believed throughout that he remained in its employ until 1 June 2004, was erroneous. Indeed, that finding was correct. Even though Teekay had no basis to assert a reasonable dispute as to its liability for Mr Visscher’s wages, based on its belief, between 3 March 2004 and 7 April 2004, the position changed on the latter date. That change affected the way in which any liability it might have under s 78 should be assessed thereafter. That is because the agreement made on 7 April 2004 held the status quo and Mr Visscher’s letter of 27 May 2004 received a prompt reply on 31 May 2004. That reply explained that Teekay considered that he was on regular leave after which it understood that he would return to Broadwater. While her Honour made no finding whether Mr Visscher only received that letter on 25 June 2004, as he asserted, the content of the letter evinced a reasonable belief on Teekay’s part in light of the 7 April 2004 agreement. It only became clear to Teekay that it had to pay Mr Visscher out on 1 June 2004 when he wrote that he had accepted other casual employment and he and Mr Brecht discussed position. Mr Visscher did not protest after Mr Brecht told him that he would process his entitlements by 4 June 2004, as happened.
85 There is nothing to suggest that the short delay between 1 and 4 June 2004, in the circumstances, was attributable to a wrongful act or default of Teekay under s 78. Mr Visscher had not demanded payment of his entitlements on his discharge from Broadwater on 26 May 2004, unlike what had occurred in respect of the 3 March 2004 discharge. Instead, he wrote to Teekay the next day (27 May 2004). That act suggested that at the time that he left the ship the previous day he did not inform Teekay that his discharge was the conclusion of his ongoing employment. Indeed, her Honour had found, correctly, that (J 184) Mr Visscher obtained his discharge on 26 May 2004 and ceased temporarily to be a member of the ship’s crew. She noted that he had obtained that discharge in the following circumstances as he described in his oral evidence:
“I told the master words to the effect of, “I am to attend an AIRC hearing for termination of employment against Teekay Shipping, and if we carry on to Indonesia I will not be able to attend the hearing, and I request to go on leave.” That’s the word I said, “To attend the hearing.””
86 Accordingly, when Mr Visscher was discharged from the ship on 26 May 2004, Teekay had no obligation to pay him wages immediately under s 75 of the Act. That is because the existing agreements that Teekay would pay his salary into his bank account at regular intervals continued. The 7 April 2004 agreement had left open the possibility of a reconciliation between the parties. Mr Visscher’s 27 May 2004 demand that he be paid out his full entitlements brought the 7 April 2004 agreement to an end. But the demand was not capable of retrospectively engaging ss 75 or 78 so as to characterise the non-payment of wages on his discharge on 26 May 2004 as a breach of the requirements of the Act. That non-payment was due to Mr Visscher’s act in treating the occasion of that discharge from Broadwater as a usual incidence of his ordinary employment. Moreover, the non-payment at that time was not due to any wrongful act or default of Teekay. Thus, ss 75 and 78 did not operate to create a new liability on Teekay.
87 Once the agreement of 7 April 2004 had come to an end, the parties’ legal rights, as they had existed on 7 April 2004, became immediately enforceable. Nonetheless, the effect of the intervening events, including the circumstances in which Mr Visscher had been discharged from Broadwater on 26 May 2004, were relevant to assessing whether Teekay had any defence to his claim for an immediate final settlement of his wages, on 27 May 2004, under s 78 as I have explained above.
88 In all the circumstances, Teekay’s small delay was due to a commercially reasonable need to work out all Mr Visscher’s entitlements on termination of his employment, including for the period after 7 April 2004, once it became clear, on 1 June 2004, that their relationship was irretrievably at an end. It was in this context that he left the ship on 26 May 2004, to pursue his application in the Commission that sought his reinstatement as first officer.
89 Teekay established under s 78 that the delay in payment between 27 May and 4 June 2004 was not attributable to any wrongful act or default by it. Rather, in contrast to its earlier stance up to 7 April 2004, Teekay’s delay in paying Mr Visscher on and after 27 May 2004 was not due to its earlier or any wrongful act or default. Mr Visscher and Teekay had agreed on 7 April 2004 that he would sail the swing on Broadwater without prejudice to either side’s position. Importantly, before that agreement Teekay had been asserting that after leaving Broadwater on 3 March 2004 he would sail as second officer, and that this was his rank. The communications by Teekay following Mr Visscher’s letter of 27 May 2004, including his discussion with Mr Brecht on that day, did not suggest that Teekay intended that thereafter Mr Visscher would sail as second officer; they did not discuss that point. Mr Brecht wrote in his letter of Monday, 31 May 2004 that he had clarified with Mr Visscher (on 27 May 2004) that the request for payment of his entitlements “relates to your outstanding leave balance, as a consequence of what you claims was your ‘constructive dismissal’ by Teekay”. He wrote that Teekay rejected that assertion and:
“We regard you as having commenced a period of regular leave and have you scheduled to rejoin the vessel “Broadwater’ as Chief Officer as the completion of your period of leave.”
90 Teekay’s assertion that Mr Visscher had not been constructively dismissed remained incorrect. However, its stated intention that Mr Visscher would sail as chief officer was a significant change in its earlier position as to his immediate future as a second officer that Mr Visscher had accepted as a repudiation of his contract of employment. The basis on which Mr Visscher asked the master for his discharge on 26 May 2004 reinforced the perception reflected in the letter of 31 May 2004, that he was on leave. However, on 1 June 2004, Mr Visscher informed Mr Brecht that he had accepted other casual maritime employment and would not be rejoining Broadwater. In response, Teekay wrote that it was treating this conduct as a resignation as at 1 June 2004 and would process his outstanding entitlements by 4 June 2004. That appeared to have included whatever adjustment to his leave balance was due to which Mr Visscher had referred to in his letter of 27 May 2004.
91 In late May and early June 2004, Teekay still did not appreciate or accept that it had constructively dismissed Mr Visscher as at 3 March 2004. However, I am satisfied that it was not then seeking to delay paying him his wages or entitlements. Its conduct at this time was unlike its earlier refusal to accept that its requirement that he sail as second mate was a constructive dismissal. Mr Visscher’s right to the 35 days double wages remained an accrued right at that time. Teekay did not include that sum in its final settlement paid on 4 June 2004. Teekay did not advert to, or deliberately chose not to recognise, that liability in calculating the final settlement. Mr Visscher had mentioned s 75 in his letter of 27 May 2004, but when he received Teekay’s final payment on 4 June 2004, he did not suggest that it was in any way inadequate. It is not a necessary condition of ss 75 and 78 that the seamen be aware of, much less assert, his or her right to double wages. However, Teekay’s liability for delay under s 78 must be assessed in the context of the situation of the parties on and after 27 May 2004.
92 I am satisfied that Teekay’s delay in paying the double wages for 35 days was due to a cause not attributable to its wrongful act or default. Rather, the delay was due to oversight. That oversight was shared by Mr Visscher. Thus, any delay in payment between 27 May and 4 June 2004 was not one on which ss 75 and 78 operated. Rather, that delay related to the discussions between the parties to ascertain the future of their relationship and bring it to an orderly conclusion.
93 Mr Visscher should not recover for the unpaid differential on the 112 days of leave between the second and first officer pay rates. That is because of his failure to claim that sum in the proceedings and the way in which he conducted his case at trial. Her Honour had required Mr Visscher to plead his various claims. In his second further amended statement of claim filed, shortly before the trial, on 12 April 2012 he claimed nearly $7 million, being comprised of double wages commencing from the time of each of the discharges from the first and second voyages on Broadwater on, respectively, 3 March 2004 (a total of about $3.4 million) and 26 May 2004 (a total of about $3.5 million). Mr Visscher made no pleaded, or any earlier claim for, or complaint of, underpayment of leave or any other entitlement, except the claims for double wages due to delay from the dates of each discharge under s 78.
94 Teekay had filed affidavit evidence from its employee, Mr Bertram, who was familiar with its current payroll system, but he had not been employed by Teekay in 2004. His evidence dealt specifically with what Teekay had paid and Mr Visscher’s then articulated claims for payment. However, his evidence did not deal with the 112 day leave differential. That was because Mr Visscher had not made any pleaded or particularised claim about it.
95 The first notice Teekay had that Mr Visscher sought to recover that differential was in his closing submissions at the trial. Teekay objected that this claim was outside his pleaded case and submitted to her Honour that it had not prepared to meet it. It accepted that Mr Bertram had been cross-examined about the differential, but pointed out to her Honour that the differential had been disclosed in Mr Bertram’s affidavit that Mr Visscher had received two years earlier in March 2010. Teekay submitted to the primary judge that it would have wished to make enquiries about the reason for and manner of calculation of the leave payment had it been on notice that this was a live claim at trial. Mr Leeming SC, who appeared for Teekay below, submitted to her Honour in final address that this claim took his client by surprise and had not been pleaded. Her Honour asked Mr Visscher if he accepted that he had not pleaded this claim, which he did. It formed no part of what was Exhibit H in the trial, it being, what her Honour described, as the “ultimate particularisation of the applicant’s claim”.
96 I am of opinion that her Honour was correct to have rejected Mr Visscher’s late attempt to rely on a claim for the differential. She said at [253], and I agree:
“… Mr Visscher confirmed that his claim in this proceeding related to his time on the Broadwater only. As the magnitude of Mr Visscher’s claim has changed no less than five times, it is understandable that counsel for Teekay were concerned to pin him down, and the value of his claim is rightly confined to his pleadings.”
Conclusion
97 Mr Visscher’s appeal has succeeded on the very limited basis that he should have been paid promptly on 3 March 2004 and that Teekay had not established any reason under s 78 not to have paid him for 35 days until 7 April 2004. However, he made no claim for double wages for that limited period alone at any time. Instead, he chose to litigate for a much larger sum on bases that were not sustainable. His first claim under s 78 was not clearly articulated and was not made for more than two years after he left Teekay’s employ. In my opinion, because of his delay in raising the issue and the lack of clarity of his real claim on which he succeeded, interest on the sum of $10,116.93 should only commence to run from the time that Mr Visscher instituted the proceedings on 2 March 2007. Interest from then calculated in accordance with practice note CM 16 totals $6,032.60.
98 Accordingly, the appeal should be allowed and the orders made by the primary judge on 9 November 2012 should be set aside and judgment entered for Mr Visscher in the sum of $16,149.53. Teekay has succeeded in resisting the substantial monetary claims by Mr Visscher. However, its contention that it had not constructively dismissed Mr Visscher as at the time he was discharged from Broadwater on 3 March 2004 was untenable after the High Court decided that issue in Giudice 239 CLR at 385 [69], 388 [81]. That contention contributed substantially to the costs.
99 Both parties contributed to the protracted and prolix nature of the proceedings and the appeal. Teekay’s notice of contention should be dismissed. In all the circumstances, we will need to hear the parties on the question of costs of both the appeal and the trial. The parties should file short written submissions on the issue of those costs, in chief, within seven days limited to two pages, and in reply, within seven further days, limited to one page. Mr Visscher’s entitlement to costs is very limited: Cachia v Haines (1994) 179 CLR 403. It may be that the costs and the judgment sum could be set off.
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I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for |
Associate:
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IN THE FEDERAL COURT OF AUSTRALIA IN ADMIRALTY |
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NEW SOUTH WALES DISTRICT REGISTRY |
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GENERAL DIVISION |
NSD 1929 of 2012 |
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
TIMOTHY VISSCHER appellant |
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AND: |
TEEKAY SHIPPING (AUSTRALIA) PTY LTD respondent |
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JUDGES: |
RARES, JAGOT AND BROMBERG JJ |
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DATE: |
13 FEBRUARY 2014 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
JAGOT J:
100 There is one issue with which I have to deal in these separate reasons for judgment. The issue is the application of s 78 of the Navigation Act 1912 (Cth) (the Navigation Act) to the facts of the present case.
101 Section 78 was repealed by the Navigation Amendment Act 2011 (Cth), Sch 1, Pt 1, cl 15. However, any rights Mr Visscher might have accrued under s 78 would continue in accordance with s 8(c) of the Acts Interpretation Act 1901 (Cth).
102 Section 78 provided as follows in 2004 (the time Mr Visscher’s rights under the section, if any, would have accrued):
If a seaman’s wages are not paid in accordance with section 75 before or at the time the seaman is given his or her discharge from a ship, the seaman’s wages shall continue to run until the time of the final settlement of his or her wages (and shall be payable at double rates for any period after the time the seaman is given his or her discharge from the ship) unless the delay is due to the seaman’s act or default, to a reasonable dispute as to liability for the wages or to any other cause not attributable to the wrongful act or default of the owner or master of the ship.
103 Section 75, which remains part of the Navigation Act, is in these terms:
(1) Where a seaman is discharged, the seaman shall, before or at the time of discharge, be paid the amount of wages due up to that time, less any deductions specified in the account required to be delivered under subsection 76(1).
Penalty (on the owner and master): $1,000.
(3) It is a defence to a prosecution for an offence against subsection (1) if the person charged proves that the failure to pay to the seaman the amount of his or her wages in accordance with that subsection was due to the seaman's act or default, to a reasonable dispute as to liability for those wages or to any other cause not attributable to the wrongful act or default of the person charged or of any person acting on his or her behalf.
104 By s 6(1) “discharge” is defined as follows:
“discharge” means the certificate of discharge given to a seaman upon his or her discharge from a ship.
105 Section 6(4C) provides that:
A person who, in pursuance of articles of agreement, ceases temporarily to be a member of the crew of a ship shall not be taken to have been discharged from the ship.
106 “Articles of agreement” has the same meaning as agreement (s 6(1)) and “agreement is defined in the same section as follows:
“agreement” means:
(a) in relation to a ship - the agreement between the owner of the ship, or a representative of the owner of the ship, and the crew of the ship; and
(b) in relation to a seaman belonging to a ship - the agreement between the owner of the ship, or a representative of the owner of the ship, and the seaman.
107 The primary judge dealt with this issue at [220]-[244] of the reasons for judgment, concluding that the delay in payment of Mr Visscher’s wages between 3 March 2004 (the date of his discharge from a ship) and 1 June 2004 (the date Teekay Shipping (Australia) Pty Ltd (Teekay) accepted that Mr Visscher had been discharged, with payment of his wages being made thereafter on 4 June 2004) was due to a reasonable dispute as to liability for the wages. The key basis upon which it is said that the primary judge erred is that it was not and never could be reasonable for Teekay to have acted on the basis of its apparent beliefs that: - (i) it had not constructively dismissed Mr Visscher when Teekay insisted that he had been effectively demoted from first mate to third (and later, second) mate, (ii) Mr Visscher was not entitled to treat Teekay’s insistence as a constructive dismissal of him and thus Mr Visscher was not entitled to accept Teekay’s repudiation of the employment contract and, in so doing, bring the employment relationship to an end, and (iii) Mr Visscher had not in fact brought the employment relationship to an end as at 3 March 2004.
108 I say “apparent” beliefs because it is clear that it was not Mr Visscher’s case before the primary judge that Teekay had been engaged in a sham, in the sense that Teekay in fact knew that its purported demotion of Mr Visscher constituted a constructive dismissal of him, knew that Mr Visscher was entitled to treat it as such, and knew that Mr Visscher had effectively brought the employment contract to an end on 3 March 2004 but, for its own purposes, pretended to the contrary. No such proposition was ever put to any witness Teekay called. Nor was it put to the primary judge. Nor, indeed, did Mr Visscher suggest in this appeal that Teekay engaged in any form of sham of this kind. This is important because it precludes the appeal being approached on the basis that Teekay knew or must have known each of the three identified matters but, for its own purposes (such as to try to retain Mr Visscher’s services because he was a highly regarded seaman), preferred Mr Visscher to believe otherwise. Given the conduct of the hearing before the primary judge it must be accepted that Teekay, no matter how implausible it might sound now with the benefit of time, distance and of course hindsight, genuinely believed each of the three identified matters. This reflects the fact that a mistaken belief genuinely held, viewed objectively, might fall anywhere on the scale from patently absurd to eminently sensible. Where the genuineness of a belief is in issue (as in was the belief truly held), where the belief falls on this objective scale will usually be relevant to determining the probability of the belief actually being held. But where, as here, the genuineness of the beliefs was never in issue, the appeal cannot be resolved on the basis of an assumption or inference, either express or implicit, that Teekay did not or could not have held the beliefs because they are now perceived to be or to be approaching the patently absurd. Where the beliefs fall on the objective spectrum is undoubtedly relevant to any question concerning their reasonableness, but that question must be answered in the present case without any attack, conscious or otherwise, on the common premise which informed the conduct of the hearing by the parties before the primary judge, that Teekay’s beliefs as to the three matters above, each of which was identified in the contemporaneous documents and in the affidavits, were genuine.
109 This is not to say that Teekay was always scrupulous in making sure it accurately represented what it thought to be the position to Mr Visscher. There is one letter that Teekay sent, of 24 February 2004, in which Teekay said to Mr Visscher “you have never been graded Chief Officer in Teekay”. This statement was wrong as Mr Visscher had indeed been graded Chief Officer (otherwise known as first mate) in Teekay, even if only briefly before Teekay’s purported demotion of him to appease the relevant union which had notified an industrial dispute in response to Mr Visscher’s perceived “out-of-turn” promotion. On the evidence it also would be open to infer that the statement was disingenuous because Teekay’s true position was that Mr Visscher had been promoted to first mate and had then, not long after (about 11 days), been demoted back to third mate in accordance with the recommendation made by the AIRC. But, again, this possible (even probable on the evidence) lack of genuineness about Mr Visscher “never” having been first mate cannot be transformed into an assumption or inference that Teekay never genuinely held the three beliefs identified. These three beliefs are clearly exposed by the contemporaneous documents of Teekay (internal and external) and accord with the evidence of the witnesses called by Teekay. They cannot now be impugned directly or indirectly given the conduct of the hearing before the primary judge.
110 Another observation should be made at this time. It is that if Teekay’s beliefs had been correct instead of mistaken then it could not have had any liability to pay Mr Visscher wages on 3 March 2004. This is because Mr Visscher would have ceased temporarily to be a member of the crew of one of Teekay’s ship and, by s 6(4C) of the Navigation Act, would not be taken to have been discharged from the ship. Mr Visscher’s wages were otherwise payable mid-month and, indeed, because of its mistaken belief that Mr Visscher had only ceased temporarily to be a member of the crew of one of Teekay’s ships, Teekay paid Mr Visscher his usual monthly salary in March, April and May 2004. This fact too is important because s 78 operates on wages due but not paid on discharge from a ship and one of the exemptions from this operation on which Teekay relies is that, accepting for this purpose that its beliefs were mistaken, the delay in payment between 3 March and 4 June 2004 was due to “a reasonable dispute as to liability for the wages”. As the liability could arise only if Mr Visscher had been discharged on 3 March 2004 and Teekay believed that Mr Visscher had not brought the employment relationship to an end and had thus not been discharged, Teekay’s position was that there was no liability to pay out Mr Visscher. It is this which Teekay submitted constituted “a reasonable dispute as to liability for the wages”.
111 For these reasons Teekay contended that the facts bore no resemblance to those in Palace Shipping Company Limited v Caine [1907] AC 386 (Palace Shipping) in which seamen who had refused to enter a war zone had been discharged, imprisoned and their wages used to defray their costs of imprisonment rather than being paid to them. It was said (at 392) that there was never any dispute that their wages were owed to them and thus the provision equivalent to s 178 was engaged. I accept this submission. In Palace Shipping the seamen had been discharged. The fact that the discharge was due to the wrongful act of the master and owner was in issue, but not the fact of the discharge itself. The master and owner did not assert any belief that the circumstances did not involve a discharge of the seamen. The master and owner believed and asserted only that the command to go to the port in question was lawful. As such, there could be no reasonable dispute about the liability to pay wages because, wrongly or rightly, the seamen had been discharged. In the present case Teekay believed that Mr Visscher had not been discharged. Teekay’s belief, for the purposes of this debate is taken to be wrong, but if its belief had been right then, in contrast to Palace Shipping, there would have been no liability to pay wages. Palace Shipping thus does not assist Mr Visscher. The nature of Teekay’s beliefs make the dispute it had with Mr Visscher about whether or not he had been discharged or was merely temporarily on leave from one of Teekay’s ships involve a dispute as to liability regarding the wages in question (that is, annual leave and other entitlements payable only on discharge). The remaining questions are, first, whether the delay in payment between 3 March and 4 June 2004, in whole or part, was due to this dispute and, second, whether the dispute was “a reasonable dispute”. To answer these issues it is necessary to consider why Teekay held the beliefs it did in all of the circumstances as they evolved leading up to and between 3 March and 4 June 2004.
112 Before considering those circumstances one more observation should be made. Section 78 requires the delay between the date on which the wages should have been paid, being the date of discharge other than by way of ceasing temporarily to be a member of the crew of a ship, and the date of final settlement to be due to a reasonable dispute as to liability for the wages. In the present case, for example, facts on which Teekay relied and which the primary judge accepted were relevant to the s 178 issue at [243] were that the AIRC, the Full Court of the Federal Court of Australia, and one member of the High Court concluded that Teekay was bound by the certified agreement listing Mr Visscher as third mate to treat him as such (and second mate, after his promotion) (Visscher v Australian Industrial Relations Commission (2007) 170 IR 419; [2007] FCAFC 206, Visscher v The Honourable President Justice Giudice (2009) 239 CLR 361; [2009] HCA 34).
113 Given that these decisions were made three to five years after the events in question their potential relevance to resolution of the issues arises in a particular way. Assume, for example, that Teekay was unaware of the certified agreement listing Mr Visscher as third mate. On this assumption, Teekay’s beliefs could not have been influenced in any way by the certified agreement. It is difficult to see how, in that event, subsequent judicial decisions about the operation of the certified agreement could bear upon the reasonableness or otherwise of Teekay’s beliefs that Mr Visscher had not been constructively dismissed, was not entitled to treat his demotion as constructive dismissal, and thus continued to be employed by Teekay, albeit temporarily having ceased to be a member of a crew on one of Teekay’s ships. Assume to the contrary that Teekay was aware of the certified agreement and believed that it meant that Teekay was bound to treat Mr Visscher as third mate. On this assumption, the fact that the AIRC, three judges of this court and a member of the High Court all concluded Teekay was right would bear upon the reasonableness or otherwise of Teekay’s beliefs. This is because the characterisation of a dispute about liability to pay wages as a reasonable dispute or not is to be assessed objectively in the light of the circumstances known and knowable at the relevant time or times.
114 In the present case it is clear that Teekay was aware of the certified agreement and that it listed Mr Visscher as third mate. What Teekay’s evidence did not disclose was the link, if any, between its awareness and its beliefs from time to time. There is no doubt that by the time Mr Visscher’s reinstatement claim was heard in the AIRC in 2006 Teekay believed that by reason of the certified agreement it was bound to treat Mr Visscher as third mate, this being an issue which led to the dismissal of the claim and rejection of Mr Visscher’s appeal by the Full Federal Court. Equally, there is no doubt that Teekay could no longer have held this belief after the majority of the High Court held to the contrary on 2 September 2009. The evidence about Teekay’s state of mind in respect of this issue before 2006 is not so clear. To the extent that the reasoning of the primary judge at [243] might suggest that the fact of the subsequent judicial decisions was relevant to the characterisation of the reasonableness of the dispute irrespective of Teekay’s state of mind about this issue, I would not agree. But it is not clear from [243] that the primary judge was suggesting this.
115 These things said, why did Teekay hold the beliefs it did in all of the circumstances as they evolved leading up to and between 3 March and 4 June 2004?
116 One relevant fact, which was not in dispute, is that Teekay always considered Mr Visscher to be a very good employee. Teekay wanted Mr Visscher on its ships. It was Mr Visscher’s competence and experience that caused Teekay to promote him to first mate out of turn, thereby triggering the industrial dispute with the relevant union. Accordingly, there can be no doubt that Teekay genuinely wanted Mr Visscher to continue in its employ at all times.
117 Mr Visscher was employed as third mate between 30 March 2001 and 4 August 2001 (at [10]-[13]). Teekay offered Mr Visscher the position of first mate by a letter he received on 7 September 2001, the promotion being back-dated to 4 August 2001. Mr Visscher accepted the promotion on 7 September 2001 and was thus employed as first mate (at [13]). At the same time as the promotion was offered and accepted the relevant union, of which Mr Visscher was a member, threatened strike action over out-of-turn promotions including the promotion of Mr Visscher. Teekay thus notified the AIRC of the dispute on 7 September 2006. On 11 September 2001 the AIRC recommended that all of the promotions be rescinded (at [14]). The AIRC had the power to make recommendations (s 111AA of the Workplace Relations Act 1996 (Cth)). Failure to comply with a recommendation had potentially serious consequences for Teekay, being the fact that the AIRC could refrain from hearing and determining an industrial dispute if either party contravened the recommendation (s 111(g)(v)(C)). Unsurprisingly, Teekay acted on the AIRC’s recommendation and by letter dated 20 September 2001 told Mr Visscher it was rescinding his promotion and that he was graded third mate (at [15]).
118 Mr Visscher thus knew from 20 September 2001 that Teekay had purported to rescind the promotion and that as far as Teekay was concerned Mr Visscher was graded third mate. In addition, Mr Visscher knew that the period during which he had formally held the rank of first mate, from Teekay’s point of view, was between 7 September 2001 (back-dated to 4 August 2001) and 20 September 2001, some 13 days. This is not to say Mr Visscher accepted that Teekay was entitled to rescind the promotion. He did not. Instead, Mr Visscher asked Teekay whether he was being sacked. The issue appears to have been resolved in 2001 in a practical way. Mr Visscher knew that Teekay had purported to do so and was treating him as formally ranked third mate. I say “formally ranked” because what is also clear is that Mr Visscher was on board a Teekay ship at the time as first mate and, as far as his then captain was concerned, Mr Visscher was first mate. Mr Visscher remained as first mate on this ship, being paid as such, for another two years or so. Neither Teekay nor Mr Vischer sought to bring to a head and thus resolve the issue of Mr Visscher’s formal status during this period. But this does not alter the fact that just as Teekay knew Mr Visscher did not accept that his promotion had been validly rescinded, Mr Visscher knew that Teekay had purported to rescind his promotion and had never accepted that, by so doing, it had also constructively dismissed Mr Visscher. Each was content to leave the issue of Mr Visscher’s formal status unresolved – Mr Visscher because he was in fact acting and being paid as first mate and Teekay because paying Mr Visscher to act as first mate whilst formally being ranked third mate enabled Teekay to have the benefit of Mr Visscher’s services but avoid any further industrial dispute with the union.
119 Teekay relied on its pay slips from July 2003 to support its case that Mr Visscher must have known that he was formally ranked third mate as these showed a normal and a higher duties rate (whereas the earlier pay slips did not). Reliance on the pay slips for this purpose is unnecessary. Mr Visscher received the letter by which Teekay purported to rescind his promotion. Before the promotion he was ranked third mate. It must have been obvious to Mr Visscher that the rescission of the promotion, if it had been valid, was to reinstate him to the rank of third mate. That Mr Visscher never accepted that Teekay could demote him without repudiating the employment contract and thus constructively dismissing Mr Visscher (which has turned out be the correct view) does not negate his awareness of both the purported demotion and the lack of resolution of his formal status at least from Teekay’s point of view.
120 These circumstances are important contextually because they disclose that despite the issue between them as to his formal status, culminating in Mr Visscher asking Teekay in writing whether Teekay was terminating his employment on 26 September 2001, Teekay and Mr Visscher found a practical way forward which enabled his employment to continue to the mutual satisfaction of Mr Visscher and Teekay. The circumstances disclose also that both Teekay and Mr Visscher were content to let the issue of his formal status remain unresolved, at least so long as Teekay could arrange things so that Mr Visscher could act and be paid as first mate. Finally, the circumstances disclose that, whatever the issue about his formal status, Mr Visscher was willing to work for Teekay as first mate and Teekay was willing for Mr Visscher to do so. The fact that the relationship continued on this basis for over two years, to the mutual satisfaction of Mr Visscher and Teekay, cannot be disregarded when assessing the reasonableness of Teekay’s beliefs subsequently.
121 As I have said, given the conduct of the hearing below, it must be accepted that Teekay honestly (albeit wrongly) believed that it had effectively rescinded Mr Visscher’s promotion. Nothing happened between 2001 and the events in late 2003 and early 2004 which could have affected Teekay’s belief or Mr Visscher’s awareness of both the purported demotion and the lack of resolution of his formal status at least from Teekay’s point of view. As I have also indicated, even if Teekay’s view of the law is able to be characterised as egregiously wrong, particularly given Teekay’s apparent sophistication and access to and employment of industrial lawyers, the serious quality of its error cannot be used to undermine the honesty of its beliefs in the circumstances of the hearing below. Further, and as I have explained, even assuming its error may be characterised as egregious, Teekay and Mr Visscher had between themselves found a way forward which enabled Mr Visscher to remain employed by Teekay.
122 This is the background against which subsequent events have to be assessed. Those events also included the certification of the agreement between Teekay and the union (of which Mr Visscher was a member) on 5 March 2002 (at [16]). The certified agreement contemplated that employees could “act up” in rank if a suitably ranked seaman was not available to fill the role (cl 23.1.5) and identified the rank of all employees as the basis for future promotions (cl 23.4). In the attached list referred to in cl 23.4 Mr Visscher was ranked “third officer” (or third mate). This is consistent with Teekay holding the belief that it had effectively rescinded Mr Visscher’s promotion and that he was “acting up” as first mate. So too is Teekay’s letter to Mr Visscher of 5 July 2002 to the effect that Mr Visscher had been promoted from third mate to second mate effective from 1 July 2002. Again, although Mr Visscher told Teekay on 24 July 2002 that he did not accept the promotion as he was already first mate, the issue of Mr Visscher’s formal status was not brought to a head and resolved (at [17]). Mr Visscher continued in his role acting as first mate to the mutual satisfaction of Mr Visscher and Teekay until 4 January 2004 (at [18]).
123 Otherwise in respect of the certified agreement, I accept that there was no evidence that Teekay believed at this time, or before some time in 2006, that the listing of Mr Visscher as third mate in the agreement had some legal effect on his status over and above the purported rescission of his promotion. That is to say, it should not be inferred on the evidence that Teekay had in its mind at this time or in 2004 the legal argument that persuaded the Full Court and one member of the High Court about Mr Visscher’s status. But this does not mean the certified agreement is irrelevant. The fact that Teekay did not apparently have this in mind before 2006 is explicable on the basis of its honest, albeit incorrect, belief that its purported rescission of the promotion, as recommended by the AIRC, was valid. Moreover, Teekay certainly knew that Mr Visscher was listed as third mate in the certified agreement (a public document) and must be inferred to have believed the listing was accurate given the purported rescission of the promotion.
124 On 4 January 2004 Mr Visscher was told that while Teekay had proposed to keep him on the Samar Spirit as first mate, because he no longer wished to sail on that ship due to a disagreement with the Master, Teekay would sail him as a second mate on another ship (at [19]). Consistent with his earlier conduct, Mr Visscher was prepared not to bring the issue to ahead saying only “We’ll cross that bridge when we come to it” (at [19]). The bridge did not have to be crossed then because Teekay found him a role on the Broadwater acting as first mate. Again, consistent with his previous willingness to remain in Teekay’s employ despite the issue about his formal ranking, Mr Visscher was happy to sign onto the Broadwater as first mate (at [20]). Even when again told before doing so that he would thereafter be sailing as second mate, Mr Visscher was willing to continue his employment with Teekay saying only that he would join the Broadwater on the Monday, which he did (at [21]).
125 Mr Visscher sought to bring the issue of his formal status to a head on 22 February 2004. In his email of 22 February 2004 to Teekay Mr Visscher said that as he had been told he would be required to sail as second mate after leaving the Broadwater he treated this as a constructive termination of his employment “upon leaving the MT Broadwater on or about 26 February 2004” and asked to be paid all of his entitlements at Teekay’s “earliest convenience” (at [22]). In the event, the Broadwater did not dock until 3 March 2004. Although Mr Visscher maintained that his acceptance of Teekay’s repudiation was irrevocable from 22 February 2004 I am unable to accept this proposition. By its own terms Mr Visscher’s acceptance of the repudiation was effective on and from the date he left the Broadwater. At any time before that date Mr Visscher could have changed his mind.
126 Further, although Mr Visscher submitted that there were two written communications from Teekay in response, only one is in evidence. The evidence on which Mr Visscher relied to support the existence of another communication is unpersuasive. I am not satisfied there was any such additional communication. That said, for its part, Teekay treated the email as Mr Visscher resigning from his employment. Mr Scott of Teekay told Captain McLellan that he “would accept” Mr Visscher’s resignation. Captain McLellan told Mr Scott, as he had been told by Mr Visscher, that Mr Visscher did not see the email as a resignation. In any event, one thing is clear – Teekay could not accept Mr Visscher’s resignation, other than in a prospective and thus contingent sense, while the Broadwater was still at sea. Accordingly, Mr Scott’s oral communication to Captain McLellan, at best, is confirmation that if Mr Visscher still wanted to resign when he left the Broadwater, Teekay would accept the resignation. Leaving aside the incorrect statement that Mr Visscher had never been graded first mate, this is the best explanation for the terms of the letter from Mr Scott to Mr Visscher on 24 February 2004 (at [24]).
127 The letter of 24 February 2004 ended with these two paragraphs:
3) On this basis Teekay is treating your email as a resignation.
Please confirm acceptance and receipt of this letter by signing and returning, in the pre-paid envelope the enclosed copy of this letter.
128 It is easy to criticise the drafting of this letter. First, hindsight shows that Teekay was not entitled to treat Mr Visscher as having resigned. To the contrary, Mr Visscher was right that Teekay had repudiated its contract of employment and Mr Visscher thus could elect to accept or waive the repudiation. Second, Mr Visscher had elected to accept the repudiation albeit, as I have said, his acceptance was not effectively immediately but was to become effective on leaving the Broadwater, with the consequence that Mr Visscher was free to change his mind before doing so. Third, if Mr Visscher had signed the letter he would be at risk of being treated as if he had resigned rather than been constructively dismissed which would undermine his capacity to seek various remedies. Fourth, the letter could have put it beyond doubt that Teekay considered that the employment contract would continue after Mr Visscher left the Broadwater until Mr Visscher took some other irrevocable act to bring the relationship to an end. All these things said, it is reasonably clear from the letter that Teekay did not consider that Mr Visscher had committed any irrevocable act by reason of his email of 22 February 2004. The letter signalled that as far as Teekay was concerned it was willing for the employment relationship to continue, presumably, as it had done for the past three years and irrespective of the issue about Mr Visscher’s formal status. At all times during that period Teekay had managed to arrange things so Mr Visscher sailed as first mate, just as it had done so in January 2004 when it had first said to Mr Visscher he would have to sail as second mate.
129 Given the circumstances of its employment relationship with Mr Visscher since late 2001 it is hardly surprising that Teekay wanted to leave open the prospect of the issue with Mr Visscher being resolved satisfactorily as it had been for more than three years. In context, it was reasonable of Teekay to wish to do so and to believe it had done so by the terms of its letter of 24 February 2004. Mr Visscher’s response to Captain McLellan that he had not resigned and would deal with it in his own way (at [25]) did not resolve the ambiguity. The primary judge did not accept Mr Visscher’s evidence that he had told Captain McLellan his employment was at and end (at [145]-[158]). Nothing has been put in this appeal which would lead to a different view of the evidence. The reference to Captain McLellan’s evidence that Mr Visscher had told him Teekay had terminated his employment has to be considered in the light of the whole of Captain McLellan’s evidence including, in particular, his discharge of Mr Visscher from the Broadwater on the basis of “leave”. It is difficult to accept that Captain McLellan would have made this written entry had he truly believed either that Teekay had terminated Mr Visscher’s employment or that Mr Visscher had resigned. Moreover, the fact that Mr Visscher signed his discharge, whether he was bound to or not, is consistent with Mr Visscher also, at least at that time, wanting to leave the door open. After all, Mr Visscher had happily sailed as first mate with Teekay knowing his formal status was in issue for more than three years. Teekay had always managed to find Mr Visscher a ship where he could act and be paid as first mate irrespective of the issue about his formal status. It is almost inconceivable that Mr Visscher did not hold out some hope when he left the Broadwater on 3 March 2004 that Teekay would be able to find another ship on which he could sail as first mate. In other words, in common with Teekay, Mr Visscher (at least as at 3 March 2004) was happy to leave things somewhat ambiguous whilst also attempting to force the other party’s hand (Mr Visscher by insisting that Teekay had constructively dismissed him and Teekay by insisting that Mr Visscher had resigned).
130 It should be apparent from this that I consider that both Teekay and Mr Visscher were involved in a bit of brinksmanship on and around 3 March 2004 on an assumption that, irrespective of the true legal position, they might be able to sort something out between them. Had either wished to close the door finally and irrevocably on or immediately after 3 March 2004 they could have done so. Teekay could have said it accepted Mr Visscher’s resignation with the consequence that the employment relationship was at an end without trying to get Mr Visscher to acknowledge this by signing and returning a letter. Mr Visscher could have said he accepted Teekay’s constructive dismissal with the consequence that the employment relationship was at an end. Neither did anything of this kind. Mr Visscher signed off the Broadwater on the basis of “leave”. While he then arranged to sail on another company’s ship, on 8 March 2004 Mr Visscher also wrote to Teekay (at [27]) saying:
I have enjoyed excellent relations with Teekay. I have performed well above the standard it might have expected and it has expressed its satisfaction with my work. It will be a great shame if we are now to descend to litigation. I suggest that an informal conference be urgently convened to reach a resolution.
131 At the same time he informed Mr Scott that he would be travelling overseas “for an imprecise time” (presumably to take up his role with the other ship) and had lodged an application in the AIRC for relief in relation to the termination of his employment.
132 As Teekay submitted, both the letter of 8 March 2004 and the AIRC application are in fact indicative of Mr Visscher wanting to remain employed with Teekay. Given it believed it had not dismissed Mr Visscher it is easy to see why Teekay would have seen both actions as consistent with Mr Visscher not having brought the employment relationship to an end. The letter referred, accurately, to the excellent working relationship between Teekay and Mr Visscher and expressed a desire for a meeting to resolve the issues between them, whereas the AIRC application was intended to ensure that Mr Visscher did in fact keep working for Teekay. As before the only issue was one of formal status which the parties had managed to avoid in the past in a mutually satisfactory way. As at 26 March 2004 Mr Visscher had been paid by Teekay for March as if he were a continuing employee on temporary leave only from a Teekay ship, there being no indication of him returning the payment on the basis that he was not a continuing employee. Instead, Mr Visscher attended a meeting with Teekay on that day to see if a resolution could be reached. That Teekay considered that Mr Visscher had not made any binding decision is clear from the statement at that meeting of Mr Parmeter that Mr Visscher’s email was “effectively notice of resignation from Teekay. However, if you change your mind, Teekay would have no objection to you withdrawing your resignation and continuing to sail with Teekay” (at [31]). Whatever the legal niceties about the effectiveness of a resignation immediately or on notice or otherwise, the real point is that Teekay did not see Mr Visscher as having done anything irrevocable. Teekay had paid Mr Visscher as a continuing employee for March and was effectively letting him know it considered that the employment relationship would continue. It does not matter, for this purpose, that Teekay had in law constructively dismissed Mr Visscher with effect from 3 March 2004 because on that date Mr Visscher had done all he needed to in order to accept the repudiation unequivocally and irrevocably. The point is that this is a legal conclusion apparent only by way of hindsight. The conduct of the parties at the time suggests that it was convenient for them both to proceed on the basis that nothing irrevocable had been done. If Mr Visscher truly believed that he no longer an employee of Teekay then numerous questions arise. For example why did he not demand the payment of his entitlements some time in March and April 2004? Why did he not return the money paid to him in March and April 2004 by way of monthly salary or offer to do so in exchange for the payment of entitlements on ceasing employment? Why was he seeking a meeting and willing to meet on 26 March 2004 despite having taken a position on another ship? Why at the end of the meeting on 26 March 2004 did he say “if they could sort out their differences he was even prepared to sail on the Samar Spirit when the master left”? (at [33]). Why did he write on 29 March 2004 offering to withdraw his AIRC application on the basis that (at [34]):
My understanding now is that at 3 March 2004, the day I deemed my employment to be terminated, I was listed as continuing sailing as Chief Officer, which of course does away with any question of my employment being terminated by reason of a demotion. I think that it would have been better for all concerned if I had been told about that earlier in the piece, but the Company remained silent on the point and I knew nothing different.
133 It is convenient for Mr Visscher now to insist that he had unequivocally and irrevocably accepted Teekay’s repudiation of his employment contract on 22 February 2004 and that everything that happened later was an attempt to see if a new employment relationship could be established but that is not how it appeared at the time. Mr Visscher’s conduct, in context, was such as to allow and encourage Teekay to believe that Mr Visscher remained in its employ after 3 March 2004. The subsequent correspondence resulting in the “without prejudice” arrangement into which the parties entered on 7 April 2004 was nothing more than the culmination of a course of dealing which was, first, consistent with the parties having managed to reach mutually satisfactory solutions to the problem of Mr Visscher’s formal status since September 2001 and, second, consistent with the brinksmanship in which they were both involved since Mr Visscher told Teekay he would no longer sail as first mate on the Samar Spirit.
134 It is for these reasons that I consider that Teekay has established that there was as at 3 March 2004 and until 1 June 2004 a reasonable dispute as to its liability to pay Mr Visscher his full entitlements on discharge. Teekay reasonable believed that Mr Visscher had not in fact been discharged on 3 March 2004. It reasonably believed that Mr Visscher was temporarily on leave from one of its ships. As such, Teekay reasonably believed it had no obligation to pay Mr Visscher his entitlements on discharge under s 75 of the Navigation Act. Mr Visscher’s conduct on and from 22 February 2004 contributed to Teekay’s belief and thus contributed to it being a reasonable belief.
135 I am not persuaded that the dispute only became reasonable on 7 April 2004 when Teekay and Mr Visscher entered into the “without prejudice” arrangement. Everything that happened after 22 February 2004 was leading up to that kind of arrangement and both parties were obviously hoping that just such an arrangement could be reached. In these circumstances, I consider that the dispute was reasonable from the outset. The hoped-for arrangement became impossible on 1 June 2004 when Mr Visscher told Teekay he had accepted employment elsewhere. Even then, Teekay (consistent with all of its earlier conduct) took it upon itself to check with Mr Visscher that he truly would not be returning to the Broadwater. Once Mr Visscher gave that confirmation Teekay thereafter arranged to pay Mr Visscher his full entitlements on discharge which was done on 4 June 2004. It is also relevant that Teekay had no reason not to pay out Mr Visscher had it truly believed his employment was at an end on 3 March 2004. Equally, it had no reason to continue to pay Mr Visscher’s monthly salary when he was not actually working in March and April 2004 unless it truly believed he was still employed at that time. All of the circumstances to which I have referred make its belief a reasonable one, with the consequence that at all times between 3 March 2004 and 4 June 2004 Teekay reasonably believed it had no liability to pay anything to Mr Visscher other than what it in fact paid. It necessarily follows that the delay in payment between 3 March 2004 and 4 June 2004 was due to a reasonable dispute as to liability for wages.
136 It follows from this that the conclusions the primary judge were right and the appeal must be dismissed. Mr Visscher should pay Teekay’s costs of the appeal.
137 I otherwise agree with the reasons for judgment of Rares J concerning the balance of the issues in the appeal. Further, if my conclusion that any delay in the payment of Mr Visscher’s wages was due to a reasonable dispute as to liability for the wages which existed from 3 March 2004 is incorrect then, consistent with the reasoning above and the conclusions of Rares J, I am satisfied that any delay in the payment of Mr Visscher’s wages thereafter was due to a reasonable dispute as to liability for the wages which existed from 7 April 2004. I agree also with the conclusions of Rares J consequential on this finding including his Honour’s calculations of the amount owed to Mr Visscher and the limitation on pre-judgment interest which his Honour proposes, as well as the proposed orders as to costs.
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I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. |
Associate:
Dated: 13 February 2014
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IN THE FEDERAL COURT OF AUSTRALIA IN ADMIRALTY |
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NEW SOUTH WALES DISTRICT REGISTRY |
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GENERAL DIVISION |
NSD 1929 of 2012 |
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ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
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BETWEEN: |
TIMOTHY VISSCHER Appellant |
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AND: |
TEEKAY SHIPPING (AUSTRALIA) PTY LTD Respondent |
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JUDGES: |
RARES, JAGOT AND BROMBERG JJ |
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DATE: |
13 FEBRUARY 2014 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
BROMBERG J:
138 I have had the benefit of reading the reasons for judgment of Rares J. I gratefully adopt his Honour’s description of the relevant legislative scheme, the relevant facts and the summary given of the primary judge’s reasons for judgment. I also gratefully adopt and apply his Honour’s helpful categorisation of the substantive issues raised for decision on appeal. I will order my reasons by reference to that categorisation.
The reasonable dispute and repudiation issues
139 As the reasons of the primary judge and those of Rares J have explained, Mr Visscher’s initial employment with Teekay came to an end on 3 March 2004 on the basis of Mr Visscher’s acceptance of Teekay’s repudiation of his contract of employment. It follows that Mr Visscher was entitled to be paid his wages for accrued leave as well as any outstanding ordinary wages on his discharge on 3 March 2004. That payment was required by s 75(1) of the Navigation Act 1912 (Cth).
140 Where wages due are not paid at the requisite time (on discharge) in accordance with s 75, s 78 of the Navigation Act penalises an employer for its delay in paying the wages due by requiring that the seaman’s wages continue to run (at double rates) until “the time of the final settlement”. A number of exceptions are identified by s 78. Relevantly, Teekay’s failure to pay Mr Visscher his outstanding wages on 3 March 2004 may have been excused if Teekay had established that “the delay [was] due … to a reasonable dispute as to liability for the wages”.
141 That exception is focused upon the basis for the delay, namely, whether the delay “is due to” a reasonable dispute. It follows that to fall within the exception, Teekay needed to first establish that at the time the payment was due (3 March 2004), an actual dispute existed as to Teekay’s liability to pay Mr Visscher his wages. For the reasons given by the primary judge at [223], the primary judge was right to conclude that there was a dispute as at 3 March 2004 as to whether Mr Visscher’s employment had come to an end and thus whether on that day, Teekay was liable to pay Mr Visscher’s outstanding wages including his accrued leave entitlements.
142 However, to fall within the terms of the relevant exception Teekay also had to establish that the dispute that then existed was “a reasonable dispute”. Read in its context, what that stipulation required was that Teekay establish that the dispute it then raised as to its liability to pay the wages, was supported by reasonable grounds.
143 Whether the dispute was supported by reasonable grounds is to be assessed objectively on the basis of the circumstances then existing and relied upon by the employer to resist the payment. That is because the relevant exception is focused on an actual dispute, not on a theoretical dispute never raised. It was therefore necessary for Teekay to establish that the basis on which it actually relied to resist making the payment to Mr Visscher was reasonable.
144 The primary judge’s conclusion that a reasonable dispute existed, was not founded upon any basis relied upon by Teekay at the time Teekay resisted paying Mr Visscher. There was no evidence that at that time, Teekay believed it was entitled to reject Mr Visscher’s assertion that he had been constructively dismissed because, by operation of the Teekay Shipping Australia / AMOU (Deck Officers) Sea-going Officers Agreement 2001 (“the Certified Agreement”), Teekay was bound to treat him as a second mate and not a chief officer. Whilst a legal view to that effect was taken by the Australian Industrial Relations Commission in Visscher v Teekay Shipping (Australia) Pty Ltd (2006) 157 IR 7 and the Full Court in Visscher v Australian Industrial Relations Commission (2007) 170 IR 419 (but later corrected by the majority in Visscher v Giudice (2009) 239 CLR 361), that view was not part of the objective facts in existence at the time that Teekay resisted paying Mr Visscher’s wages. That legal view was not therefore capable of supporting the reasonableness of Teekay’s resistance to paying Mr Visscher his wages because it formed no actual part of that resistance. In my respectful view, the primary judge erred in that respect.
145 Teekay’s reason for resisting the making of payments due to Mr Visscher upon the termination of his employment, was that his employment had not been terminated and was still on foot. The basis for Teekay’s resistance was initially set out in Mr Scott’s letter of 24 February 2004 which responded to Mr Visscher’s 22 February 2004 email in which Mr Visscher asserted that by demoting him Teekay had constructively terminated his contract of employment.
146 There were two grounds given in Mr Scott’s letter to support the position taken by Teekay that Mr Visscher had not been constructively dismissed. The first was that Mr Visscher “had never been graded Chief Officer in Teekay”. That assertion was patently untrue and could not have provided a reasonable basis for Teekay’s dispute as to its liability to pay.
147 The second basis was that any demotion in rank did not constitute a constructive dismissal. For the reasons given by Rares J by reference to the judgment of the majority in Giudice, this ground could not have provided a reasonable basis upon which Teekay could have resisted paying Mr Visscher his wages.
148 The facts also suggest that a third basis was relied upon by Teekay for resisting payment. This was that Teekay was not satisfied that Mr Visscher intended to end his employment with Teekay. In this respect Mr Scott’s letter of 24 February 2004 said that Teekay was treating Mr Visscher’s email of 22 February 2004 as a resignation but that Teekay sought Mr Visscher’s confirmation. The evidence relevant to Teekay’s position in this respect is conveniently set out in the following passage of the primary judge’s reasons for judgment at [158]-[159]:
Mr Parmeter, who had seen and vetted the letter [of Mr Scott of 24 February 2004] before it was sent, said that he had experience of seafarers making threats in relation to their employment to achieve a particular outcome. As Director of Human Resources, he said, his practice was not to accede to these tactics. He said he required Mr Visscher to take a positive step to confirm his intention to end the employment. In cross-examination he confirmed this was the company’s intention:
MR PARMETER: Well, my recollection is that we see this – what was happening – as a threat of resignation and we wanted to be clear that you intended to go ahead with it.
MR VISSCHER: Can you tell the court how you intend to be clear?
MR PARMETER: By having the sentence at the end of the letter requiring you to respond to our letter.
As he did not take that step, Mr Parmeter said he was satisfied that Mr Visscher’s “threat to resign” was an empty one.
149 It was unreasonable for Teekay to take the position that unless Mr Visscher acknowledged that he had resigned, it would regard his employment as continuing. By his email of 22 February 2004, Mr Visscher had clearly informed Teekay that he considered that by demoting him, Teekay had constructively dismissed him and that therefore his employment was terminated upon his discharge from the Broadwater. There was no history of Mr Visscher making empty threats to end his employment. There was no need for Mr Visscher to take any further positive step to confirm his position that the contract had ended and no reasonable basis existed for Teekay to require him to do so.
150 Mr Visscher’s statement that his proposed demotion was unacceptable, that it constituted a constructive dismissal and that he considered his employment to be terminated, was a sufficiently clear and unequivocal acceptance of Teekay’s repudiation. No particular form of words is required to be communicated when an innocent party accepts a repudiation. It is sufficient if the innocent party makes it unequivocally clear that he or she is treating the agreement as being at an end: see Ryder v Frohlich [2004] NSWCA 472 at [117]-[120] (McColl JA, with whom Hodgson and Ipp JJA generally agreed).
151 Not only was an acknowledgment from Mr Visscher that he had resigned inconsistent with his position and unnecessary, the making of it would have significantly prejudiced Mr Visscher’s position. The jurisdiction of the Commission to have entertained Mr Visscher’s application claiming an unfair dismissal was dependent upon the existence of a dismissal at the initiative of the employer: s 170CE(1) of the Workplace Relations Act 1996. A resignation would have denied Mr Visscher the right to agitate an unfair dismissal application and obtain relief in the form of either compensation, reinstatement or both. Whether deliberate or not, Teekay’s position unjustifiably required Mr Visscher to give up his right to apply to the Commission in exchange for his termination payment.
152 Despite there being no need to do so, Mr Visscher did take further positive steps to confirm his position that the employment had ended. By letter of 8 March 2004, Mr Visscher replied to Mr Scott’s correspondence of 24 February 2004. In that letter he set out in some detail the factual basis upon which he relied to contend that his employment had been terminated. On the same day Mr Visscher told Teekay that he had been notified that afternoon that he would be departing the next day to “travel overseas for an imprecise time”. Whilst that comment was made in the context of Mr Visscher suggesting that an urgent conference be convened in order to avoid litigation, it must have been reasonably clear to a person in Teekay’s position that Mr Visscher did not consider himself to be in Teekay’s employ. Furthermore, on the following day (9 March 2004) Mr Visscher lodged with the Commission an application for relief in relation to the termination of his employment. In that application he stated that the employment had been terminated on 3 March 2004 and claimed that the termination was harsh, unjust or unreasonable.
153 Mr Visscher’s position that the employment had ended could hardly have been made clearer. Teekay’s refusal to recognise Mr Visscher’s intent in the absence of a clear resignation was in effect an attempt to have Mr Visscher concede that his repudiatory conduct, rather than that of Teekay, had resulted in the termination of Mr Visscher’s employment.
154 In the absence of a reasonable basis for contending that it had not repudiated Mr Visscher’s contract, Teekay’s insistence upon a resignation or some further confirmation from Mr Visscher that he intended to end the employment was not a reasonable basis for disputing Teekay’s liability to pay Mr Visscher’s wages.
155 It is not to the point that the evidence suggests that both Teekay and Mr Visscher were open to the possibility that they may resolve their differences and that as a consequence Mr Visscher would continue to be employed by Teekay. The mere possibility that what had been done could be undone by agreement was not a reasonable basis upon which Teekay could resist making the payments that were due upon discharge.
156 For those reasons, I respectfully agree with Rares J that Teekay’s delay in paying Mr Visscher was not due to a reasonable dispute as to liability for wages.
The casual issue
157 Clause 24.1 of the Certified Agreement provided that:
24.1 Where an officer is employed on a casual basis (ie. not made permanent) they shall be paid a loading of 6.7% of their salary.
158 The primary judge correctly observed at [191] that the Certified Agreement provided for only two classes of employees. Where an officer is not employed on a permanent basis the officer is deemed by clause 24.1 to be employed on a casual basis and is entitled to a loading on the salary payable of 6.7%. The distinction drawn by clause 24.1 is between a permanent or ongoing employee and a temporary employee
159 Mr Visscher’s entitlement to the casual loading provided by clause 24.1, depended upon whether he could establish that his employment on the second Broadwater voyage was other than on a permanent or ongoing basis. Mr Visscher contended that his facsimile to Mr Parmeter of 7 April 2004 and Mr Parmeter’s reply, evidenced an agreement to an appointment for a fixed term of about 6 weeks rather than an appointment to ongoing employment.
160 The determination of this issue turns on the correct characterisation of the without prejudice agreement made on 7 April 2004 by the exchange between Mr Visscher and Mr Parmeter. The primary judge held that on its proper construction the agreement between the parties was that Mr Visscher would sail the Broadwater for the voyage on the same terms as he had previously sailed. That is, as a member of Teekay’s permanent staff at the same salary as he had previously been paid.
161 In my view, the primary judge correctly construed the agreement made. By that agreement the parties agreed to reinstate Mr Visscher’s employment with Teekay without prejudice to their competing positions as to the seniority of the position he held and without prejudice to their competing positions as to whether Mr Visscher’s prior employment had or had not been terminated.
162 Given that Mr Visscher’s prior employment had in fact been terminated, the legal effect of the without prejudice agreement was to create a new employment but on the without prejudice basis that the prior ongoing employment was resumed and would continue at least for the 6 weeks of the second voyage on the Broadwater and in the hope that in the interim a resolution of the issues between Mr Visscher and Teekay may be arrived at. As such, there was no intent to change the nature of Mr Visscher’s employment from permanent to that of a casual or temporary employee. To the contrary, the parties’ actions evinced an intent that Mr Visscher be engaged on the same terms as those previously applicable to him. In those circumstances, the casual loading provided for by clause 24.1 of the Certified Agreement was inapplicable.
163 The primary judge’s rejection of Mr Visscher’s contention that he was employed as a casual employee on the second Broadwater voyage supported her Honour’s rejection of Mr Visscher’s claim that ss 75 and 78 of the Navigation Act were enlivened when Mr Visscher was discharged from the Broadwater.
164 Despite Mr Visscher’s contentions on the appeal, the primary judge was right to conclude that Mr Visscher was not discharged from the Broadwater for the purposes of s 75. That conclusion follows from the conclusion that the relevant employment was ongoing and not casual and the operation of s 6(4C) of the Navigation Act. Further, insofar as Mr Visscher’s claim of an underpayment of wages for the second voyage was based on a failure by Teekay to pay him a casual loading, that claim was also correctly rejected by the primary judge because, for the reasons I have indicated, Mr Visscher was not entitled to be paid a casual loading.
The quantum issue
165 In the light of my conclusions about the applicability of s 78 of the Navigation Act to Mr Visscher’s discharge on 3 March 2004, I consider that from 3 March 2004, Mr Visscher became entitled to the penalty which s 78 imposes.
166 The primary judge very helpfully determined the total value of Mr Visscher’s claim on the assumption that there was no reasonable dispute as to liability and that beyond his claim for wages due on 3 March 2004, Mr Visscher was also entitled to double wages during the period 3 March 2004 to 4 June 2004.
167 I respectfully agree with the primary judge’s findings that by 4 June 2004, Mr Visscher had been fully paid his outstanding wages and that the “final settlement” of those outstanding wages was achieved by that time.
168 The primary judge accepted Mr Visscher’s claim that as at 3 March 2004 he was owed three days of ordinary wages and 49 days wages for accrued leave.
169 After his discharge from the Broadwater on 3 March 2004, Teekay continued to pay Mr Visscher his full monthly salary. In particular it did so on 12 March 2004 and 14 April 2004. That occurred despite Mr Visscher’s employment having ended on 3 March 2004 and his further employment (on the second Broadwater voyage) having only commenced on 8 April 2004. The primary judge found that 35 days of wages were paid by Teekay whilst Mr Visscher was not in its employment. The primary judge regarded that payment as part payment of the 49 days of wages for leave outstanding as at 3 March 2004, so that only 14 days of wages for leave remained to be paid. On 4 June 2004 Teekay paid Mr Visscher the 49 days of outstanding wages for accrued leave, albeit at the rate applicable to a second mate and not a chief officer. The primary judge accepted that the chief officer’s rate was the applicable rate but reasoned that the shortfall in the payment of outstanding leave (together with the three days ordinary wages outstanding as at 3 March 2004) were covered by the 35 days of wages received by Mr Visscher whilst not in Teekay’s employment.
170 In essence, the primary judge determined that by 4 June 2004, Mr Visscher had been paid more than he was due because he was paid a salary in March and April 2004 as if his employment had continued throughout that period.
171 Mr Visscher contended that the primary judge erred because the payment made by Teekay on 4 June 2004 was not a payment for the purposes of the Navigation Act, the Certified Agreement or his contract. As a consequence, he contended that the totality of the wages which were due on 3 March 2004 remain unpaid. He characterised the payment made on 4 June 2004 as a gift. He also contended that because in an earlier application made by Teekay to strike out his Statement of Claim, Teekay had argued that no entitlement to accrued leave arose from the Certified Agreement, the 4 June 2004 payment could not be regarded as a payment for accrued leave.
172 Mr Visscher’s contentions are misconceived. Mr Visscher received a range of benefits which the primary judge was entitled to take into account as the payment of outstanding wages. Firstly, he received a payment for 35 days of wages. Secondly, he received a payment on 4 June 2004 which included an amount referable to outstanding leave owed to him.
173 Whatever Teekay’s view may have been as to the source of any entitlement Mr Visscher had, each of those benefits were paid as wages owed. There is no basis in the evidence for any suggestion that the payments were made for a purpose other than the payment of wages to Mr Visscher. Consequently, the benefits provided to Mr Visscher were of the same character as the wages outstanding and due to Mr Visscher on 3 March 2004. In those circumstances, the primary judge was entitled to regard those benefits as reducing the wages owed to Mr Visscher which were outstanding as at 3 March 2004.
174 That reasoning is consistent with the principles applied by courts in an action for wrongful dismissal when reducing the sum of damages awarded to an employee because collateral benefits were provided by an employer to the employee upon termination: see Irving M, The Contract of Employment (LexisNexis Butterworths, 2012) at [14.119]-[14.120].
175 Mr Visscher also contended that the primary judge was wrong to conclude that the “final settlement” of his outstanding wages occurred on 4 June 2004. Mr Visscher contended that on the proper construction of s 78 of the Navigation Act, “final settlement” refers to the point in time when the seaman has been paid both the wages that were due on discharge as well as the penalty payable under s 78. If that construction is correct, there was no “final settlement” on 4 June 2004 and the wages owed to Mr Visscher are yet to be finally settled.
176 The word “wages” is used on four occasions by s 78 and it is apparent that the word is not used consistently but takes its meaning from its particular context. When used on the first and fourth occasions, the context makes it clear that the term refers only to those wages not paid in accordance with s 75 which, as s 75 itself specifies, are the wages due at the time of the seaman’s discharge. When “wages” is used by s 78 on the second occasion, the context makes it apparent that what is being referred to is not the wages due at the time of discharge in accordance with s 75, but “wages” that are deemed to become due by the operation of s 78 as a penalty for the non-payment of the s 75 wages. The crucial question is what was intended by the use of the word “wages” on the third occasion in s 78 in the expression “final settlement of his or her wages”.
177 It is arguable that the word “wages” was there used to refer to both the wages owing in accordance with s 75 and the wages that are deemed to be payable as a penalty under s 78. However, by reference to both the text of s 78 and its underlying purpose, the better view is that the wages referred to are the wages outstanding under s 75.
178 It is the fact that the s 75 wages are outstanding which triggers the penalty provided for by s 78 which then runs until “final settlement”. The obvious purpose of the imposition of a penalty under s 78 is to induce the payment of the s 75 wages. That purpose is achieved upon the payment of the s 75 wages. It is likely that in that context what was intended to be the subject of “the final settlement” was the wage debt which triggered the penalty rather than any debt created by the imposition of the penalty. Consistently with the view taken by the primary judge at [269], in the absence of clear words, it ought not be presumed that s 78 was intended to impose a penalty upon the non-payment of a penalty and that a ship owner continue to be penalised despite the wages owed in accordance with s 75 having been paid.
179 Mr Visscher also challenged the primary judge’s quantification of the wages owed to him by reference to his contention that he should have been paid $2,931.04 more in respect of 120 days leave that was only paid to him at the second officer rate. I agree with Rares J, for the reasons his Honour has given, that Mr Visscher should be held to his pleaded claim.
180 The primary judge was correct to conclude that in the absence of a reasonable dispute, Mr Visscher was entitled to be paid wages at double rates for 93 days from 3 March 2004 until 4 June 2004. Her Honour calculated that Mr Visscher was therefore entitled to $53,764.23, being 93 days’ pay at the double rate of $578.11 per day.
181 Mr Visscher challenged that quantification on the basis that the primary judge failed to apply the correct daily rate. For the reasons expressed by the primary judge at [270]-[272], I consider that the primary judge applied the correct daily rate.
The exemption issue, the construction issue and the implied repeal issue
182 Teekay contended that the primary judge was wrong to conclude that an exemption under s 78 of the Navigation Act was not enlivened by the conduct of Mr Visscher. Relevantly, Teekay contended that the failure of Mr Visscher to promptly agitate his claim for outstanding wages was a “delay…due to the seaman’s act or default” within the meaning of s 78.
183 The primary judge dealt with that issue at [210]-[219]. In my view, Teekay has not demonstrated any error in the primary judge’s reasoning. In particular, I respectfully agree with the primary judge that the “seaman’s act or default” with which the exemption in s 78 is concerned, does not include the failure of a seaman to agitate his or her claim in the early part of the limitation period provided by s 37 of the Admiralty Act 1988 (Cth), rather than later within that period as was here the case.
184 Furthermore, for the reasons set out at [245]-[249] of the primary judge’s reasons for judgment, I consider the primary judge correctly rejected Teekay’s attempt to attribute its delay in paying Mr Visscher to another “cause not attributable to the wrongful act or default of the owner or master of the ship”. Beyond those matters, no other basis was raised by Teekay on the appeal which was capable of disturbing the primary judge’s conclusion that in the absence of a reasonable dispute, Mr Visscher was entitled to double wages from 3 March 2004 until 4 June 2004.
185 As to the construction issue and the implied repeal issue raised by Teekay, I respectfully agree with the conclusion reached by Rares J for the reasons his Honour has given.
conclusion
186 For those reasons, I would allow the appeal, set aside the orders made by the primary judge and enter judgment for Mr Visscher in the sum of $53,764.23 together with interest from the date that Mr Visscher instituted the proceeding. I agree with Rares J that directions should be made for the filing and exchange of submissions on the question of costs.
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I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. |
Associate:
Dated: 13 February 2014
