EAST & COULSON (ANTI-SUIT INJUNCTION)
[2010] FamCA 641
•27 July 2010
FAMILY COURT OF AUSTRALIA
| EAST & COULSON (ANTI-SUIT INJUNCTION) | [2010] FamCA 641 |
| FAMILY LAW – INJUNCTION – anti-suit injunction – applicant seeks anti-suit injunction to restrain the continuation of proceedings in the Industrial Court of New South Wales – accrued jurisdiction – arbitral jurisdiction and judicial power |
| Family Law Act 1975 (Cth) Industrial Relations Act 1996 (NSW) |
| Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Blacker v National Australia Bank Ltd [2000] FCA 681 Buckingham and Others v Pan Laboratories (Australia) Pty Ltd (in liq) (2004) 136 FCR 102 Edensor Nominees Pty Ltd v Australian Securities and Investments Commission and Others [1999] FCA 1722 Fisher v Madden as Receiver and Manager of Dataflow Computer Services Pty Ltd (2002) 54 NSWLR 179 Heath Group Australasia Pty Ltd v Hanning [1999] NSWSC 719 Jeffcoat v Queensland Coal & Oil Shale Mining Industry (Superannuation) Ltd [2000] FCA 655 (Kiefel J, 19 May 2000, unreported) Kruger v The Commonwealth (1998) 190 CLR 1 Minister for Youth and Community Services v Health and Research Employees Association of Australia, NSW Branch (1997) 10 NSWLR 543 Murphy v Overton Investments Pty Ltd (2001) 112 FCR 182 Resarta Pty Ltd and Others v Finemore (2002) 55 NSWLR 320 Re Wakim; Ex parte McNally (1998) 198 CLR 511 The Rochester Communications Group Pty Ltd v Adler (1996) 65 FCR 572 Smith v Smith (1986) 161 CLR 217 Thomas v Ducret (1984) 153 CLR 506 Tszyu v Fightivision Pty Ltd [2001] NSWCA 103; (2001) 104 IR 225 Valceski v Valceski (2007) 70 NSWLR 3 |
| APPLICANT: | Mr East |
| RESPONDENT: | Ms Coulson |
| STATE OF NEW SOUTH WALES: | Attorney-General for New South Wales |
| TRUSTEE FOR THE BANKRUPT ESTATE OF THE WIFE, E COULSON: | Mr R |
| HUSBAND: | Mr D Coulson |
| FILE NUMBER: | SYC | 4243 | of | 2007 |
| DATE DELIVERED: | 27 July 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 2 July 2010 and by written submissions |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Foster |
| COUNSEL FOR THE RESPONDENT: | Mr Moorhouse |
| COUNSEL FOR THE STATE OF NEW SOUTH WALES: | Mr Sexton SC and Mr Free |
| TRUSTEE FOR THE BANKRUPT ESTATE OF THE WIFE, E COULSON: | Request not to appear in person granted |
| HUSBAND: | Request not to appear in person granted |
Orders
The Application in a Case filed by Mr East on 22 January 2010 seeking that Mrs J Coulson be by injunction, restrained from continuing proceedings initiated in the Industrial Court of New South Wales, is dismissed.
Any applicant for an order for costs is to file and serve a submission in support of that application and an itemisation of the costs claimed within a period of 14 days from today’s date together with, in the case of the applicant and the respondent to these proceedings for injunctive relief, a statement of their financial affairs in the form used by this Court.
The respondent to the application is to file within a further fourteen days any submission which the respondent wishes to make and the applicant will have a further fourteen days in which to file any submission in reply.
The question of costs will be decided on that material in chambers.
IT IS NOTED that publication of this judgment under the pseudonym East and Coulson (anti-suit injunction) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4243 of 2007
| MR EAST |
Applicant
And
| MS J COULSON |
Respondent
And
| STATE OF NEW SOUTH WALES |
Attorney-General for the State of New South Wales
And
| MR R |
Trustee for the bankrupt Estate of the wife, E Coulson
And
| MR D COULSON |
Husband
REASONS FOR JUDGMENT
Introduction
The application currently before the Court is an application by Mr East
(“the applicant”) for an anti-suit injunction restraining Mrs J Coulson (“Mrs Coulson”) from continuing certain proceedings in the Industrial Court of New South Wales (“the Industrial Court”) in which proceedings she seeks relief under the Section 106 of the Industrial Relations Act 1996 (NSW).
The substantive proceedings in this matter relate to the adjustment of property interests between the wife, E Coulson (“the wife”) and her former husband, D Coulson (“the husband”).
The proceedings were commenced by the wife, who filed an Application for Final Orders on 14 June 2007, and to which the husband is the first respondent, and who filed a Response to an Application for Final Orders on 15 October 2007.
In those substantive proceedings, Mr East (the applicant in these proceedings) is the second respondent and he seeks equitable relief against the husband and wife in relation to financial contributions said to have been made by him to the W Enterprise, in which enterprise he is a partner with the husband and the wife, although the extent of his entitlement as a partner is in dispute.
The W Enterprise is an accommodation business in the Hunter Region in New South Wales. A number of interim orders have been made in the substantive property proceedings, in relation to the sale, operation and management of the W Enterprise.
The husband has remarried, and his wife, Mrs Coulson, is not a party to the substantive proceedings, although she has filed affidavits in respect of them. However, Mrs Coulson commenced proceedings in the Industrial Court in relation to issues arising out of her employment contract with the W Enterprise and, in particular, the circumstances of her asserted dismissal from that employment and the issue of unpaid wages.
A Trustee in Bankruptcy was appointed in respect of the wife’s estate on
17 February 2010, and on 9 March 2010 the Trustee was joined as a party to these proceedings.
On 9 March 2010 I made Orders requiring the Attorneys-General for the Commonwealth and the States to be given notice of a question arising in the matter of the power of this Court to accrue the jurisdiction under the provisions of the Industrial Relations Act 1996 (NSW) and an opportunity to be heard in these proceedings in relation to the argument that, the Family Court of Australia, in an exercise of its accrued jurisdiction would not have power to deal with the relief sought by Mrs Coulson in the proceedings by reason of the arbitral nature of those proceedings. As a result of that notice the State of New South Wales sought to be heard in these current proceedings.
It is the applicant’s position that there is a jurisdiction that can be accrued to this Court in the exercise of its power under section 79 of the Family Law Act1975 (Cth) (“the Act”), and the applicant argues that Mrs Coulson’s claim in the Industrial Court is so intrinsically mixed up in the controversy before this Court that it is incumbent upon this Court, by means of the anti-suit injunction, to restrain Mrs Coulson from continuing the proceedings she has commenced, and to invite Mrs Coulson to join in these proceedings and pursue her claim for relief in them. It was conceded by the applicant that, absent a power in the Court to provide Mrs Coulson with the relief that she sought, the injunction should be refused.
Oral and written submissions were made as to the matters said to be relevant to the aspects of the exercise of this Court’s discretion, which was argued to arise from either the Court’s inherent jurisdiction or under the provisions of section 90AF of the Act.
The respondent argues that the Family Court of Australia does not have the power, to accrue jurisdiction, to exercise the power conferred by section 106 of the Industrial Relations Act1996 (NSW), as it is a power given to a named and specialist State court.
It was also submitted that the power exercised by the Industrial Court is an exercise of an arbitral, not judicial, power and thus cannot be exercised by this Court as part of its accrued jurisdiction, since this Court can only exercise judicial power.
It is further the respondent’s position that Mrs Coulson’s claim in the Industrial Court is not part of the same judiciable controversy as the substantive proceedings in this Court.
The State of New South Wales in substance agreed with the position taken by the respondent.
Background facts
In 1962 the wife was born, and is currently 48 years of age.
In 1964 the husband was born, and is currently 45 years of age.
In 1967 the applicant was born, and is currently 42 years of age.
On 14 June 2007 the wife filed an Application for Final Orders, which has been subsequently amended.
On 15 October 2007 the husband filed a Response to an Application for Final Orders, which has subsequently been amended.
On 25 October 2007 Mr East filed a Response to an Application for Final Orders, which has subsequently been amended.
On 30 October 2009 the substantive proceedings were listed for final hearing before me for four days, commencing 18 January 2010.
On 31 December 2009 Mrs Coulson filed a Summons in the Industrial Court seeking relief under s106 of the Industrial Relations Act1996 (NSW).
On 7 January 2010 the husband filed an Amended Response to an Application for Final Orders, which had been sworn on 22 December 2009.
On 7 January 2010 Mrs Coulson filed an affidavit in the substantive proceedings, and which had been sworn on 16 December 2009.
On 18 January 2010 leave was granted to the applicant to make an oral application that Mrs Coulson be by injunction, restrained from continuing proceedings initiated in the Industrial Court and that leave be granted to Mrs Coulson to commence proceedings in the accrued jurisdiction of this Court for the like relief in these proceedings. In addition, the Court noted the undertaking given by Mrs Coulson through her counsel that she will not, pending the further mention of this matter, take any further steps in the proceedings initiated by her in the Industrial Court.
On 22 January 2010 an Application in a Case was filed by the applicant formalising the applicant’s abovementioned oral application.
On 27 January 2010 this matter was mentioned before me, and the parties agreed to provide written submissions on the issue of the accrued jurisdiction of the Family Court of Australia.
On 17 February 2010 a Trustee in Bankruptcy was appointed for the wife.
On 4 March 2010 Mr East provided an amended outline of written submissions.
On 8 March 2010 Mrs Coulson provided an outline of written submissions.
On 8 March 2010 a Bankruptcy – Notice of Appearance was filed on behalf of the wife.
On 9 March 2010 Orders were made, inter alia, requiring the Attorneys-General for Commonwealth and the States to be notified of the issue which had arisen and the State of New South Wales sought to be heard in these proceedings.
The issues
It was agreed as between the parties that the proceedings in the Industrial Court required resolution before this Court could commence the exercise of its jurisdiction under section 79 of the Act in respect of the substantive proceedings between the parties, since the outcome of those proceedings might be that there was a further liability of the partnership in the W Enterprise.
The matter was the subject of a short hearing before me, and written submissions were also received from the State of New South Wales and on behalf of the applicant and Mrs Coulson. The issues for determination involved:
a.Whether there is an exclusive jurisdiction in the Industrial Court to the extent that the Family Court of Australia would be unable to deal with the Industrial Court proceedings.
b.Whether the proceedings before the Industrial Court are the exercise of a process of an arbitral nature which would not make them amenable to the jurisdiction of the Family Court of Australia.
c.Whether, in the exercise of the Family Court of Australia’s discretion to accrue State jurisdiction (in the event that it found it could do so), that course ought not to be undertaken because of the special nature of the Industrial Court’s jurisdiction.
The Industrial Court Proceedings
Mrs Coulson seeks relief under section 106 of the Industrial Relations Act1996 (NSW), and seeks that the terms of what is asserted to be an unfair contract be set aside, with consequential relief which includes the payment of damages and wages. Those orders are sought against the wife and the applicant, in their capacity as partners of the W Enterprise.
The specific claims made by Mrs Coulson in her Summons for Relief are as set out hereunder:
1.An order declaring that the contract or arrangement, or any related condition or collateral arrangement (hereafter called the Contract), whereby the Applicant performed work in an industry, is unfair in that it is harsh, unjust or unconscionable and/or contrary to the public interest.
2.Further and in addition, an order declaring void in whole or in part the Contract from commencement or from some other time that the Commission considers just in the circumstances of the case, and an order that the Contract be varied from its commencement or from some other time as the Commission considers just, to include the terms set out in Schedule A to this Summons, and the deletion of any terms inconsistent therewith.
3.Further and in addition, an order that the Respondents pay to the Applicant such amount of money in connection with the Contract so avoided or varied as may appear to be just in the circumstances, together with interest.
4.An order under section 181 of the Industrial Relations Act 1996 (NSW), that the Respondents pay the Applicant’s costs, of and incidental to, these proceedings.
5.An order that such further or other declarations and orders as the nature of the case may require.
Schedule A of the Summons sets out the ways in which the contract is sought to be varied, and sets out a range of orders, including that the employer will provide fair and reasonable compensation for all work performed under the Contract, including for all additional hours worked. Schedule B to the Summons further sets out the factual circumstances relating to the contractual arrangement under which Mrs Coulson asserts she performed work for the W Enterprise, and the factual circumstances which are said to justify the relief sought.
Relevantly in the current dispute, the provisions of Part 9 of Chapter 2 of the Industrial Relations Act1996 (NSW) deal with unfair contracts and Divisions 1 and 2 are the relevant provisions relating to the Industrial Court’s unfair contracts power.
Section 105 of the Industrial Relations Act1996 (NSW) sets out the definitions of a “contract” and an “unfair contract”.
Section 106(1) provides that 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.”
Subsection (2) of that section goes on to provide that 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.”
Section 109 of that same Act is headed “conciliation of applications to be attempted first”, with subsection (1) stating that “[t]he Commission must endeavour, by all means it considers proper and necessary, to settle a matter under this Division by conciliation.”
I agree with the oral submission made by counsel for the respondent that this provision is consistent with the specialist nature of the Industrial Court, and the unique nature of such applications.
The Applicant’s case for an anti-suit injunction
The applicant in these current proceedings filed an Application in a Case on
22 January 2010, seeking an anti-suit injunction restraining Mrs Coulson from continuing the proceedings in the Industrial Court, which were commenced on 31 December 2009, upon the filing of a Summons for Relief under section 106 of the Industrial Relations Act1996 (NSW).
The applicant submits that the Court’s power to grant the injunction as sought by them, emanates either from the Court’s inherent jurisdiction or under the provisions of section 90AF of the Family Law Act 1975 (“the Act”), which gives the Court the power to make an order or injunction under section 114 binding a third party. Mrs Coulson’s present position is that whilst she has made a claim under the State Act, her position is not that of a creditor in respect of that claim and indeed might never be.
Accrued Jurisdiction
At the nub of the dispute is whether the jurisdiction exercised by the Industrial Court is an exercise of arbitral power and jurisdiction and, if so, whether it can be accrued to this Court.
It was submitted by counsel for the applicant that the jurisdiction is not an arbitral jurisdiction and that in this Court I would be exercising a judicial power in coming to a determination in relation to the issues before the State Court.
In particular, counsel for the applicant referred to the decision of Justice Austin in Heath Group Australasia Pty Ltd v Hanning [1999] NSWSC 719. In that case an application was made to the Supreme Court of New South Wales under section 8 of the Jurisdiction of Courts (Cross-Vesting) Act1987 (New South Wales) (“the Cross Vesting Act”), for the removal of proceedings from the Industrial Commission of New South Wales to the Supreme Court of New South Wales. At issue in that case was whether, when the Supreme Court makes an order under section 8, it thus confers upon itself a jurisdiction to deal with the removed proceeding, if it does not otherwise have that jurisdiction. Counsel drew my attention to paragraph 16 of his Honour’s Judgment, as set out hereunder:
16. Chapter 2 Pt9 of the Industrial Relations Act 1996 (NSW) ('IR Act'), which includes s106, creates a special statutory regime under which the Commission may declare void or vary a contract whereby a person performs work in an industry, if the Commission finds that the contract is an unfair contract. Chapter 4 of the IR Act distinguishes between the Commission and the Commission in Court Session. A person appointed as a member of the Commission in Court Session is referred to as a judicial member of the Commission: s149(3). The Commission in Court Session is constituted by a judicial member or members (s151(1)), and the Commission in Court Session is established as a superior court of record: (s152(1)). Certain functions of the Commission are to be exercised only by the Commission in Court Session. These include the hearing and determination of proceedings with respect to unfair contracts under Chapter 2 Pt9: s153(1)(c).
His Honour concluded that (emphasis added):
17. While these provisions contemplate that only the Commission in Court Session will exercise the statutory jurisdiction which they create, in my opinion they do not exhibit a legislative intention to vest the statutory jurisdiction exclusively in the Commission. To put my conclusion another way, an enactment of the New South Wales Parliament authorising the Supreme Court to exercise the statutory jurisdiction vested by the IR Act in the Commission would add to but not be inconsistent with the IR Act. There is a difference between vesting a new statutory jurisdiction in a single body, and vesting the statutory jurisdiction in that body exclusively, and in my opinion the IR Act does the former but not the latter. This distinguishes the present case from Gaza Grazing Pty Ltd v Ampol Exploration Ltd [1990] 1 Qld R202, where the relevant mining legislation conferred exclusive jurisdiction on the Warden's Court.
What was said by Justice Austin to be a “significant factor” in making the orders sought by the plaintiff, was that the Supreme Court was the only tribunal which had the jurisdiction to “…deal comprehensively with all aspects of the dispute between the parties” (at paragraph 43). Therefore, his Honour concluded (at paragraph 47), that:
“… the most convenient and expeditious way of resolving all aspects of the dispute between the parties is to take such steps as I am able to take in order to have the proceedings determined by the only court with plenary jurisdiction, namely this Court.”
Further consideration was had to the characterisation of these particular proceedings, including that it involved highly paid employees whose conditions of employment were not governed by an industrial instrument. Similarly, in the decision of the New South Wales Court of Appeal in Resarta Pty Ltd and Others v Finemore (2002) 55 NSWLR 320, Foster A-JA noted (at paragraph 80) that it is clear that not all maters before the Commission involve questions containing broad industrial implications and public interest ramifications, and that such cases “… should present no problems to courts of general jurisdiction”.
Indeed, Justice Austin in Heath Group Australasia Pty Ltd v Hanning (supra) went on to consider that even if the Commission’s power under section 106 was an arbitral power rather than a judicial power, “…it may nevertheless be appropriate to make an order which has the effect that the arbitral power is exercised by this Court” (at paragraph 54). It should be noted that this decision is about the exercise of power by a State Supreme Court not a Federal Court.
His Honour then turned to a consideration (at paragraph 48) of the argument in relation to whether the Industrial Relations Commission was such a specialist tribunal that a removal of the matter should not be permitted. It was the defendant’s case in that matter that the Commission was the most appropriate tribunal to determine the section 106 proceedings, because they raised non-judicial issues and required the exercise of arbitral power. In that regard, it was further argued that the Commission had acquired a form of specialisation and characteristic jurisprudence, giving rise to forensic advantages and that as such the Court should not make an order when there is another tribunal with the requisite power particularly suited to deal with that issue, and reference was made to the decision of Harry M Miller Attractions Pty Ltd v Actors’ & Announcers’ Equity Association of Australia [1970] 1 NSWLR 614.
At paragraph 51 Justice Austin concluded that:
“… In summary, in my view there is nothing in the statutory provisions which confer jurisdiction on the Commission in Court Session under Pt9 of the IR Act which identifies the Commission's power as a non-judicial power which ought not to be exercised by a court such as the Supreme Court pursuant to an order for removal under s8 of the cross-vesting legislation.”
In Heath Group Australasia Pty Ltd v Hanning (supra), the defendants further cited the decision in Murray v Transport Workers’ Federation of Australia [1969] 1 NSWR 351, in support of their argument that the legislature had established the Commission to consider disputes of this nature.
His Honour went on to further consider the issue of arbitral power, at paragraphs 53 and 54, and referred to the judgment of McHugh J in Minister for Youth & Community Services v Health & Research Employees’ Association of Australia (1987) 10 NSWLR 543, at 559-560. His Honour held that the power conferred by section 88F, a precursor to section 106, was an arbitral rather than judicial power. However, in considering that decision, Austin J noted that one of the factors which influenced McHugh J’s decision in that regard was that under the industrial relations legislation at that time the power was vested in the Commission as opposed to a judicial body and additionally the Commission could apply section 88F of its own motion. Austin J considered that:
“[e]ven if the Commission’s power under s106 is, like its power under s88F, an arbitral rather than a judicial power, it may nevertheless be appropriate to make an order which has the effect that the arbitral power is exercised by this Court.”
It was further considered that, in view of the changes to the industrial relations legislation and the expansion of the functions required to be performed by a court, it may well mean that what was classified as an arbitral power at the time Minister for Youth & Community Services v Health & Research Employees’ Association of Australia (supra) was decided, is now better classified as a judicial power.
Interestingly, Austin J considered (at 55) that whilst the Commission in Court Session and its predecessors “…have built up a formidable jurisprudence with respect to the ‘unfair contracts’ jurisdiction…” it may also be that:
“… in certain kinds of case [sic] the Commission’s expertise is such that a removal order should not be made – for example, where the issue for determination is closely bound up with the interpretation and effect of an industrial award or enterprise agreement” (at 56).
The decision in Heath Group Australasia Pty Ltd v Hanning (supra) was subject to comment in the decision of the New South Wales Court of Appeal in Resarta Pty Ltd and Others v Finemore (supra) at paragraph 55, and their Honours also considered the issue of whether the power is a judicial or
non-judicial power. Whilst it should be noted that Resarta Pty Ltd and Others v Finemore (supra) concerned a transfer to another Supreme Court, their Honours discussed the specialist nature of the Commission, which was relied upon by counsel in that case. In a separate Judgment Foster A-JA considered the argument that the Commission had developed a significant level of expertise and a significant body of jurisprudence, and that:
“[t]his expertise and familiarity with a specialised body of case law would not admit of easy or efficient transference to judges sitting in another jurisdiction, let alone an interstate jurisdiction” (at paragraph 79).
His Honour however went on to say (at paragraph 79):
“Whilst appreciating the force of these submissions, I am not persuaded by them. It is not uncommon for Courts, especially with the assistance of competent and experienced counsel, when required, to effectively deal with problems associated with jurisdictional and jurisprudential areas with which they are not normally involved. The Commission’s jurisdiction and jurisprudence may be specialist but it is not occult.”
And at paragraph 82 (emphasis added):
“In the same vein, were submissions relating to the Commission’s obligations under s 106 of the Industrial Relations Act to consider matters of New South Wales public interest and the effect of the subject contract or contracts upon “providing a sufficient and trained labour force.” Again, these are forceful arguments; but they do not persuade me. They may provide significant reasons why, in a particular case, removal and
cross-vesting should not be ordered. They do not, however, require a finding that this Court has no jurisdiction to make such orders.”Counsel for the respondent argued however that Resarta Pty Ltd and Others v Finemore (supra) does not stand for the view that the proceedings under section 106 are not an arbitral power and drew the Court’s attention to paragraph 5 of that decision, in which Spigelman CJ said:
“... A number of the matters identified as indicia of non-judicial power by McHugh JA in Minister v Health and Research Employees’ Association still appear in the Industrial Relations Act 1996, eg, the ability of industrial organisations to apply for the variation of contracts (s 108) and the determination as to whether a contract is “unfair” on the basis of events subsequent to the time when the contract was entered into (see s 106(2)). It is not necessary to determine this issue.”
At paragraph 6 his Honour noted that it was not necessary for the Court to decide whether section 106 was a judicial power.
Indeed, Counsel for the applicant in the case presently before me argued that, if the Court finds that the Supreme Court has the power to remove and remit proceedings to other courts, including Federal Courts, then there is no impediment to that occurring by virtue of analysis of the judicial and
non-judicial power of the Industrial Court, and that it is a judicial power exercised by a court of superior jurisdiction.
Counsel for the applicant drew attention to the chronology of the proceedings and, in particular, to the timing of documents filed in the substantive proceedings, and their proximity to the commencement by Mrs Coulson of the proceedings in the Industrial Court. On 22 December 2009 the husband swore an Amended Response to an Application for Final Orders, which was filed on
7 January 2010. In that document the husband sought orders, inter alia, that a sum be paid from the sale of the W Enterprise to Mrs Coulson, in respect of unpaid wages. Mrs Coulson filed an affidavit on 7 January 2010, also in relation to that claim. Furthermore, the final hearing of this matter had been listed for final hearing for four days commencing 18 January 2010. On
31 December 2009 Mrs Coulson filed a Summons in the Industrial Court seeking relief under s106 of the Industrial Relations Act 1996 (NSW).
During oral argument before me, counsel for the applicant submitted that explanation has not been given as to why Mrs Coulson did not forthwith make an application to the Industrial Court for relief, and rather commenced proceedings having only sworn an affidavit some weeks prior.
Counsel for the applicant further pointed to the fact that the husband was not named as one of the partners of the W Enterprise and was not named as a defendant in the proceedings before the Industrial Court. It was his submission that this failure has not been satisfactorily explained.
In Heath Group Australasia Pty Ltd v Hanning (supra), Austin J rejected the defendant’s argument that the commencement of proceedings in the Federal Court, contemporaneously with the present application and after the Industrial Court proceedings, must be viewed as a tactic by the plaintiffs to transfer the dispute to a more amendable tribunal. His Honour distinguished the facts of the case from those in cases such as Wood v Boral Resources (NSW) Pty Ltd (No 4980/92, 28 October 1993, unreported), in which proceedings were instituted in the Federal Court after applications for interlocutory relief in the Supreme Court and the Federal Court were unsuccessful. I note however that the New South Wales Court of Appeal in Resarta Pty Ltd and Others v Finemore (supra) noted (at page 337) that the decision in Wood v Boral Resources (NSW) Pty Ltd (supra) has not been followed in later first instance decisions in the Equity Division, although it was submitted in Resarta Pty Ltd and Others v Finemore (supra) that it should now be followed in preference to those decisions.
The applicant’s position is that, if the wife’s claim in the Industrial Court is successful, or if she is successful in pursuing that relief, then Mrs Coulson is a creditor or potential creditor of the major asset owned by the parties in the substantive proceedings in this Court, namely the W Enterprise. It is submitted that, as a consequence, the result of Mrs Coulson’s claim will affect the pool of assets available for distribution and the administration of the wife’s bankrupt estate.
It is further the argument proffered on behalf of the applicant that if the proceedings were to be heard by this Court, that it would simply be a circumstance in which a court of superior jurisdiction is exercising a jurisdiction that is not so specialist and that it is appropriately a matter which I could accrue to the jurisdiction of the Family Court of Australia, for the purpose of making orders under section 79 of the Act.
Transfer of the Industrial Court proceedings under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (New South Wales)
The second basis upon which the applicant relies in relation to the jurisdiction issue rests upon a combination of an application under section 5 and section 8 of the Jurisdiction of Courts (Cross-Vesting) Act1987 (NSW) (“the Cross Vesting Act”).
It was submitted that, once the Supreme Court removes the proceedings from the State Court, they become proceedings in the Supreme Court. The Supreme Court then exercises jurisdiction under section 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act1987 (NSW), to transfer the proceedings to the Family Court of Australia, subject to considerations set out in the legislation.
A further option considered by the application of Valceski v Valceski [2007] 70 NSWLR 36 was to make an order removing the proceedings from the Industrial Commission to the Supreme Court of NSW.
Additionally, it was argued by the applicant that there are strong reasons of convenience as to why the proceedings should be heard in this Court, namely to save time and expense by avoiding having two sets of proceedings running over the same set of facts and to avoid disparate findings in relation to those facts. Counsel for the applicant further drew to the Court’s attention paragraph 90 of the decision in Resarta Pty Ltd and Others v Finemore (supra) in which Foster A-JA quoted Street CJ in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713, in relation to the uniform cross-vesting legislation, and said that:
“The introduction of this scheme is a significant move towards providing throughout our nation the services of an integrated court system transcending the boundaries, both geographic and jurisdictional, that have in the past obstructed the courts in meeting the requirements of the Australian public.”
It was argued that the above quoted statement, whilst general in it nature, nonetheless reflects the object of the legislation and is equally applicable to the exercise of this Court’s discretion in relation to the question of accrued jurisdiction.
There is also the further consideration of the wife’s bankrupt estate, and that the determination of the nature and extent of that estate awaits the outcome of the determination of the pool of assets.
The Respondent’s case
Accrued Jurisdiction
It was argued on behalf of Mrs Coulson that the Family Court of Australia does not have the power under its accrued jurisdiction to deal with the matter the subject of the anti-suit injunction.
During oral submissions, counsel for the respondent took the Court to the decision in Fisher v Madden as Receiver and Manager of Dataflow Computer Services Pty Ltd (2002) 54 NSWLR 179, which involved a characterisation by the New South Wales Court of Appeal of a claim that an employment contract of a dismissed employee be varied under section 106 to provide for retrenchment payments. It was said in that case that the applicant’s right was in the form of a right to apply for an order and to take proceedings in the Industrial Relations Commission to vary the contract and in that regard Meagher JA considered (at paragraph 12) that “Section 106 of the Industrial Relations Act does not of itself confer any rights or obligations on anyone.”
Counsel for the applicant further pointed to a Federal Court of Australia decision, Buckingham and Others v Pan Laboratories (Australia) Pty Ltd (in liq) (2004) 136 FCR 102, and relied upon paragraph 85 of Justice Jacobson’s judgment, in which his Honour said:
“It would be inconsistent with these fundamental principles for a claim under s106 of the IR Act to be characterised as a “future claim” which may be admitted to proof in a winding up. The section gives the Commission a wide discretion to alter, retrospectively, substantive rights and liabilities. In Fisher at [5] Meagher JA described the Commission’s powers as malleable. The power which is conferred would, if exercised, permit the Commission to alter retrospectively the rights of existing creditors which have already crystallised on liquidation. The power to alter those rights would flow from a finding of unfairness in a claim made by a person to whom no obligation is owed at the relevant date. …”
In The Rochester Communications Group Pty Ltd v Adler (1996) 65 FCR 572, Beaumont J considered whether the Federal Court had jurisdiction (as part of its accrued jurisdiction) to hear matters arising under section 275 of the Industrial Relations Act (1991) (NSW). This decision was relied upon by the respondent, and in which section 275 was the antecedent to section 106 and both contain the power to vary or void a contract on the basis of it being unfair, harsh or unconscionable or against the public interest. At page 573 his Honour said:
“It should be noted at the outset, even if the jurisdiction claimed to exist might otherwise have been available, the applicant is immediately confronted by one significant threshold in this context, that is, in its terms, s275(1) of the NSW Act vests the jurisdiction in question in the Industrial Court, but not in any other court. Indeed, a similar and, in my view, properly analogous situation was considered by the High Court in Smith v Smith (1986) 161 CLR 217. There it was held that the Family Court had no accrued or other jurisdiction to exercise the power of approval conferred on the Supreme Court of New South Wales by s 31 of the Family Provision Act 1982 (NSW).”
In support of the respondent’s position that section 275 is in essence the same as the current section 106 of the Industrial Relations Act 1996 (NSW), the Court’s attention was directed to a drafting change namely that the definitions of “unfair contract” and “contract” were subsumed into the substantive part of the section, the two sections are in essence the same, and I agree that the change made is not a substantive change.
The decision in The Rochester Communications Group Pty Ltd v Adler (supra) was cited with approval by the Full Court of the Federal Court of Australia (Hill, Sundberg and Mansfield JJ) in Edensor Nominees Pty Ltd v Australian Securities and Investments Commission and Others [1999] FCA 1722, at paragraph 27. Whilst that decision was subsequently overturned by the
High Court of Australia, counsel for the respondent submitted, and I accept, that there was nothing in the High Court of Australia’s decision to suggest that The Rochester Communications Group Pty Ltd v Adler (supra) was incorrectly decided.
The question of whether the Federal Court of Australia had accrued jurisdiction to deal with a claim under the Contracts Review Act 1980 (NSW) was considered by the Federal Court of Australia in Blacker v National Australia Bank Ltd [2000] FCA 681. Justice Katz expressed the view (at paragraph 26) that:
“… not only was the decision of Beaumont J in Rochester Communications not distinguishable or plainly wrong, but it was on point and right; a State statutory provision performing a double function (see par 15 above) cannot be a source of accrued jurisdiction in this Court.”
And his Honour referred to the decision of Justice Kiefel in Jeffocat v Queensland Coal & Oil Shale Mining Industry (Superannuation) Ltd 2000 [FCA] 655 (Kiefel J, 19 May 2000, unreported).
However, the decision in Blacker v National Australia Bank Ltd (supra) was effectively overruled by the Full Court of The Federal Court of Australia (Branson, Nicholson and Gyles JJ) in Murphy v Overton Investments Pty Limited (2001) 112 FCR 182. In that decision their Honours held that the Federal Court could grant relief under section 7 of the Contracts Review Act 1980 (NSW), if the claim formed part of the justiciable controversy. Whilst this decision is contrary to that in Blacker v National Australia Bank Ltd [2000] FCA 681, counsel for the applicant argued that the power under the Contracts Review Act 1980 (NSW) is a much narrower power than that under section 106, and additionally that it is a power given to State courts, and not to a specialist court. The power is to declare a contract unjust in the circumstances relating to the contract at the time that it was made by comparison to the provisions of section 106 which are not so limited.
In considering Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559, counsel for the respondent relied upon paragraph 57 of the Judgment of Gleeson CJ, Gaudron and Gummow JJ, which set out section 79 of the Judiciary Act 1903 (Cth), and in particular that State and Territory law is binding only “in all cases to which they are applicable”. The Majority continued to discuss what state laws could be “picked up” by section 79 of the Judiciary Act 1903 (Cth). At paragraph 72 their Honours quoted Gaudron J in Kruger v The Commonwealth (1998) 190 CLR 1 (at 140) as follows:
“There may be statutory provisions couched in terms which make it impossible for them to be ‘picked up’ by s 79 of the Judiciary Act. Similarly, there may be provisions which impose functions which are beyond the reach of s 79. Even so, I see no reason why s 79 cannot ‘pick up’ limitation laws or other statutory provisions merely because they are expressed in terms applying specifically to State or Territory courts.”
Whilst Justice Kirby delivered a dissenting judgment in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (supra), counsel for the respondent directed my attention to paragraph 201 of his Honour’s reasons, and relied upon same, on the basis that they formed a discussion of general principle, namely the ability of state laws being picked up by section 79 Judiciary Act 1903 (Cth) as part of the accrued jurisdiction of a Federal court. His Honour considered three categories of courts where section 79 has been invoked. In considering the second category, “confined to particular state courts”, his Honour considered (at paragraph 201, footnotes omitted, emphasis added), a difficult question is presented when:
“… by the express provisions of the State or Territory law, or upon the proper construction of that law, it is limited in its application to the courts, or a particular court, of the State or Territory concerned. Because s 79 adopts the law of the State or Territory, made substantively for that jurisdiction and extends its operation into federal jurisdiction, some degree of adaptation is obviously contemplated. But a point will be reached, because of the language of the legislation in question, the nature of the powers conferred on the particular court, or the specialised character of that court, where it will be concluded that the State or Territory law in question is not “applicable”.”
In Minister for Youth and Community Services v Health and Research Employees Association of Australia, NSW Branch (1997) 10 NSWLR 543 at 559 the New South Wales Court of Appeal considered section 88F of the Industrial Arbitration Act 1940, that being the ancestor of section 275. McHugh JA opined (at 559-560) that:
“A further indication that the proceedings are not an ordinary suit or action is that the power conferred by s 88F is arbitral, not judicial power. Even before the amendments made in 1985 an industrial union of employees could invoke the jurisdiction of the Commission …
That a stranger to a contract can obtain an order that the contract is void is itself an indication that the Commission is not exercising judicial power in an ordinary suit or action. Moreover, I think that the Commission can exercise its power under s 88F in a case where, although the contract was not unfair or harsh or unconscionable or against the public interest at the time of its making, subsequent events have made it so. The jurisdiction of the Commission to void or vary a contract, independently of the circumstances which existed at the time of its making, indicates conclusively in my opinion that the power conferred by s 88F is not an exercise of judicial power: cf R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd 91970) 123 CLR 361.”
The Solicitor General for the State of New South Wales relied upon the abovementioned decisions in The Rochester Communications Group Pty Ltd v Adler (1996) 65 FCR 572 and Smith v Smith (1986) 161 CLR 217 and further considered the effect of the decision in Edensor Nominees Pty Ltd v Australian Securities and Investments Commission and Others (supra) on the authorities, it being argued that, in essence they remain unaltered.
The Solicitor General contended that it is important to consider the facts in that case, it in essence being said that the questions raised in that case, and this present matter, were very different, including that jurisdiction was with the Federal Court of Australia, as the Australian Securities and Investments Commission was the moving party.
The Solicitor General further directed the Court’s attention to a portion of paragraph 201 in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (supra), and which refers to Smith v Smith (supra) and The Rochester Communications Group Pty Ltd v Adler, as set out hereunder (footnotes omitted):
“Where a State law confers on a particular State court, and no other, the power to make an order which is a condition precedent to the efficacy of an agreement otherwise ineffective, s 79 does not modify the operation of the State law so as to permit an order of a federal court to be made capable of satisfying the condition precedent.”
The further reason that it was submitted that section 79 cannot accrue the jurisdiction of section 106 is that if the Court were to then hear those proceedings, it would not be an exercise of federal judicial power. With this submission I agree having regard to the nature of the proceedings under section 106.
Jurisdiction of Courts (Cross-Vesting) Act 1987 (New South Wales) (“the Cross-Vesting Act”)
Section 8 of the Cross-Vesting Act concerns orders by the Supreme Court and provides that the Supreme Court of New South Wales has the power to order the removal of proceedings from the Industrial Court to the Supreme Court under subsection (1).
Section 5 of the Cross-Vesting Act, concerns the transfer of proceedings, and in particular subsection (9), states that “[n]othing in this section confers on a court jurisdiction that the court would not otherwise have.”
In the written submissions on behalf of the applicant, filed 5 March 2010, it was said that the discrete arguments in relation to the existence of accrued jurisdiction, as considered in Valceski v Valceski (2007) 70 NSWLR 3, were not relevant in the present matter, except to the extent of considering the outcome of any application under the Cross-Vesting Act, were an anti-suit injunction not granted.
It is argued by the respondent that the cross-vesting legislation cannot be utilised to transfer the proceedings in the Industrial Court to this Court. In view of the decision of the High Court of Australia in Re Wakim; Ex parte McNally (1998) 198 CLR 511, the cross-vesting legislation is not available where the jurisdiction does not independently exist in a Federal court. Indeed, in Valceski v Valceski (supra), Brereton J considered (at 43) that “…it is a
pre-requisite to a transfer order that the transferee court have jurisdiction in respect of the relevant matter.” The movement of the proceedings through the Supreme Court does not change their fundamental nature as an exercise of arbitral power.
Conclusion
I note that the decisions in Heath Group Australasia Pty Ltd v Hanning (supra) and Resarta Pty Ltd and Others v Finemore (supra), related to a consideration of whether proceedings would be transferred to the New South Wales Supreme Court, or another state court. They did not consider such a transfer to a Federal Court vested with the Judicial power and only able to exercise its power judicially.
For the reasons referred to above, I consider that the language of the provisions of the Industrial Relations Act1996 (NSW), including the ability to determine rights upon a consideration of events subsequent to the making of the contract and including Public policy considerations and factors such as the requirement for the conciliation of applications, distinguishes Section 106 of the Industrial Relations Act1996 (NSW) as a specialised provision, to afford relief to an applicant by a process foreign to the understood exercise of Federal Judicial power.
I find that the Industrial Court is, under section 106 of the Industrial Relations Act 1996 (NSW), exercising an arbitral jurisdiction to provide relief to an applicant under that section. Therefore, I decline to make orders granting the anti-suit injunction as sought by the applicant in this case since this Court cannot accrue arbitral power to itself and exercise that power, it being constrained to exercise only judicial power.
It was put to me by counsel for the applicant in his submissions that, if orders were not made granting the interlocutory injunction, the applicant would be seeking an order that Mrs Coulson be restrained from further continuing proceedings in the Industrial Commission, pending an application to the Supreme Court of New South Wales under section 8 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), being made within reasonable time. The submission was that this presented as the most appropriate and
cost-effective course to deal with the issue, as opposed to commencing proceedings in another jurisdiction and being subject to the cross-vesting scheme.
I do not accept that State proceedings can be transferred to Federal courts under the provisions of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) (see Re Wakim; Ex parte McNally (supra)). In any event, even if that were not so the nature of the proceedings, as arbitral proceedings, does not change by reason of their transfer to the Supreme Court nor would such a transfer give this Court a power that it does not have to provide the relief presently sought by the respondent in that named State Court.
I have before me no application to transfer these present proceedings to the Supreme Court of New South Wales, which course would, if that Court transferred the proceedings before the Industrial Court to itself, provide a single venue for the determination of those proceedings.
I find that because of the arbitral nature of the proceedings in the Industrial Court this Court cannot exercise that jurisdiction. Accordingly, the injunction would not be granted for that reason. If I am wrong in that in the exercise of my discretion, I would not grant the injunction because the jurisdiction is vested by statute specifically in the State Court and the jurisdiction there exercised is specialist in nature. Further, I am further informed that the State proceedings can be dealt with in a time frame which will in all probability produce a result not too distant from the time that this matter might be heard aliunde.
Costs
The respondent to this application sought costs in the event that the application was unsuccessful. So that I can properly consider that application under section 117 of the Act it is my intention to make directions as to the filing of statements of financial affairs and a statement of the applicant for costs orders claimed together with any additional submission in support of that application, within 14 days.
The respondent is to file a any submission in response to the application together with a statement of his financial affairs within a further 14 days and the applicant may file a submission in reply within a further seven days.
The matter of costs will be dealt with by me on written submissions after the expiration of the time limited by these directions on the material filed and in Chambers.
For these reasons I make the orders set forth above.
I certify that the preceding one-hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.
Associate:
Date: 27 July 2010
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