Federal Court of Australia

Australian Municipal, Administrative, Clerical and Services Union v Hobsons Bay City Council [2021] FCA 806

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be stayed until the matter AG2020/4136 - Application by Hobsons Bay

City Council is heard and determined by the Fair Work Commission, or until further order of the Court.

2.    The Respondent is to notify the Court within 3 working days of the application referred to in order 1 above being determined by the Fair Work Commission.

3.    Pursuant to r 1.34 of the Federal Court Rules 2011, compliance with r 16.32 be dispensed with, and the Respondent not be required to file a Defence until further order of the Court.

4.    Costs are reserved.

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

REASONS FOR JUDGMENT

ANASTASSIOU J:

Introduction

1    By interlocutory application dated 25 February 2021, Hobsons Bay City Council seeks a temporary stay of a proceeding in this Court (VID 31 of 2021) (the Substantive Proceeding), pending the determination of an application by Hobsons Bay to the Fair Work Commission. That application was brought pursuant to s 217 of the Fair Work Act 2009 (Cth), to vary the Hobsons Bay City Council Enterprise Agreement 2016-2019 to remove a contended ambiguity or uncertainty regarding redundancy entitlements under the Enterprise Agreement (the s 217 Application). Hobsons Bay also seeks an order that it not be required to file a Defence until the determination of the s 217 Application, unless the Court otherwise orders.

Hobsons Bay’s Submissions

2    Hobsons Bay contends it is desirable for parties to industrial agreements to “avail themselves of a facility” afforded by s 217 before seeking enforceable orders or declarations of rights under an industrial agreement which is arguably uncertain or unambiguous: see, eg, Bassett v Coles Myer Logistics Pty Ltd [2003] FCA 551 at [5] (Ryan J). Given the powers of the Commission under s 217 of the Act to vary agreements, and the fact that the Substantive Proceeding concerns the interpretation of clauses which ought to be varied pursuant to s 217 of the Act, Hobsons Bay submits that the effect of the s 217 Application may potentially render the Substantive Proceeding otiose and would, in any event, materially affect Hobsons Bay’s Defence in the proceeding.

3    Hobsons Bay submits that it would be unjust for the Court to determine the rights of the parties based on an industrial instrument which it either knows, or suspects, does not reflect the parties’ intentions in making the agreement, citing Warramunda Village Inc v Pryde [2002] FCAFC 58; 116 FCR 58 at [61] (Finkelstein J). Further, Hobsons Bay submits that the costs borne by both parties in resolving the Substantive Proceeding will be lessened if a temporary stay of the Substantive Proceeding is granted, consistent with the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth).

4    Hobsons Bay submits that it is likely that the Commission will determine the application imminently and therefore failure to grant the stay would merely create continued uncertainty.

5    Hobsons Bay’s application is supported by an affidavit of Ross Levin sworn on 25 February 2021 and written submissions dated 4 March 2021 and 6 April 2021.

Australian Municipal, Administrative, Clerical and Services Union’s Submissions

6    Australian Municipal, Administrative, Clerical and Services Union (ASU) objects to the stay being granted for the following reasons:

(1)    the Substantive Proceeding is narrow in scope, and can be heard and determined quickly;

(2)    the Substantive Proceeding was ready to be filed in September 2020 and may have already been heard had it not been for the delay on the part of Hobsons Bay. ASU submits that Hobsons Bay gave the appearance of cooperating and progressing the Substantive Proceeding, when it appears to have instead been preparing an application to the Commission;

(3)    the s 217 Application is properly characterised as being for the purposes of allowing Hobsons Bay to better its position in the Substantive Proceeding by changing the respective rights of the parties: see, eg, McGarry v Boonah Clothing Pty Ltd (1988) 49 IR 66; 80 ALR 284 at 77-78 (Gray J), cited with approval in Finance Sector Union of Australia v Commonwealth Bank of Australia [2003] FCA 51 at [7] (Moore J);

(4)    the possibility of conflicting findings is immaterial in the sense that it is the Court’s task, not the Commission’s, to ascertain the actual and true meaning of the relevant clauses in the Enterprise Agreement: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; 275 FCR 385 at [66] (Flick, White and Perry JJ);

(5)    it would not be unjust for the Court to determine the rights of the parties even if it knows or suspects the relevant clause to be ambiguous; and

(6)    each of the factors in s 37M(2)(a)-(e) of the Federal Court Act count against a stay. A stay will only delay the determination of the Substantive Proceeding and its efficient disposal, and, is inconsistent with the disposal of the Substantive Proceeding in a timely manner.

7    ASU relied on an Affidavit of Angus Macdonald Mackenzie affirmed on 19 March 2021 and written submissions dated 19 March 2021.

Background

8    The central dispute in the Substantive Proceeding is whether certain former employees of Hobsons Bay are entitled to redundancy payments in circumstances where their employment was terminated on or about 30 June 2019 in a “transfer-of-business” context.

9    On 9 September 2020, ASU gave Hobsons Bay a copy of a draft Statement of Claim. The claimed purpose of providing the draft was to engage in discussions, with a view to resolving or narrowing the issues in dispute. The pleadings were drafted such that foundational facts were neutrally pleaded. The central allegation in the dispute related to a matter of construction and was that pleaded at [22] of the Statement of Claim:

On its proper construction, clause 17.7 of Part B of the Agreement is inconsistent with the clauses in Part A of the Agreement pleaded in Parts B.2.2 and B.2.3 above, and therefore the clauses in Part A prevail by operation of Part A, clause 6.

10    It was estimated by ASU that the matter could be heard and resolved in half a day to a full day on the premise that there would be limited evidence required and cross-examination unlikely.

11    On 21 September 2020, the solicitors for Hobsons Bay, Mills Oakley, advised the solicitors for ASU, Maurice Blackburn Lawyers that they would respond to the draft within a week. A month later, Mills Oakley was yet to respond but advised that they were speaking with counsel and would respond in a week. On 26 November 2020, Mills Oakley explained that the delay in responding was due to difficulty obtaining instructions from the senior management of Hobsons Bay as the local council elections were being held over that period. Accordingly, on 14 December 2020, ASU conveyed that it was inclined to file the Substantive Proceeding on 11 January 2021.

12    On 23 December 2020, Hobsons Bay applied to the Commission pursuant to s 217 of the Act to vary the Enterprise Agreement to remove an ambiguity or uncertainty. The s 217 Application sought to vary clauses in the Agreement:

(1)    to clarify that the redundancy entitlement in Annexure A of Part A is subject to the exclusions under cl 17.7 in Part B of the Enterprise Agreement; and

(2)    such variations would have retrospective effect from 6 February 2017.

13    On 23 December 2020, Mills Oakley provided Maurice Blackburn a letter stating, amongst other things, that:

(1)    ASU should refrain from filing the Substantive Proceeding until the s 217 Application is heard and determined by the Commission; and

(2)    if ASU proceeds with the filing of the Substantive Proceeding, Hobsons Bay will seek a temporary stay of such proceeding until the s 217 Application is heard and determined.

14    On 1 February 2021, Maurice Blackburn sent a letter to Mills Oakley attaching the Originating Application and Statement of Claim filed by ASU. On 3 February 2021, Mills Oakley accepted service on behalf of Hobsons Bay.

15    On 25 February 2021, Hobsons Bay filed the present application and I made timetabling orders on 3 March 2021 in relation to the stay application.

Consideration

16    In ResMed Limited v Australian Manufacturing Workers’ Union (No 2) [2015] FCA 537; 243 FCR 366, Perry J set out the relevant principles regarding the Court’s power to stay proceedings:

34.    It is well established that the Court has an extensive jurisdiction to stay proceedings in the interests of justice as a matter of judicial discretion: Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562 at [53] (Dodds-Streeton J); Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd [2005] FCA 1135; (2005) 66 IPR 506 at [5] (Sundberg J).

…

48.    …The question of whether a stay should be granted must be resolved in the exercise of discretion having regard to the potential impact of the applications before the FWC on the utility of the relief sought in these proceedings.

49.    In this regard, Bennett J in Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745 identified a number of guidelines as generally apposite to assist in identifying how the discretion to grant a stay should be exercised. In that case, the respondents sought a stay of proceedings in the Court which sought the revocation of a patent pending the decision of the Australian Patent Office on whether to grant or refuse a patent the subject of a notice of opposition filed by Apotex.

50.    The guidelines identified by her Honour at [9] included that:

a.    Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court (Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 (Rochfort) at [19]).

b.    It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification of proper grounds (Rochfort at [19]).

c.    The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with (Jefferson Ltd v Bhetcha [1979] 2 All ER 1108 at 1113).

d.    The Court’s task is one of “the balancing of justice between the parties”, taking account of all relevant factors (Jefferson at 1113).

e.    Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (Jefferson at [1113]).

 51.    I agree with and adopt that approach.

52.    Relevant also, as her Honour accepted, is s 37M, FCA Act providing that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. That overarching purpose includes the following objectives:

   (a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

   (c)    the efficient disposal of the Court’s overall caseload;

   (d)    the disposal of all proceedings in a timely manner;

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

17    A highly relevant factor identified by ASU is its expectation, and the Court’s duty to ensure, that the cases which are brought within its jurisdiction are to be determined. That is undoubtedly a significant, if not paramount, factor that must inform the judicial exercise of discretion in this circumstance: Finance Sector Union of Australia v Commonwealth Bank of Australia [2003] FCA 51 at [9] (Moore J).

18    On the other hand, there are a range of factors that, having regard to the efficient allocation of the Court’s resources, as well as making allowance for the prospect of success of the s 217 Application, favour a stay of the Substantive Proceeding. Delay, in an unorthodox sense, is of particular significance in this application. The relevant delay is not the common example of a failure to assert rights in a timely manner. Rather, any relative prejudice should be seen as lying in the time, or delay, between the making of the present application and when the s 217 Application may be heard relative to the Substantive Proceeding.

19    At the hearing on 28 June 2021, I asked counsel for Hobsons Bay, Ms Campbell, to provide an update on the status of the s 217 Application. Ms Campbell informed the Court that both parties had filed evidence and submissions and that the Commission had listed the matter for a case management conference on Friday, 2 July 2021. Counsel envisaged that the application would be listed for hearing at the case management conference.

20    Given the proximity of the case management conference before the Commission, I adjourned the interlocutory application part heard on the basis that the parties were to inform the Court of the outcome of the case management conference as soon as practicable. This course was appropriate in circumstances where Mr Hartley, counsel for ASU, conceded, correctly in my view, that the s 217 Application was reasonably arguable.

21    On 2 July 2021, my Chambers received an email from Ross Levin of Mills Oakley, a solicitor acting for Hobsons Bay, informing the Court that following the case management conference, the application had been listed for hearing before the Commission on 22 and 23 July 2021 (on an estimate of one and a half days).

22    In Commonwealth Bank of Australia v Finance Sector Union of Australia [2003] FCAFC 212; 124 IR 453 at [11] (Wilcox J), at [31] (Marshall J) and at [37]-[38] (Merkel J), the Full Court considered that where there was no immediate prospect of the Commission dealing with the application to vary the award, the primary judge could not “responsibly have come to any other conclusion” than to dismiss the stay application.

23    In the present application, the Commission will hear the s 217 Application on 22 and 23 July 2021. The Substantive Proceeding will not be heard for many months, given it is in a very early interlocutory stage. In practical terms, the stay applies presently only to the filing of a Defence by Hobsons Bay, as there is no realistic prospect that the Substantive Proceeding may be heard before the s 217 Application is to be both heard and likely, determined.

24    ASU complains, in substance, that it has been played tactically by Hobsons Bay and, but for that, the Substantive Proceeding might conceivably have been heard and determined by now. However, the circumstances of this case are not analogous to that of Warramunda Village, where the applicant’s failure to act expeditiously in seeking relief from the Commission was fatal: Warramunda Village at [19]-[20] (Lee J), [56] (Finkelstein J) and [97] (Gyles J). Hobsons Bay has not waited for the question of construction to be resolved by the Court prior to making its s 217 Application. Further, it did not wait considerable months before filing the stay application. In fact, Hobsons Bay filed its stay application less than a month after ASU filed the Substantive Proceeding.

25    The s 217 Application will be heard on 22 and 23 July 2021. Conversely, the Substantive Proceeding remains at a nascent interlocutory stage. Accordingly, the prejudice that might otherwise flow from the stay of the Substantive Proceeding will not occur in these circumstances.

Disposition

26    For the above reasons, I will stay the Substantive Proceeding.

Associate:

Dated:    15 July 2021