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Dalley & Ors v Kelsey & Ors[2019] ICQ 8

Dalley & Ors v Kelsey & Ors[2019] ICQ 8

INDUSTRIAL COURT OF QUEENSLAND

CITATION:

Dalley & Ors v Kelsey & Ors [2019] ICQ 8

PARTIES:

C/2019/14

CHERIE MARIE DALLEY

(first appellant)

RUSSELL BRUCE LUTTON

(second appellant)

STEPHEN FREDERICK SWENSON

(third appellant)

LAURENCE WILLIAM SMITH

(fourth appellant)

PHILIP WAYNE PIDGEON

(fifth appellant)

TREVINA DALE SCHWARZ

(sixth appellant)

JENNIFER RACHEL JULIE BREENE

(seventh appellant)

v

SHARON RAE MARIE KELSEY

(first respondent)

LOGAN CITY COUNCIL

(second respondent)

TIMOTHY LUKE SMITH

(third respondent)

C/2019/15

TIMOTHY LUKE SMITH

(appellant)

v

SHARON RAE MARIE KELSEY

(first respondent)

LOGAN CITY COUNCIL

(second respondent)

CHERIE MARIE DALLEY

(third respondent)

RUSSELL BRUCE LUTTON

(fourth respondent)

STEPHEN FREDERICK SWENSON

(fifth respondent)

LAURENCE WILLIAM SMITH

(sixth respondent)

PHILIP WAYNE PIDGEON

(seventh respondent)

TREVINA DALE SCHWARZ

(eighth respondent)

JENNIFER RACHEL JULIE BREENE

(ninth respondent)

FILE NOS:

C/2019/14 and C/2019/15

PROCEEDING:

Appeal

DELIVERED ON:

2 July 2019

HEARING DATE:

14 June 2019

MEMBER:

Martin J, President

ORDER:

The appeal is dismissed.

CATCHWORDS:

INDUSTRIAL LAW – QUEENSLAND – APPEALS – APPEAL TO INDUSTRIAL COURT – OTHER MATTERS – where the first respondent in both appeals was appointed as CEO of the Logan City Council (the second respondent in both appeals) – where the first respondent subsequently made a Public Interest Disclosure alleging possible misconduct on behalf of the mayor of the Council – where the first respondent commenced proceedings in the Queensland Industrial Relations Commission against the Council and the mayor – where the first respondent’s employment at the Council was terminated as a consequence of a vote of the Council – where the first respondent subsequently amended her application to include the Councillors who voted in favour of her termination as respondents – where the appellants in both appeals were then each charged with fraud – where the hearing in the Commission is on the cusp of conclusion – where the appellants applied for an order staying the proceedings in the Commission until the hearing and determination of the criminal charges – where the Commission dismissed the application – whether the Commission made some error in exercising its discretion – whether the proceedings before the Commission should be stayed

Criminal Code 1899, s 408C

Industrial Relations Act 2016, s 285

Public Interest Disclosure Act 2010, s 48

CASES:

ASIC v Craigside Company Ltd (2013) 93 ACSR 176, cited

ASIC v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487, considered

De Simone v Bevnol Constructions & Developments Pty Ltd (2009) 25 VR 237, cited

Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union & Anor (2015) 323 ALR 294, cited

Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17, cited

House v The King (1936) 55 CLR 499, applied

Macleod v The Queen (2003) 214 CLR 230, cited

McLachlan v Browne (No 9) [2019] NSWSC 10, cited

McMahon v Gould (1982) 7 ACLR 202, followed

R v Dillon; Ex parte Attorney-General (Qld) [2015] QCA 155, cited

R v Ferguson; Ex parte Attorney-General (Qld) (2008) 186 A Crim R 483, applied

Tattsbet Ltd v Morrow (2015) 233 FCR 46, cited

Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation (Cth) (2006) 64 ATR 316, cited

Yuill v Spedley Securities Ltd (in liq) & Ors (1992) 8 ACSR 272, considered

APPEARANCES:

C Massy instructed by McInnes Wilson Lawyers for the appellants in C/2019/14 and the third to ninth respondents in C/2019/15

M Trim and P Kinchina instructed by Gadens Lawyers for the appellant in C/2019/15 and the third respondent in C/2019/14

A Herbert directly instructed by the Logan City Council for the second respondent in both appeals

D Williams of MinterEllison for the first respondent in both appeals

  1. [1]
    On Friday 26 April 2019 each of the appellants in C/2019/14 (the first appeal) were arrested by officers of the Crime and Corruption Commission and charged, under s 408C of the Criminal Code 1899, with fraud.  The charge against each is:

“That between the 9th day of October 2017 and the 8th day of February 2018 at Logan or elsewhere in the State of Queensland, one [name] dishonestly caused a detriment namely the dismissal from employment to Sharon Rae Marie Kelsey and the detriment was of a value of at least $100,000.00”

  1. [2]
    Soon after that the appellants in the first appeal and Mr Luke Smith (who is the appellant in the second appeal – C/2019/15 – and who had also been charged) applied for an order staying the proceedings in the Queensland Industrial Relations Commission[1] until the hearing and determination of the criminal charges against all of the appellants.
  2. [3]
    On 4 June 2019 O'Connor VP dismissed that application.[2]
  3. [4]
    The factual background to this matter is not in dispute. It was summarised in the Vice President’s reasons:
    1. (a)
      Ms Kelsey was appointed as CEO of Logan City Council on 2 June 2017. Ms Kelsey’s contract of employment contained a six-month probation period during which her employment could be ended on two weeks’ notice. The contract had a nominal expiry date of 25 June 2021.
    2. (b)
      On 10 October 2017 Ms Dalley, Ms Schwarz and Mr Smith conducted a performance review meeting with Ms Kelsey. During this meeting, the Councillors present told Ms Kelsey that there were concerns with her performance.
    3. (c)
      On 12 October 2017 Ms Kelsey made a Public Interest Disclosure (PID) to the Logan Council, Minister for Local Government, and to the Crime and Corruption Commission (CCC) alleging possible misconduct on behalf of Mr Smith.
    4. (d)
      After the PID was made the Councillors received legal advice that they could not take the PID into account when considering Ms Kelsey’s employment.
    5. (e)
      On 1 December 2017 Ms Kelsey (the applicant) commenced proceedings against the Council (first respondent) and Mr Smith (second respondent), alleging contraventions of s 285 of the Industrial Relations Act 2016 (Qld) (IR Act) and s 48 of the Public Interest Disclosure Act 2010 (Qld) (PID/2017/3).
    6. (f)
      On 1 February 2018 the applicant was successful in obtaining injunctive orders from the Commission that the second respondent is prohibited from taking part in any resolution by the Council in respect of the applicant’s employment.
    7. (g)
      On 5 February 2018 the CCC wrote to each of the Councillors informing them of the penalties involved in taking action against a person because they had made a PID and advising that they would be investigating any action taken in respect of the applicant’s employment.
    8. (h)
      On 6 February 2018 the applicant’s solicitors wrote to the first respondent asserting that if a Councillor voted for her termination then they would have to individually justify the reason for that decision.
    9. (i)
      On 7 February 2018 the applicant’s employment at the Logan City Council was terminated as a consequence of a vote of the Council. Councillors Dalley, Lutton, Swenson, Smith, Pidgeon, Schwarz and Breene all voted in favour of the termination of her employment. Her employment was brought to an end by the giving of two weeks’ notice.
    10. (j)
      The applicant subsequently amended her application to include the named Councillors as respondents.
    11. (k)
      The substantive hearing commenced on 17 December 2018 with evidence being heard over 15 days concluding on 15 February 2019.
    12. (l)
      Mr Smith did not give evidence but each of the appellants in the first appeal did.
    13. (m)
      The parties filed written submissions and were due to give oral responses to the written submissions on 2 and 3 May 2019.

Ms Kelsey’s claims

  1. [5]
    Ms Kelsey alleges that the appellants (and the Logan City Council) have contravened s 285 of the Industrial Relations Act 2016 (Qld) (IR Act) and s 48 of the Public Interest Disclosure Act 2010 (Qld) (PID Act).
  2. [6]
    Section 285 of the IR Act provides:

“(1) A person must not take adverse action against another person—

  1. (a)
    because the other person—
  1. (i)
    has a workplace right; or
  1. (ii)
    has, or has not, exercised a workplace right; or
  1. (iii)
    proposes to or proposes not to, or has at any time proposed to or proposed not to, exercise a workplace right; or
  1. (b)
    to prevent the exercise of a workplace right by the other person.

Note—

This subsection is a civil penalty provision.

  1. (2)
    A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes to or has at any time proposed to exercise, a workplace right for the second person’s benefit or for the benefit of a class of persons to which the second person belongs.

Note—

This subsection is a civil penalty provision.

  1. [7]
    Section 314 of the IR Act provides for the orders that may be made if contravention is shown:

“(1) Without limiting the commission’s jurisdiction to make orders, the commission may make 1 or more of the following orders on deciding an application mentioned in section 313 

  1. (a)
    an order for reinstatement of the person;
  1. (b)
    an order for the payment of compensation to the person;
  1. (c)
    an order for payment of an amount to the person for remuneration lost;
  1. (d)
    an order to maintain the continuity of the person’s employment;
  1. (e)
    an order to maintain the period of the person’s continuous service with the employer;
  1. (f)
    an order granting an interim or other injunction or make any other order it considers appropriate to prevent, stop, or remedy the effects of, a contravention of this part.
  1. (2)
    A person to whom an order under subsection (1) applies must not contravene a term of the order.

Note—

This subsection is a civil penalty provision.

  1. [8]
    The IR Act provides for a “reverse onus” in cases of this kind in s 306.
  2. [9]
    That section provides:

(1) Subsection (2) applies if—

  1. (a)
    in an application in relation to a contravention of a provision of this part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
  1. (b)
    taking that action for that reason or with that intent would be a contravention of the provision.
  1. (2)
    It is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
  1. (3)
    Subsection (2) does not apply in relation to orders for an interim injunction.”
  1. [10]
    Section 48 of the PID Act provides:

(1) An application for an injunction about a reprisal may be made to the industrial commission if the reprisal—

  1. (a)
    has caused or may cause detriment to an employee; and
  1. (b)
    involves or may involve a breach of the Industrial Relations Act 2016 or an industrial instrument under that Act.
  1. (2)
    The application may be made by—
  1. (a)
    the employee; or
  1. (b)
    an industrial organisation—
  1. (i)
    whose rules entitle it to represent the industrial interests of the employee; and
  1. (ii)
    acting in the employee’s interests with the employee’s consent; or
  1. (c)
    the Crime and Corruption Commission acting in the employee’s interests with the employee’s consent if—
  1. (i)
    the employee is a public officer; and
  1. (ii)
    the reprisal involves or may involve an act or omission that the Crime and Corruption Commission may investigate.
  1. (3)
    The Industrial Relations Act 2016, section 473 applies to the application, but this part prevails if it is inconsistent with that section.
  1. (4)
    If the industrial commission has jurisdiction to grant an injunction on an application under subsection (1), the jurisdiction is exclusive of the jurisdiction of any other court or tribunal other than the Industrial Court.
  1. (5)
    Without limiting this section, the application is an industrial cause within the meaning of the Industrial Relations Act 2016.”

The elements of the s 408C charge

  1. [11]
    As will be apparent later in these reasons, the criminal proceedings against the appellants are at a very early stage. To the extent necessary to understand the matters which have to be proved by the prosecution in such a charge the following may be said.
  2. [12]
    So far as is relevant, s 408C of the Criminal Code provides:

“(1) A person who dishonestly—

  1. (e)
    causes a detriment, pecuniary or otherwise, to any person; or

commits the crime of fraud.

Penalty—

Maximum penalty—5 years imprisonment.

(2A) The offender is liable to imprisonment for 20 years, if, for an offence against subsection (1)

  1. (a)
    the property, or the yield to the offender from the dishonesty, or the detriment caused, is of a value of at least $100,000; or
  1. (b)
    the offender carries on the business of committing the offence.
  1. [13]
    In Macleod v The Queen[3]the High Court (in dealing with a similar provision) said that a trial judge should, when instructing the jury:
    1. (a)
      identify the knowledge, belief or intent which is said to render the relevant conduct dishonest,
    2. (b)
      instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest, and
    3. (c)
      direct the jury that, in determining whether the conduct of the accused was dishonest, the standard is that of ordinary, decent people.[4]
  2. [14]
    The Court of Appeal followed Macleod in R v Dillon; Ex parte Attorney-General (Qld)[5] and said, at [48]:

“ … Queensland Courts must now construe the term ‘dishonestly’ in s 408C as requiring the prosecution to prove only that what the accused person did was dishonest by the standards of ordinary honest people. To secure a conviction, the prosecution need not prove that the accused person must have realised that what he or she was doing was dishonest by those standards.”

An appeal from a discretionary decision – the principles

  1. [15]
    It is not in dispute that the Vice President’s decision required the exercise of a discretion. The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. They are set out in House v The King:[6]
    1. (a)
      It must appear that some error has been made in exercising the discretion.
    2. (b)
      If the decision maker:
      1. acts upon a wrong principle,
      2. allows extraneous or irrelevant matters to guide or affect him or her,
      3. mistakes the facts, or
      4. does not take into account some material consideration,

then the determination should be reviewed and the appellate court may exercise its own discretion if it has the materials for doing so.

  1. (c)
    It may not appear how the decision maker has reached the result embodied in the 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 decision maker. 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. 

The grounds of appeal

  1. [16]
    The grounds of appeal in the first appeal are many and lengthy. The grounds in the second appeal effectively adopt the grounds in the first appeal and add a few more.
  2. [17]
    I will deal with them in detail later but, in summary, the grounds are that the Vice President:
    1. (a)
      failed to apply the principle propounded in ASIC v HLP Financial Planning (Aust) Pty Ltd,[7]
    2. (b)
      failed to take into account the prejudice which would or might be caused by the QIRC determining the same factual questions that a jury would have to consider in a criminal trial,
    3. (c)
      conflated two different issues: the effect of pre-trial publicity and the determination of “precisely the same factual matter that will need to be determined by the jury”,
    4. (d)
      failed to take into account public interest in maintaining the integrity of the criminal justice system,
    5. (e)
      did not find that the prejudice to the appellants outweighed that which would be suffered by Ms Kelsey,
    6. (f)
      failed to accept that it would be unfair for the appellants to be forced to make a decision as to whether they would make submissions in the proceeding without knowing how the prosecution in the criminal trial will put its case,
    7. (g)
      failed to take into account:
      1. that there might be an appeal from the QIRC proceedings,
      2. the evidence which Ms Kelsey would give at a criminal trial,
      3. the potential prejudice to the appellants in combination with the gravity of the potential sentences,
    8. (h)
      the Vice President erred by finding that compensation was not an adequate remedy for Ms Kelsey.

The factors which inform the discretion on a stay application

  1. [18]
    In his decision, the Vice President relied upon the analysis in McMahon v Gould,[8] in which Wootten J collected a number of guidelines (or factors) which may be considered on an application for a stay of proceedings. They are:

“(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court;

  1. (b)
    It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds;
  1. (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;
  1. (d)
    Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
  1. (e)
    The court’s task is one of ‘the balancing of justice between the parties’, taking account of all relevant factors;
  1. (f)
    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;
  1. (g)
    One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused’s ‘right of silence’, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding;
  1. (h)
    However, the so-called ‘right of silence’ does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding;
  1. (i)
    The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;
  1. (j)
    In this regard factors which may be relevant include:
  1. (i)
    the possibility of publicity that might reach and influence jurors in the civil proceedings;
  1. (ii)
    the proximity of the criminal hearing;
  1. (iii)
    the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;
  1. (iv)
    the burden on the defendant of preparing for both sets of proceedings concurrently;
  1. (v)
    whether the defendant has already disclosed his defence to the allegations;
  1. (vi)
    the conduct of the defendant, including his own prior invocation of civil process when it suited him;

(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendan’'s obligation to the plaintiff;

  1. (1)
    In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed.”[9] (citations omitted)
  1. [19]
    Since that exposition a number of courts have considered the continuing applicability of that list of matters. The Victorian Court of Appeal has held that the principles in McMahon govern the grant of a stay in circumstances where there are anticipated or actual criminal proceedings related to the civil proceedings against the applicant.[10]
  2. [20]
    In Yuill v Spedley Securities Ltd (in liq) and Others[11] the majority (Priestly and Meagher JJA) regarded McMahon “as a useful guide to the exercise of the court's discretion in cases of this kind.”[12]
  3. [21]
    But there are decisions in which it has been suggested that some of the factors do not adequately reflect a defendant’s right to silence. For example, in Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union and Another[13] Mortimer J noted that there have been suggestions in some cases that “the principles provide insufficient protection to prospective defendants, in particular because what Wootten J had to say about the right to silence gives insufficient weight to the privilege against self-incrimination, and the indirect or derivative use of evidence in a subsequent criminal proceeding, if there is no stay.”
  4. [22]
    The doubts which have been expressed about the McMahon guidelines are concentrated upon the importance of the “right to silence” and the weight which that should be given in the assessment of prejudice. I deal with that below.

Ground A – the Vice President failed to have regard to and apply the principle propounded in ASIC v HLP Financial Planning (Aust) Pty Ltd.[14]

  1. [23]
    The appellants identify paragraph [58] of the reasons of Finkelstein J in HLP as containing the principle which should have been applied. He said:

“[58] I would sum up the position as I see it as follows. The English and Australian authorities that warn of the dangers of a civil court becoming involved in criminal conduct continue to apply in an appropriate company case. The general rule in a company case is that a civil court will usually be the appropriate court to deal with a contravention of the Corporations Act. But the court should be wary of granting relief, including the grant of a declaration or an injunction, if the case is likely to end up before a criminal court. Ordinarily, a civil court should not intervene in those circumstances unless its failure to do so will result in irreparable injury. That strict rule need not be applied if the case involves undisputed facts and the issue raised gives rise to a question of pure law. Then a declaration can be a very useful remedy. As Barwick CJ said in Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305 that is the kind of case ‘which contributes enormously to the utility of the jurisdiction.’”

  1. [24]
    The first point that should be made about the decision in HLP is that it did not concern an application for a stay of proceedings and, presumably, that is why Finkelstein J did not see the need to consider (or mention) McMahon. Finkelstein J was dealing with the issue of making final declarations following a hearing. In the case before him, ASIC had sought a declaration that a scheme was an unregistered management investment scheme and for an order that it be wound up. ASIC also sought orders against a Mr Berlowitz who was said to have controlled the group operating the scheme. Those orders included a declaration that he operated the illegal scheme and that he carried on a financial services business without the appropriate licence. His Honour identified the real debate in the case as being whether he should consider making a declaration that Mr Berlowitz had operated the scheme in contravention of s 601ED(5) of the Corporations Act and grant perpetual restraining orders against him. He said that he was being asked to make an order in relation to Mr Berlowitz’s alleged criminal conduct. He also identified two features which bore upon his considerations. First, he was told that consideration was being given to whether Mr Berlowitz would be charged with criminal offences and that it was likely that they would be charged upon indictment. Secondly, the evidence upon which ASIC would rely to establish the operation of the unregistered scheme was based substantially on statements made by Mr Berlowitz in an examination conducted under legislation which required him to answer all relevant questions. Any such statements made in response to those questions which might have tended to incriminate him or make him liable to a penalty were not admissible in a criminal proceeding or in a proceeding for the imposition of a civil penalty. As the matter before Finkelstein J was not a civil penalty proceeding those statements could be used against him but could not be used in any later criminal proceeding. That is not a consideration which is present in this case.
  2. [25]
    Finkelstein J conducted a detailed examination of the authorities which have examined the traditional view that civil courts have no jurisdiction to grant relief in aid of or to supplement the criminal law. He then undertook a further examination of what he referred to as the “company cases” on the basis that the Corporations Act “allows, indeed contemplates, the enforcement of most of its provisions (including those creating criminal offences) by a court in the exercise of its civil jurisdiction granting relief by way of injunctions, what are known as ‘civil penalties’ and other remedies appropriate to the circumstances.”[15]
  3. [26]
    He concluded his examination as follows:

“[50] The current regime of corporate regulation is, as the Cooney Committee’s report observed (at 190), characterised by a ‘pyramid of enforcement’. The basic premise is that to deter breaches of the legislation, there should be various levels of enforcement that correspond to the seriousness of the contravention. There are three levels to this pyramid: civil remedies at the base, civil penalties in the middle and criminal sanctions at the top. But it is the court exercising its civil jurisdiction that is the primary means of enforcement. Only the most serious contraventions now end up before a criminal court. Nonetheless when a criminal proceeding is commenced the criminal court should be given (and in many cases is expressly given) priority over civil litigation.

[51] The present case is one where the contraventions of the Corporations Act of which Mr Berlowitz has been accused may result in him being prosecuted for criminal offences. What should happen when a civil court is asked to make a declaration of contravention and to grant an injunction restraining future contraventions when a criminal trial is pending or threatened?”

  1. [27]
    His Honour then considered a number of cases in which declarations that a person had contravened the Corporations Act were granted. He then arrived at paragraph [58] in which he answered the question which he posed at the end of paragraph [51], that is: “What should happen when a civil court is asked to make a declaration of contravention and to grant an injunction restraining future contraventions when a criminal trial is pending or threatened?” In doing so he spoke in terms of a “general rule”, “the court should be wary …”, “ordinarily, a civil court should not intervene …” and so on. Finkelstein J was not purporting to lay down any strict principle. He was setting out a number of guidelines which he drew from the cases he considered. In any event, nothing he said could be regarded as a principle which should be applied on an application for a stay. His analysis was well described by Jagot J in ASIC v Craigside Company Ltd:[16] “the analysis … involves consideration of the underlying principles of the potential problems of hearing and determining civil proceedings when the subject matter of the civil proceedings is or may be the subject of criminal prosecutions.”
  2. [28]
    Finally, in HLP the civil proceedings and the proposed criminal proceedings each concerned an alleged breach of the same section of the Corporations Act. That is not the case here.
  3. [29]
    There was no principle, applicable in these circumstances, enunciated by Finkelstein J which should have been applied by the Vice President.

Ground B – the Vice President failed to take into account a relevant matter being the prejudice that the appellants would suffer from a judicial officer of the State of Queensland determining precisely the same factual question(s) that would fall to be resolved by the jury in their criminal trials.

  1. [30]
    This ground of appeal is based upon an unproved assumption – that in the QIRC proceedings there would be a determination of “precisely the same factual questions that would fall to be resolved by the jury”. This was asserted a number of times but at a very general level. It overlooks a substantial difference between the adverse action proceedings and any criminal proceedings. The issue in the adverse action proceedings revolves around whether the appellants can demonstrate[17] that the action they took was not for one of the reasons set out in s 285 of the IR Act, whereas in any criminal proceeding it will be for the prosecution to prove beyond reasonable doubt that actions taken by the appellants were dishonest by the standards of ordinary honest people. The difference is more than just the different onus in each case. 
  2. [31]
    In the written submissions of all appellants it is put that: “The central question to be resolved in both cases will be whether the [appellants] should be believed as to their reasons for terminating the applicant’s employment.” This misunderstands the nature of the criminal trial which may take place. In any such trial, it is for the prosecution to establish that the appellants acted in a way which brought them within s 408C of the Criminal Code. The appellants need not give evidence and, even if they do, the jury will be directed in accordance with the law in terms similar to this:

“It is not a question of your making a choice between the evidence of the prosecution’s principal witness or witnesses, and the evidence of the defendant (or defendants) (and/or their witnesses).  The proper approach is to understand that the prosecution case depends upon you the jury accepting that the evidence of the prosecution’s principal witness (or witnesses) was true and accurate beyond reasonable doubt, despite the evidence by the defendant; so you do not have to believe that the defendant is telling the truth before he/she is entitled to be found not guilty.”

  1. [32]
    This basis of the appellants’ argument is a false one. It is inevitable that some of the evidence relating to the steps taken by the appellants and the context in which they were taken will be the subject of evidence in any criminal proceedings. But just because there is an overlap of evidence it does not follow that the questions to be resolved are the same. In the adverse action proceedings there is no warrant for a decision about the honesty or absence of honesty exhibited in the actions of the appellants. There is no requirement for the Vice President to consider anything more than whether the action was taken for a reason set out in s 285.
  2. [33]
    The complaint of the appellants is that the Vice President misunderstood the case being made before him. As it was put in the written submissions: “The appellants did not seek a stay of the proceeding because of publicity about the proceeding. Rather, the appellants sought a stay because the Commission was being called upon to decide the central question in the criminal trial. With respect the Vice President failed to consider this very issue.”
  3. [34]
    It is correct to say that the Vice President did deal with the prospect of publicity and its effect upon any proposed criminal proceedings. And while the Vice President did not go into detail about the prospect of the Commission deciding the “central question in the criminal trial”, he did expressly refer to the possibility of prejudice arising from a determination of the proceedings in the Commission. He identified that “the outcome of these proceedings is likely to receive publicity …”. That followed his description of the appellants’ argument in [35]:

“The thrust of the Second to Ninth Respondent's submissions centre around the potential adverse publicity which may ensue as a consequence of the continuation and determination of the proceedings in the Commission. It is contended that the Commission cannot safely assume that any publicity will accurately and faithfully represent the full force and effect of any judgment. The Second Respondent argues that the ability of the Commission to reinstate or to compensate Ms Kelsey creates an inevitable prejudice in the mind of the jury pool given the publicity which would surround such a determination.” (emphasis added)

  1. [35]
    I take that as a reference to the determination of the adverse action proceedings which is the subject of the appellants’ concern.
  2. [36]
    The Vice President did advert to the prejudice which might arise or flow from the “outcome” of the Commission proceedings. That is enough to dismiss this ground of the appeal. But, it is more to the point that the foundation of this ground of appeal is misconceived.

Ground C - the Vice President erred as a matter of principle at [61] by wrongly conflating the principles concerned with whether criminal proceedings should be permanently stayed because of adverse pre-trial publicity with the principles concerning whether a civil matter should proceed where the judicial officer will be required to determine precisely the same factual matter that will need to be determined by the jury.

  1. [37]
    This ground was not made out. The Vice President understood the difference between publicity about the Commission hearing and publicity about the Commission’s decision and decided on that basis. For the reasons set out above, the “same factual matter” argument has no basis.

Ground D - the Vice President failed at [64] to take into account public interest in maintaining the integrity of the criminal justice system.

  1. [38]
    This ground proceeds upon the basis that specific recognition of the public interest in having the criminal justice system operate without undue interference is a factor which must be taken into account. The appellants rely upon the statements by Kirby P in Yuill v Spedley Securities Ltd and Others[18] about the guidelines in McMahon. It must be observed that he prefaced his comments in this way: “One day it may be appropriate for this court to reconsider the guidelines stated by Wootten J in McMahon v Gould.[19] His Honour then went on to suggest that other considerations, including the administration of criminal justice, would be relevant considerations. What he said is not authority for the proposition, implicit in this ground of appeal, that an omission to specifically identify the administration of criminal justice as a consideration to be taken into account is an error of the kind described in House v The King.
  2. [39]
    In any event, the other members of the Court of Appeal did not agree with Kirby P on this point. Priestley JA said:

“I agree generally with the President except as to his reservation concerning McMahon v Gould . For my part I am content to treat that decision in the same way as Sir John Young did in Philippine Airlines v Goldair Australia Pty Ltd  , as a useful guide to the exercise of the court's discretion in cases of this kind.

The only possible criticism that I can see in regard to the guidelines set out by Wootten J in 7 ACLR at 206 is that the use of the words ‘prima facie’ in guideline (a) might possibly be misleading to some readers.

It seems to me to be plain from the context of the whole set of guidelines set out by his Honour that by ‘prima facie’ as he used it there, he meant substantially ‘unless there is some reason for not doing so’. Once the guidelines are read in that way they are in my respectful opinion irreproachable.” (emphasis added)[20]

  1. [40]
    Meagher JA said: “No occasion has arisen to consider the correctness of McMahon v Gould …”.[21]
  2. [41]
    The appellants have failed to demonstrate that an omission to recognise as a factor the administration of criminal justice is an error of the kind described in House v The King.

Ground E – the Vice President erred, as a matter of principle, by failing to accept that it was unfair for the appellants to be forced to make a decision as to whether they would make submissions in the proceeding, which could be relied upon against them in the criminal trials, without knowing precisely how the prosecution in the criminal trial will put the case against the appellants.

  1. [42]
    The “right to silence” is a consideration which is often at the forefront of the cases in which a stay is sought. It informs much of the consideration given in cases which have referred to McMahon.
  2. [43]
    It is at the base of this ground of appeal.
  3. [44]
    Where a civil proceeding has not commenced as, for example, in McLachlan v Browne (No 9),[22] then a party will be concerned about the privilege against self-incrimination and, thus,  might be forced to decide between conducting the civil trial in as complete a manner as possible and running the risk of exposing matters to the advantage of the prosecution or not giving evidence and running the risk of failing in the civil trial.
  4. [45]
    This is not a case in which that is a real consideration. The appellants in the first appeal have given evidence and written submissions have been filed on their behalf. The appellant in the second appeal, knowing that he was the subject of investigation, did not give evidence, but written submissions have been filed on his behalf.
  5. [46]
    It was argued for the appellants that, in civil matters, litigants choose for forensic reasons to make concessions. And that, in order to efficiently and persuasively conduct their defence of the adverse action application, the appellants would be likely to concede certain factual and legal matters. The dilemma which the appellants say faces them is that they will need to choose between conducting their defence of this application and the defence of the criminal charges. I do not accept that. The appellants have filed written submissions. One of those documents is 125 pages long. If a concession were going to be made then one could reasonably expect that it has already been made.
  6. [47]
    The appellants also submitted that the “practical reality of making oral submissions” results in the making of concessions to narrow the issues. While that is undoubtedly the case, it does not mean that a party who is aware of possible criminal proceedings cannot exercise appropriate restraint and still engage with the issues to the fullest extent.
  7. [48]
    This is a case in which sworn evidence has been given by some of the appellants and in which all of them have committed their cases to writing in their submissions. Any fear about making a concession in the short period allocated for oral submissions can be dispelled by the appellants not making any concessions beyond any which may have already been made. In any event, no submission was made that the appellants’ cases would be damaged or diminished in any way if they declined to make any oral submissions. In such circumstances it would be most unlikely that any adverse inference would be drawn by the failure to make a concession.
  8. [49]
    All of the appellants have already filed written submissions. This argument is little more than boxing at shadows. No submissions were made that the appellants would be harmed in any way if they declined to make further submissions. It was not explained how, in the light of their lengthy written submissions, the appellants would be disadvantaged or prejudiced by (a) deciding whether to make oral submissions, or (b) if they decided to do so, how they could not engage in a way which protected them from any disadvantage.

Ground F - the Vice President’s discretion miscarried because the decision to dismiss the application for a stay was manifestly wrong in circumstances where:

  1. (a)
    the appellants would suffer irremediable prejudice if a judicial officer of the State of Queensland determined against them precisely the same factual questions that would fall to be resolved by the jury in their criminal trials,
  2. (b)
    the matter had been the subject of significant publicity and it could safely be assumed that any decision of the Commission would come to the attention of a jury,
  3. (c)
    the Logan City Council had undertaken to pay Ms Kelsey’s salary pending the hearing and determination of the proceedings in the Commission,
  4. (d)
    the reasons at [67] did not identify what the prejudice to Ms Kelsey was said to be for the purpose of the decision set out therein or were unclear what prejudice was relied upon in making the determination,
  5. (e)
    the only prejudice to Ms Kelsey were of the non-pecuniary benefits of performing her role if she were reinstated and the loss of opportunity of performing her role, and
  6. (f)
    any award of damages, should Ms Kelsey be successful, was uncapped.
  1. [50]
    This ground, in some respects, simply revisits earlier grounds. For the reasons given above, the same factual questions will not be decided by the Commission and any jury.
  2. [51]
    The effect of publicity which has so far been created could not be diminished by staying this application. The case for the appellant says that any decision by the Commission would be publicised or would, in other ways, come to the attention of a jury. It was argued that “given the expected timeframe of a decision of this size, that publicity will likely be at a critical juncture in the conduct of the criminal trial.” There is no basis for that assumption. It is appropriate, at this stage, to consider that submission in the light of the likely disposition of any criminal proceedings.
  3. [52]
    At this time, the appellants have been charged. They have been provided with the QP9 relevant to their charges. Some of the appellants are charged conjointly with some of the appellants. Other appellants are charged separately. There is no reason to believe that, should these charges proceed in a way familiar to the Supreme Court or the District Court, any form of committal will be concluded within six months. On the assumption that the appellants are committed for trial, the Director of Public Prosecutions has six months in which to present indictments. One of the complicating factors is not knowing whether the prosecution, assuming committal, will proceed against all the appellants conjointly or separately or a combination of those two processes. It is reasonable to expect that there would be some interlocutory applications and that, if the matters go to trial, they would not be likely to commence within, at least the next 18 months to two years. If the prosecution proceeds against each of the appellants separately then the trials could take years to be heard.
  4. [53]
    If a stay were to be granted, then Ms Kelsey would not know her fate for at least two years but it would, more likely, be longer than that. It could, depending upon the way in which many trials are conducted, and if there were to be appeals from any convictions that might occur, result in this matter not resuming for some 3 to 4 years.
  5. [54]
    The effect of this delay has to be considered with respect to all the parties. It was accepted that issues of credit would need to be decided in the Commission proceedings. To delay the consideration of those matters – as a stay would because the hearing would not have concluded – would have the effect of delaying a decision concerning credibility for years.
  6. [55]
    Lengthy delays in concluding matters and the consequent effect on the ability to make a decision should be avoided. The principles relating to delayed judicial decisions were considered by the Full Court of the Federal Court in Expectation Pty Ltd v PRD Realty Pty Ltd[23] where the extra burden on the decision maker was discussed. The need to avoid delay was made explicit in Tattsbet Ltd v Morrow[24] where Jessup J (with whom Allsop CJ and White J agreed) said:

“[134] The critical finding with respect to the appellant’s reason or reasons for taking adverse action turned substantially upon the credit which the primary judge assigned to the evidence of Mr Fletton. Notwithstanding the existence of transcript, that finding was inevitably based upon his Honour’s observation of Mr Fletton as a witness, and upon the advantage which a trial judge conventionally has in such a setting. In my view, there is a real risk that his Honour compromised his ability to use that advantage in the determination of Mr Fletton’s reasons for acting when he allowed such an inordinate period to elapse between the giving of the evidence and the making of the determination.”

  1. [56]
    The possibility of concluding the hearing and deciding the matter but not informing the parties of any decision until after the conclusion of all criminal proceedings was briefly contemplated in argument. The injustice of that is, with respect, obvious. Should Ms Kelsey be successful she would be held out of a judgment in her favour for years and, if reinstatement was ordered, the judgment could be nugatory given that her contract of employment would have expired. In either case, all parties would have the proceedings hanging over their heads for years. It is an entirely unsatisfactory solution.
  2. [57]
    It is explicit in the case for the appellants that a jury, properly instructed, could not put to one side the expected publicity about the decision in this case.[25] That contention cannot be accepted. The principles informing the exercise of a discretion to stay the prosecution of a criminal case were examined in R v Ferguson; Ex parte Attorney-General (Qld).[26] Although that case concerned an order permanently staying proceedings against an accused on the basis, among other things, that pre-trial publicity meant that he could not receive a fair trial, the consideration given by the Court of Appeal to these issues applies to the effect of adverse publicity more generally.
  3. [58]
    The court said at [26]:

“ … there is an abundance of authoritative statements that even where a trial is accompanied by adverse publicity, even adverse publicity concerning the accused’s previous criminal convictions, the court should be slow to conclude that the resultant risk of unfairness to the accused is intractable because the jury is unlikely to be amenable to the directions of the trial judge to ignore the adverse publicity and render their verdict based on the evidence.”

  1. [59]
    After a close examination of the authorities, the court went on to say:

“[39] These passages emphasise the need for circumspection on the part of a court in acting upon a prediction of the inability of the jury to render a verdict fairly in accordance with the directions of the trial judge. It is necessary to bear in mind that, pursuant to s 50 of the Jury Act, the members of a jury swear ‘to give a true verdict, according to the evidence, on the issues to be tried …’. The passages which we have set out above also emphasise that the system of trial by jury proceeds on the assumption that jurors can be trusted to be true to their oath.

[40] The jury trial has not been regarded and should not be regarded, as an exotic and delicate contrivance, the integrity of which cannot survive jurors’ knowledge of matters adverse to an accused gained other than through admissible evidence.

[43] Jury deliberations take place in an environment peculiarly conducive to the unbiased assessment of evidence with a view to determining guilt or innocence. …

[44] And, of course, the trial judge's instructions should be fashioned in light of the circumstances of the case with a view to assisting the jury to give a verdict uninfluenced by any irrelevant or improper considerations. …

[46] It was also said on behalf of the respondent that jurors might readily inform themselves of the full detail of the publicity adverse to the respondent, including his previous convictions, by accessing such information on the internet, and that this risk to the fairness of the trial could not be obviated by directions by the trial judge. But s 69A of the Jury Act makes it an offence for a jury to make such inquiries ‘about the defendant in the trial until the jury … has given its verdict, or the [juror] has been discharged by the judge.’ A court asked to grant a permanent stay of proceedings on indictment should not proceed on the basis of speculation that jurors might, not only disregard their oath to render a verdict based only on the evidence, but also commit an offence in order to do so.”

  1. [60]
    Those statements compel a conclusion that even if the decision made by the Commission comes to the attention of the jury it can be dealt with appropriately and it does not contribute to a case in favour of the granting of a stay.
  2. [61]
    The appellants argued that the undertaking offered by the Council to pay Ms Kelsey’s salary pending the hearing and determination of the proceeding favours the grant of a stay. The Vice President was correct in not giving that weight. The undertaking is to pay the salary on condition that, should Ms Kelsey be unsuccessful, she would be required to pay it back in full. In other words, it is a loan conditional upon the result in the Commission. It gives her no comfort and was correctly put to one side.
  3. [62]
    It is also argued that the only prejudice to Ms Kelsey concerned the non-pecuniary benefits and loss of opportunity of performing her role if she were to be reinstated. That is not correct. If she succeeds, then she will have shown that her termination was unjust. While this matter remains unresolved she bears the decision of the Council to dismiss her for misconduct. It was contended that Ms Kelsey had not taken any sufficient steps to obtain employment. But, on the other side of the balance, is the obvious difficulty in obtaining other employment that any person would have who had been dismissed in those circumstances and who was engaged in a lengthy hearing before the Commission. It is also appropriate to take into account that Ms Kelsey is bearing her own costs while, so far as it was made known, the other parties can rely on independent sources for their costs.
  4. [63]
    The Vice President did not, in [67] of his reasons, specify the prejudice to Ms Kelsey. He did not need to. He had done that, for example, in [33] where he referred to her inability to obtain her primary remedy, namely reinstatement and the consequences flowing therefrom and, more particularly, in [63]:

“Ms Kelsey's contract of employment is for a term which expires on 25 June 2021. If a stay is granted, it is probable that the contract of employment will expire before these proceedings are determined. In those circumstances, I accept the argument that Ms Kelsey would lose the opportunity to demonstrate to a new Council, once elected, that she ought to be awarded a second contract. Equally, even if she was not offered a further contract she would lose the opportunity to work at the First Respondent during [the] balance of her contract including the ability to protect her reputation, and her future employment prospects. I do not accept that the offer of the Administrator of the First Respondent is sufficient to deal with the prejudice to which Ms Kelsey claims. The offer was conditioned on her acceptance of the stay. Ms Kelsey's position would not change. She will have lost the opportunity to return to her employment and notwithstanding what has been submitted, compensation is not in those circumstances an adequate remedy.”

  1. [64]
    The extent of any award of damages as a factor was not the subject of any substantial submission. It could only be one of the many matters which may be taken into account.

The other grounds advanced for Mr Smith. The Vice President:

  1. (a)
    failed to take into account the possibility of an appeal,
  2. (b)
    failed to take into account that Ms Kelsey would need to give evidence in any criminal proceeding and “the impact on the jury of hearing Ms Kelsey give (or not give) evidence of her role if she was to be reinstated”,
  3. (c)
    erred by finding that compensation was not an adequate remedy in the circumstances, and
  4. (d)
    failed to take into account the potential prejudice to the appellants in combination with the gravity of the potential sentences in the criminal proceeding.
  1. [65]
    It may be accepted that the Vice President did not explicitly refer to the possibility of an appeal or the “impact on the jury of hearing Ms Kelsey give evidence”.  The former point can only be relevant with respect to the publicity which might accompany such an appeal and the time at which it might be determined. This falls within that category of concern which is dealt with by way of an appropriate direction to a jury. The next point advanced for Mr Smith concerned the prospect of Ms Kelsey being asked to say where she was employed at the time of any criminal trial. That assumes that Ms Kelsey will be reinstated and at the time of any trial she will still occupy the office of CEO. The extent of the prejudice that this might raise is, with respect to the submission made, ephemeral at best and easily dealt with by way of a suitable direction.
  2. [66]
    Whether compensation is an adequate remedy in the circumstances is, no doubt, something which will be considered by the Commission in its final decision. The complaint here is that the Vice President held to the contrary of the appellants’ case in deciding this interlocutory point. The issue is whether or not he considered the point. He did. And nothing that was put on Mr Smith’s behalf demonstrates that he was wrong.
  3. [67]
    Finally, it is said that the Vice President didn’t take into account the “potential prejudice” to the appellants in combination with the gravity of the potential sentences in the criminal proceedings. I do not accept that that is a matter which was overlooked in the approach taken by the Vice President. While he did not refer to the maximum sentences available upon conviction it is clear that he bore in mind the nature of the criminal proceedings and specifically referred to the “potential prejudice” faced by the appellants.

Conclusion

  1. [68]
    The appellants have not demonstrated an error of the kind referred to in House v The King. Had they done so I would have considered whether this Court should deal with the matter. In all the circumstances, it would have been appropriate to do so. I would not have granted a stay. Many of the authorities were concerned with civil proceedings which had only commenced. Unlike so many of those cases which deal with the principles to be applied on such an application, these proceedings are on the cusp of conclusion. The actual prejudice which Ms Kelsey would suffer (and which was described by the Vice President) outweighs the potential prejudice which might be inflicted on the appellants.
  2. [69]
    The appellants accepted, as they had to, that there has been substantial publicity given to this matter and that is something which will probably have to be dealt with in any criminal proceeding. The concern of the appellants concentrated on two issues. First, that the Commission would decide precisely the same questions as a jury would be asked to decide. For the reasons given above that cannot be accepted. Secondly, the appellants were concerned about any publicity which might be given to the decision of the Commission. While that can be dealt with by way of appropriate direction to a jury, any possible harm can be alleviated by only publishing the reasons to the parties. That would avoid the prospect of findings made about the credibility of any witness entering the public domain.
  3. [70]
    At the heart of any application for a stay is a balancing exercise where the rights of all the parties must be considered. This is a case in which the prejudice which would be caused by any stay of proceedings to Ms Kelsey weighs more heavily than the potential prejudice which might be suffered by the appellants.
  4. [71]
    The appeal is dismissed.

Footnotes

[1] PID/2017/3.

[2] [2019] QIRC 085.

[3] (2003) 214 CLR 230.

[4] See [55], [100].

[5] [2015] QCA 155.

[6] (1936) 55 CLR 499.

[7] (2007) 164 FCR 487.

[8] (1982) 7 ACLR 202.

[9] At 206-207.

[10]Trade World Enterprise Pty Ltd v Deputy Commissioner of Taxation (Cth) (2006) 64 ATR 316 at [12] per Chernov JA, with whom Nettle and Redlich JJA agreed. Referred to with approval in De Simone v Bevnol Constructions & Developments Pty Ltd (2009) 25 VR 237.

[11] (1992) 8 ACSR 272.

[12] At 275.

[13] (2015) 323 ALR 294; [2015] FCA 47 at [95].

[14] (2007) 164 FCR 487.

[15] At [40].

[16] (2013) 93 ACSR 176 at [13].

[17] In light of the reverse onus in s 306 of the IR Act.

[18] (1992) 8 ACSR 272.

[19] At 274.

[20] At 275.

[21] At 276.

[22] [2019] NSWSC 10.

[23] (2004) 140 FCR 17; [2004] FCAFC 189 at [66]-[83].

[24] (2015) 233 FCR 46.

[25] It must be borne in mind that the publicity which has already been generated cannot be affected in any way by a stay.

[26] (2008) 186 A Crim R 483; [2008] QCA 227 at [23]-[55].

Close

Editorial Notes

  • Published Case Name:

    Dalley & Ors v Kelsey & Ors

  • Shortened Case Name:

    Dalley & Ors v Kelsey & Ors

  • MNC:

    [2019] ICQ 8

  • Court:

    ICQ

  • Judge(s):

    Martin J, President

  • Date:

    02 Jul 2019

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2019] QIRC 8504 Jun 2019Application for an order staying proceedings in the Queensland Industrial Relations Commission until determination of criminal charges against the appellants dismissed: O'Connor VP.
Primary Judgment[2019] ICQ 802 Jul 2019Appeal dismissed: Martin J.
Notice of Appeal FiledFile Number: Appeal 7699/1922 Jul 2019Appeal by appellants in C/2019/14.
Notice of Appeal FiledFile Number: Appeal 7689/1922 Jul 2019Appeal by appellant in C/2019/15.
Appeal Determined (QCA)[2020] QCA 5527 Mar 2020Appeals dismissed: Morrison and Philippides JJA and Brown J.

Appeal Status

Appeal Determined (QCA)

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