GLEESON CJ, GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ
PETER JAMES BATTERHAM & ANOR APPELLANTS
AND
QSR LIMITED & ANOR RESPONDENTS
Batterham v QSR Limited [2006] HCA 23 18 May 2006 S207/2005
ORDER
Appeal dismissed with costs.
On appeal from the Supreme Court of New South Wales
Representation:
R C Kenzie QC with M J Kimber SC for the appellants (instructed by Turner Freeman)
D E Grieve QC with J M Miller for the first respondent (instructed by Pryor Tzannes & Wallis)
Submitting appearance for the second respondent
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Batterham v QSR Limited
Industrial law (NSW) – Industrial Relations Commission – Jurisdiction – Power given to the Commission by s 106(1) of the Industrial Relations Act1996 (NSW) to declare wholly or partly void, or to vary, any contract whereby a person performs work in any industry if the contract is an unfair contract – Option to acquire shares in company pursuant to an option deed – Option deed made as part reward to option holder as promoter of company – Application to Commission for orders declaring the option deed unfair, harsh, and unconscionable and contrary to the public interest, and orders varying the deed – Whether the option deed was a contract or arrangement according to which the first appellant performed work in any industry – Relevance of the fact that the work performed pre-dated the option deed.
Industrial law (NSW) – Industrial Relations Commission – Writ of prohibition sought to restrain the Commission from exercising jurisdiction – Entitlement of the Commission to determine its own jurisdiction in first instance.
Prerogative writs – Prohibition – Excess of jurisdiction – Industrial Relations Commission (NSW) – Whether writ lies in the circumstances – Commission in Court Session a superior court of record of limited jurisdiction equivalent in status to the Supreme Court – Whether application for prohibition premature –Likelihood or danger of order being made in excess of jurisdiction – Relevance of privative provision purporting to exclude issue of writ – Relevance of specialist subject-matter of disputes before the Commission.
Statutes – Privative clause – Industrial Relations Commission (NSW) – Whether privative provision applicable – Relevance of interlocutory decision of the Commission dismissing a motion by the respondent for pre-emptive relief.
Statutes – Construction – Interpretation – Remedial statute – Purposive approach to construction – Objects of statute.
Statutes – Construction – Interpretation – Composite phrase incorporating technical words – Extrinsic matters – Legislative history – Relevance of Parliament's purpose of successive re-enactment in increasingly ample terms.
Words and phrases – "any contract whereby a person performs work in any industry", "any related condition or collateral arrangement", "arrangement", "decision or purported decision", "industry".
GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND CRENNAN JJ. In November 1999, QSR Ltd ("QSR") sought…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Batterham v QSR Ltd [2006] HCA 23
Case
[2006] HCA 23
Decision Date
CaseChat Overview and Summary
The case of *Batterham v QSR Ltd* involved an appeal to the High Court of Australia concerning the jurisdiction of the Industrial Relations Commission of New South Wales. The dispute arose when Mr Peter Batterham, a promoter and director of QSR Limited, sought to have an option deed declared unfair, harsh, unconscionable, and contrary to public interest, and to have it varied. QSR Limited was the corporate vehicle established to acquire KFC stores in New South Wales. The option deed, which provided Mr Batterham with an option to acquire shares in QSR, was granted as part of his remuneration for work performed as a promoter and director.
The central legal issues before the High Court were whether the Industrial Relations Commission had jurisdiction to declare the option deed void or to vary it under section 106(1) of the *Industrial Relations Act 1996* (NSW), and whether this constituted a contract or arrangement for the performance of work in an industry. Additionally, the Court considered whether a writ of prohibition lay to restrain the Commission from exercising jurisdiction, particularly in light of a privative provision in the Act and the Commission's status as a superior court of record. The relevance of the work performed predating the option deed was also a point of contention.
The High Court, in its joint reasons, upheld the approach taken by Spigelman CJ in the Court of Appeal. The Court reasoned that the Industrial Relations Commission possessed the initial jurisdiction to determine its own competence. It found that the option deed could be construed as an arrangement for the performance of work, thereby falling within the Commission's purview under section 106(1) of the *Industrial Relations Act 1996* (NSW). The Court also determined that the application for prohibition was premature, as there was no certainty that the Commission would act in excess of its jurisdiction. The privative provision was considered in conjunction with the Commission's specialist subject-matter jurisdiction, and the Court emphasised the importance of allowing the Commission to proceed with its hearing.
The appeal was dismissed, with costs awarded to the respondent. The High Court confirmed that the hearing in the Commission should proceed, thereby upholding the appeal in relation to the jurisdictional question.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
The first and second reasons expressed by Spigelman CJ played little part in the argument before this Court. However, the third reason was critical and is decisive. Both for the proper application of the privative provision in the IR Act[31] and for the observance of the correct relationship between the Court of Appeal and the Commission, the approach adopted by Spigelman CJ was the correct one. It should be confirmed by this Court. The hearing in the Commission should proceed. To allow that to happen, this Court must uphold the appeal.[31]Section 179. The facts The background facts:The general background facts are stated in the reasons of Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ ("the joint reasons")[32]. For the most part, it is sufficient to refer to the activities of the first appellant, Mr Peter Batterham, and the first respondent, QSR Limited ("QSR"). The Commission, the second respondent, submitted to the orders of this Court.[32]Joint reasons at [1]-[12]. In late 1998, Mr Batterham discovered that Tricon Global Restaurants Inc ("Tricon"), the owner of the KFC and Pizza Hut brands in Australia, desired to sell its business and property interests in forty-one KFC stores in New South Wales and to grant the purchaser a long-term franchise agreement with the right to operate a business utilising the KFC brand name. Mr Batterham and a colleague, Mr Steven Gillard, negotiated heads of agreement with Tricon to purchase the stores. The two men then involved Mr Anthony Veale in the acquisition proposal. Mr Veale had extensive experience in property syndication. The three promoters engaged lawyers and other advisers to provide advice about the suitable means to be utilised both to purchase and operate the restaurants. The promoters incurred expenses. They agreed amongst themselves to share these expenses in the event that the deal did not proceed. QSR was then established as the corporate vehicle to carry the negotiations forward. The three promoters became the foundation shareholders and directors of QSR. They undertook substantial work to make the project a reality. Through QSR, they raised approximately $40 million to finance the deal. The promoters' option deed:The promoters agreed that they should be remunerated for the work that they had undertaken before the incorporation of QSR. They were also to be remunerated for work done on behalf of QSR in bringing the deal to fruition. They were to be remunerated further for work that they would undertake for QSR on an ongoing basis as agreed prior to the issue of a prospectus on 3 November 1999. An understanding was reached amongst them whereby QSR would pay directors' fees and charges. Details of the proposed remuneration and commitments of QSR were duly published in the prospectus. Tricon insisted, and Mr Batterham agreed, that QSR could not approve the resignation, replacement or removal of any of the three promoters, except as required by law, without its prior written approval. Moreover, in so far as Mr Batterham's agreed remuneration was in the form of options in QSR, his entitlements were set out in an Option Deed. This deed was executed by Mr Batterham and QSR on 2 November 1999, the day before the prospectus was issued. Mr Batterham thereafter continued to work for QSR until, in April 2002, he was allegedly forced to resign.