Australian Co-operative Foods Ltd v SW & JD Reilly & Sons Pty Ltd

[2011] NSWCA 148

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Australian Co-operative Foods Ltd v SW & JD Reilly & Sons Pty Ltd [2011] NSWCA 148

Hearing dates:

23 May 2011

Decision date:

10 June 2011

Before:

Giles JA at 1;
Hodgson JA at 2;
Basten JA at 8

Decision:

(1) Direct that SW & JD Reilly & Sons Pty Ltd be the first respondent.

(2) Dismiss the summons.

(3) Applicant to pay the costs of the first respondent, SW & JD Reilly & Sons Pty Ltd in this Court.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

INDUSTRIAL LAW - unfair contracts - jurisdiction of Industrial Court (NSW) - whether contract for delivery of milk is a contract whereby a person performs work in an industry - Industrial Relations Act 1996 (NSW), s 106

PROCEDURE - summary dismissal of proceedings - jurisdictional issue - issue requiring evaluative judgment - application of General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69, 112 CLR 125

WORDS & PHRASES - "contract whereby a person performs work in any industry" - Industrial Relations Act 1996 (NSW), s 106(1)

Legislation Cited:

Constitution, s 51(xxxv)
Independent Contractors Act 2006 (Cth)
Industrial Relations Act 1996 (NSW), ss 5, 7, 8, 105, 106, 108, 179, 309; Ch 2, Ch 6; Sch 1, cl 19B, Sch 4
Supreme Court Act 1970 (NSW), s 69
Trade Practices Act 1974 (Cth), Part IVB
Trade Practices (Industry Codes - Franchising) Regulations 1998 (Cth)
Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28, 51.2, 51.45; Pt 28

Cases Cited:

Batterham v QSR Ltd [2006] HCA 23; 225 CLR 237
Brown v Rezitis [1970] HCA 56; 127 CLR 157
Caltex Oil (Australia) Pty Ltd v Feenan [1980] 1 NSWLR 724 (NSWCA)
Caterpillar of Australia Pty Ltd v Industrial Court (NSW) [2009] NSWCA 83; 225 ALR 131
Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223; 63 NSWLR 291
Fish v Solution 6 Holdings Ltd [2006] HCA 22; 225 CLR 180
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69, 112 CLR 125
Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531
McDonald's Australia Holdings Ltd v Industrial Relations Commission (NSW) [2005] NSWCA 286; 144 IR 179
Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443
Old UGC Inc v Industrial Relations Commission (NSW) [2006] HCA 24; 225 CLR 274
Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd [1987] HCA 28; 163 CLR 117
Sin Yong Yim v Industrial Relations Commission (NSW) [2007] NSWCA 77
Solution 6 Holdings Ltd v Industrial Relations Commission of NSW [2004] NSWCA 200; 60 NSWLR 558
SW & JD Reilly & Sons Pty Ltd v Australian Co-operative Foods Ltd [2009] NSWIRComm 176
Wishart v Fraser [1941] HCA 8; 64 CLR 470

Category:

Principal judgment

Parties:

Australian Co-operative Foods Ltd (Applicant)
SW & JD Reilly & Sons Pty Ltd (First Respondent)
Industrial Court of New South Wales (Second Respondent)

Representation:

Counsel:

P M Kite SC/S B Piedade (Applicant)
R C Kenzie QC/A Britt (First Respondent)
Submitting appearance (Second Respondent)
Solicitors:

Addisons Commercial Lawyers (Applicant)
WH Parsons & Associates (First Respondent)
I V Knight, Crown Solicitor (Second Respondent)

File Number(s):

CA 2010/304711

 Decision under appeal 

Jurisdiction:

9105

Citation:

Australian Co-operative Foods Ltd v SW & JD Reilly & Sons Pty Ltd [2010] NSWIRComm 110

Date of Decision:

2010-08-13 00:00:00

Before:

Walton J Vice-President; Staff J; Backman J

File Number(s):

IRC 1814 of 2008

HEADNOTE

[This headnote is not to be read as part of the judgment]

The Industrial Relations Act 1996 (NSW), s 106, permits the Commission to vary an unfair contract "whereby a person performs work in any industry". In June 1998, in anticipation of deregulation of the dairy industry in New South Wales, the applicant (known in the proceedings by its business name "Dairy Farmers") entered into an agreement with the respondent (Reilly & Sons) whereby Reilly & Sons would distribute milk products for Dairy Farmers to supermarkets in a particular area ("the delivery contract"). In 2002, Reilly & Sons commenced proceedings pursuant to s 106 of the Industrial Relations Act , seeking to have the delivery contract varied on the basis that it was "unfair". In June 2009, Dairy Farmers sought to have the proceedings dismissed on the basis that the delivery contract was not one whereby a person performed work in an industry.

For the purposes of the summary dismissal application, Dairy Farmers accepted that it needed to establish that there was no arguable case that the delivery contract fell within the scope of the section. In October 2009 Marks J dismissed the motion. On an appeal by Dairy Farmers, a Full Bench of the Industrial Court upheld his Honour's order and dismissed the appeal.

Dairy Farmers sought to review the decisions in the Industrial Court in the supervisory jurisdiction, pursuant to s 69 of the Supreme Court Act 1970 (NSW).

Held, dismissing the application :

(1) (Hodgson JA, Giles JA agreeing and Basten JA)

(a) There can be more than one contract whereby a person performs work in an industry as, for example, where an individual is employed by his or her service company, which in turn contracts to provide services, involving work in an industry: at [3]-[5] and [54].

Caterpillar of Australia Pty Ltd v Industrial Court (NSW) [2009] NSWCA 83; 225 ALR 131 explained and applied.

(b) Whether the work undertaken by Mr Stephen Reilly, as driver of a delivery truck, was work undertaken pursuant to the contract with Dairy Farmers, depended upon an evaluative judgment as to the extent to which the delivery contract had an impact on the conditions and remuneration for the work: at [6] and [64].

Batterham v QSR Ltd [2006] HCA 23; 225 CLR 237; Fish v Solution 6 Holdings Ltd [2006] HCA 22; 225 CLR 180 and Old UGC Inc v Industrial Relations Commission (NSW) [2006] HCA 24; 225 CLR 274 applied.

(2) (Basten JA, Giles and Hodgson JJA agreeing)

The decision sought to be reviewed was one which engaged the principles with respect to summary dismissal established in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69, 112 CLR 125: at [12].

(3) The supervisory jurisdiction of the Court was invoked to challenge the correctness of the decisions in the Industrial Court on that basis and did not require the Court to assess for itself, as a matter of final determination, whether or not jurisdiction existed: [21].

(4) In circumstances where -

(a) the nature of the work to be performed was clearly work of a kind which could, if undertaken by employees, be the subject of an industrial instrument;

(b) as such the work could have been undertaken by Dairy Farmers, employing its own drivers;

(c) the evidence did not unequivocally demonstrate that Reilly & Sons operated a significant separate and independent business;

(d) while the delivery contract did not require the employment of any individual to perform the work, it contemplated that work would be performed by truck drivers who would be identified to Dairy Farmers and who would need to be employed on conditions which reflected a number of requirements set out in the delivery contract, and

(e) the hours of work and remuneration of the operators would, in practical terms, be affected by the delivery contract -

evaluation of such matters prevents the negative proposition, namely that it was not reasonably open to argue that the delivery contract was one whereby work would be performed in an industry, being made good: [62]-[67].

Judgment

1. GILES JA : I agree with Basten JA, and with the additional comments of Hodgson JA.

1. HODGSON JA : I agree with the orders proposed by Basten JA and with his reasons. I would add the following comment.

1. I note that in Caterpillar of Australia Pty Ltd v Industrial Court (NSW) [2009] NSWCA 83; (2009) 225 ALR 131 at [122], Spigelman CJ found error in the judgment of the Full Bench of the Industrial Court in that they asked whether the work in question "was performed pursuant to" the agreements variation of which was being sought; whereas they should have asked " what was the contract or arrangement pursuant to which" the relevant persons performed work. See also [125].

1. Those paragraphs could in isolation be read as suggesting there can in each case ever be only one "contract whereby a person performs work in any industry", within the meaning of s 106(1) of the Industrial Relations Act 1996. However, in its context it is in my opinion drawing attention to the need to recognise that the contract variation of which is sought must bear some resemblance to an employer/employee relationship, in which the employee performs work having the necessary "industrial" character: Caterpillar at [124] and [134] - [142].

1. Where an individual has a one-person company which contracts, with a company conducting a business in an industry, to provide the services of that individual to the latter company, the circumstance that there is a contract of employment between the individual and his own one-person company would plainly not of itself prevent his company's contract with the other company being a contract whereby the individual performs work in the relevant industry, even if the contract between the individual and his own company was also such a contract.

1. In my opinion, one relevant consideration is whether the work performed is of a type that would otherwise be performed by an employee in the industry, rather than of a type that would be performed by an entrepreneur employing others. Another is whether the contract, variation of which is being sought, has a substantial impact on the conditions of and remuneration for the work: the greater that impact, the more likely it is that the contract would be considered to be a contract whereby the person performs work in the industry.

1. In this matter, the respondents' case was not shown to be not reasonably arguable.

1. BASTEN JA : On 9 June 1998, in anticipation of deregulation of the dairy industry in New South Wales, the applicant in this Court entered into an agreement described as a "Supermarket Delivery Contract" with SW & JD Reilly & Sons Pty Ltd ("Reilly & Sons"). Industry deregulation occurred one month later. On 1 May 2002 Reilly & Sons commenced proceedings in the Industrial Court, seeking to have the contract varied, pursuant to s 106 of the Industrial Relations Act 1996 (NSW).

1. On 28 June 2009, Australian Co-operative Foods Ltd (which is referred to throughout the contractual documentation as "Dairy Farmers") sought to have the proceedings dismissed on the basis that the Court lacked jurisdiction in respect of the application. Dairy Farmers contended that the Supermarket Delivery Contract ("the delivery contract") was not a contract "whereby a person performs work in an industry" within the meaning of s 106.

1. On 29 October 2009 Marks J ("the primary judge") dismissed the motion: SW & JD Reilly & Sons Pty Ltd v Australian Co-operative Foods Ltd [2009] NSWIRComm 176. Dairy Farmers applied for leave to appeal to the Full Bench of the Industrial Court. Leave was granted, but the appeal was dismissed: Australian Co-operative Foods Ltd v SW & JD Reilly & Sons Pty Ltd [2010] NSWIRComm 110 (Walton V-P, Staff and Backman JJ).

Issues

1. The summons in this Court sought to invoke the supervisory jurisdiction of the Court, pursuant to s 69 of the Supreme Court Act 1970 (NSW). The issue was presented in this Court in the following terms:

Whether the Industrial Court was in error in failing to find that there was no reasonably arguable basis upon which, if the application proceeded to final determination, the jurisdiction of the Court could be upheld.

1. The issue was presented in this convoluted form because Dairy Farmers sought to set aside the decisions of both the primary judge and the Full Bench. Marks J dismissed the application because he was unable to be satisfied that there was not a reasonably arguable case that jurisdiction existed. By contrast, the Full Bench was affirmatively satisfied that the Court did have jurisdiction. However, it was common ground in this Court that this was a finding for the purposes of the strike out application only, which was to be determined, as noted by Marks J, in accordance with the principles in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69, 112 CLR 125.

1. Although it would have been open to either party to seek resolution of the issue concerning the jurisdiction of the Court as a separate question, pursuant to the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), Pt 28, that step was not taken. Thus, although the relief claimed in this Court included a declaration that the Industrial Court did not have jurisdiction to grant the relief sought by Reilly & Sons, and prohibition, that relief (which would involve a final determination of the jurisdictional issue) was not pressed. There remains a question as to how this Court should approach the exercise of its supervisory jurisdiction, which will be addressed below.

1. It was common ground that the jurisdiction of the Court under the State legislation was not affected by any Commonwealth Act, such as the Independent Contractors Act 2006 (Cth) or Part IVB of the Trade Practices Act 1974 (Cth) and the Trade Practices (Industry Codes - Franchising) Regulations 1998 (Cth), as then in force.

1. A second issue as to which no argument was raised in this Court was the application of the privative provision in s 179 of the Industrial Relations Act . That section, as presently in force, purports to exclude from the supervisory jurisdiction of this Court any decision of the Commission other than a "purported decision" on an issue of the jurisdiction of the Commission, made by the Full Bench, or, if the Full Bench refuses leave to appeal, of a single judge: s 179(4). It is now understood that reference to a "purported decision" is simply inelegant drafting: it is not in doubt that the Industrial Court has power to consider its own jurisdiction: see Batterham v QSR Ltd [2006] HCA 23; 225 CLR 237 at [26]-[28] (Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ) addressing a previous form of s 179, and Sin Yong Yim v Industrial Relations Commission (NSW) [2007] NSWCA 77 at [20]-[23] (Spigelman CJ, Mason P and Handley AJA agreeing).

1. Nevertheless, s 179 purports to exclude review of a decision of a single judge, where the Full Bench has given leave to appeal. If leave were granted and the Full Bench reached its own decision on the matter, it is at least arguable that that decision would supersede the decision of a single judge and would be the only operative decision, until set aside, by analogy with the reasoning in Wishart v Fraser [1941] HCA 8; 64 CLR 470. If the decision of the Full Bench were to be set aside, there might be a question as to the constitutional validity of s 179 if it purported to exclude the jurisdiction of this Court to correct jurisdictional error on the part of a single judge: see Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531. If s 179 were not to be read down so as to avoid that result, it might be necessary for this Court to remit the matter to the Full Bench if the decision of the Full Bench were to be set aside. Because, in the circumstances set out below, the order made by the Full Bench (and the order made by the primary judge) have not been shown to be erroneous, it is not necessary to resolve this question.

1. Finally, in terms of formalities, the proceedings in this Court were erroneously identified in two respects which should be noted because the errors are commonplace. First, the parties were identified as "Claimant" and "Opponent": that language is not reflected in the Uniform Civil Procedure Rules. Since 1 January 2008, the party filing an originating process is an "applicant" and the opposing party the "respondent": rr 51.2 and 51.45. Secondly, although it is necessary to join the court or tribunal which made the decision to be reviewed, the first respondent should be the active party, in this case Reilly & Sons. The Court should direct that the operative documents in the Court should be treated as amended accordingly.

Exercise of supervisory jurisdiction

1. The relevant evidential material was presented to this Court as on an appeal: in other words, appeal books containing affidavits, documents and the transcript of the hearings in the Industrial Court were filed. Although at one stage Reilly & Sons foreshadowed reading a fresh affidavit in this Court, that course was abandoned and, as a consequence, no issue arose as to the appropriate manner for proceeding in this Court in respect of evidence. Nevertheless, that was not the end of the matter.

1. Reference to "the supervisory jurisdiction" tends to obscure an important distinction between separate functions exercised by the Court, albeit in each case in the original and not the appellate jurisdiction. Review for jurisdictional error requires the identification of a decision of the court or tribunal under review and commonly is accompanied by a claim for relief in the nature of certiorari, quashing or setting aside that decision. That step will require identification of an operative decision affecting the rights or interests of a party: interlocutory, procedural orders may not qualify.

1. The second function involves this Court reaching a decision itself as to whether the court or tribunal has jurisdiction to deal with a particular matter. That may occur before any decision has been made which might be reviewed. The usual form of relief in such a case will be a restraining order in the nature of prohibition, or an injunction. Except in unusual circumstances, such relief will not be granted in respect of proceedings in a court which has power to determine its own jurisdiction. Where the court below has not been given an opportunity to decide the issue as to its jurisdiction, relief may well be refused as premature. A different approach was taken in relation to proceedings in the Industrial Court when a strong privative clause appeared to preclude any form of review of a decision, once made: see, eg, Solution 6 Holdings Ltd v Industrial Relations Commission of NSW [2004] NSWCA 200; 60 NSWLR 558.

1. The application filed by Dairy Farmers sought both declaratory relief and prohibition. In each case, the relief would have been appropriate only in respect of a final determination as to jurisdiction. By its concession that this case was not concerned with final relief, Dairy Farmers impliedly abandoned its request for a declaration and prohibition.

1. The remaining relief was expressly directed to the decisions of the Industrial Court refusing the strike out application. The privative clause precluded reliance upon error of law on the face of the record, leaving only a claim based on jurisdictional error. However, much of the debate proceeded on the basis that an error of law appearing in the reasons of the Tribunal would necessarily satisfy that test. The debate in this Court also proceeded on the assumption that a refusal to strike out a proceeding was the kind of decision which would attract relief in the nature of certiorari. Even if that assumption were justified, there might still be discretionary consideration, in the event (which does not arise in the circumstances explained below) that a relevant error had been established.

1. Accepting that no final determination of jurisdiction is in issue, there was a question as to the manner in which this Court should deal with findings of the Full Bench in respect of the statutory question. Thus, in Caterpillar of Australia Pty Ltd v Industrial Court (NSW) [2009] NSWCA 83; 225 ALR 131 at [139], Spigelman CJ stated:

"There will be cases in which it is correct, or at least open, to conclude that the working proprietor of a franchise or dealership does perform 'work in an industry' in accordance with the dealership or franchise agreement. When exercising its supervisory jurisdiction, this Court would not substitute its own views on such a matter for those of the Industrial Court where the issue turns on matters of fact and degree. However, the fact that there may be cases in which drawing the line is difficult, does not mean, when a particular fact situation clearly falls on one side of the line, that the Court must refrain from exercising its supervisory jurisdiction."

1. The language adopted in Caterpillar must be adapted to apply on a strike out application to the test of lack of a reasonably arguable case as to jurisdiction. In one sense, this obscured the correct approach to be taken in this Court, because Dairy Farmers accepted that it needed to establish in any event that a finding of jurisdiction was not reasonably open.

Jurisdictional issue: background

1. Without trespassing upon the debate as to what surrounding circumstances were relevant to the jurisdictional issue, Dairy Farmers contended that the contractual documentation included the delivery contract itself, a "Supermarket Contractor Manual" ("the manual"), referred to in the delivery contract, and two letters - one of 4 June 1998 from Dairy Farmers to Reilly & Sons and another of 9 June 1998 from Dairy Farmers' solicitors to the solicitors for Reilly & Sons.

1. The contract referred to Reilly & Sons as "the Contractor". It described "the Business" as "the activities of the Contractor delivering the Dairy Farmers Products to the Designated Customers in accordance and by virtue of the rights granted by this Agreement", specifically excluding any other activities. The phrase "the Business" was not much used in the rest of the contract, but the responsibilities of the contractor were identified in terms reflecting the definition: clause 13.1. Thus, Reilly & Sons' "prime responsibility" was to deliver Dairy Farmers products and it was required to "avoid all activities which shall give rise to any conflict of interest or prejudice" its ability to perform its prime responsibility. Further, it was not allowed to "sell or deliver any other products without the prior written consent of Dairy Farmers" although such consent could not be unreasonably withheld: clause 13.2. Further, clause 13.3 provided:

"The Contractor and Dairy Farmers will work together to deliver the Dairy Farmers products in the manner and time requested by the Designated Customers."

1. The term "Designated Customers" referred to "those supermarket outlets to which the Contractor has the exclusive right to delivery Dairy Farmers Products": clause 1.

1. Reilly & Sons was to be paid by a "Commission", being a rate calculated as a number of cents per litre, set by Dairy Farmers, but having regard to the costs incurred by Reilly & Sons: clause 7.2(b).

1. It may be inferred from the text of the contract and its title that it was a standard form contract used by Dairy Farmers for delivery arrangements to supermarkets throughout New South Wales. Most, though not all, of its terms could operate with respect to contractors who were incorporated, or were individuals. Some could not: thus, Dairy Farmers was entitled to terminate the agreement where "the Contractor dies or is permanently incapacitated": clause 19.1. The contract envisaged that deliveries would be undertaken by "Operators". No doubt in relation to corporate contractors, the physical activity of delivering dairy products could only be undertaken by operators, although a contractor who was an individual could no doubt also be an operator. The contract defined the term "the Operator" as "an individual approved and accredited by Dairy Farmers who has completed the training prescribed by Dairy Farmers for Operators and who is employed by the Contractor to drive the vehicle or otherwise assist in servicing the Designated Customers of the Business": clause 1.

1. The contract required both parties to "adhere to the System, the Image and the Standards as prescribed by this Agreement and the Manual": clause 9.1. Each of these was a defined term, clause 1 providing:

"* 'the Image' means the distinctive range and reputation of Dairy Farmers products in the market. The Dairy Farmers name, the registered and unregistered trademarks, brand names, logos and slogans associated with the Dairy Farmers products are features of the Image.

...

* 'the Manual' means the Manual specifying the Standards and procedures which Dairy Farmers requires of contractors, as amended from time to time.

...

* 'the Standards ' means the prescribed standards of health, safety, refrigeration, delivery, storage, customer service and performance as specified by Dairy Farmers in this Agreement and the Manual.

...

* ' the System' means the processes, systems and operational procedures developed from time to time by Dairy Farmers for the sale or delivery of the Dairy Farmers Products to the Designated Customers in accordance with the Standards."

1. The contract imposed controls on the contractor and operators:

"6.2 Prior to the Commencement Date the Contractor and all Operators shall satisfactorily complete any initial training program and obtain all necessary permits or licences required by Dairy Farmers or any law, regulation or industry code of conduct....

6.3 The Contractor shall ensure that the Vehicle is suitable for use in the Business, meets the specifications of Dairy Farmers as set out in the Manual, complies with all relevant laws or regulations, and is correctly outfitted and sign written in accordance with the Dairy Farmers Image.

6.4 Prior to the Commencement Date the Contractor shall appoint the Operator, and notify Dairy Farmers of the appointment. All Operators must have an appropriate driver's licence and will otherwise be able to lawfully and competently drive the Vehicle."

1. The responsibilities of Dairy Farmers under the contract included training the contractor in the system and providing uniforms for the operators at its expense: clause 10.1 and 10.11.

1. The manual appears to have come in several versions, but the only complete version in the papers, and the one upon which the parties were content to rely, was one dated July 1997. It may be inferred that this was the manual in operation when the contract commenced. Aspects of the manual were repetitive of provisions in the contract, but in other respects it provided greater detail in respect of particular aspects of the contractual arrangement. Thus, under the heading "Hours of Operation", it required that supermarket contractors "must be prepared to work up to seven days a week to deliver product to meet customer requirements and at the agreed customer service standards of Dairy Farmers": clause 2.3. The contractor was required to notify Dairy Farmers of the appointment of drivers: clause 2.4. Contractors (and it may be inferred drivers) were required to be attired "in clean, freshly laundered and pressed Dairy Farmers uniforms at the commencement of each day": clause 2.6. Dairy Farmers was to bear the cost of the "first uniform". The contract required that the make, model and registration number of the vehicles be identified in a schedule to the contract; the manual provided that Dairy Farmers would apply signage on any truck to be used in the business and would bear the cost of respraying as a result of changes to logos or livery and would share the cost of subsequent resprays due to general wear and tear: clause 5.4. The training to be provided was spelled out in some detail in clause 6.

1. The letters added little by way of contractual detail, but provided some further information as to the circumstances of Reilly & Sons at the date the contract commenced. For example, an obligation to collect products from a central depot at Lidcombe was varied for a transitional period to allow collection from a distribution centre at French's Forest. Dairy Farmers also indicated a willingness to allow Mr Stephen Reilly, and his operators, to include "Reilly & Sons Food Services" and other details on the uniforms provided by Dairy Farmers and on their vehicles. The letter of 4 June 1998 also set out the terms on which Dairy Farmers was prepared to consent to Reilly & Sons "selling non-dairy products such as eggs and fruit juices" to designated customers, although the consent precluded any delivery to other customers where the delivery methods used Dairy Farmers system, image, marks or standards, thus preventing the use of vehicles and uniforms bearing the Dairy Farmers logos.

1. The inference which Dairy Farmers sought to draw from this material was that Reilly & Sons was an independent business, not exclusively devoted to the delivery of Dairy Farmers products. This material was relevant to the only factual issue identified as surrounding circumstances, which appeared to be of any significance to the jurisdictional issue.

1. Dairy Farmers operated three separate franchise systems, one involving supermarkets, a second involving "route trade" and a third providing for home deliveries. The route trade was said to include delivery to milk bars, take-away food shops, restaurants, caterers and selected convenience stores. Reilly & Sons had a separate franchise agreement in relation to route trade, which was not the subject of the application to the Industrial Court. The evidence filed in the Industrial Court included a number of affidavits of Mr Stephen Reilly, who was the managing director of Reilly & Sons. In an affidavit of 28 August 2009, he explained the corporate structure of the business. Reilly & Sons was incorporated in 1979. At the time the delivery contract was signed, Mr Reilly and his wife were the directors of Reilly & Sons. Reilly & Sons was a trustee for a family settlement trust. Although it had not traded in its own right, Mr Reilly said that up until 30 June 2006, it had employed persons working in other related businesses of which Mr Reilly and his wife and, in one case, their two sons, were directors and shareholders. The family operated the business "Reilly & Sons Food Services" through an entity which was incorporated in late 1998, Sydney Northern Beaches Milk Co Pty Ltd.

1. Mr Reilly described his own role in the business in an affidavit of 16 June 2008 in the following terms (par 20):

"From the time [Reilly & Sons] commenced working in the milk industry and up to deregulation, I performed the majority of work involved in the delivery of Dairy Farmers products and other milk processors products. That is, I attended the local depot in order to collect the Dairy Farmers products in my refrigerated truck and I performed the majority of delivery work. [Reilly & Sons] did employ people to work part-time to assist on weekdays and also on the weekends. Usually, I employed one driver on Saturday to do the weekend delivery to the supermarkets. My wife, June, has always attended to administrative tasks including paying accounts and organising the records of the business."

1. Referring to an earlier period, "up until 29 October 1997" Mr Reilly stated that Reilly & Sons had three trucks, that he worked 12-16 hours a day and there were two part-time employees who only did supermarket deliveries, for no more than 2-3 hours a day: par 30. In a later affidavit of 29 July 2009 he stated:

"18. In order to perform its obligations under the Supermarket Delivery Contract, the Applicant had to undertake various tasks associated with the delivery of milk. Many of these tasks were done by me personally. ... The tasks that I would perform including driving [Reilly & Sons'] truck to the depots at Frenchs Forest, Lidcombe and Arndell Park, collecting the order and loading the truck, driving to the supermarkets, unloading the truck onto the delivery dock, and driving back to [Reilly & Sons'] warehouse. I would also perform other tasks including placing and checking orders, liaising with Dairy Farmers' staff, liaising with supermarket managers as required, and various other organisational duties.

19. Before deregulation, I performed very similar tasks. ... In general, I have always personally undertaken much of [Reilly & Sons'] work delivering Dairy Farmers' products.

20. [Reilly & Sons] has from time to time performed delivery work of dairy products other than Dairy Farmers' products. It has also from time to time employed other persons to perform aspects of the work described at paragraph 18 above. These arrangements have come and gone and have usually been on a temporary basis. ..."

1. Dairy Farmers also sought to rely upon evidence given by Mr Reilly in relation to leasing the business to another contractor in October 2007. However, it is not clear that this material is of present relevance. Reliance upon it raised an issue as to the admissibility of material relating to events long after the contract started and after the application was made. In any event, it did little more than provide an example of the operation of the contractual provision which prevented a contractor from transferring, sub-contracting or otherwise dealing with the business without the written consent of Dairy Farmers: Contract, clause 18.3. The relevant inference available to Dairy Farmers from that clause was that the contract could be characterised as one involving a business, rather than the performance of work by individuals.

Jurisdictional issue: applicable principles

1. Reilly & Sons' rights to relief accrued (contingently) when an application was made under s 106 of the Industrial Relations Act on 1 May 2002: Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223; 63 NSWLR 291 at [30]-[31] (Handley JA, Giles JA agreeing). Relevantly for present purposes, s 106 then provided:

" 106 Power of the Commission to declare contracts void or varied

(1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

(3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time."

1. Section 106 is contained in Pt 9, Div 2 of the Industrial Relations Act , Div 1 of which provides relevant definitions in the following terms:

" 105 Definitions

In this Part:

contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument.

unfair contract means a contract:

(a) that is unfair, harsh or unconscionable, or

(b) that is against the public interest, or

(c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or

(d) that is designed to, or does, avoid the provisions of an industrial instrument."

1. The term "industrial instrument" is defined to mean "an award, an enterprise agreement, a public sector industrial agreement, a former industrial agreement, a contract determination or a contract agreement": s 8. The term "industry" is broadly defined to include "any trade, manufacture, business, project or occupation in which persons work": s 7(a).

1. The terms "contract determination" and "contract agreement" have no direct relevance for present purposes, but they relate to matters dealt with in Ch 6 of the Industrial Relations Act , headed "Public vehicles and carriers". The Commission has powers with respect to certain contracts of carriage, though not contracts "for the carriage of bread, milk or cream for sale or delivery for sale": s 309(4)(d). The Act also contains a definition of "employee" which covers persons employed in any industry, "whether on salary or wages or piece-work rates" and any person taken to be an employee for the purposes of the Act, being a person described in Schedule 1: s 5(1) and (3). Schedule 1 relevantly provides:

" 1 Persons to be treated as employees

The following persons are taken to be employees:

(a) Milk vendors

Any person (not being registered as a milk vendor to sell milk or cream from a vehicle or any other conveyance) who sells or delivers for the purpose of sale milk or cream from any vehicle. (In such a case, the employer is taken to be any person whose milk or cream is so delivered or who supplies the milk or cream so delivered.)"

1. There is no longer any suggestion that Schedule I was engaged to create a relationship of employment between Dairy Farmers and Reilly & Sons or Mr Stephen Reilly. However, the statutory context and purpose of s 106 may depend upon the operation of such provisions, one of the purposes, as derived from pars (c) and (d) of the definition of "unfair contract", being to prevent persons who might otherwise be treated as employees or as entitled to benefits under industrial instruments, being excluded from such benefits or entitlements.

1. There is a relevant procedural provision:

" 108 Who may apply for order

An order may be made under this Division on the application of:

(a) any party to the contract, or

(b) any person who, but for the making of such an order, would be a party to the contract, or

(c) an industrial organisation of employers whose members employ persons working in the industry to which the contract relates, or

(d) an industrial organisation of employees whose members are employed in the industry to which the contract relates, or

(e) an association registered under Chapter 6 of which a party to the contract is a member,

and not otherwise."

1. In effect, applications may be made by a party to the contract or a relevant industrial organisation whose members employ, or are employed, in a particular industry. The Act does not prescribe who is to be a respondent to any such application, but presumably it must be another party (or the other parties) to the contract.

1. The scope and operation of s 106 has been determined by a trilogy (or perhaps it should be triplet) of judgments in the High Court and subsequent authorities in this Court. The primary judgment in the High Court was that of Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ in Fish v Solution 6 Holdings Ltd [2006] HCA 22; 225 CLR 180; see also Batterham at [15] above; Old UGC Inc v Industrial Relations Commission (NSW) [2006] HCA 24; 225 CLR 274.

1. It is clear from those three decisions, and the underlying judgments in this Court, that their effect was to restrict the operation of s 106 as previously understood. That was achieved in part by eschewing too literal a reading of the statutory words and taking into account the industrial context in which the provision was intended to operate. More specifically, as may be understood from the joint judgment in Fish , three broad propositions were established.

1. First, the initial inquiry required by the section is whether a person "performs work in any industry": at [18]. Read in isolation, that question lacks content. However, if it is understood as requiring identification of the relevant person, the relevant work and the relevant industry, it will provide an answer against which the next question can be determined. In the present case, the person was treated as Mr Stephen Reilly; the work included the driving of a delivery truck and related activities, such as loading, unloading and maintaining appropriate records. The industry was variously described as milk vending and transport of milk products for the purpose of sale. The precise description did not matter in the present case: narrower descriptions focused on the precise activities undertaken by Mr Reilly, whilst broader descriptions treated his operations as part of the broader industry in which Dairy Farmers was engaged.

1. The second question is whether the contract which the applicant in the Commission seeks to have varied is in fact a contract whereby an identified person performs work in an industry. In the present case, the contract sought to be varied was the delivery contract. It follows that the jurisdiction of the Commission will not be engaged unless it can properly be said that the work Mr Stephen Reilly performed was performed pursuant to that contract: see Fish at [19] and [41].

1. The third proposition derived from Fish concerns the operation of the expanded definition of "contract", which includes the phrase "or any related condition or collateral arrangement". If that definition is simply fed into the operative provision, it permits the Commission to make an order varying "any contract or arrangement, or any related condition or collateral arrangement, whereby a person performs work in any industry". As explained in Fish , to focus on related conditions or collateral arrangements, when, whatever the identifiable source, it is that which gives rise to the performance of work, risks losing sight of the need to identify the source of any obligation to perform work.

1. In Brown v Rezitis [1970] HCA 56; 127 CLR 157, Barwick CJ noted (at 164) that an important purpose of the Act was to deal with "subterfuges which take workers outside the operation of industrial instruments intended to protect workers in an industry": Fish at [41]. Although neither party suggested that avoidance of subterfuges was the limit of the scope of s 106, nevertheless, its purpose is undoubtedly to extend the protection afforded by the Act to persons performing work in an industry, who fall outside the scope of such collective arrangements. As explained in Caterpillar , the scheme of the legislation, and particularly Ch 2, the heading of which is "Employment", demonstrates the nature of the relationship between a contract and the performance of work in an industry encapsulated in the connecting adverb "whereby".

1. Because the characterisation of the contractual arrangements must fall within an industrial context, there is a natural tendency to provide a different label for those which fall outside that context, the usual epithet being "commercial". This is strengthened by the fact that jurisdiction with respect to commercial arrangements lies with the Supreme Court, rather than the Industrial Court. However, to set up such a dichotomy may itself be unhelpful. Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd [1987] HCA 28; 163 CLR 117 at 135 noted that many management decisions "once viewed as the sole prerogative of management, are now correctly seen as directly affecting the relationship of employer and employee and constituting an 'industrial matter'", for the purposes of s 51(xxxv) of the Constitution . The Court rejected the proposition that "managerial decisions stand wholly outside the area of industrial disputes and industrial matters", suggesting that the distinction "is so imprecise as to be incapable of yielding any satisfactory criterion of jurisdiction": at 136. The present context is different from that involving industrial disputation, and the purpose of charactering a particular contractual arrangement as one whereby work is performed in an industry should remain the focus of attention.

1. As explained in Caterpillar at [123], it is necessary to recognise that Mr Stephen Reilly must have performed his work pursuant to an employment contract between himself and Reilly & Sons or the family trust. (The evidence does not suggest that he himself worked as an independent contractor.) That legal relationship may be described as "the first step back" from the actual performance of work, or as the immediate source of the legal obligation to perform work. Other contractual arrangements may arise collaterally between the same parties. In addition, the relationship between Reilly & Sons and Mr Reilly may itself be the result of a separate contractual relationship, being the second step back sequentially from the performance of the work. Dairy Farmers does not dispute that there may be more than one contract whereby work is performed, but denies that the contractual arrangement between itself and Reilly & Sons constitutes such a contract.

1. A further statutory consideration applies in the present case which did not arise in the three judgments in the High Court, nor in Caterpillar . Following the decision of this Court in Solution 6 Holdings , s 106 was amended to add the following subsection:

"(2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as:

(a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and

(b) the performance of work is a significant purpose of the contractual arrangements made by the person."

1. The language could be clearer, but considering the circumstances of the present case, it appears to permit variation of the delivery contract, if it is "a related condition or collateral arrangement" in relation to the employment contract whereby Mr Stephen Reilly performs work. That is so even if the delivery contract itself is not a contract whereby Mr Reilly performs work in an industry. The awkwardness of the drafting has three aspects. First, the delivery contract is not described as a "related contract", but as a related condition or collateral arrangement. It is at least arguable that an independent contract in a chain between the principal and the performance of work, does not satisfy that language. Secondly, the delivery contract is said to be variable "even though it does not relate to" the performance by a person of work in an industry, rather than being a contract other than one "whereby" the person performs work in an industry. It is unlikely that anything turns on this semantic awkwardness. Thirdly, in paragraph (b), a grammatical reading would suggest that "the person" refers to the person who performs work - as in par (a) - rather than the person who enters into the delivery contract, in this case Dairy Farmers. However, that could give rise to anomalous results.

1. In Caterpillar , it was accepted that sub-s 106(2A) did not apply, because of the operation of the transitional provision, clause 19B of Schedule 4. The provision commenced on 9 December 2005 and it was not disputed that it could have operation in relation to these proceedings as proceedings pending in the Commission at that date and not finally determined, assuming they are not to be struck out. Whatever the scope of the provision, it is at least arguable that it could permit the delivery contract to be varied, even though it was not a contract whereby Mr Stephen Reilly performed work in the industry. However, as no weight was placed on the possible operation of this provision in argument in this Court, its construction need not be addressed further.

1. It should also be noted that the case was argued and determined in the Industrial Court on the implicit basis that the reference in s 106 to "a person" performing work, was to an individual and did not include a corporate person. That assumption appears to be correct given the purpose of the provision in Ch 2 of the Industrial Relations Act , as discussed above.

Jurisdictional error: application of principles

1. Dairy Farmers submitted that the contract which is sought to be varied, being that between it and Reilly & Sons, is not a contract pursuant to which Mr Stephen Reilly, or indeed any other individual, performs work in an industry: it contains no express requirement that Reilly & Sons employ persons to carry out the work. Further, Reilly & Sons is not required under the delivery contract to work exclusively for Dairy Farmers and may carry on other businesses concurrently. These factors distinguish the present circumstances from those operating in Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443.

1. Dairy Farmers accepted that there was a degree of "inter-dependence" between its contract with Reilly & Sons and the employment contracts, but submitted that such inter-dependence did not provide a basis for concluding that its contract fell within the terms of s 106. It also rejected the proposition relied on in the Full Bench, that cases involving large commercial operations were distinguishable.

1. For present purposes, each of the factors raised by Dairy Farmers may be accepted in its terms, and treated as relevant. The question is whether they are conclusive, or must be weighed against other circumstances or factors which tend to engage the operation of s 106. Those factors, may be summarised in the following terms.

1. First, the nature of the work to be performed was clearly work of a kind which could, if undertaken by employees, be the subject of an industrial instrument. Secondly, it was such as could well have been undertaken by Dairy Farmers employing its own drivers. No doubt, to effect that purpose, it would have needed to purchase or lease vehicles. However, the circumstances were closer to an employment relationship than cases where it was necessary to establish retail outlets or other infrastructure to sell products or provide services.

1. Thirdly, the evidence did not unequivocally demonstrate that Reilly & Sons operated a separate and independent business, of which the Dairy Farmers deliveries were merely a part. The factual inference available on the evidence was that Reilly & Sons depended on their delivery contract with Dairy Farmers (and perhaps the route contract), which they sought to supplement by delivery of other products requiring refrigerated delivery vehicles. Further, the subsidiary nature of the other business was demonstrated by the controls over them exercised by Dairy Farmers under the delivery contract.

1. Fourthly, while it is correct to say that the delivery contract did not require the employment of any individual to perform the work, it contemplated that the work would be performed by individuals, that the individuals would be identified to Dairy Farmers and that they would undergo training by Dairy Farmers. It follows that any employment contract entered into by Reilly & Sons with an individual would have to reflect its obligations under its contract with Dairy Farmers. Those employment conditions would need to reflect or include:

(a) obtaining, cleaning, laundering and pressing uniforms on a daily basis;

(b) undertaking training prescribed by Dairy Farmers;

(c) complying with Dairy Farmers' requirements in respect of licences and abilities;

(d) complying with Dairy Farmers' requirements in respect of dealings with designated customers.

1. Fifthly, although the hours of work and remuneration of operators are not defined by the delivery contract, the hours required for performance of the contract will be fixed, in practical terms, by Dairy Farmers, as will be the income of the contractor. In setting that income, Dairy Farmers is required to have regard to the costs incurred by the contractor to service the designated customers, which will no doubt take account of administrative costs, maintenance of vehicles and wages payable to operators. The practical effects on a contractor for which the contract with Dairy Farmers constitute a substantial part of its business, will be direct and significant.

1. Whether a contract, not being an employment contract, qualifies as a contract whereby work is undertaken in an industry, will depend upon the evaluation of a number of factors, including those set out above. Responding specifically to the arguments put forward for Dairy Farmers, the following points are significant. First, whilst acknowledging that the contract under consideration does not involve the employment of persons to perform work in an industry, it must be accepted that s 106 was not intended to be so limited. Any contract involving a service company of an individual worker, will involve two contractual steps between the principal and the performance of the work. It was not in dispute that such an arrangement could constitute a contract within s 106.

1. Secondly, whether the contract is entered into with an established business, having additional independent sources of income, is a significant factor because it will diminish the extent to which the impugned contract affects the terms and conditions of employment of the contractor's staff. Thirdly, and by parity of reasoning, the size of the contractor is likely to be significant. The larger the business, the greater the opportunity for the contractor to control the administration of its business and thus reduce the extent to which an impugned contract affects the terms and conditions on which its staff operate.

Reasoning in Industrial Court

1. Dairy Farmers raised issues as to the reasoning adopted in the Full Bench of the Industrial Court. On one view, once it is established that it was reasonably arguable that the delivery contract did engage the operation of s 106, the failure of the applicant to persuade either the primary judge or the Full Bench to a different view should mean that the application to this Court is dismissed. The case is not an appeal which requires analysis of reasoning in the courts below. Nevertheless, as noted above, there is a question as to whether it is sufficient for this Court to accept the evaluative judgment as to the characterisation of the contract made by the Full Bench. That cannot be done if the reasoning of the Full Bench was affected by material error.

1. In one respect, Dairy Farmers was successful before the Full Bench. The first question it sought to raise on appeal, which appears to have been the basis on which leave to appeal was granted, was the failure of the primary judge to determine the jurisdictional issue "as a threshold issue": Full Bench Reasons at [27]. The question identified by Dairy Farmers in respect of that ground was that Marks J had declined the invitation contained in their motion, on the basis that it was not "an appropriate time" to decide the issue. The Full Bench held:

"35 Given that Marks J had before him all of the evidence relied upon by the parties being relevant to the jurisdictional issue, and given that it was the parties' joint position that it was the 'appropriate time' in which to decide the issue, it was incumbent upon his Honour to consider, by reference to that evidence, whether the [delivery contract] was amenable to s 106. The possible existence of some other alternative contract or arrangement not squarely raised by either party was not a relevant line of enquiry.

36 This conclusion must result in the appeal being upheld in this respect."

1. There are two difficulties with this passage. First, it is clear beyond the need for authority that appeals are brought from orders and not from reasons for judgment. The order made by Marks J was that the motion be dismissed. If the order were correctly made, though for the wrong reason, the appeal would be dismissed, not upheld. Secondly, the discussion confused the basis upon which the motion was determined. Although it was common ground in this Court that the motion was properly dealt with as an application for summary dismissal, presumably pursuant to UCPR, r 13.4 (or possibly r 14.28), to be addressed, as Marks J correctly noted, pursuant to General Steel principles, the notice of motion did not so state. It merely sought an order "dismissing the proceedings". Although there were passages in the primary judgment referring to the absence of "the totality of the evidence" and uncertainty as to how the matter would be dealt with at a final hearing, these references, read in context, demonstrate that his Honour was not satisfied that it was appropriate to strike out the proceedings summarily.

1. Dairy Farmers' application for leave to appeal to the Full Bench gave no indication that its motion was one seeking summary disposal, but rather implied that it was in the nature of an application for determination of a separate question, on a final basis. The Full Bench appears to have accepted the implication underlying the appeal and determined the matter as if it were a separate question for final determination. It is now agreed that the Full Bench was in error in that respect.

1. The second complaint, and one upon which the applicant relies in this Court, was a failure to adopt the correct approach as identified in the High Court authority, as expanded upon in Caterpillar . In this respect, the reasons of the Full Bench were equivocal. At [50], the reasons turned to the second stage of the inquiry, described as "the identification of the contract, or set of arrangements, according to which, or whereby, a person, or persons, performed the work". That part of the reasons commenced with the heading "What was the Contract or Arrangement whereby a person performed the work?" Those statements of the issue were uncontroversial; the applicant's complaint was that, in the following paragraph [51], the Full Bench continued:

"The only contract which arises for consideration is the [delivery contract]. It is the only contract which is the subject of the application for relief. The present inquiry must, therefore, focus on that contract which, it will be recalled, also incorporates the terms of the Manual."

1. Although not expressed in terms disclosing manifest error, Dairy Farmers invited the Court to read that passage in the light of the later statement that, there being no evidence as to the terms and conditions of any employment contract entered into by Reilly & Sons, "[n]either party placed any great reliance on the existence of such contracts or their relevance to the jurisdictional issue": at [111]. Dairy Farmers submitted that, to the contrary, it had at all stages insisted that the contract pursuant to which work was performed by Mr Stephen Reilly was a contract of employment between him and the family trust, or Reilly & Sons as trustee.

1. Although the Full Bench commenced by identifying the correct question, there would be substance in a complaint raised on a final determination of the issue, that the Full Bench had acknowledged the existence of, but dismissed as of little weight - given ignorance as to its specific terms - the employment contract between Mr Stephen Reilly and Reilly & Sons or the trust. For a final determination of the issue, what was required was an analysis of the ways in which the delivery contract impinged upon the employment relationship. A failure to take that course might well demonstrate legal error.

1. However, it is not clear that the Full Bench failed to undertake that task at [112]-[115]. Part of that material reads:

"113 The [delivery contract], by its terms, exhibits, in our view, an ongoing business relationship between the parties with regard to the delivery of [Dairy Farmers] products. It is not a contract where, after its execution, [Dairy Farmers] had no further interest in [Reilly & Sons'] activities .... [Dairy Farmers] had a 'real interest' in the work being performed by the Operators ( Majik Markets at 465A). It resulted in the sale of its products to the supermarkets for profit. [Dairy Farmers] also stood to benefit from the obligations imposed upon [Reilly & Sons] under the [delivery contract] to build and maintain positive relations with representatives of the Designated Customers. Under the [delivery contract] [Reilly & Sons] is required to deliver [Dairy Farmers'] products seven days per week. In addition, [Reilly & Sons] is obliged to ensure that its staff are aware of its obligations as 'Contractor' imposed under the [delivery contract]. [Reilly & Sons] is obliged to ensure its staff are appropriately trained and supervised 'at all times' with regard to the required adherence by it to [Dairy Farmers'] 'System, Image and Standards'. The Operators involved in 'the Business' must wear [Dairy Farmers'] uniforms, details of which are set out in the Manual. [Reilly & Sons'] 'prime responsibility' under the [delivery contract] is identified as the delivery of [Dairy Farmers'] products.

...

115 These obligations and responsibilities, in the context of an ongoing business relationship between the parties, indicate, in our view, that the [delivery contract] is a contract according to which, or 'whereby, [Reilly & Sons], through the Operators, performed the work, namely, the delivery of [Dairy Farmers'] products.

116 The performance of work under the terms of the [delivery contract] also sits comfortably ..., with the requirement ... that there be an 'industrial element in the work performed. .... [Reilly & Sons'] operation, in particular from the period commencing in 2002, may be best described as 'modest'. In real terms, Mr Reilly conducted the bulk of the delivery work to the supermarkets. Other Operators, of which there appear to be only a few, perhaps two or three, worked in the business in a part-time capacity."

117 The [delivery contract], therefore, falls within the ambit of s 106 as a contract according to which or 'whereby' Mr Reilly and the other operators performed delivery work in the milk vending industry."

1. It is unnecessary to reach a final view as to that matter; all that was required being a conclusion that Dairy Farmers had failed to establish that the case maintained by Reilly & Sons was not reasonably arguable.

1. A third criticism of the Full Bench's reasons related to the manner in which it analysed judgments in Caltex Oil (Australia) Pty Ltd v Feenan [1980] 1 NSWLR 724 (NSWCA), and at [1981] 1 NSWLR 169 [PC], Majik Markets (above at [59]); McDonald's Australia Holdings Ltd v Industrial Relations Commission (NSW) [2005] NSWCA 286; 144 IR 179 and Caterpillar (above at [23]). These criticisms need not be explored further, but for the most part they lacked substance, the Full Bench having correctly identified critical features of each of the judgments, relevantly for the case before it.

Conclusions

1. As remarked by Mahoney JA in Majik Markets , at 455-456, the boundary between those cases where it is possible and desirable to determine the jurisdictional issue early in the proceedings, so as to avoid unnecessary expenditure and delay, and those cases where that step cannot appropriately be taken, is difficult to draw. Had there been an application for determination of jurisdiction as a separate issue, those difficulties might have been squarely confronted at an early stage. The course in fact taken by Dairy Farmers was to seek summary dismissal of the proceedings, a course which imposed upon it a higher burden in respect of both legal and factual arguments.

1. In substance, the primary judge held that, in accordance with General Steel principles, it was inappropriate to strike the proceedings out on a summary basis. No error of law or principle was demonstrated in respect of his Honour's reasons. In the Full Bench, the matter appears to have been approached on a final basis, erroneously, but the Court being affirmatively satisfied as to the existence of jurisdiction. To the extent that the judgment might be so understood, the approach of the Full Bench was erroneous. Nevertheless, an independent assessment of the circumstances presented on the evidence before the Industrial Court, precludes the conclusion that the case presented by Reilly & Sons was not reasonably arguable. Accordingly, the Full Bench was correct not to overturn the judgment of the primary judge dismissing Dairy Farmers' strike out application.

1. It follows that the application in the supervisory jurisdiction of this Court must be dismissed and the applicant must pay the costs of Reilly & Sons. As indicated above, Dairy Farmers is to be identified as the applicant and Reilly & Sons is to be the first respondent.

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Decision last updated: 10 June 2011