FEDERAL COURT OF AUSTRALIA

Trifunovski v ACE Insurance Limited (No 2) [2012] FCA 937

THE COURT:

1.    Orders that

(a)    order 3 made by Perram J on 13 August 2012; and

(b)    any order the Court may make as to the payment of costs by the respondent to the applicant

and any execution thereof be stayed pending the determination of the respondent’s appeal against the orders of Perram J made on 18 November 2011 and order 3 made on 13 August 2012.

2.    Orders that order 1 only take effect upon the respondent filing on or before 3 September 2012 a notice of appeal against the orders of Perram J made on 18 November 2011 and order 3 made on 13 August 2012.

3.    Orders that, in the event that the respondent files a notice of appeal, the costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012 be costs in the appeal

4.    Orders that, in the event that the respondent does not file such a notice of appeal, the respondent pay the applicant’s costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012.

5.    Orders that the exhibits be returned.

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

THE COURT:

1.    Orders that

(a)    order 1 made by Perram J on 13 August 2012; and

(b)    any order the Court may make as to the payment of costs by the respondent to the applicant

and any execution thereof be stayed pending the determination of the respondent’s appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

2.    Orders that order 1 only take effect upon the respondent filing on or before 3 September 2012 a notice of appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

3.    Orders that, in the event that the respondent files a such notice of appeal, the costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012 be costs in the appeal

4.    Orders that, in the event that the respondent does not file such a notice of appeal, the respondent pay the applicant’s costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012.

5.    Orders that the exhibits be returned.

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

THE COURT:

1.    Orders that

(a)    order 1 made by Perram J on 13 August 2012; and

(b)    any order the Court may make as to the payment of costs by the respondent to the applicant

and any execution thereof be stayed pending the determination of the respondent’s appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

2.    Orders that order 1 only take effect upon the respondent filing on or before 3 September 2012 a notice of appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

3.    Orders that, in the event that the respondent files a notice of appeal, the costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012 be costs in the appeal

4.    Orders that, in the event that the respondent does not file such a notice of appeal, the respondent pay the applicant’s costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012.

5.    Orders that the exhibits be returned.

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

THE COURT:

1.    Orders that

(a)    order 1 made by Perram J on 13 August 2012; and

(b)    any order the Court may make as to the payment of costs by the respondent to the applicant

and any execution thereof be stayed pending the determination of the respondent’s appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

2.    Orders that order 1 only take effect upon the respondent filing on or before 3 September 2012 a notice of appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

3.    Orders that, in the event that the respondent files such a notice of appeal, the costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012 be costs in the appeal

4.    Orders that, in the event that the respondent does not file such a notice of appeal, the respondent pay the applicant’s costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012.

5.    Orders that the exhibits be returned.

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

THE COURT:

1.    Orders that

(a)    order 1 made by Perram J on 13 August 2012; and

(b)    any order the Court may make as to the payment of costs by the respondent to the applicant

and any execution thereof be stayed pending the determination of the respondent’s appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

2.    Orders that order 1 only take effect upon the respondent filing on or before 3 September 2012 a notice of appeal against the orders of Perram J made on 18 November 2011 and order 1 made on 13 August 2012.

3.    Orders that, in the event that the respondent files such a notice of appeal, costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012 be costs in the appeal

4.    Orders that, in the event that the respondent does not file such a notice of appeal, the respondent to pay the applicant’s costs of and incidental to the interlocutory application filed on 13 August 2012 and the hearing on 28 August 2012.

5.    Orders that the exhibits be returned.

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

REASONS FOR JUDGMENT

1    Last year, I delivered judgment in these various proceedings, in which I concluded that the agents were employees of the then respondent, Combined: ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532. Subsequently, following further argument, I awarded each of the applicants amounts of compensation for unpaid annual leave and long service leave: ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793. At the same time, I imposed a civil penalty. Orders were not made at the time that the judgment was delivered, but instead a direction was made that orders be brought in giving effect to the reasons for judgment, including an order granting leave to appeal. On 13 August, orders of that kind were brought in. Also on 13 August, I delivered further judgment recalling part of the judgment in ACE v Trifunovski (No 2): Trifunovski v ACE Insurance Limited [2012] FCA 858.

2    The respondent, who for the purposes of these reasons I shall call Combined, has not yet taken up the grant of leave to appeal, but it is anticipated and I accept that it is very likely that that grant will be availed of. In anticipation that there will be an appeal, Combined now seeks to stay the execution of the orders which would provide for compensation and for the payment of the civil penalty, pending the outcome of the appeal proceedings. The principles governing the grant of such a stay are not in dispute. They are to be found in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 693-695 per Kirby P, Hope and McHugh JJA.

3    Those principles may be summarised this way:

(1)    where there is a risk that an appeal will prove abortive if the appellant succeeds and a stay is not granted, the Court will normally exercise its discretion in favour of granting a stay;

(2)    the onus is upon the applicant to demonstrate a proper basis for a stay;

(3)    it is a matter of discretion whether the Court grants a stay and if so as to the terms that would be fair;

(4)    what is important in considering whether or not a stay ought to be granted is the balance of convenience and the competing rights of the parties before it; and

(5)    it is not necessary that special or exceptional circumstances should be made out; it is sufficient for the applicant to demonstrate a reason or an appropriate case to warrant the exercise of discretion in its favour.

4    In addition to those principles, Mr Leopold SC, who appeared for Combined with Mr Glover of counsel, pointed to the New South Wales Court of Appeal’s decision in TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381 at 385 [15], where a Court of Appeal comprising Handley, Beazley and Stein JJA noted that:

This Court regularly stays execution on judgments pending an appeal where there is a risk that the plaintiff will be unable to repay the money without difficulty or delay if the appeal were to succeed.

5    Mr Leopold put a case for a stay on the basis that he was not required to show the existence of special or exceptional circumstances and that the material which was available from the agents’ own financial records showed that there was a risk – he put it as high as a significant risk – that if, the agents received the judgment sum, it would be difficult to recover that sum from them in the event that the appeal were successful. He submitted that it was not necessary to go into the merits of the proposed appeal in any detail and that, even so, the appeal was plainly an arguable one.

6    Combined administered, as part of the interlocutory steps leading to the present application, a series of notices to produce directed to the end of identifying and specifying what the financial position of each of the agents was. This was a detailed enterprise and resulted in a lever arch folder of financial records, which together comprise Exhibit 1. I do not propose to go through that material.

7    Mr O’Donnell, for the agents, very properly, if I may say so, conceded that that material showed that it would be difficult for Combined if it were successful on the appeal to recover any moneys which had been paid to them under the judgments. It was a properly made concession because the material shows that the agents are persons of modest means, conducting their affairs in a regular fashion. That being so, though, there is nothing in any of their cases by way of an excess of assets which, in the event that the judgment sums were received and expended on non-enduring items, would provide a buffer which might lessen the concerns of Combined. It seems to me, therefore, that this is a matter which weighs in the balance when one comes to consider where the balance of convenience lies.

8    On the other hand, it is true that the moneys in question have been, if one accepts the agents’ theory of the case, outstanding for a very long period of time. On one view, that may rather tend to suggest that waiting a little bit longer is not the end of the world but, on the other, it can be viewed – as, indeed, Mr O’Donnell submitted – as suggesting that the time had come to pay.

9    I accept, as Mr Leopold submitted, that the capacity of Combined to pay at some later date is not in doubt. As part of the ACE Group, it plainly has sufficient financial resources to do so. I also accept that the proposed appeal is not trivial and indeed it was for those reasons that I granted leave to appeal.

10    The matter which has caused me most concern in this regard is the fact that, in a sense, although the money involved in this litigation in terms of quantum is not trivial, nevertheless – at least from Combined’s perspective – it has perhaps not been the main driver in the litigation. A principal concern in the litigation is the much broader question of whether Combined’s insurance agents are its employees or not and an adverse determination of that issue is likely to have significant implications for the conduct of its Australian operations. Those consequences are, in my opinion, likely to be perhaps of greater significance to it than the sums of money which have been awarded in this litigation. On the other hand, as Mr Leopold correctly submitted, it was not Combined which started the proceedings which bring us here today and it was not its wish to be involved.

11    In all the circumstances, it seems to me that an appropriate exercise of the discretion is that I do grant the stay and I will do so on the terms which are proposed by Mr Leopold in the short minutes of order.

Associate:

Dated:    3 September 2012