Alan Gerrard and Graham Kirchner v Mayne Nickless Limited & In the matter of an application for a Writ of Prohibition and a Writ of Certiorari against: The Hon Justice Munro of the Australian Industrial Relations...

DECISION NO: 67/96

INDUSTRIAL LAW - INDEPENDENT CONTRACTORS - Contracts allegedly unfair, harsh or against the public interest - Applications for review made to Australian Industrial Relations Commission before amendments that took effect on 30 March 1994 - Interim order made on some applications before that date - Interim order imposed obligations on other party to contract to give priority in future engagements to applicants if contract terminated - Validity of an order imposing obligations only after contract terminated - Power of Commission to make orders in relation to a contract that was terminated before an application was made to the Commission - Power of Commission to make orders in respect of a contract between a constitutional corporation and a partnership - Whether Commission has continuing jurisdiction after 30 March 1994 to hear and determine an application lodged before that date - Whether an interim order made before 30 March 1994 remains in force after that date - Constitutional validity of provisions empowering Commission to alter retrospectively the right of parties under a contract discharged before an application was made to the Commission.

Industrial Relations Act 1988, ss.4(1A), 45, 46, 127A and 127B.
Constitution, s.51(xxxi).
Acts Interpretation Act 1901, ss.8, 22(aa) and 23(b)

VI.1052 of 1994
ALAN GERRARD and GRAHAM KIRCHNER v MAYNE NICKLESS LIMITED

VI.1529 of 1995
IN THE MATTER of an application for a Writ of Prohibition and a Writ of Certiorari against: THE HON JUSTICE MUNRO of the AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION First Respondent
ALLAN GERRARD & OTHERS Second to Twenty-ninth Respondents

EX PARTE: MAYNE NICKLESS LIMITED Applicant/Prosecutor

VI. 4989 of 1995

SAM PAPA & OTHERS v FINEMORES PTY LTD

CORAM:    WILCOX CJ, RYAN and MARSHALL JJ
PLACE:    MELBOURNE
DATE:     5 MARCH 1996

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY          )      VI.1052 of 1994

BETWEEN:ALAN GERRARD and
GRAHAM KIRCHNER

Applicants

AND:MAYNE NICKLESS LIMITED

Respondent

CORAM:    WILCOX CJ, RYAN and MARSHALL JJ
PLACE:    MELBOURNE
DATE:     5 MARCH 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

The respondent be granted leave to appeal against the interlocutory order of Northrop J of 8 February 1995.

The appeal be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY          )    No. VI 1529 of 1995

IN THE MATTER of an application for a Writ of Prohibition and a Writ of Certiorari against:

THE HON JUSTICE MUNRO of the AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

First Respondent

ALLAN GERRARD & OTHERS

Second to Twenty-ninth Respondents

EX PARTE:MAYNE NICKLESS LIMITED

Applicant/Prosecutor

VI 4989 of 1995

BETWEEN:SAM PAPA & OTHERS

Applicants

AND:FINEMORES PTY LTD

Respondent

CORAM:    WILCOX CJ, RYAN and MARSHALL JJ
PLACE:    MELBOURNE
DATE:     5 MARCH 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

The notice of motion for a rule nisi be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY          )    No. VI.4989 of 1995

BETWEEN:SAM PAPA & OTHERS

Applicants

AND:FINEMORES PTY LTD

Respondent

CORAM:    WILCOX CJ, RYAN and MARSHALL JJ
PLACE:    MELBOURNE
DATE:     5 MARCH 1996

MINUTES OF ORDER

THE COURT ORDERS THAT:

The questions asked in the case stated by the Full Bench of the Australian Industrial Relations Commission be answered:

(a)yes;

(b)(i) yes;
(ii)yes;

(c)(i) no;
(ii) no.

The matter be returned to the Australian Industrial Relations Commission for determination.

Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT    )
OF AUSTRALIA  )
VICTORIA DISTRICT REGISTRY          )      VI 1052 of 1994

BETWEEN:ALAN GERRARD and
GRAHAM KIRCHNER

Applicants

AND:MAYNE NICKLESS LIMITED

Respondent

VI 1529 of 1995

IN THE MATTER of an application for a Writ of Prohibition and a Writ of Certiorari against:

THE HON JUSTICE MUNRO of the AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

First Respondent

ALLAN GERRARD & OTHERS

Second to Twenty-ninth Respondents

EX PARTE:MAYNE NICKLESS LIMITED

Applicant/Prosecutor

VI 4989 of 1995

BETWEEN:SAM PAPA & OTHERS

Applicants

AND:FINEMORES PTY LTD

Respondent

CORAM:    WILCOX CJ, RYAN and MARSHALL JJ
PLACE:    MELBOURNE
DATE:     5 MARCH 1996

REASONS FOR JUDGMENT

THE COURT: These reasons for judgment deal with three proceedings that were heard by us over two days, 20 and 21 November 1995. Each proceeding concerns ss.127A - 127C of the Industrial Relations Act 1988. Those sections relate to unfair contracts with independent contractors. In the Act, the term "independent contractor" refers only to natural persons. This is made clear by s.4(1A) which provides: "To avoid doubt, it is declared that a reference in this Act to an independent contractor is confined to a natural person". Sections 127A and 127B were amended, as from 30 March 1994, by ss.71 and 72 of the Industrial Relations Reform Act 1993 ("the Reform Act"). These amendments create some of the issues that arise in these proceedings.

The Mayne Nickless proceedings

The proceedings come to the Court in different ways. The first two proceedings are related. Each involves contracts made between a transport company, Mayne Nickless Limited ("Mayne Nickless"), and 28 lorry owner-drivers. The contracts required the owner-drivers to perform work for Mayne Nickless in connection with the delivery of freight in Melbourne and Victorian country areas.

It appears that a dispute as to the fairness of the contracts arose between Mayne Nickless and some or all of the 28 owner-drivers. On 14 January 1994, a number of the owner-drivers applied to the Australian Industrial Relations Commission for review of their contracts. Their applications were made under s.127A(2), as it then stood. Section 127A(1) defined the word "contract", for the purposes of the section, as:
"(a)a contract for services that:

(i)is binding on an independent contractor; and

(ii)relates to the performance of work by the independent contractor, other than work for the private and domestic purposes of the other party to the contract; and

(b)any condition or collateral arrangement relating to such a contract."

However, it is important to note that s.127C(1) further limited the meaning of "contract". It provided that ss.127A and 127B applied only:

"(a)in relation to a contract to which a constitutional corporation is a party;

(b)in relation to a contract relating to the business of a constitutional corporation;

(c)in relation to a contract entered into by a constitutional corporation for the purposes of the business of the corporation;

(d)in relation to a contract relating to work in trade or commerce to which paragraph 51(i) of the Constitution applies;

(e)in relation to a contract so far as it affects matters that take place in or are otherwise connected with a Territory;

(f)in relation to a contract to which the Commonwealth or a Commonwealth authority is a party."

Section 127C(2) defined the term "constitutional corporation" as meaning "a corporation to which paragraph 51(xx) of the Constitution applies".

As it stood when the Mayne Nickless owner-drivers made their application to the Commission (that is, prior to 30 March 1994), s.127A(2) provided three grounds of review. The subsection read:

"(2)Application may be made to the Commission (constituted by a Presidential Member or a Full Bench) to review a contract on any or all of the following grounds:

(a)the contract is unfair;

(b)the contract is harsh;

(c)the contract is against the public interest."

Subsection (3) dealt with parties. The remainder of s.127A set out the rules applicable to a review:

"(4)In reviewing the contract, the Commission may have regard to:

(a)the relative strength of the bargaining positions of the parties to the contract and, if applicable, any persons acting on behalf of the parties; and

(b)whether any undue influence or pressure was exerted on, or any unfair tactics were used against, a party to the contract; and

(c)whether the contract may have an adverse effect on the development of the skills of employees performing work of the relevant kind in the industry, including any system designed to provide a trained labour force (for example, apprenticeship or any arrangement for improving the skills of employees); and

(d)whether the contract provides total remuneration that is, or is likely to be, less than that of an employee performing similar work; and

(e)any other matter that the Commission thinks relevant.

(5)If the Commission forms the opinion that a ground referred to in subsection (2) is established in relation to the whole or part of the contract, it must record its opinion, stating whether the opinion relates to the whole or a specified part of the contract.

(6)The Commission may form the opinion that a ground referred to in subsection (2) is established in relation to the whole or part of the contract even if the ground was not canvassed in the application.

(7)The Commission must exercise its powers under this section in a way that furthers the objects of this Act as far as practicable."

The consequences of the recording of an opinion under s.127A were stipulated in s.127B:

"127B(1)If the Commission records an opinion under section 127A in relation to a contract, it may make one or more of the following orders in relation to the opinion:

(a)an order setting aside the whole or part of the contract, as the case may be;

(b)an order varying the contract.

(2)An order may only be made for the purpose of placing the parties to the contract as nearly as practicable on such a footing that the ground on which the opinion is based no longer applies.

(3)While the application is pending, the Commission may make an interim order if it thinks it is desirable to do so to preserve the position of a party to the contract.

(4)An order takes effect from the date of the order or a later date specified in the order.

(5)A party to the contract may apply to the Court to enforce an order by injunction or otherwise as the Court thinks fit.

(6)This section does not limit any other rights of a party to the contract."

The applications made by the Mayne Nickless owner-drivers came before Justice Munro, a Presidential Member of the Commission, on 17 and 28 January 1994. The applicants asked him to make an interim order under s.127B(3) of the Act. On 28 January, he announced that he would do so. After giving the parties an opportunity to put submissions about the form of the order, on 3 February 1994, he made an interim order in these terms:
"A(1)The contract for services between Allan W. Gerrard and each of the applicants herein respectively of the one part, and Mayne Nickless Limited of the other part, be varied to the extent necessary to make it a term of the contract that: Subject to written agreement between the parties expressly varying this term, and notwithstanding any action by or on behalf of the Company to terminate the contract for reasons other than serious misconduct or breach of agreement covered by clause 9.3, the term of the contract extends beyond such termination, or purported termination, (including a termination based upon acceptance of a voluntary redundancy package) until the completion of the hearing and determination of the application made in relation to the contract under section 127A of the Industrial Relations Act 1988 in matter C No 20040 of 1994, including any related appeal or judicial review proceedings, as though the contract remains on foot as an executory contract; provided that without derogation from rights arising under the contract up to the time of any such termination or purported termination, and subject to further order of the Commission or of the Industrial Relations Court of Australia this term does not operate otherwise to establish additional rights or duties in respect of any extended term herein provided for.

(2)In relation to any termination of the services of the Owner Driver other than under clause 9.3, or to any restructure of the company's operations affecting the duration of the contractual relationship, the Owner Driver and the Transport Workers Union of Australia (TWU) through the TWU Delegate and the Branch Secretary of the TWU (Victoria) shall be consulted and they or their representatives and the company shall negotiate in good faith about a process to be followed for avoiding, implementing and mitigating the burden of any proposed termination or restructure, and about the Owner Drivers likely to be affected being offered some acceptable alternative engagement or employment with the company after any such termination or restructure, provided that for the purposes of this term the consultation between the Company and representatives of Owner Drivers which commenced on 13 December 1993 in relation to a proposed reduction of "employees" within the Security Express Victorian operations from 279 to 167 shall be deemed to have been in performance of the requirements of this term.

(3)That in the event of the services of the Owner Driver being terminated other than under clause 9.3, the company, if it has not already done so, shall take measures that are reasonably practicable having regard to the company's operational and commercial requirements:

(i)(a) to find an acceptable alternative engagement or employment with the company for the Owner Driver; or, if no such engagement or employment is practicable within 14 days of the termination,

(b)to give the Owner Driver priority and preference for engagement or employment in vacancies for work within the Victorian operations of the company arising within 12 months from the date of termination, being work for which the Owner Driver is suitable, and for which the Owner Driver is qualified, ready and willing to perform at the time the vacancy is to be filled;

(ii)to establish a process whereby, after appropriate consultation with the Owner Driver and the TWU, the Owner Drivers whose services are to be retained (and the position and terms of the further engagement or employment) or not retained (and the terms of the termination) by the company are selected and determined according to fair and reasonable criteria.

(4)Sub-clauses (2) and (3) of this clause do not confer any rights on the company additional to those which it may have under other provisions of the contract, or at law, to terminate the services of the Owner Driver or to restructure its operations in a way that affects the duration of the services of the contractor, or to propose any such termination or restructure."

When he made the interim order, Justice Munro had not reached any conclusion as to whether any of the contracts were unfair, harsh or against the public interest. He intervened because he believed that the applicants had an arguable case and that the existing situation should be preserved whilst the applications were under consideration. Accordingly, he ordered that the interim order, and the variation to which it gave effect, take effect from 10am on 3 February 1994.

On 4 February, Mayne Nickless commenced terminating the contracts of owner-drivers. Thereupon two of them, Allan Gerrard and Graham Kirchner, made application to the Federal Court of Australia, which was then the "Court" referred to in s.127B(5) of the Act, for orders enforcing para. A(3) of the interim order. The applicants brought the action as representative parties (see Part IVA of the Federal Court of Australia Act 1976) on behalf of all the owner-drivers referred to in the order made by Justice Munro on 3 February 1994 and whose contracts were terminated on or after 3 February. The proceeding was numbered VI.1052 of 1994.

Before any substantive order could be made by the Federal Court, the Reform Act came into force on 30 March 1994. By force of s.64 of that Act, the proceeding was automatically transferred to this Court. As the Industrial Relations Act makes provision for representative proceedings in this Court (see Part XIV Division 6 of the Act), no problem arose out of the nature of the proceeding. However, when the application came before Northrop J, Mayne Nickless questioned whether the Commission's interim order had continuing effect after 30 March 1994. The reason was that the Reform Act transferred jurisdiction under ss.127A-127C from the Commission to this Court. It did this by substituting in each of s.127A(2), (4), (5), (6) and (7) and s.127B(1) and (3) a reference to "the Court" - that is, this Court - for a reference to the Commission.

The Reform Act made two other significant amendments. Paragraph (c) of s.127A(2), which provided for review on the ground that the contract is against the public interest, was omitted, as was para. (c) of s.127A(4).

After discussion with the parties, Northrop J ordered that four questions be tried separately before the further trial of the proceeding:

"1.Did the Interim Order made by Justice Munro on 3 February 1994 cease to have effect on 30 March 1994 on the coming into operation of section 71 of the Industrial Relations Reform Act 1993?

2.Is the Interim Order invalid and beyond power?

3.Does the Industrial Relations Court have jurisdiction or power under section 127B of the Industrial Relations Act or at all to make an award for damages arising out of non-compliance with an Interim Order made under section 127A?

4.Is it appropriate that this proceeding continue as a representative proceeding under Part XIV Division 6 of the Industrial Relations Act 1988?"

However, during the course of the separate trial, Northrop J expressed doubt as to the Court's jurisdiction to determine question 2 in the absence of a remittal from the High Court of Australia: see s.412(2) and (3) of the Industrial Relations Act. The parties agreed to adjourn determination of that question. Counsel for the applicants announced their clients would not pursue a claim for damages under s.127B of the Act; accordingly, question 3 was discarded from consideration. And it was decided to postpone consideration of question 4. In the result, Northrop J dealt only with question 1. By an order made on 8 February 1995, he answered that question in the negative, for reasons to which we will return. Mayne Nickless challenges that answer. As the order made on 8 February 1995 was an interlocutory order, leave to appeal is necessary: see s.420(2) of the Industrial Relations Act. An application for leave to appeal was made to us in conjunction with Mayne Nickless' argument on the merits of the point.

The second Mayne Nickless proceeding was commenced on 16 December 1994 when Mayne Nickless filed in the High Court a notice of motion for a rule addressed to Justice Munro and the 28 owner-drivers requiring them to show cause why writs of prohibition and certiorari should not issue against Justice Munro. The proceeding was commenced in order to overcome the jurisdictional problem identified by Northrop J in connection with question 2. The supporting affidavit focused particularly on para. A(3) of the interim order imposing on Mayne Nickless obligations to take reasonably practicable measures to find an acceptable alternative engagement or employment for owner-drivers terminated otherwise than under clause 9.3 of the agreement or, if this was not practicable within 14 days of termination, to give the owner-drivers priority in connection with future engagement or employment and to establish an appropriate selection process for owner-drivers whose services were to be retained. Mayne Nickless contended that this part of the order was invalid because it did not preserve the position of any party to the contract but created new and different rights and obligations.

On 7 February 1995, Toohey J made a consent order remitting the motion for a rule nisi to this Court. The motion was numbered VI.1529 of 1995.

The Finemores proceeding

Finemores Pty Ltd ("Finemores") is also a transport company. It entered into contracts with a number of lorry owner-drivers as sub-contractors. Each agreement was expressed to be binding until 28 February 1994. Each prescribed rates of remuneration, an entitlement to two weeks paid annual leave and ordinary hours of work, and imposed various obligations on Finemores and the sub-contractor respectively going to the maintenance and livery of vehicles, the supply and wearing of uniforms, the provision of parking spaces and the like. Termination of the agreement by Finemores and retrenchment were governed by cll. 16 and 17 in these terms:

"16.Termination by the Company

a)One month's notice of its intention to cease trading.

b)Unsatisfactory service or failure to carry out any reasonable request or rules of the company, a written warning. On the receipt of three (3) warnings, disengagement of services.

c)The Company will replace Owner/Drivers who leave or are terminated at their discretion. The Company will determine the number of permanent and casual drivers employed at anytime.

d)Conclusive evidence of gross dishonesty, stealing or consuming intoxicating liquor or under the influence of a drug of addiction between the hours of clocking on and clocking off, INSTANT DISENGAGEMENT, except for alcohol consumed during the official meal break and does not render the Sub-contractor beyond the legal limit as defined by law. In the event of a), b) or c) occurring the person concerned and the union delegate shall be notified in writing immediately by the Company.

17.Retrenchment

In the event of retrenchments due to either business conditions or reorganisation, the principle of 'last on, first off' will apply by vehicle size classification. In such case the Company will give one (1) month's notice and advise the Union."

Apparently pursuant to cl.16, on 21 June 1993, Finemores notified the applicants that their services would no longer be required. On 2 July 1993, Finemores terminated the contracts.

Between 6 July and 25 August 1993 some 25 owner-drivers applied to the Commission under s.127A of the Industrial Relations Act for review of their contracts. They sought orders under s.127B of the Act along the following lines:

"(a)That the Applicants be reinstated by the Company as owner drivers on the terms and conditions of employment set out in the contracts:

(b)That Clause 16 of the attached agreement be set aside; and

(c)That the contracts be varied to provide that the Applicants' employment continue until terminated on receipt of 18 months notice or terminated on receipt of payment of an amount representing the remuneration the Applicants would have received had their employment continued until the expiration of 18 months from the date of termination."

The applications came before Justice Munro. In a decision given on 31 August 1994, he held that the unfair contracts review jurisdiction provided by ss.127A to 127C applied to terminated contracts and that the Commission retained this jurisdiction despite the amendments to ss.127A and 127B that came into force on 30 March 1994. He held that applications made in respect of applicants who performed work pursuant to the relevant contracts as partners were competent but the application made on behalf of Chris Bouterakos, who performed work pursuant to a contract made by him as the agent of a company, was not. On the question of unfairness, the Deputy President concluded:

"I am of the opinion that in the circumstances, each contract covered by the application in C311261/93 was unfair in that the provision of one months' notice of termination of the contract by reason of closure of the Express Operation, or by reason of transfer and redistribution of its trading activity, was neither adequate nor fair having regard to the terms of the contract and to the circumstances relating to the operation of the contract. I am also of the opinion that the contract was unfair in that clauses 16, 17, and the contract as a whole operated in a manner which resulted in the provision of such limited notice of termination of the contract in the circumstances set out in the preceding sentence. My opinion about the unfairness of the contracts in this respect is not based on or derived from the other grounds of unfairness relied upon by the applicants, but it is fortified by a number of the circumstances and considerations associated with those grounds."

Justice Munro then indicated the form of the order that he was provisionally minded to make. After hearing further argument, he published a supplementary decision on 17 March 1995 and an order of the same date. Paragraph 1 of that order provided:

"1.So much of the contract for services between each of the applicants listed in Schedule 1, trading as described and the respondent company in operation as at 20 June 1993 be set aside and varied to the extent necessary to permit the contract to be varied to insert and make it a term of the contract that:

In the event of a decision by the Principal Contractor to close the Express Operation, or to transfer or redistribute the activity of the Express Operation, in substitution for any period of notice of termination of contract elsewhere specified, a period of 10 weeks' notice of termination shall be given by the Principal Contractor to each of the subcontractors identified in Schedule 1 of this order, as the case may be for each relevant contract. In default of such notice being given in a manner permitting the full period of notice to be worked prior to termination of work under the contract, the Principal Contractor will, not later than 21 days after the coming into operation of this term, make payment in lieu of notice for the unexpired portion of such notice. Such payment for the unexpired notice period shall be calculated by applying the hourly rate set by reference to the 1993/94 Subcontract Divers Agreement Addendum 1 for the subcontractor's vehicle as at the date notice was given, (which shall be deemed to be 21 June 1993), applied to the guaranteed minimum ordinary hours of 45 per week of not less than 9 hours per day Monday to Friday inclusive. Any payment already made by the Principal Contractor for work undertaken during a period covered by the notice required by this term, shall be treated as payment in settlement of the payment due under this term in respect of the part of the period to which that payment relates, and no payment shall be due under this term in respect of a day on which the Principal Contractor required work to be performed under this contract and the subcontractor refused or was not available to perform such work."

Paragraphs 2 and 3 of the Order were to similar effect, prescribing a period of notice of termination of 12 weeks and 8 weeks respectively for the applicants listed in Schedule 2 and Schedule 3 of the Order.

Finemores appealed to a Full Bench of the Commission against Justice Munro's decision. However, at the commencement of the hearing of that appeal, the Full Bench decided to refer some questions of law to this Court pursuant to s.46 of the Industrial Relations Act. These questions were:

"(a)whether the Commission has the jurisdiction to hear and determine the applications of the applicants despite the coming into force of the Reform Act;

(b)whether the powers formerly conferred on the Commission pursuant to ss 127A-127C of the Act were exercisable in respect of -

(i)a contract which had been terminated before the application was made to the Commission calling for the exercise of those powers; and

(ii)a contract for services between a constitutional corporation and two or more natural persons who comprise a partnership; and

(c)whether, on the facts found by Justice Munro, the application made by Mr Bouterakos was an application -

(i)in respect of a "contract" under s 127A(2) of the Act defined by ss 127A(1) and 4(1A); and

(ii)by a party to the contract under
s 127A(3)(a)."

The stated case is proceeding VI.4989 of 1995 in this Court.

The issues

Although the Full Bench of the Commission referred three questions to the Court, we need address only two of them. Mr K Bell, counsel for the applicants in the Finemores case, conceded that both aspects of question (c) must be answered in the negative, with the consequence that, regardless of any other matter, the Commission lacked jurisdiction to determine Mr Bouterakos' application. However, question (b) raises two separate issues. Moreover, Finemores raises a constitutional question. It contends that, to the extent that ss.127A to 127C of the Act confer power upon the Commission to alter retrospectively the rights of parties under a contract that was discharged before the application was made, it effects an acquisition of property otherwise than upon just terms, contrary to s.51(xxxi) of the Constitution, and is accordingly invalid. Notice of the point was given to the Commonwealth and State Attorney Generals pursuant to s.78B of the Judiciary Act 1903 and the Commonwealth Attorney General appeared at the hearing by counsel (Mr E Willheim and Ms R Phelan) to contest Finemores' argument.

In the result, the three proceedings raise a total of six topics for our consideration. Rather than address each topic in the context of the proceeding in which it arises, it seems preferable to discuss them in their logical order.

The first three topics take the Act as it was before 30 March 1994. They are:
(i)whether the Commission has power to make orders in relation to a contract that was terminated before any application was made to the Commission;
(ii)whether the Commission has power to make orders in relation to a contract for services between a constitutional corporation and two or more natural persons comprising a partnership.
(iii)whether para. A(3) of the interim order made by Justice Munro in the Mayne Nickless case was valid.

Topics (iv) and (v) arise as a result of the commencement of the Reform Act on 30 March 1994. They are:
(iv)whether the Commission has continuing jurisdiction, after that date, to hear and determine an application made before that date;
(v)whether an interim order made before 30 March 1994 remains in force after that date.

The sixth topic is the constitutional question earlier mentioned.

Dingjan's case

Discussion of these topics will be facilitated by immediate reference to the decision of the High Court in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323. This is the only occasion, so far, in which the High Court has had to consider ss.127A to 127C of the Industrial Relations Act. It did so in the context of a challenge to the constitutional validity of s.127C(1)(b). By majority (Brennan, Dawson, Toohey and McHugh JJ; Mason CJ, Deane and Gaudron JJ dissenting) the Court held the paragraph invalid. As will be recalled, s.127C sets out the situations to which ss.127A and 127B applies. The application of the two sections to three of those situations, listed in paras. (a), (b) and (c), was intended to be supported by the corporations power (Constitution, s.51(xx)). Each of those three paragraphs refers to a "constitutional corporation", a term defined by s.127C(2) as a corporation to which s.51(xx) applies. However, whereas paras. (a) and (c) require that the constitutional corporation be a party to the relevant contract, para. (b) does not. Paragraph (b) purports to apply ss.127A and 127B "to a contract relating to the business of a constitutional corporation". If this provision were valid, it would have applied ss.127A and 127B to contracts entered into by Mr and Mrs Wagner, who traded in partnership, with the respondent owner-drivers, being two married couples each trading together in a partnership. The reason that the two sections would have applied was that the contracts between Mr and Mrs Wagner and each of the two owner-driver partnerships were directed to the fulfilment by Mr and Mrs Wagner of their obligations under contracts they had made with a constitutional corporation, Tasmanian Pulp and Forest Holdings Ltd. In that sense, the relevant contracts were related to the business of a constitutional corporation.

It is not necessary for present purposes to discuss the reasoning of the High Court on this point. Nor is it necessary to deal with an ancillary question: whether ss.127A and 127B, as they then stood, were invalid because they purported to confer judicial power on the Commission. Gaudron J discussed that question at 360-361, rejecting the argument of invalidity. Mason CJ and Deane J agreed with her Honour generally and Brennan and Toohey JJ agreed with her on this question. The other members of the Court, Dawson and McHugh JJ, made no comment about it.

Presently important, however, is the High Court's consideration of another question: whether the Commission has power to make orders in respect of a contract that was in existence at the date of the application to the Commission but had since terminated. Brennan J thought not. He said at 341 that he was "unable to see how it is possible to set aside or vary a contract that is sterile of any enforceable right or obligation". At 342, he made a comment that may have led to Finemores' constitutional point in this case. While being careful not to express an opinion on the point, he said that, if a retrospective operation were attributed to s.127B(1), it would be necessary to consider whether "a power to alter retrospectively the rights of the parties under the contract (would) amount to an acquisition of property within s.51(xxxi) of the Constitution and be subject to the requirement of just terms"

Gaudron J rejected the argument that termination of the contract deprived the Commission of power to make an order under s.127B(1). She thought the use of present tense verbs in ss.127A and 127B inconclusive; the present tense might be used descriptively rather than as signifying contemporaneity. Nor was the power to make interim orders significant. For Gaudron J the most significant point was one of policy. At 362-363 she said:
"No question arises in this case as to whether the Commission's jurisdiction is confined to contracts that are current when application is made to it under ss127A and 127B. That question may raise a different issue from that involved in this case. In particular, it may raise the issue whether ss127A and 127B were intended to have retroactive operation. Whatever the position in that regard, ss127A and 127B are not, in my view, confined to contracts which are current when the particular power of review or variation comes to be exercised. That construction would allow the Commission to review a contract that is current when the review takes place, but not to vary the contract if it comes to an end or, as is more likely, if it is brought to an end before an order is made under s127B. It cannot be supposed that Parliament intended that consequence, particularly in the context of contracts relating to the performance of work by an independent contractor where, in the nature of things, the power to terminate without notice or on short notice may well be the very matter which makes the contract unfair, harsh or against the public interest. That being so and given that 'binding' is often used to mean 'enforceable', the use of the present tense in ss127A and 127B is merely descriptive of the nature of the contracts which may be the subject of the Commission's powers, namely, contracts enforceable against an independent contractor and whose terms or operation may be described as unfair, harsh or against the public interest. Contrary to the argument advanced on behalf of the prosecutors, its use does not signify that the Commission's powers under ss127A and 127B are confined to contracts that are current when it comes to exercise those powers".

As mentioned Mason CJ and Deane J agreed with Gaudron J generally. Toohey J at 356 agreed with her on this point. Neither Dawson J or McHugh J dealt with it. Even so, there was a clear majority for the view that the termination of a contract after the date of application did not deprive the Commission of power to make orders under s.127B(1). The same reasoning would suggest that termination after the date of application did not deprive the Commission of power to make interim orders under s.127B(3).

Power to make orders in relation to contract terminated before application

The question whether the Commission has power to make orders in relation to a contract that was terminated before the making of any application to the Commission is raised by question (b)(i) in the Finemores Stated Case. In argument before us, Mr R Buchanan QC and Mr G Giudice, who appeared for Finemores, contended that the Commission has no such power. They put two submissions. The first is that the view expressed by Brennan J in Dingjan is to be preferred to that of Gaudron J; we should hold that the Commission has no power to make an order in respect of a terminated contract even if the contract was still in existence at the date of the application to the Commission. This submission must be rejected. As we have noted, the view expressed by Gaudron J in Dingjan was endorsed by three other Justices. It had majority support and we are bound to apply it.

Counsel's second submission fastens on the fact that the particular question we have to determine was left open in Dingjan. In the passage quoted above, Gaudron J said it "may raise a different issue" from that discussed by her; in particular, "whether ss.127A and 127B were intended to have retroactive operation". Counsel say there is a compelling case against construing ss.127A and 127B as conferring power in relation to a contract terminated before application. They refer to the language and intended operation of the relevant provisions, the absence of any statutory indication that the provisions have retroactive effect, the nature of the power exercised by the Commission and the absence of any prescribed limitation period. They say that, if it is not necessary that the contract be on foot when the application is made, independent contractors could re-open contracts terminated a long time ago, and the Commission could make orders having a substantial retrospective operation.

Mr Bell, on behalf of Mr Papa and his fellow-applicants, argues that, although Gaudron J addressed the specific situation of an application filed before the contract was terminated, her reasoning is equally apposite to a case where termination preceded the application; in particular, her rejection of arguments based on the use in ss.127A and 127B of present tense verbs. He says that Parliament would not have intended different results according to whether or not the independent contractor succeeded in filing an application before the contract had been terminated.

It is clear that Gaudron J deliberately left open the point we have to determine. Technically, it is incorrect to say that an order made by the Commission in respect of a terminated contract has retrospective operation; s.127B(4) provides that an order takes effect from its date or a later date specified in the order. However, in a practical sense, an order will always involve an element of retrospectivity. The rights and obligations of parties to a contract crystallise on termination. If an order varying the contract is subsequently made, it must affect those rights and obligations.

There is a general principle of statutory construction that legislation should be construed in such a way as to avoid its having retrospective operation: see Pearce and Geddes "Statutory Interpretation in Australia" (3rd edition) at 180-195. However, this general principle may be qualified or negated by an indication of a contrary intention in the particular legislation. As the cases cited in Pearce and Geddes demonstrate, the general principle is directed, primarily at least, to the situation that occurs when a statute changes the law. That is not what is claimed in this case. It cannot be suggested that ss.127A and 127B have application to contracts that were terminated before the sections were enacted. The applicants' argument assumes contracts that were in existence after the enactment of the sections. Once the sections came into operation they had the potential, if invoked, to affect those contracts. The application of the sections to the contracts did not involve any element of retrospectivity, within the usual application of the principle.

Even if the general principle of statutory construction applies to a situation such as this, where an existing law is invoked to vary already-crystallised rights and obligations, that principle is subject to any indication of contrary intention. In relation to ss.127A and 127B, it is apparent that Gaudron J discerned a contrary indication. It will be recalled that she said: "It cannot be supposed that Parliament intended that consequence"; that is, that termination should exclude the Commission's power to make orders under s.127B(1). In the absence of any indication that Parliament distinguished between cases where the application was filed before termination of the contract and cases where it was not, there is no reason to doubt that the contrary intention applies also to cases of the latter kind.

The absence of any prescribed limitation period is a telling point in favour of the argument put by counsel for Finemores. As they say, if the legislation does not require the application to be made before termination of the contract, it would be possible for an independent contractor to make an application long after termination and reopen issues seemingly dead and buried. One answer to that concern is to say that s.127B relief is discretionary. In exercising its powers under s.127B, the Commission is entitled to take into account any delay in making the application and, particularly, any prejudice thereby occasioned to the other party to the contract. However, two other arguments of Mr Bell are even more cogent. First, the fundamental reasoning of Gaudron J on this point applies as much to a situation like the one involving Mr Papa and his co-applicants as it does to that in Dingjan. In both cases there was a dispute between the independent contractor and the other party to the contract, one issue being the ability of the other party to terminate the contract on little or no notice. It would be strange if the legislation permitted the Commission to intervene only if the independent contractor had been well-informed and efficient enough to file an application before the other party could terminate the contract. The legislation being protective in character, it is unlikely that Parliament intended it to operate in such a way as to disadvantage those less able to look after themselves.

The second factor that points in favour of Mr Bell's argument is the history of the legislation. Sections 127A to 127C inclusive were inserted into the Act on 23 July 1992 as a result of the enactment of the Industrial Relations Legislation Amendment Act 1992. In his Second Reading Speech on the Bill for that Act, the then Minister, Senator Cook, referred to the fact that similar provisions had existed in New South Wales for a long time. He said:

"[T]he unfair contracts review procedure is a more limited procedure than that now available under some State laws. Such a procedure has existed in New South Wales for many years, and has recently been carried over by the Greiner Government into the New South Wales Industrial Relations Act 1991. The procedure proposed in this Bill will only operate in respect of a limited class of unfair contracts."

The Minister's reference to a procedure that has "existed in New South Wales for many years" was a reference to s.88F of the Industrial Relations Act 1940 (NSW). That section was framed in language substantially similar to that of ss.127A and 127B. For many years prior to the Minister's speech, it was settled law that s.88F permitted the New South Wales Industrial Commission to grant relief in respect of terminated contracts, even contracts that were terminated before the filing of an application: see Manni v Scully [1967] AR (NSW) 606 at 615-617 and Re Becker; Ex parte Harry M Miller Attractions Pty Ltd [1972] AR (NSW) 298 at 310-311. It must be presumed that, in adopting the New South Wales provisions without relevant amendment, the federal Parliament intended that they should be construed in the same way: see Melbourne Corporation v Barry (1922) 31 CLR 174 at 186-187.

We are of the opinion that the Commission was not deprived of power to make orders under s.127B in respect of the applications against Finemores by the circumstance that Finemores terminated the contracts before the applications were filed.

Before leaving this topic, we should mention the decision of Keely J in Dickins v Herald and Weekly Times Ltd (1994) 1 IRCR 135. That case involved an application under ss.127A and 127B that was made to the Court on 7 June 1994. The relevant contract had been terminated on or about 30 August 1993; that is, before the transfer of jurisdiction under the sections from the Commission to the Court. The respondent sought summary dismissal of the application. It stated two grounds: that the Court had no jurisdiction at the date of termination of the contract and that, "properly construed, s.127A does not permit the review of a contract no longer in existence at the time the application for review is made". If the second ground had been argued and determined, Keely J's decision would be material to the topic we have just discussed. However, it was not. Rather, counsel argued, and Keely J accepted, a wider submission: "that the powers conferred upon the court by s.127B are powers to make orders in respect of an existing contract i.e. a contract that has not been terminated". His Honour accepted that argument primarily because of the use of present tense verbs in ss.127A and 127B. In taking that course, he acted inconsistently with the later High Court decision in Dingjan. As this was the only point decided in Dickins, the decision must be treated as overruled by Dingjan.

Partnership contracts

We turn to question (b)(ii) in the stated case. Counsel for Finemores argue that ss.127A to 127C do not apply to contracts with partnerships, but only to contracts where the "independent contractor" is a single individual. They say this is the natural meaning of the legislation and refer to three particular provisions: s.127A(1)(a)(ii) which refers to a contract for services that "relates to the performance of work by the independent contractor", s.127A(4)(d) that requires consideration of the question "whether the contract provides total remuneration that is, or is likely to be, less than that of an employee performing similar work" and s.4(1A) that refers to an independent contractor being a natural person. Counsel recognise that s.23(b) of the Acts Interpretation Act1901 provides, that in an Act unless the contrary intention appears, "words in the singular number include the plural". But they say that a contrary intention is evident and sought to derive support from Arnold v Queensland (1987) 73 ALR 607. A question arose in that case as to whether Parliament had displayed a contrary intention, in relation to the meaning of the word "person" in s.27 of the Administrative Appeals Tribunal Act 1975. The point was discussed at 611-612 but the discussion turns entirely on the scheme and terms of the Administrative Appeals Tribunal Act. It is not relevant to the present problem.

Mr Bell disputes the argument of counsel for Finemores. He submits that there is nothing in the legislation inconsistent with the possibility of the "independent contractor" being a partnership. He points out that, if Parliament had intended ss.127A and 127B to apply only to a contract to which a single individual was a party, it could have used the expression "individual" in s.4(1A) rather than "natural person". The expression "individual" is defined under s.22(aa) of the Acts Interpretation Act as meaning "a natural person", thus excluding a corporation.

If Finemores' argument is correct, it would have furnished a complete answer to the claims made in Dingjan. It will be recalled that the two "independent contractors" who made applications to the Commission were each husband and wife partnerships. But the point was not taken at any stage of the litigation. [The Commission's decision is reported as Re Transport Workers Union (1993) 50 IR 171]. This does not establish that the argument is bad; sometimes a good point is overlooked, even by experienced counsel. But we do not think that happened here. We prefer Mr Bell's argument on this issue. It is not a misuse of language to speak of a partnership performing work under a contract. Many partnerships provide services to clients, the relevant work being carried out wholly or partly by one or more partners or by one or more of their employees. Although s.127A(4)(d) requires a comparison to be made between the remuneration payable under the contract and the wages that would be payable to an employee doing the same work, this is merely to ensure that a comparison is made between the quantum of work and the quantum of remuneration payable under each of the two arrangements. The comparison is not affected by the circumstance, if it occurs, that partners may share between them the work and the remuneration payable to the independent contractor. We think it is particularly significant that Parliament chose not to use the word "individual" in s.4(1A).
Validity of the order of 3 February 1994

It will be recalled that cl.A(3) of the order made by Justice Munro on 3 February 1994 purported to impose on Mayne Nickless an obligation to find alternative work for owner-drivers terminated otherwise than under clause 9.3 of the contract between them and Mayne Nickless; or alternatively, to give them priority in filling vacancies for work. Counsel for Mayne Nickless, Dr C Jessup QC and Mr D J O'Callaghan, say the Commission had no power to make an order of that kind. This is the issue in VI.1529 of 1995, the application remitted from the High Court. It is the third topic identified above.

Counsel point out that the Commission's power to make an interim order arises only "if it thinks it is desirable to do so to preserve the position of a party to the contract": see s.127B(3). It follows, they say, that an interim order must be conducive to preserving the position of a party. Clause A(3), they argue, is not of this nature; rather, it "creates new obligations and imposes new conditions that do not form any part of the contract or preserve any party's position under it". They add a general submission that s.127B(3), as it stood on 3 February 1992, did not authorise the making of an interim order that, by its terms, would only become operative if the contract were terminated.

The general submission is clearly incorrect. It is not warranted by the terms of s.127B(3) and is at odds with Gaudron J's observation in Dingjan at 362:

"The power to make interim orders is not confined to orders which operate to keep a contract on foot. Moreover, it is power that might usefully be invoked even if the Commission has power to vary contracts that have come to an end."

In other words, an interim order may be made even though a contract has come to an end. If it is made, it must create rights and obligations that would not otherwise exist. If an order may be made that will become immediately operative notwithstanding that the contract is at an end, there is no reason to exclude an order, made before the contract comes to an end, that will become operative if it does.

As to the narrower submission, it is inappropriate to take clause A(3) of the order in isolation. Clause A(1) of the order deemed the term of the contract to extend beyond any termination (other than for serious misconduct or under clause 9.3 of the agreement), subject to any written agreement to the contrary, until the hearing and determination of the matter by the Commission. Clause A(3) is ancillary to clause A(1). The term of the contract having been extended notwithstanding a termination or purported termination, clause A(3) was designed to ensure that the owner-drivers would be offered whatever work was available. As Mr H Borenstein, counsel for the Mayne Nickless owner-drivers, put it: "It preserves the entitlement of the company not to use these drivers if there is no work for them ... to do. And it preserves the right of the drivers in that it offers them [an] opportunity to earn income under the contract if there is work to be done". It seems to us that nothing could be more conducive to preserving the position of an independent contractor pending determination of an application than to make an order designed to keep him or her in work. In our opinion, order A(3) was within the Commission's power.

The Commission's jurisdiction after 30 March 1994

It is convenient to discuss together the topics that we have numbered (iv) and (v): whether the Commission has continuing jurisdiction, after 30 March 1994, in respect of an application made to it before that date and whether an interim order made before that date thereafter continues in force. The former question is question (a) in the Finemores stated case. The latter question was addressed by Northrop J in the Mayne Nickless case, VI.1052 of 1994. It will be recalled that he held that an interim order remained in force notwithstanding the transfer of jurisdiction under ss.127A and 127B from the Commission to the Court. The reason was that s.8 of the Acts Interpretation Act applied to the case. That section reads:

"8.Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not:

(a)revive anything not in force or existing at the time at which the repeal takes effect; or

(b)affect the previous operation of any Act so repealed, or anything duly done or suffered under any Act so repealed; or

(c)affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; or

(d)affect any penalty forfeiture or punishment incurred in respect of any offence committed against any Act so repealed; or

(e)affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid;

and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed."

It seems that, before Northrop J, Mr Borenstein, as counsel for Mr Gerrard and Mr Kirchner, placed particular reliance on s.8(c). He contended that each of his clients had a "right" to obtain relief from the Commission in relation to a contract between them and Mayne Nickless that was unfair, harsh or against the public interest and that this was preserved by s.8(c). The proceeding itself was preserved by s.8(e). Counsel for Mayne Nickless submitted to Northrop J that an entitlement to approach the Commission was not a "right" within the meaning of s.8(c).

Northrop J upheld Mr Borenstein's submission. In doing so, he drew a distinction between what he called "a true administrative application" and "a quasi-judicial application". He said:

"A consideration of the authorities referred to in submissions relating to the application of section 8 of the Acts Interpretation Act and its equivalent in other jurisdictions, disclose a dual approach depending upon the nature of the right, or rather the accrued right, sought to be continued or enforced.

A different approach has been taken to cases where an administrator, whether a natural person or a statutory body, has a statutory power to confer a right or privilege on a member of the public. In practice, the person seeking the right or privilege may be required to give notice of the application to enable other persons to make representations to the administrator in opposition to the application. To this extent, the procedures adopted by the administrator may have the appearance of legal or quasi-legal proceedings between competing parties but in truth what is being sought by the applicant is the grant of a right or privilege at the disposal of the administrator. In these reasons, this type of case will be described as a true administrative application.

The other type of case arises where one person is in dispute with another person and seeks a resolution of that dispute by making an application to a tribunal, whether administrative or judicial, for orders determining the dispute between those persons. Here there are in truth opposing parties and normally orders made by the tribunal confer rights or privileges on one of the parties and impose co-relative duties or obligations on the other. In some cases, it might be difficult to identify the competing parties, for example in cases of applying the cy-pres doctrine where the Attorney-General normally is a party to protect the concept of the charity or an administrator to assist the Court ... In this type of case the tribunal, whether a natural person, a statutory body or an institution has no privileges or rights at its disposal to confer upon the successful litigants. The duty of the tribunal is to determine the dispute between the parties according to law without fear or favour affection or ill-will. In these reasons, this type of case will be described as a quasi-judicial application.

The authorities show that a claimant in a true administrative application is not afforded the protection given by section 8 of the Acts Interpretation Act in cases where the claimant has commenced proceedings to obtain the privilege or right at the disposition of the administrator. On the other hand, the authorities show that a claimant in a quasi-judicial application does have the protection of section 8 at least where the claimant has instituted that claim before the Act conferring the right or privilege sought to be enforced is repealed."

Northrop J supported his conclusion by references to several authorities. In relation to administrative applications, he cited Director of Public Works v Ho Po Sang [1961] AC 901 and Robertson v City of Nunawading [1973] VR 819. Both cases involved applications for the exercise of a statutory discretion - in the first case a building approval and in the second a subdivision approval - that were unresolved when relevant legislation was altered. In each case it was held that there was no accrued "right" within the meaning of a provision like s.8 of the Acts Interpretation Act. Northrop J contrasted these cases with Esber v Commonwealth of Australia (1992) 174 CLR 430 and likened the present case to Esber. Counsel for Mayne Nickless, submitted to us that his Honour erred at that point.

Esber was a former defence force member who received compensation payments exceeding $50 per week in respect of a work-related injury, pursuant to the Compensation (Commonwealth Government Employees) Act 1971. He applied to the Commissioner for Employees' Compensation for a lump sum in redemption of his entitlement to future weekly payments. The Act specified criteria to be considered in relation to a redemption application. The Commissioner refused the application. On 15 September 1988, Esber applied to the Administrative Appeals Tribunal for review of the refusal. His application was lodged out of time. However, on 28 June 1989, the Tribunal granted an extension of time. In the meantime, on 1 December 1988, the Commonwealth Employees' Rehabilitation and Compensation Act 1988 came into force. That Act prohibited redemption of payments exceeding $50 per week. The Tribunal held that the 1971 Act continued to apply to the case and made a redemption order. By majority, the Full Federal Court held this decision erroneous. But the High Court, also by majority (Mason CJ, Deane, Toohey and Gaudron JJ; Brennan J dissenting), overruled the Federal Court, holding that the 1971 Act applied to the application for review.

The majority held that a transitional provision of the 1988 Act applied to the case, so as to preserve Esber's entitlement under the 1971 Act. So they did not need to refer to s.8 of the Acts Interpretation Act. However, as counsel for Esber had put an alternative argument that relied on that section, they chose to do so. After setting out paras. (c) and (e) of s.8, the majority said at 439:

"The first step in a consideration of s.8 is to identify the 'right' which the appellant says was acquired or accrued under the repealed Act. Paragraph (e) operates in relation to such a right, not independently of it.

In this regard the appellant puts his case on s.49 of the 1971 Act on two footings. First, he says that he had, in the circumstances, a right to redemption of weekly payments. Alternatively, he says that he had a right to have the Tribunal determine his application to review the delegate's decision. In either event, the appellant contends, the repeal of the 1971 Act did not affect the right."

Their Honours considered whether it could properly be said that Esber had a "right" to redemption. They said this would depend upon whether, if the relevant criteria were satisfied, the Commissioner had a residuary discretion. They doubted whether the evidence established that the Commissioner was satisfied about the criteria. But they thought this did not affect the alternative claimed "right". They said at 440-441:

"If it be assumed that the appellant did not have a right to redemption in the sense first discussed, he had a right to have his claim to redemption determined in his favour if the delegate had wrongly refused his claim. To borrow a sentence from the judgment of Hope J.A. in N.S.W. Aboriginal Land Council v The Minister (The Winbar Claim) (1988) 14 NSWLR 685 at 694:

'The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional.'

Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely 'a power to take advantage of an enactment'. Nor was it a mere matter of procedure; it was a substantive right. Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, 'although that right might fairly be called inchoate or contingent'. This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s.8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act."

In argument before us, counsel for Mayne Nickless submitted that Esber is distinguishable from the present case. They say that Mr Gerard and Mr Kirchner "had no right to have their claim determined in their favour if a contingency or condition is made good". They contend that the "claim to relief under s.127A sought the exercise by the Commission of a very wide discretion. The respondents had no more than a hope or chance that the discretion would be exercised in their favour".

We do not accept that description of s.127A. As Mr Bell submitted in the Finemores case, the jurisdiction conferred by ss.127A and 127B is not a mere exercise of discretion. Taking the provisions as they were when the applications against Mayne Nickless were filed, in order to obtain relief an applicant was required to demonstrate that the contract was unfair, harsh or against the public interest. A determination that a contract is unfair, harsh or against the public interest involves an exercise of judgment, having regard to the proved facts. It does not involve the exercise of a judicial discretion. The situation is similar to that discussed in The Queen v Judges of the Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368 in relation to the power conferred on the Court under s.140 of the Conciliation and Arbitration Act 1904 to declare a rule of an organisation to be invalid. The prescribed grounds of invalidity included that the rules imposed restrictions that were "oppressive, unreasonable or unjust". At 383, Kitto J (with whom Dixon CJ agreed) referred to these words as having "a degree of vagueness about them". But he said that the notions the words convey "must be conceded, having regard to the nature of the criteria with which courts are familiar in other fields, to be not so indefinite as to be insusceptible of strictly judicial interpretation". An example from another field is the decision of the New South Wales Court of Appeal, in relation to the question whether a contract was "unjust", in Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 at 259-261 and 270.

If the Commission found one of the three grounds stipulated by s.127A(2) established, it was required to record its opinion to that effect: see s.127A(5). If it did so, it had a discretion as to whether it would make an order under s.127B(1) setting aside or varying the contract. But it had a duty to determine whether or not to exercise that discretion: compare Stevenson v Barham (1977) 136 CLR 190 at 201. As it seems to us, once the various owner-drivers had made application to the Commission, they acquired a right to have their applications heard and determined. If they made out a ground specified in s.127A(2), they had a right to a decision recording the Commission's opinion to that effect and a right to have the Commission determine whether or not to grant discretionary relief under s.127B(1). The case falls within the first of the two situations considered by the Judicial Committee of the Privy Council in Ho Po Sang at 922:

"It may be, therefore, that under some repealed enactment a right has been given but that in respect of it some investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. Upon a repeal the former is preserved by the Interpretation Act. The latter is not. Their Lordships agree with the observation of Blair-Kerr J. that: 'It is one thing to invoke a law for the adjudication of rights which have already accrued prior to the repeal of that law; it is quite another matter to say that, irrespective of whether any rights exist at the date of the repeal, if any procedural step is taken prior to the repeal, then, even after the repeal the applicant is entitled to have that procedure continued in order to determine whether he shall be given a right which he did not have when the procedure was set in motion.'"

We add a reference to a statement of Fox J, in the Full Federal Court, in J R Exports Pty Ltd v Australian Trade Commission (1986) 71 ALR 717. Speaking of s.8(c) his Honour said at 719:

"It is not possible to define an 'accrued right', anymore than it is a 'right', but the notion which underlies the latter, when dealing with the present type of problem, is that there is something in the nature of a cause of action which has arisen, or is claimed to have arisen, before the repeal or amendment, in circumstances which would render it manifestly unjust for the repealing or amending Act to affect the situation adversely."

The claim of the owner-drivers, in these cases, was that, before 30 March 1994, "something in the nature of a cause of action had arisen"; there were contracts that had one or more of the characteristics specified in s.127A(2) and this entitled them to a finding under s.127A(5) and to consideration of the question whether an order should be made under s.127B(1). Their right to pursue that "cause of action" was a right accrued under the earlier provisions and was unaffected by the amendments. The rights conferred on the owner-drivers by the interim order made by Justice Munro on 3 February 1994, and which was in aid of that proceeding (because it was made in order to preserve the independent contractors' position pending determination of the application), were also rights accrued under the earlier legislation.

It seems to us that this argument is correct. As is evident from the extract from Esber quoted above, a right may be protected by s.8 notwithstanding that it is inchoate. The point is well illustrated by the decision of the Judicial Committee of the Privy Council in Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541. Ranasinghe suffered injuries in a motor accident in March 1948. He brought an action against one Appuhamy, the employer of the driver of the other vehicle. On 24 September 1951, he was awarded damages against Appuhamy but apparently did not succeed in collecting the award. Appuhamy was insured against third party claims by Free Lanka Insurance and, at the time of the accident, an ordinance was in force that made the insurer liable to any person obtaining a decree in respect of a liability covered by a third party policy. That ordinance was repealed on 1 September 1951, a few weeks before Ranasinghe obtained a decree against Appuhamy. However, a provision similar to s.8(c) was applied in his favour. He was held entitled to recover his damages directly from the insurer. The Judicial Committee at 552 described Ranasinghe's right as "inchoate or contingent" but held that his assertion of claim against the insurer was effective notwithstanding that "the quantum of his claim was dependent upon the finding of the court in a decree made in his favour in his action against Appuhamy". In the same way, in the present case, there were assertions of claims, prior to 30 March 1994, that were effective notwithstanding that the grant of relief depended upon the Commission finding that one of the prescribed grounds had been established.

Counsel for Mayne Nickless submit that s.8 of the Acts Interpretation Act does not apply to the present case because Parliament evinced a contrary intention. They point out that the Reform Act contains transitional provisions in respect of many topics, but not in relation to the amendments made to ss.127A and 127B. They say this must be because Parliament intended that rights given under the earlier form of the sections should not survive the amendments.

We do not accept this submission. It seems to us that the more likely explanation of the absence of transitional provisions is that Parliament relied on s.8 of the Acts Interpretation Act to protect parties to pending applications. It is noteworthy, as Mr Borenstein pointed out, that the Reform Act amended s.45(1) of the Industrial Relations Act 1988 so as to provide for appeal to a Full Bench of the Commission (with leave) against an opinion formed by a member of the Commission under s.127A or a decision of a member not to form such an opinion (para. (ea)) or an order of a member under s.127B or a decision by a member not to make an order (para. (eb)). Especially in a situation where Parliament has provided for appeals in connection with ss.127A and 127B, it is unlikely in the extreme that it intended that a first instance hearing that was all but complete on the commencement of the Reform Act would be brought to a peremptory conclusion by that event.

In our opinion, the effect of s.8 of the Acts Interpretation Act was to permit the continuation until finality of an application made to the Commission before 30 March 1994. Further, it had the effect of continuing any valid interim order made before that date, notwithstanding the amendments to the legislation and the transfer of the review power from the Commission to the Court. Substantially for the reasons stated by him, we agree with the answer given by Northrop J to the question he considered.

The constitutional point

As mentioned, Finemores contend that, if ss.127A and 127B conferred jurisdiction on the Commission in respect of contracts terminated before any application was made to it, they provided for acquisition of property otherwise than on just terms and were, accordingly, rendered invalid by s.51(xxxi) of the Constitution. In putting the submission, counsel for Finemores acknowledge that the constitutional guarantee of just terms has no application where the notion of just terms would be incongruous or where the relevant law is a "genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity": see Australian Tape Manufacturers Association Limited v The Commonwealth (1993) 176 CLR 480 at 510 and Nintendo Company Limited v Centronics System Pty Limited (1994) 181 CLR 134 at 160-161. But they say that neither of these limitations applies in this case; the contractual relationship was at an end; the rights of the parties depended on property, not contract.

It seems to us that this analysis is too limited. Where the contract had been terminated before the Commission made an order under s.127B(1), there was no relevant contractual relationship between the parties; subject to ss.127A-127B, the parties' rights depended on property interests. But the qualification is important. Because the parties were once in an independent contractor-contractor relationship, their rights and obligations were susceptible to variation by the Commission if it found their contract to have been unfair, harsh or against the public interest. In Dingjan it was accepted by the majority that there was no constitutional problem about ss.127A and ss.127B conferring power on the Commission to make such a variation where the application was filed before termination; the constitutional validity of the provisions enabling the Commission to take this course did not depend upon the subsistence of a contractual relationship. It was sufficient that there had previously been a contractual relationship, of a particular kind, between the parties. In terms of legal principle, it makes no difference if the contractual relationship had come to an end before the application was filed.

The authorities demonstrate that the "genuine adjustment of competing rights" limitation is not confined to a legislative adjustment of rights under a continuing relationship. It includes adjustments of rights under former relationships or former situations. See, for example, Mutual Pools & Staff Pty Limited v Commonwealth of Australia (1994) 179 CLR 155, Health Insurance Commission v Peverill (1994) 179 CLR 226 and Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.
We accept that ss.127A and 127B apply only where, after the commencement of the sections, there was a relationship of independent contractor-contractor in respect of an arrangement falling within the definition of "contract" in s.127A(1) and one of the categories set out in s.127C. It does not matter whether or not the arrangement commenced before or after the commencement of the sections, so long as it was in existence after that time. As we understand it to be common ground that the arrangements between Mr Papa and his fellow-applicants, on the one hand, and Finemores, on the other, meet these criteria, there is, in our opinion, no constitutional difficulty about those applications being heard and determined on their merits in accordance with the legislation as it stood before 30 March 1994.

Orders
As we have indicated, Mayne Nickless needs leave to appeal against the interlocutory judgment of Northrop J in matter VI.1052 of 1994. The matter sought to be raised on appeal is one of general importance in connection with the operation of the legislation. If decided in one way, it might be determinative of the litigation between Mayne Nickless and its former independent contractors. Accordingly, leave should be granted. However, for the reasons set out above, the appeal should be dismissed.

The notice of motion for a rule nisi in matter VI.1529 of 1995 should be dismissed.

The questions asked in the case stated in matter VI.4989 of 1995 should be answered:
(a)yes;

(b)(i) yes;
(ii)yes;

(c)(i) no;
(ii) no.

I certify that this and the preceding forty-seven (47) pages are a true copy of the Reasons for Judgment of the Court.

Associate:

Dated: 5 March 1996

APPEARANCES

Counsel for Mayne Nickless Ltd: C Jessup QC and D J O'Callaghan

Solicitor for Mayne Nickless Ltd: Freehill Hollingdale & Page
Counsel for Allan Gerrard &

Graham Kirchner: H Borenstein

Solicitor for Allan Gerrard &

Graham Kirchner: McMullin, Coate & Co

Date of hearing: 20 November 1995

Counsel for Sam Papa & Others: K H Bell

Solicitor for Sam Papa & Others: Steven Moore

Counsel for Finemores Pty Ltd: R J Buchanan QC and G Giudice

Solicitor for Finemores Pty Ltd: Blake Dawson Waldron

Counsel for the
Commonwealth Attorney General: E Willheim and R Phelan

Solicitor for

Commonwealth Attorney General: Australian Government Solicitor

Date of hearing: 21 November 1995

[1996] IRCA 67

5 Mar 1996