FEDERAL COURT OF AUSTRALIA

Lambley v DP World Sydney Limited [2013] FCA 4

THE COURT ORDERS THAT:

1.    The application be dismissed.

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

REASONS FOR JUDGMENT

1    On 1 August 2011 DP World Sydney Limited (“DP World”) dismissed Steven Lambley for misconduct after 30 years of service. Mr Lambley claimed his dismissal was unfair and applied to Fair Work Australia (“FWA”) for a remedy. Deputy President Sams heard the application and found in Mr Lambley’s favour, ordering that he be reinstated with continuity of service and partial payment of lost remuneration. DP World successfully applied to the Full Bench of FWA for permission to appeal and persuaded the Full Bench to set the decision aside. Now Mr Lambley applies for writs of certiorari and mandamus to quash the decision of the Full Bench and require it to re-hear and determine the appeal according to law. It is common ground that to succeed he must show that the decision was infected by jurisdictional error.

2    In the affidavit filed in support of the application Mr Lambley claimed that the Full Bench made the following errors which are said to be jurisdictional in nature:

(1)    It erroneously imposed constraints and/or limitations on the unfair dismissal jurisdiction of FWA;

(2)    It misunderstood the nature of the error it had to identify in order to confer jurisdiction on the Full Bench on appeal; and

(3)    It misconceived its duty, identified the wrong issue, applied the wrong test and/or asked the wrong question in the (purported) exercise of its jurisdiction.

3    In broad terms, then, the issues are whether the Full Bench erred in any of these respects and if so, whether the error or errors go to jurisdiction.

Factual background

4    Mr Lambley was employed by DP World as a Grade 5 stevedore at the Port Botany Terminal. DP World had a policy which stated that fighting on site and the use of abusive or threatening language or physical force with the intent to harass, victimise, coerce or injure was conduct that could lead to suspension or dismissal. On the night of 5 June 2011 Mr Lambley was filmed at the Terminal by closed circuit television cameras viciously assaulting a fellow employee, Peter Smith. The antecedent circumstances are uncontroversial. Mr Smith had a long history of abusive, threatening and bullying behaviour towards Mr Lambley and other employees. In the proceeding before the Deputy President Mr Lambley gave uncontradicted evidence that Mr Smith had repeatedly threatened that he would “cave his head in”. The assault followed a heated verbal altercation in the canteen while Mr Lambley was waiting to start his shift in which Mr Smith goaded him into meeting outside for a fight in 10 minutes time. Mr Lambley left the canteen and waited in the car park for about nine minutes, left the car park to go to the toilet and returned to wait for Mr Smith. The Full Bench described what happened next:

When Mr Smith exited the premises Mr Lambley approached him quickly with his clenched fists raised. Mr Lambley threw the first punch. Mr Smith did not fight back or raise his hands, and during the entire altercation, he did not throw any punches. Mr Lambley punched Mr Smith again in the face with force, got him into a headlock and punched him 2-3 more times, grabbed him by the shoulders and threw him to the ground, and while Mr Smith was on the ground, moved around his body and kicked him in the head as hard as he could. He then tried to pull Mr Smith up to continue to fight. At that stage, about 10.30pm the fight broke up and Mr Lambley re-entered the DP World premises.

5    DP World carried out an investigation into the incident and decided to dismiss both Mr Lambley and Mr Smith. The two men applied for reinstatement but Mr Smith’s application was settled on terms the evidence does not disclose.

6    In his application to FWA Mr Lambley challenged the decision to dismiss him as unfair because of “intense preconceived provocation and goading” by Mr Smith over a number of years and immediately before the assault and because DP World had kept Mr Smith in employment despite a long history of “adverse conduct in the workplace towards fellow employees”. Mr Lambley contended that the dismissal was unfair, too, because DP World had not considered all the circumstances. He said that those circumstances included:

that the incident was an isolated one, that Mr Lambley in nearly 30 years of service has not had any similar events recorded against him, and the adverse effect and negative life position the dismissal leaves Mr Lambley and his family in, renders the dismissal in all the circumstances harsh, unjust and unreasonable.

The jurisdiction of FWA

7    The Fair Work Australia Act 2009 (Cth) (“FW Act”) entitles a person who has been dismissed to apply to FWA for an order under Div 4 of Pt 3–2 for the grant of a remedy (s 394). FWA may order a remedy if it is satisfied that the person was protected from unfair dismissal and has been unfairly dismissed (s 390).

8    The stated objects of Pt 3–2 are to establish a framework for dealing with unfair dismissal that balances the needs of business with the needs of employees, to establish quick, flexible and informal procedures for dealing with unfair dismissals that address the needs of both parties, and to provide remedies if a dismissal is found to be unfair (with an emphasis on reinstatement). The express intention behind these procedures and remedies is to afford the parties “a fair go all round”: see FW Act, s 381.

9    A person has been unfairly dismissed within the meaning of the FW Act if FWA is satisfied that he or she had been dismissed, the dismissal was harsh, unjust or unreasonable, not consistent with the Small Business Fair Dismissal Code, and not a genuine redundancy: FW Act, s 385.

10    The only issue for the Deputy President in the present case was whether he was satisfied that Mr Lambley’s dismissal was harsh, unjust or unreasonable. In considering that issue he was obliged to take into account eight criteria listed in s 387 of the FW Act. They are:

(a)    whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b)    whether the person was notified of that reason; and

(c)    whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d)    any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e)    if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f)    the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g)    the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h)    any other matters that FWA considers relevant.

11    A person who is aggrieved by a decision of FWA may appeal the decision “with the permission of FWA” (s 604(1)). The jurisdiction of the Full Bench is defined by the terms of ss 400 and 607. The Full Bench is constrained from granting permission to appeal unless it considers that it is in the public interest to do so (s 400(1)) and, to the extent that the appeal concerns a question of fact, the appeal can only be made on the ground that the decision involves a significant error of fact (s 400(2)). If permission is granted, the Full Bench may confirm, quash or vary the decision under appeal, make a further decision for itself or refer the matter to a member for further determination (s 607(3)).

The decision of DP Sams

12    The Deputy President found that Mr Lambley had been set up by Mr Smith with the express intention of procuring his dismissal. He referred to Mr Smith’s history of threatening and bullying behaviour and the curiosity that, having goaded Mr Lambley into a fight, Mr Smith threw no punches himself. He accepted evidence that about a month before the incident Mr Smith had vowed to “get” Mr Lambley and “fuck him up”. He found that Mr Smith had engaged in a pattern of reprehensible behaviour towards fellow employees. He considered that Mr Smith’s behaviour during the fight was contrived in order to create the false impression that he was an innocent victim. Evidence was given, which the Deputy President found significant, that the CCTV footage skipped about 20 seconds at the very time that it was said that Mr Smith had feigned a punch. The Deputy President thought this raised questions about whether the footage had been manipulated to erase Mr Smith’s punch.

13    The Deputy President accepted that Mr Lambley’s conduct provided a valid reason for his dismissal. Nevertheless, he found the termination was harsh, unjust and unreasonable because he considered it to be “an utterly flawed and unbalanced response” to the incident. He said it was “grossly unfair” for DP World to rely on the CCTV footage to dismiss Mr Lambley while ignoring “the bizarre and unexplained circumstances” in which that footage was created. He held that DP World’s decision was “coloured and ultimately tainted by a perception … that there would be trouble if one of them was reinstated, but not the other”. In the process, he found that DP World had failed to weigh up (properly or at all) the motive, provocation and past history of Mr Smith and Mr Lambley’s “long and relatively unblemished service”, Mr Lambley’s honesty during the investigation and his “remorse and contrition”.

The appeal to the Full Bench

14    An appeal to the Full Bench is in the nature of a rehearing, so that the decision of the Deputy President could only be disturbed if error could be demonstrated (see Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [18], [32] per Gleeson CJ, Gaudron and Hayne JJ, at [75] per Kirby J). The parties accepted as much. They also accepted that the Deputy President’s decision was a discretionary one, involving as it did the exercise of value judgments (Coal and Allied Operations at [19]), with the result that the kind of error that had to be shown to warrant intervention by the Full Bench was the kind described in House v The King (1936) 55 CLR 499 at 504-5, although they differed about the extent to which the principles in the case applied to appeals in FWA.

15    Before the Full Bench DP World claimed that the decision of the Deputy President was manifestly unjust having regard to Mr Lambley’s admitted wilful and serious misconduct. In its notice of appeal it contended that it was in the public interest for leave to be granted to appeal the decision because it involved serious errors of fact that should be corrected and it was also counter-intuitive. It further contended that the decision was of general application to all workplaces and that it was important to send a strong message to employees never to take matters into their own hands and that fighting in the workplace is not to be condoned or excused. Moreover, it asserted that the decision was inconsistent with earlier decisions on the same subject.

16    There were three grounds of appeal:

(1)    the Deputy President erred in finding that Mr Lambley was set up;

(2)    the Deputy President erred in failing to find that the gravity of the misconduct outweighed all other factors; and

(3)    the Deputy President erred in ordering reinstatement.

17    In support of the second ground DP World submitted that, having regard to the Deputy President’s findings as to the very serious nature of Mr Lambley’s conduct, the conclusion that the assault amounted to a valid reason for his dismissal, and the terms of DP’s disciplinary policy against fighting, the Deputy President’s conclusion that the dismissal was nevertheless harsh, unreasonable and unjust was “contrary to authority and constituted an error because it was a decision that was unreasonable and plainly unjust”.

18    The Full Bench considered only this ground, upholding DP World’s submission, and finding it unnecessary in these circumstances to consider the remaining grounds.

19    The Full Bench began its consideration by examining the limits on its jurisdiction. It referred to s 400 of the Act. It cited a passage from the decision in GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 setting out the circumstances in which the public interest might be attracted. It noted that the grounds of appeal challenged aspects of the decision which are discretionary in nature, so that the principles in House v The King had to be applied to the determination of whether the Deputy President had fallen into error.

20    After summarising the parties’ arguments, the Full Bench then referred to the objects of Pt 3–2 of the Act, and, in particular, the need to ensure a “fair go all round”. It noted that s 387 of the Act sets out the factors the tribunal must take into account and stressed that all those factors had to be given “due weight”. It observed that an appeal bench will only “in unusual circumstances overturn a discretionary decision which does not take into account or gives weight to all the factors required, and in which the error is alleged to be one of failure to appropriately balance those factors”. It went on to find that this was such a case. It held that the decision of the Deputy President was unreasonable and plainly unjust, in substance because (it found) he had failed to apply an approach that was consistent with the proper principles and because he did not appropriately balance all the circumstances or give due weight to the factors in s 387 of the FW Act. Its reasons are largely encapsulated in six paragraphs, which it is convenient to set out in full.

[26]    [The factors in s 387] although not an exhaustive list, are a strong indicator of the elements of a fair dismissal. In circumstances where a valid reason is found to exist, and procedural fairness has been afforded, significant mitigating circumstances are required in order to lead to a conclusion that the termination is nevertheless harsh, unjust or unreasonable. In order to give those factors appropriate weight, they need to be seen as such and balanced against factors that might otherwise lead to the characterisation of the dismissal as harsh, unjust or unreasonable. The balancing of factors involves discretion, but a conclusion must be reached after giving full effect to the findings on all relevant circumstances. Different employers may approach a misconduct matter differently and take different disciplinary actions. A tribunal member determining whether a dismissal is harsh, unjust or unreasonable does not stand in the shoes of the employer and determine what action they would take in the circumstances. Only if the employer’s disciplinary actions are judged to lie outside the description of a reasonable and just response to the relevant conduct and are disproportionate, should a finding of unreasonableness or injustice be made.

[27]    This present matter concerns fighting by Mr Lambley. The principles outlined above establish that fighting at the workplace usually amounts to a valid reason for dismissal, an employer has every right to establish policies against fighting and an employer has every right to ensure compliance with those policies by dismissing employees who are found to have engaged in fighting absent some extenuating circumstances. These principles are consistent, for example, with regulation 1.07 of the Fair Work Act Regulations 2009, which relevantly defines ‘serious misconduct’ as including conduct that causes serious and imminent risk to the health or safety of a person, or assault. Importantly, the authorities also establish that the dismissal of an employee found guilty of fighting at the workplace can only be found to be harsh, unjust or unreasonable in extenuating circumstances.

[28]    The Deputy President in the extracts set out above paid due regard to the circumstances of the employee including his long service. We accept that much of this analysis is appropriate. He is also critical of the decision-making process of the employer, the failure to fully consider allegations of Mr Smith’s bullying, and the failure to have regard to allegations that Mr Smith set up Mr Lambley. We do not consider that these matters were soundly balanced by the Deputy President by way of a finding that they amount to significant mitigating factors that render Mr Lambley’s otherwise serious misconduct excusable. Such an approach does not give appropriate weight to the seriousness of the conduct, nor the need for employers to be able to establish policies against fighting, and to enforce such policies when they are breached. It does not accord a fair go all round to each side. Nor do we consider that these factors are capable of amounting to such mitigating circumstances. Mr Lambley may have been goaded into a fight, but he engaged in it willingly and after contemplation. He had other choices and he chose not to follow them. He chose to fight. In the fight he was the aggressor - indeed the sole aggressor. He cannot be described as acting in self defence. He did not simply throw a single unwise punch. He continued to assault Mr Smith when Mr Smith was not fighting back and when Mr Smith was on the ground, moved into a position to kick him in the head as hard as he could. On the scale of physical altercations Mr Lambely’s (sic) conduct was very high on the scale.

[29]    If Mr Smith had set up Mr Lambley to engage in this conduct in front of CCTV cameras, it does not in any way excuse Mr Lambley’s conduct or suggest that an employer cannot reasonably discipline an employee for the conduct in which they have clearly engaged. We do not consider that this possibility, even if correct, is capable of outweighing the otherwise inherent fairness of dismissing an employee for engaging in a serious assault after following a procedurally fair investigation.

[30]    If the history of the conflict between the two involved bullying and intimidation by Mr Smith, this did not excuse the conduct. An employer is entitled to implement its disciplinary policies in a way designed to ensure employees comply with its standards of behaviour.

[31]    In our view the Deputy President did not adopt an approach consistent with these principles and his conclusion was unreasonable and plainly unjust as a result. In our view the Deputy President has appropriately had regard to the circumstances of the dismissed employee including his long service, and other matters. In many respects his careful analysis of those circumstances is useful and appropriate. However, he has not appropriately balanced all the circumstances of the matter nor given due weight to the factors in s.387. Counsel for DP World has established that the Deputy President’s decision in this respect involves an error of the House v R kind.

(Citations omitted.)

21    The Full Bench proceeded to find that the result below was unjust and to hold that it was in the public interest that decisions in unfair dismissal cases be consistent with established principles and involve the sound exercise of the discretions vested in the tribunal. Consequently, it granted permission to appeal, allowed the appeal and quashed the decision of the Deputy President.

Did the Full Bench fall into error?

22    It is well established that in an appeal from a discretionary decision it is not enough that the appellate tribunal would have reached a different conclusion. Nor is it sufficient that the appellate tribunal disagrees with the weight to be given to the factors the original decision-maker took into account. Thus, the mere fact that the appellate tribunal considers that the primary decision-maker gave insufficient weight to something will not justify setting aside a discretionary decision. Mr Lambley understandably relied heavily on these principles. He argued that in reality all the Full Bench was doing was expressing a different view from the view expressed by the Deputy President. He particularly relied on what Stephen J said in Gronow v Gronow (1979) 144 CLR 513 at 519 that “[w]hen no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight”.

23    There can be no doubt that the Full Bench emphatically disagreed with the Deputy President. But I do not accept that the Full Bench decided to set aside the Deputy President’s decision simply because of a difference of opinion.

24    The reference to Stephen J’s remarks in Gronow was a selective one. Absent the context, it is potentially misleading. This is the fuller exposition:

The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight. …

25    The principle is that an appellate tribunal cannot substitute its own view for the decision of the primary decision-maker where it considers that insufficient weight has been given to a relevant consideration unless it comes to the clear conclusion that “for that reason” the discretion has been wrongly exercised: Gronow at 534–5, 537 per Aickin J. As Kitto J said in Lovell v Lovell (1950) 81 CLR 513 at 533 in a passage cited by Aickin J with approval in Gronow:

The proposition that the appeal court will consider whether ‘no sufficient weight’ has been given to relevant considerations is not inconsistent with the principle that the appeal court does not deal with the appeal as if it were exercising the original jurisdiction; even if it considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it comes clearly to the conclusion for that reason that the discretion has been exercised wrongly.

(Emphasis added.)

26    In my view this is what the Full Bench in substance decided. FWA is an administrative tribunal. Its reasons are not to be “construed minutely and finely with an eye keenly [focussed on] the perception of error” (Collector of Customs v Pozzolanic Enterprises Pty Ltd (1994) 43 FCR 280 at 287 and Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272). Yet in the clinical way in which Mr Lambley’s counsel dissected the reasons it seems to me that this was what they were inviting the Court to do. On a fair reading of its reasons the Full Bench was unequivocally of the opinion that, by not giving due weight to “the factors in s 387”, the discretion must have miscarried. In essence, it took the view that, had he given the appropriate weight to those factors, only one outcome was possible.

27    Mr Lambley submitted, however, that the findings of the Full Bench are affected by error because they were made through the prism of the wrong test. He submitted that the Full Bench erroneously relied on three “purported principles”.

28    First, Mr Lambley argued that the Full Bench imposed a test (in the second sentence of [26] of its reasons) that, absent significant mitigating circumstances, where a valid reason for dismissal is found to exist and procedural fairness has been afforded, dismissal will not be harsh, unjust, or unreasonable. Mr Lambley further submitted that it was wrong in principle to give the valid reason criterion greater emphasis or focus than the other matters or to first form the view that a valid reason is established and then considered whether the other matters in s 387 “displaced that view” (Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78 (“Coal & Allied v Lawler”)).

29    Secondly, Mr Lambley argued that the Full Bench held that only where an employer’s disciplinary actions are judged to lie outside the description of a reasonable and just response to the relevant conduct and are disproportionate should a finding of unreasonableness or injustice be made. In other words, the Full Bench was imposing fetters on the jurisdiction of FWA not found in the Act itself.

30    Thirdly, Mr Lambley submitted that the Full Bench applied a purported principle (in [27] of its reasons) that the dismissal of an employee found guilty of fighting at the workplace can only be found to be harsh, unjust or unreasonable in “extenuating circumstances”.

31    As the third “purported principle” is said to be related to the first it is convenient to deal with them together.

32    I do not think it is fair to say that the Full Bench gave greater emphasis or focus to the valid reason criterion over any other factor in s 387 or first formed the view that a valid reason was established and then considered whether the other factors in s 387 “displaced that view”. But I do think there is merit in Mr Lambley’s other complaints.

33    The statement in the second sentence of [26] of the reasons of the Full Bench appears to be at odds with the proposition that a dismissal may be “harsh in its consequences for the personal and economic situation of the employee” (Byrne v Australian Airlines Ltd (1995) 185 CLR 410 (“Byrne”)) and if it purports to be a proposition of law, it deflects attention from the terms of the statute itself. The Full Bench recognised in [25] that all the factors in s 387 must be given due weight but in the paragraphs that follow, it appears to discount as a matter of principle any weight being given to factors not expressly mentioned in the section, despite the presence of para (h).

34    DP World accepted that it was an overstatement on the part of the Full Bench to say (as it did in [27]) that the authorities establish that the dismissal of an employee found guilty of fighting at the workplace “can only be found” to be harsh, unjust or unreasonable in extenuating circumstances. It is certainly not an accurate reflection of what Moore J said in AWU–FIME Amalgamated Union v Queensland Alumina Limited (1995) 62 IR 385, which is one of the two authorities to which the Full Bench referred. There, his Honour observed that generally the attitude of industrial tribunals tends to be that, absent extenuating circumstances, a dismissal for fighting will not be regarded as harsh, unjust or unreasonable. Even if this could be said to be the effect of the authorities, it was not a binding rule which could be applied to confine the discretion of FWA more narrowly than the Parliament intended (Norbis v Norbis (1985) 161 CLR 513 at 537 per Brennan J).

35    It is possible that in these passages the Full Bench was doing no more than indicating that in practice an employee found to have been fighting at the workplace will rarely be able to establish that his or her dismissal was harsh, unjust or unreasonable. But the language it used suggests that it was doing more than this.

36    The second “purported principle” (contained in [26] of the reasons of the Full Bench) is also a sweeping statement. The Full Bench cited Byrne and Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 (“Australian Meat Holdings”) for it. DP World submitted that the Full Bench was merely paraphrasing what was said in those cases. I disagree. In Byrne, which was concerned with whether the dismissal of a number of employees was harsh, unjust or unreasonable in breach of the provisions of a clause in an industrial award, McHugh and Gummow JJ observed at 465:

[i]t may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

37    In Australian Meat Holdings the Full Bench extracted this passage. It also provided a reasonably accurate summary of it. In this case, however, the Full Bench did neither. In particular, it omitted any reference to the personal and economic consequences for the employee, one of the bases upon which Mr Lambley had challenged his dismissal.

38    The Full Bench concluded at [31] that the Deputy President fell into appealable error because he did not adopt an approach consistent with “these principles”. It is not entirely clear what the Full Bench meant by “these principles” but it must at least have included the three propositions called into question by Mr Lambley. In enunciating these propositions and in reaching its conclusion relying on them, the Full Bench itself erred.

39    The more difficult question is whether the errors of the Full Bench go to jurisdiction. Mr Lambley argued that the errors are jurisdictional because they led to a misunderstanding about the nature of the error which had to be identified in order to confer jurisdiction on the Full Bench in the appeal. He argued that by constraining the exercise of the unfair dismissal jurisdiction, the Full Bench failed to apply itself to the question which the Act prescribes and therefore constructively failed to exercise jurisdiction.

40    In Coal and Allied Operations at [31] Gleeson CJ, Gaudron and Hayne JJ explained that a Full Bench will have fallen into jurisdictional error only if it misconceived its role, misunderstood the nature of its jurisdiction, misconceived its duty, failed to apply itself to the question prescribed by ss 400 and 607 of the Act (cf. s 45 of the Workplace Relations Act 1996 (Cth)) or misunderstood the nature of the opinion it was to form. In that case Giudice J, the President of the Australian Industrial Relations Commission (“AIRC”) (the predecessor of FWA), sitting as a member of the Full Bench, had found error on the part of a member of the AIRC (Boulton J). The majority of the High Court said that had Giudice J been wrong in that view, the error would have been within the jurisdiction of the Full Bench. To similar effect in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [163] Hayne J explained (in a passage cited with approval by the plurality in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 at [66]):

[t]here is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.

41    In Re Commonwealth; Ex parte Marks (2000) 75 ALJR 470 McHugh J heard a notice of motion for an extension of time to apply for writs of certiorari and mandamus directed to the Full Bench of the AIRC. The Commonwealth had terminated the applicant’s employment. The applicant applied to the AIRC for relief against the termination pursuant to s 170CE of the Workplace Relations Act. The Commissioner determined that the termination was not harsh, unjust or unreasonable. The applicant applied for an extension of time to appeal to the Full Bench, which the Full Bench granted, but it refused leave to appeal. His Honour dismissed the applicant’s notice of motion. His Honour explained at [23]–[24] that the role of the Full Bench on the appeal was to ascertain whether the Commissioner had made an error in dismissing the applicant’s application. He had no doubt the Full Bench understood this was its function, it considered the applicant’s grounds of appeal, and concluded that, in respect of each of them, the Commissioner made no relevant error. His Honour said that if it was in error to come to this conclusion, the error was within jurisdiction.

42    Here, too, the Full Bench expressly recognised the limits of its functions and powers. It correctly understood that its functions were to decide whether it was in the public interest to grant permission to appeal and whether the Deputy President had made an error of the kind described in House v The King. It considered a ground of appeal which, if successful, would determine the outcome of the appeal. It concluded that the particular ground should succeed because the Deputy President had made a relevant error. In coming to that conclusion, it was not doing something it lacked the power to do. It was deciding matters within its jurisdiction, albeit incorrectly.

43    Yet, Mr Lambley also submitted that the Full Bench misunderstood the test in House v The King and the extent to which it applied to appeals to the Full Bench and that this was an error that went to jurisdiction. I reject the submission.

44    In the well-known passage in House v The King Dixon, Evatt and McTiernan JJ said (at 504-5):

It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

45    Relying on the fact that in Coal and Allied Operations Gleeson CJ, Gaudron and Hayne JJ referred to the first two sentences (“the first limb”) but not to the third and fourth (“the second limb”), Mr Lambley at first contended that in an appeal from a federal industrial tribunal, the second limb might not apply. Recognising that this was not the approach of the Full Court in Coal and Allied v Lawler, Mr Lambley sought to distinguish Coal & Allied v Lawler on the ground that the point was not argued there. In oral submissions he retreated from this position and ultimately abandoned it, and rightly so. If the principles in House v The King govern appeals from discretionary decisions in FWA, as the parties accepted they did, there is no sound reason why only some of those principles should apply. I do not believe that by not quoting the entire passage the plurality in Coal and Allied Operations was intending to suggest that the second limb of House v The King did not apply to federal industrial tribunals.

46    Mr Lambley argued, however, that the Full Bench wrongly applied those principles. He contended that House v The King only authorises interference with a discretionary decision on the ground that it was unreasonable and plainly unjust where it does not appear how the result was reached. Yet here the Full Bench considered that the result had been reached by the Deputy President failing to “soundly balance” the relevant factors. Mr Lambley contended that, as it was apparent how the result was reached, the decision could not be set aside on this ground. This argument must also be rejected. It is too prescriptive an approach. It is at odds with the statements to which I have referred in Lovell and Gronow. It also misinterprets what was said in House v The King. The starting point is that an appellate court cannot interfere with a discretionary decision unless “some error has been made in exercising the discretion”. The list of matters in the statement that follows in House v The King is illustrative of errors of this kind. As Campbell JA observed in Durham v Durham (2011) 80 NSWLR 335 at [73]:

While the passage … from House v The King has been cited in Australian appellate courts repeatedly in the last 85 years, it is the thoughts that it conveys about the permissible scope for appellate review of discretionary decisions, rather than the precise words itself, that are important. What a ground of appeal against a discretionary decision must identify in the decision appealed against is an error that, in substance, falls within the test laid down in House v The King.

(Emphasis added.)

47    I do not believe that in the opening sentence of [30] of its reasons, which was the foundation for Mr Lambley’s submission, the Full Bench was doing anything different from what Kitto J sanctioned in the passage from Lovell to which I referred at [25] above.

48    Moreover, the approach Mr Lambley urged is illogical. Why should an appellate tribunal be able to set aside a discretionary decision as unreasonable or plainly unjust when it does not know how the primary decision maker reached the result but not be able to do so when it thinks it does?

49    Finally, Mr Lambley submitted, in effect, that even if the Full Bench validly found appealable error it failed to complete its jurisdictional task because, having found error, it did not go on to exercise the discretion for itself.

50    DP World submitted otherwise, arguing that at [27] of its reasons the Full Bench found that there was a valid reason for the dismissal, examined Mr Lambley’s conduct at [28] and at [29] and [30] determined that there were no mitigating factors that would lead to a conclusion that the termination was harsh, unjust or unreasonable. In the passages to which DP World referred, however, the Full Bench was explaining how the discretion of the Deputy President miscarried. It is clear that the Full Bench took the view that any proper exercise of the discretion would have resulted in only one answer, namely, that the dismissal was not harsh, unjust or unreasonable. At [33] it described the way in which the Deputy President had exercised his discretion as “unjust”. But the Full Bench did not purport to exercise the discretion for itself. It made no order disposing of the application. I therefore accept Mr Lambley’s submission that the Full Bench did not go on to exercise the discretion for itself. Yet, this was not a jurisdictional error as Mr Lambley contended because s 607 of the Act does not require the Full Bench to exercise the discretion for itself. It could have done so (see s 607(3)), but it did not. Consequently, mandamus does not lie: Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at [70]. The decision of the Deputy President having been quashed, the application now needs to be determined afresh.

51    The application should therefore be dismissed. Neither party applied for costs. It was common ground that s 570 of the FW Act applies and that none of the circumstances that would enable the Court to make a costs order applies here (see, for example, Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia (No 2) [2012] FCA 419). Accordingly, there will be no order as to costs.

Associate:

Dated:    10 January 2013