Fish & Anor v Solution 6 Holdings Ltd & Ors

[2005] HCATrans 896

[2005] HCATrans 896

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S206 of 2005

B e t w e e n -

NICHOLAS TERRENCE FISH

First Appellant

NISHA NOMINEES PTY LIMITED

Second Appellant

and

SOLUTION 6 HOLDINGS LIMITED

First Respondent

SOLUTION 6 PTY LIMITED

Second Respondent

NEVILLE BUCH

Third Respondent

NEIL GAMBLE

Fourth Respondent

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Fifth Respondent

Office of the Registry
  Sydney  No S207 of 2005

B e t w e e n -

PETER JAMES BATTERHAM

First Appellant

MAYLORD EQUITY MANAGEMENT PTY LTD

Second Appellant

and

QSR LIMITED

First Respondent

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Second Respondent

Office of the Registry
  Sydney  No S209 of 2005

B e t w e e n -

OLD UGC INC

First Appellant

UIH ASIA/PACIFIC COMMUNICATIONS INC

Second Appellant

AUSTAR ENTERTAINMENT PTY LIMITED

Third Appellant

CTV PTY LIMITED

Fourth Appellant

STV PTY LIMITED

Fifth Appellant

and

THE INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

First Respondent

ROBERT McRANN

Second Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 8 NOVEMBER 2005, AT 12.01 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR S.J. BURCHETT, for the appellants in Fish.  (instructed by Clayton Utz)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR B.J.A. SHIELDS, for the respondents in Fish.  (instructed by Deacons)

MR R.C. KENZIE, QC:   May it please the Court, I appear with my learned friend, MR M.J. KIMBER, SC, for the appellants in Batterham.  (instructed by Turner Freeman)

MR D.E. GRIEVE, QC:   May it please your Honours, I appear with MR J.M. MILLER for the first respondent in Batterham.  (instructed by Pryor Tzannes & Wallis)

MR G.J. HATCHER, SC:   May it please the Court, I appear with my learned friend, MR C.S. WARD, for the appellants in Old UGC.  (instructed by Thomson Playford)

MR J.N. WEST, QC:   May it please the Court, I appear with my learned friend, MR J.D. SMITH, for the second respondent in Old UGC.  (instructed by Harmers Workplace Lawyers)

GLEESON CJ:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, may I mention a matter as to time, first of all.  Your Honours, we have arrived at an arrangement whereby I will take an hour and a quarter, Mr Hatcher, when it comes to his turn, an hour and a quarter, the other parties an hour and then three‑quarters of an hour for the replies in‑chief.  That would, on the ordinary Court’s hours, finish at 4.15 tomorrow.

GLEESON CJ:   Thank you, Mr Jackson.  We promise not to interrupt you.

MR JACKSON:   Your Honour, some promises are of imperfect obligation, of course. Your Honours, as the Court will have seen, this case is concerned with two issues: the ambit of section 106 of the Industrial Relations Act 1996 (NSW) and, secondly, whether prohibition should have issued to that Commission. Your Honours, may I go, first of all, to the provisions of the statute dealing with the Commission, the body to which the Court of Appeal’s order was directed. Your Honours should have a white volume which sets out the position as at, we think, the relevant time.

KIRBY J:   Have you, for your own purposes, Mr Jackson, prepared a sort of analysis that shows the common issues in the three cases and the separate issues, because there are some separate issues in the ‑ ‑ ‑

MR JACKSON:   Your Honour, I have not but I think a significant amount of what I say will deal with issues concerning the construction of the provisions, which I expect would be common, but there are certainly some distinct matters arising in relation to the particular cases. 

KIRBY J:   I wonder if it would be possible to get an overview, it is easy to get lost in the detail of these matters, that somebody prepare a document which sets out the common issues of the three appeals and the separate issues that we have to address.

MR JACKSON:   Your Honours, may I come to the statute, the Industrial Relations Act and could I take your Honours to section 145 of it which establishes the Industrial Relations Commission of New South Wales.  Your Honours will see – it should be at page 66 I think at the top – the Industrial Relations Commission may sit as the Commission or as the Commission in Court Session.  Could I in that regard refer to section 151(1) and your Honours will see that:

The Commission in Court Session is the Commission constituted by a judicial member or members -

and, your Honours, only judicial members may constitute the Commission in Court Session.  Your Honours will see that also from section 149 of that Act, so 149 and 151 have the effect that only persons who are judicial members may be members of the Commission in Court Session.  That Commission is a superior court of record – you will see that at section 152(1):

a superior court of record.

(2)      For the purposes of Part 9 of the Constitution Act -

which deals with matters such as removal and retirement and so on.  It is a court of equal status to the Supreme Court.

Your Honours, its jurisdiction, in matters of the kind with which this Court is presently concerned, must be exercised by the judicial members, that is by the Commission in Court Session and your Honours will see that from section 153(1) and paragraph (c) of that provision deals with unfair contracts.

Your Honours, the Commission in Court Session may sit in either original or appellate jurisdiction.  If one goes to section 156(1) your Honours will see a reference to:

A Full Bench of the Commission . . . 

(3)      A Full Bench of the Commission in Court Session must include only judicial members.

Your Honours, there is an appeal available from a single judge sitting in Court Session to the Full Bench and your Honours will see that from two provisions.  The first is section 187(a) particularly, and section 188 provides that an appeal is by leave of the Full Bench and the public interest test must be satisfied, subsection (2).  Your Honours, I should also mention then section 179, and your Honours will see from section 179(1):

Subject to the exercise of a right of appeal . . . a decision or purported decision of the Commission (however constituted):

(a)      is final, and

(b)      may not be appealed against –

et cetera.  Now, your Honours, section 179 is no doubt a relatively wide‑ranging privative clause.  However, it did not apply directly to this case – when I say this case, I mean Fish – because there had been no “decision or purported decision of the Commission” and your Honours will see that referred to in paragraph 113 of the Court of Appeal’s reasons at page 424 and, in essence, what had happened had been that the proceedings had been instituted and no more, page 424, paragraph 113.

GLEESON CJ:   What is the right of appeal referred to in section 179(1)?

MR JACKSON:   Your Honour, the right of appeal comes from section 187 - so far as this Act is concerned, section 187.  Your Honours will see the persons who may appeal, but it is qualified by section 188, the requirement for leave.

GLEESON CJ:   That looks like a no right of appeal.

MR JACKSON:   I am sorry, it is an ability to appeal.  Perhaps I can put it that way.  Once leave is given, of course, there is then the right to appeal.

GLEESON CJ:   But if you lose at first instance in the Commission, you cannot appeal to a Full Bench unless you get leave and you cannot get leave unless public interest requires it.

MR JACKSON:   That is so, your Honour, yes, yes.  There are some similarities to special leave.  Now, your Honours, if I might say so, your Honours, what that demonstrates is the legislative view in respect of statutory provisions that have been around for, I think, more than 45 years, that as between the courts in New South Wales, then, prima facie, the body which is to have the ability to decide these matters is to be the Industrial Commission and that its decisions are ones that are to be respected in the various ways referred to in sections 179 and 188 to which your Honour referred.  Your Honours, could I come then to the provisions of the Act that deal with the jurisdiction of the Commission in cases of this kind?

GUMMOW J:   Those provisions that the Chief Justice referred you to would not be of any avail if this body was exercising federal jurisdiction, would it?

MR JACKSON:   No, your Honour.  No, your Honour, and a number I think ‑ ‑ ‑

GUMMOW J:   It does happen from time to time, does it not?

MR JACKSON:   Gosper v Sawyer I think was the federal jurisdiction case which came here.

GUMMOW J:   Yes.

MR JACKSON:   Your Honour, I am aware of at least one case had endeavoured unsuccessfully to get special leave directly from the Commission.  But there was no question about the court’s jurisdiction.  It was simply a question of special leave not being granted directly from it.

GUMMOW J:   Nor any question that it is a court within the meaning of section 77(iii) of the Constitution.

MR JACKSON:   Your Honour, that question may be perhaps divisible into two parts, with respect.  As to the first of those, there is no reason to suggest that it is not a court in the ordinary sense of the term.  I am speaking about the Commission in Court Session.  Now, there was an issue raised by, I think, Justice McHugh in the Court of Appeal in one of the cases which has from time to time been picked up but not decided about whether in the exercise of jurisdiction under provisions of this kind, it was acting judicially.  Your Honour, that is a question that really does not seem to arise for present purposes.

Your Honours could I go then to the provisions in question? The current provisions – I use the expression “current provisions” because this is the third occasion on which there have been provisions of this kind. One was section 88F. I will come to the particular provision in a few moments. The second was section 275. The third is section 106. They adopt largely similar language but, with the passage of time and cases having occurred, various parts of various deficiencies in the earlier provisions have been fixed up.

Could I take your Honours first to the definition section, section 105?  It should be at page 50, I think, your Honours. Your Honours will see that section 105 provides two definitions.  One is the term “contract” and it is given an expanded meaning.  Your Honours will see that “contract” is defined to mean:

any contract or arrangement, or any related condition –

presumably meaning a condition related to a contract or arrangement and finally any:

collateral arrangement -

that is any arrangement, collateral, presumably, to the contract or arrangement.

Your Honours, there is an exclusion of the term “industrial instrument” in the end of the definition of “contract”.  You will find that, your Honours, in I think section 8 – it does not matter for present purposes.  So that is the first provision.  It gives an expanded definition to the term “contract”.  The second thing, your Honours, is that the definition of “unfair contract” is also found in section 105 ‑ ‑ ‑

GUMMOW J:   Just before you leave that, there is no question, is there, in this or any of the cases that there was an industrial instrument?

MR JACKSON:   I do not think so, your Honour.  It is certainly not in our case.  I do not think there is one involved in the other cases.  Your Honours, the second definition is “unfair contract”.  Your Honours will see that an unfair contract means a contract, presumably - that term having the meaning defined by the immediately preceding provision – a contract that has a characteristic referred to in the several paragraphs of the definition of “unfair contract”:

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

(b)      that is against the public interest, or

(c)      that provides a total remuneration . . . 

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

Your Honours, from those two definitions one goes to the provision conferring the power, and that is section 106.

GUMMOW J:   Does not the phrase “performing the work” in paragraph (c) of the definition of “unfair contract” perhaps give a clue as to what 106(1) is looking to?

MR JACKSON:   Well, your Honour, it gives a clue to one of the grounds upon which the power may be exercised but, your Honours, one sees that the earlier provisions – it would be very difficult to read down “against the public interest”, very difficult to read down “unfair”, difficult to read down “harsh or unconscionable” ‑ ‑ ‑

HAYNE J:   It depends on what you mean by “reading down”.  You have to give them content.

MR JACKSON:   Quite, your Honour, reading down is perhaps the wrong word.  I was, in a sense saying it in reference to paragraph (c).  What I seek to say about it your Honours is this.  If one starts looking at the definition of “unfair contract” it speaks of a contract “that is unfair”; it speaks of a contract “that is harsh or unconscionable”; it speaks of a contract “that is against the public interest”.  Those three species, as it were, are themselves terms that are wide, not limited in any particular way.  One sees then two particular aspects referred to in paragraphs (c) and (d).  No doubt, one gives particular reference to paragraphs (c) and (d) in cases to which they may be applicable. 

HAYNE J:   But is this not an indication of the difficulty that is encountered if you simply read the Act in the sequence of the sections?  I understand of course why you begin with the definitions, yes, we must take them into account but if you begin inquiry with the definition without understanding where it applies, one is led off down paths about understanding of what is meant in the definition that are perhaps uninformed by its context.

MR JACKSON:   Your Honour, if one looks to see the context, and I will come to this in a little more detail later, but the context in which one sees this statute is a context where cases of the general kind of which this case is part, and I deal only with my own case for present purposes, cases of this kind were and have been dealt with by the Commission for years before this provision came in.  Could I also say about it that whether one starts at 106(1) and says these words have to be looked at as defined or whether one looks at the definition and then says look at 106(1), the answer, with respect, should not be different.

In dealing with that, your Honours, one sees that there has been given to a body – anyway I do not want to keep emphasising this, it has been there for a long time – but this is a body that has been doing this for years.  The fact of the matter is that if one looks at, for example, the objects of the Act which you will see set out in section 3, that it is to promote, amongst other things, “efficiency and productivity in the economy of the State”.  No doubt there are references to various aspects of industrial matters but a large part of the Act deals with that.  It is just that this part deals in a sense with that but more.

HAYNE J:   Is not the hinge about which these provisions turn the concept a person performs works in any industry.

MR JACKSON:   Yes, it is, your Honour.  I accept that.

HAYNE J:   And is not that the first step in the inquiry to identify whether you have a person perhaps who is performing?  Let us leave aside for the moment the question of whether it extends to persons who have in the past performed, but do you not first find a person who performs or you would have it, has performed, work in any industry?

MR JACKSON:   Your Honour, of course, but could I say in relation to that that if one is looking for that one goes, for example, to see the ambit of it, one takes the word ‑ ‑ ‑

HAYNE J:   Very broad:  see “industry”, et cetera.  Very broad.

MR JACKSON:   Very broadly defined in section 7, including “any . . . business . . . or occupation in which persons work”. So that is very broad. It is necessary, of course, to identify what is the contract whereby the person performs work. Having said that, your Honours, one is not looking at section 106(1) in circumstances where those words have no particular meaning and the particular meaning is that one is looking to see, when it speaks of a “contract whereby a person performs work in any industry” – “industry”, as I said, is very broadly defined. One comes then to the term “contract” and “contract means any contract or arrangement”, et cetera.

HAYNE J:   What is the sense given to the word “whereby”?

MR JACKSON:   Well, your Honour, in concert…..or pursuant to.

HAYNE J:   In accordance with?

MR JACKSON:   Well, in accordance with, if one likes, but it then becomes a question of identifying, which is in the end a factual matter, what is the contract, bearing in mind, of course, the defining words in 105, whereby the person does so.  Once one identifies the contract, then the Commission looks to see whether the contract is something that is, as defined, an unfair contract.  It then has a power to deal with it if it so chooses.  Your Honours, undoubtedly, the power is broad.  I am speaking purely about a question of jurisdiction.  The manner of exercise of it is a different question altogether, including whether there should be an exercise.

KIRBY J:   The word “contract” in section 106(1) would be contract as defined in section 105, would it not?

MR JACKSON:   Yes.

KIRBY J:   So it picks up not just the word “contract” as appearing there but “arrangement”, et cetera, as appearing there.

MR JACKSON:   Yes, and of course it is probably unnecessary, in a sense, but the term “unfair contract” itself includes the word “contract” in the definition, which of course picks up 105. If I could go back to section 106(1) for a moment, your Honours will see that the power to make the order is found there. There are some supplementary provisions I will mention in a moment, but if one does go to section 106(1) what one sees is that the power that is there given is a power to declare void, as it is put, in whole or in part, or to vary contracts or arrangements to which the provision refers.

Your Honours, as one can see from subsection (3), the declaration of whole or partial voidness, or the variation, may occur from the time of commencement of the contract or arrangement or from some later time.  Your Honours, if I could go back to subsection (1), the contract must be one which possesses two characteristics:  the contract or arrangement is to be one, as your Honours asked me, whereby a person performs work and, secondly, the work must be in an industry, industry being broadly defined.  Your Honours, it was held by this Court that there does not have to be an identity between the person working and the party contracting.  Could I just give your Honours the reference to that without going to the detail of it?  It is Stevenson v Barham (1977) 136 CLR 190 at 200 and 201.

GUMMOW J:   Mr Walker, I think, would have us, at any rate, look very closely at Stevenson v Barham.

MR JACKSON:   Yes.  Well, I propose to take your Honours to particular passages in that case to which I wish to refer.  Your Honours will see at page ‑ ‑ ‑

GUMMOW J:   Perhaps, it seems to me, it is only really understood in the light of what the New South Wales Court of Appeal was saying.

MR JACKSON:   Yes.  Well, your Honour, that is so.  It is also rather dependent on the other case that is referred to, and that is what was said by Justice Jacobs in V.G. Haulage which was picked up in Stevenson v Barham at page 200. Your Honours will see, in Justices Mason and Jacobs at page 200, a reference immediately before the quotation to the critical passage in the V.G. Haulage Case being – and your Honours will see that there set out but, particularly, if I can go to the passage about 10 lines from the bottom of the quotation which commences “Presumably”, it says:

Presumably, this is because any transaction, leading to work in an industry, which can be so described is regarded as inimical to the purposes of the Act.  I think this last sentence properly expresses the principle, in that the transaction must directly lead to work in the industry – that is what gives the industrial colour or flavour –

“industry”, your Honour, widely defined, as I said before –

but there is no suggestion in the passage that there must be throughout an identity between the person working and the contracting party.

And your Honours will see the comment that immediately follows in the last paragraph on that page.  It is said:

it becomes obvious that what was being rejected was the argument that the powers of the Commission are confined to transactions which directly undermine awards or threaten industrial standards and what was being asserted was that so long as the transaction leads directly to work in any industry it has the necessary “industrial colour or flavour”.

GUMMOW J:   Where does this phrase “industrial colour or flavour” come from?  It is meaningless to me.

MR JACKSON:   Well, your Honour, it really is a term that one finds – I think it comes from this case – it difficult to give it a very satisfactory meaning in the light of the definition of “industry”.  Perhaps “industrial flavour” has a relationship to employment in some way, but when one looks at the definition of “industry”, which in fact has become wider, I think, on two occasions since then, it is very difficult to try to, if I may use the expression, read it down, as it were.  It is a very broad term and that is why the “industrial colour or flavour” ‑ ‑ ‑

GUMMOW J:   Is there any consideration in Stevenson v Barham in this Court in the majority of the mischief to which 88F was directed and any consideration of the extraneous materials to which one can now look but which one could only look in a rather abashed fashion in 1977?

MR JACKSON:   I think, your Honour, the answer is no.  One starts at the bottom of page 197 where there is set out the provision at the top of the next page.  Some reference to legislative history, as distinct from discussion about it, is in the first new sentence on page 198 and I think, your Honour, after that one sees really an analysis by reference to the terms of the statute.

GUMMOW J:   Yes.

MR JACKSON:   Your Honours, I intend to come to the legislative history, if I may, in a relatively short time, but may I go very briefly to the proceedings in the Commission and in the Court of Appeal.  Your Honours, as I have said before, the appellants instituted proceedings in the Commission.  The nature of the application they brought appears from their amended summons, which is at page 180 of the appeal book.  It is divided up into a couple of parts.

At pages 180 to 188 are set out the various claims for relief and the second part is a summary of the facts and law at pages 188 to 215.  Could I go to the second part, your Honours, the summary, commencing at page 188.  Now, your Honours will see in paragraphs 1 to 8 on page 188 – I am referring to paragraphs in the summary itself – that the first appellant was a successful young businessman.  Then, as one sees at page 189, paragraph 9, he was offered the opportunity of joining the first and second respondents’ organisation as a senior executive and selling his company, to put it shortly, to it.  Your Honours will see that at paragraphs 9 to 12 are on page 189 to page 190.

Could I say particularly, if one looks at paragraph 12(c), what your Honours will see is that it was proposed to him that the respondent would purchase the shareholding in his company at a purchase price of $19 million and it was represented that – and your Honours will see paragraph (c):

the Share Sale Agreement would be conditional upon the First Applicant agreeing to be employed by the Second Respondent for a period of three years.

Now, your Honours will see then there was entry into the share sale agreement referred to at paragraph 17.  There was the exchange of the agreements on 2 March.  Completion was a few months later but the agreements were exchanged on 2 March.  I will go to its terms very shortly, your Honours, but could I invite the Court to note that set out on page 192 are various extracts from it but, amongst other things, your Honours will see in paragraph 2.1(a) that:

Completion will not proceed unless the Buyer is satisfied that before or simultaneously with Completion, Nick Fish has been released from employment with the Company and has entered into an employment contract with the Buyer, on terms acceptable to the Buyer ‑ ‑ ‑

HAYNE J:   Is it this provision upon which you fasten as bringing the share sale agreement or share purchase agreement within the definition of contract?

MR JACKSON:   That plus some others, your Honour.

HAYNE J:   At some point if you could identify each of them, but when you come to them.

MR JACKSON:   Yes, I will, your Honour.  The amended summons then goes on to allege at paragraphs 22 to 24, which your Honours will see on page 198, the failure to provide the $500,000 of the purchase price – the purchase price being divided up into effectively two amounts, $18,500,000 and $500,000 – and in paragraphs 25 to 26 the failure to perform to the representations.  Paragraphs 27 to 31 deal with the contract of employment into which Mr Fish entered.  Your Honours will see that Mr Fish entered into those arrangements – this is paragraph 27 – at the time the share sale agreement was entered into, 2 March 2000.

Now, your Honours will see also the allegation that the contract of employment involved him having a senior position, and your Honours will see that referred to in paragraph 27.  Your Honours, there could be, of course, no doubt that the contract of employment was a contract whereby work was to be performed in an industry as defined.  If I could just say that the question, of course, was whether the share sale agreement was part of the arrangement, to put it shortly, which resulted in him working for the company.

Your Honours, one then sees that there follow, in the summons, allegations in relation to a number of matters - I will not go into the detail of them.  Bonus schemes, that is paragraphs 32 to 42 and 43 and 47; redundancy, between those two, and then an attempt to settle termination entitlements, paragraphs 64 to 67; superannuation, paragraphs 68 to 70 and then attempts to mitigate something required by the statute, paragraph 71.

GUMMOW J:   Mr Jackson, I am not sure what you say that the linkage is between the share sale agreement and the employment contract for the purposes of the definition in 106.

MR JACKSON:   Yes.  We say, in effect, three things and those three things, your Honours - your Honour is speaking of definitional terms as distinct from leakages in the agreements?

GUMMOW J:   Yes.

MR JACKSON:   Your Honours, so far as they are concerned we - your Honours will see those set out in the judgment of the Chief Justice in the Court of Appeal and at page 405, paragraph 52 he puts them shortly.  Now, that is a brief version of it.  You will see a third of them are referred to also in paragraph 42 and also, your Honours, the earlier ones, paragraph 36.

HAYNE J:   And do you maintain those contentions?

MR JACKSON:   Your Honour, the second and third we would put at the forefront.  The first of those is perhaps a more difficult proposition but we seek to maintain it.

HAYNE J:   Is the second, which I understand to be that the share sale agreement is collateral to a contract, et cetera, whereby work is performed, a submission that would read “collateral arrangement” where it appears in the definition of “contract” as freed from the qualification “whereby a person performs work in any industry” where it appears in 106(1)?

MR JACKSON:   No, your Honour. If one looks at the definition, what it has in relation to collateral arrangement is an arrangement which is collateral to a contract or collateral to an agreement. The term “whereby” in section 106(1) is one which really qualifies, in effect, all the words of contract, but the collateral arrangement is one – I am sorry, I will start again. If one identifies what is the collateral arrangement and the collateral arrangement is one whereby the person performs work in the industry then, your Honour, it falls within it.

If the collateral arrangement does not itself provide or, if one puts it this way, if the collateral arrangement looked at alone, that is without reference to the instrument to which it was collateral, did not itself say anything about performing work in the industry then it would seem probably to fall outside the terms of 106(1) but the feature about it is that it is collateral of its nature.  Unless it is collateral to something one takes the two together and it will be by the operation of the two that one gets the “whereby”.

HAYNE J:   At some point in your argument, either immediately or after the adjournment, I would be glad if you would deal with this chain of steps.  Your argument in part, it seems to me at the moment – it may not – depend upon first identifying what agreements and arrangements are related one to another and then, and only then, asking do the arrangements thus identified as a global whole require, provide for, performance of work in an industry?  If yes, then the Commission may reform any part.

The alternative that I put to you for your consideration is to begin the inquiry at the opposite end, to begin by identifying what is the work that a person is performing in an industry, recognising as you rightly emphasise the breadth of the term “industry”.  Step one, having identified that a person is performing work in an industry; step two, what are the arrangements, be they contractual, non-contractual, collateral, primary, whatever, but what are the arrangements in accordance with which the person performs that work, and only those arrangements may be subject to reformation by the Commission.  Now, it seems to me that something may turn upon which part of the definition you begin from.

MR JACKSON:   Your Honour, it is possible that is so, I will accept, but may I just say that the way in which your Honour uses the phrase “in accordance with” gives it a somewhat different shade of meaning from “in consequence of which” or “leads directly” if one uses the expression that is ‑ ‑ ‑

HAYNE J:   That is why I take a phrase found in meaning two of “whereby” in the OED, “in accordance with”.

MR JACKSON:   Yes.  Your Honour, “in accordance with” is a possible meaning of “whereby” but one comes then to say what is the appropriate meaning of “in accordance with”.  Now, if “in accordance with” simply means terms and conditions of employment as they operate day by day then the answer that one gets to determining what is the contract or arrangement may, but may not, be different from the answer one would get if one starts with identifying the contract or arrangement, but it really turns on what one means by “in accordance with”.

That is, with respect – the meaning that I suspect underlies what your Honour is putting to me, if I may say so, with respect, is one that one does not really fit too well, we would submit, with the other parts of the provision.  If you look for subsection (2) it says 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.

That is a very broad provision and seems to be looking not just at the hours of work or large matters of that kind, but rather looking at events that brought about, perhaps, the entry into it.  If one looks, your Honours, at subsection (3) which speaks of the ability to declare the contract:

wholly or partly void, or varied, either from the commencement . . . or from some other time -

if one is speaking about the commencement that seems to suggest that the power is a power to be which may extend to dealing with the contract and what led to performing work under that.

Your Honours, if one looks at subsection (4) one sees ‑ in the cases to which it applies – matters that must be looked at in the public interest, and if one is looking at the matters that are referred to there the very thing one would be looking at is the conduct, one might think, that led people into being in contracts of this kind, and ‑ ‑ ‑

GLEESON CJ:   Is that a convenient time, Mr Jackson?

MR JACKSON:   Yes, your Honour.

GLEESON CJ:   We will adjourn until 2.15 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ:   Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honours.  Your Honours, may I say two things in response to the question your Honour Justice Hayne asked me before lunch.  I think I have in part answered that and it is obvious from what I said, I think, that we would be supporting the former of the two views your Honour put to me.  But may I say a couple more things in relation to it.  One is that the view that your Honour was putting to me as the alternative does seem to depend upon a particular – and I do not say that in any adversely critical way, of course – but a particular view of the meaning of “in accordance with” in that context. 

The second thing, your Honours, is this, that the cases do, in our submission, rather support the contention we have advanced rather than the other.  May I in that regard refer to the decision of the Privy Council in the Caltex Oil v Feenan Case [1981] 1 NSWLR 169. Now, your Honours, the question in that case was whether the agreement which they called the Solus agreement was one that attracted the jurisdiction of the Industrial Commission and your Honours will see at page 172, if one goes to the paragraph commencing around E, they say the question:

Was this a “contract whereby a person performs work in any industry”?

That was the section 88F they were talking about –

As a result of numerous decisions in the Industrial Commission of New South Wales, the Supreme Court of New South Wales and in the High Court itself, it is well established that the phrase is to be treated as broad and comprehensive in its scope.

Your Honours, there is a reference there to Stevenson v Barham.  May I go down to G on the same page, where it is said:

The majority and the minority used somewhat different language to express their understanding of the meaning of the crucial phrase . . . and it has formed the main burden of the argument by Caltex that the way that the minority put it is to be preferred –

Your Honours, if I could come then to the next page, page 173, towards the bottom of the page between F and G it is said:

The remaining question of construction is whether the Solus Contract was a contract “whereby” they did so.  In their Lordships’ view this provision in the context of contract or arrangement bears its ordinary meaning of “in consequence of which” or “in fulfilment of which”.  Either meaning is sufficient to bring the Solus Contract within the description of contracts to which s 88F applies.

So that is the meaning that was attributed to the expression in that and the terms of section 88F are set out on page 170 of that judgment.

There was a reference to Stevenson v Barham (1977) 136 CLR 190. May I take your Honours to that decision. Chief Justice Barwick at page 192 agreed with the views expressed by Justices Mason and Jacobs. Your Honours will see that in the penultimate paragraph of his reasons. Your Honours will see in the paragraph immediately above that a reference to the language of section 88F being:

intractable and must be given effect according to its width and generality.  The legislature has apparently left it to the good sense of the Industrial Commission –

and your Honours will see the remainder of that sentence.

Could I go then to one of the dissenting judgments of Justice Stephen at page 194 and your Honours will see ‑ ‑ ‑

KIRBY J:   Leaving “it to the good sense” is not a very helpful criterion event.

GUMMOW J:   Particularly when they are hedged with the probative clause.

MR JACKSON:   I am sorry, your Honours.

KIRBY J:   I am saying it is not a very helpful dictum.

MR JACKSON:   Your Honour, all that is being said really is that it is a case where it is within jurisdiction.  The question of the relief that should be granted is a matter for the Tribunal to whom the jurisdiction has been given and, yes, your Honour, the expression, “to the good sense of the Tribunal” is an expression one see often enough used in circumstances where a wide power is given but the power is to be exercised by a body and one says it is left to the good sense of the Tribunal to make ‑ ‑ ‑

KIRBY J:   Is that a correct legal principle?  What about Julius’s Case?
If you have the jurisdiction, if it is a facultative jurisdiction, if it is intended for the purpose of giving relief against unfair arrangements then what will stop the provision of relief?  Unless you have some notion of what stops you getting into the class, once you are in the class it is pretty hard to say, well, it is just a matter of good sense.

MR JACKSON:   That might be.  Your Honour will appreciate that the observation that is made by Chief Justice Barwick is one where he is saying “The legislature has apparently left it”, et cetera.  Now, that could refer to one of two things, the ambit of a provision such as unfair or against public interest.  It may be also that there is some - he regards the question as one where it is in the end some ultimate discretion in the way in which section 88F was expressed, and there may be a discretion, your Honour, but that is not an ultimately jurisdictional question but, your Honour, I am not really defending what his Honour said in what in a sense was a throwaway line to the extent to which one ever sees that.

GUMMOW J:   Is there a section as well as 106(1) which vests jurisdiction?  On the face of it 106(1) is a Barrett‑type provision, is it not?

MR JACKSON:   Yes.  Your Honour, there is ‑ ‑ ‑

GUMMOW J:   It says the court “may make an order” doing this, that and the other.  It does not seem to say “The Commission is hereby vested with jurisdiction”.

MR JACKSON:   As your Honour said, there is 106.  When one comes, I think, to the provisions I was referring to this morning ‑ ‑ ‑

HAYNE J:   Section 153(1)(c) is perhaps part of it.

MR JACKSON:   Yes, that is so, your Honour.  There is another provision.  Your Honours will see section 146(1)(e) which says it has those functions.

GUMMOW J:   Yes, it talks about functions.

MR JACKSON:   Well, your Honour, ones does not – or the legislature is not absolutely tied to particular words.  Function may be near enough but, in our submission, good enough.

HAYNE J:   They refer to “functions relating to proceedings for contempt” in 153(2), which is an unusual combination of words.

MR JACKSON:   Yes, and 151(1).  May I give your Honours a note of this or say something about it perhaps more in reply if there is something more I want to say about that jurisdiction conferring provision.  Your Honours, I was going to refer to Justice Stephen in Stevenson v Barham and, in particular, at page 194.

GUMMOW J:   Just before we leave that, what is then the jurisdictional fact entangled in all this complex running together of disparate ideas in 106 (1)?

MR JACKSON:   Your Honour, the jurisdictional fact, if one looks at 106 (1), is that there be established the existence of a contract whereby a person performs work in an industry.  Now, that is the jurisdictional fact.  For there to be - it may or may not be right to say that a second aspect of the jurisdictional fact is that that contract itself have one of the characteristics referred to in paragraphs (a) to (d) of the definition of “unfair contract”.

GUMMOW J:   Another way of looking at it is the jurisdictional fact is the performance in New South Wales of work in an industry where that work is performed in accordance with a contract within the expanded definition of “contract”.

MR JACKSON:   Your Honour, that takes away the word “whereby” and puts a possible synonym for it.

HAYNE J:   As to that I should correct myself.  The OED expression is “according to which”, not “in accordance with” as I put to you this morning, “according to which”.

MR JACKSON:   Well, that, your Honour, in our submission, is one that accords better with the first of the propositions that your Honour was putting to me, in our submission.

GUMMOW J:   What is lacking from the case is, to be perfectly frank about it, any sort of analysis of the kind we have just been discussing.

MR JACKSON:   I am sorry, but I just did not hear what your Honour ‑ ‑ ‑

GUMMOW J:   What is lacking in the cases which the written submissions oppress us with is any sort of basic analysis of the construction of the section of the sort of thing we have been debating here.

MR JACKSON:   Well, your Honour ‑ ‑ ‑

GUMMOW J:   Where does one find this in Stevenson v Barham?

MR JACKSON:   Your Honour, in Stevenson v Barham what one sees in part is the picking up of the earlier decision in the New South Wales Court of Appeal, V.G. Haulage.

GUMMOW J:   Yes, I know.

MR JACKSON:   But that itself involves a discussion – for example, at page 198 one sees in the paragraph commencing about the middle of the page:

the agreement must be one “whereby a person performs work in any industry”.  It is upon these apparently innocuous words –

there is a reference then to the definition of ‑ ‑ ‑

GUMMOW J:   The question is what was the jurisdictional fact for the purposes of prohibition in all these cases?  I am not complaining about it particularly.  All I am saying is the cases do not provide any great inhibition upon looking at it with fresh eyes.

MR JACKSON:   Your Honour, in our submission, one sees in, for example, Stevenson v Barham and other cases the members of the courts looking at the Act saying, in effect, “This is what has to be established”.  They clearly enough identify the extent to which establishing the jurisdiction may not result in there necessarily being an order, but one does see that, your Honour.  Perhaps if I can endeavour to isolate the cases in which ‑ ‑ ‑

GUMMOW J:   Maybe the nature of the order is linked to the nature of the jurisdictional fact, namely the performance of the work.

MR JACKSON:   Well, your Honour, there is no doubt that for there to be a contract in relation to which the Commission is capable of exercising jurisdiction in terms of having been conferred on it there has to be a contract or arrangement, et cetera whereby a person performs work in any industry.  That being so, and if there is then a finding that the contract or arrangement suffers one of the disabilities in the definition, one then sees the expanded forms of relief that can be given in relation to it.

What I mean by that are the several paragraphs of section 106, which are not limited, your Honour. All that is necessary really to enliven the jurisdiction is to have a situation where it is found that there is a contract or arrangement, et cetera which is one whereby a person performs work in an industry, a term being widely defined.

HAYNE J:   And to reform any term of that, whether the term concerns the way in which or terms upon which the person is performing work in the industry?

MR JACKSON:   Could I answer that, your Honour, yes and no.  It is a wide power to reform the terms, but it has to be exercised, one would think, with a view to taking away either the whole of the contract or arrangement, because it speaks of avoiding them, ab initio or from a later point.  So it is clear that one can get rid of the lot.  It is clear there is a power to vary.  Now, those powers presumably are to be exercised with a view to removing in toto or to the extent necessary the features which make the contract or arrangement one which is unfair, harsh or unconscionable, et cetera.  That inevitably, one would think, would have a relationship to the performance of work in the industry.

HAYNE J:   How does the reformation of the provision about valuation of shares by inserting a floor price relate to the performance of work in an industry in the Fish Case?

MR JACKSON:   Well, your Honour, in this way.  If your Honour is speaking about a particular form of relief, a number of forms of relief are suggested including simply the payment of a sum of money.  Now, in relation to that one sees that the agreement would be varied so that there would be, to put it shortly, a fair price for the shares.  Now, in relation to that, that was connected with, or the agreement was connected with, and I mean by that the share sale agreement, the employment agreement and the two formed part of an arrangement.  Now, the arrangement is one which subsequently, if it was not initially so, became an unfair contract.  The Commission then has power to remedy that by, amongst other things, making an order, for example, under subsection (5).  It may or may not, but it has power to do so.

In section 106(1) the power that is there given is to find that the contract – and one has to give “contract” its defined meaning including arrangement – is an unfair contract or arrangement. If that is so, the power is enlivened. Whether the power is exercised, different question. Now, your Honours, I am sorry, I think I was at Justice Stephen in Stevenson v Barham.

GUMMOW J:   Yes.

MR JACKSON:   Your Honours, I was going to go to page 194 and the last paragraph on the page.  Now, your Honours, Justice Stephen was dissenting in the application of it.  All I wanted to refer to was the first four lines of that paragraph where he said that he regarded it as clear that:

the present agreement is not one in consequence of which –

and it is that usage –

in consequence of which Barham was to perform work for Stevenson.

Now, he was dealing, I appreciate, with a slightly different issue, but at the same time your Honours will see the usage that is referred to there.  Could I mention in passing, your Honours, at page 195 in the penultimate paragraph on that page, the first two sentences of Justice Stephen.  He agreed it was:

not to be restricted to cases of contracts which are in some way thought to be subversive of the scheme of industrial regulation –

and, your Honours ‑ ‑ ‑

GUMMOW J:   That is what the Court of Appeal had considered, was it not, this notion of subversion, particularly of Justice Hutley?

MR JACKSON:   Yes, yes, subversion.  But, your Honour, the Court disagreed with that view.

GUMMOW J:   Yes.

MR JACKSON:   Your Honours, if I could go very briefly to Justices Mason and Jacobs at page 198.  You will see they refer in the paragraph, which is the second‑last paragraph, to the fact that the words – this is the fourth line:

have to be read in the light of a statutory definition of the word “industry” –

which was then widely expressed.  Then at the top of the next page they said:

the power conferred upon the Commission by s 88F is in the widest terms.  It enables the Commission to make an order or award –

et cetera –

The grounds so stated are wide ranging and embrace many considerations.  They are not all limited to considerations which are themselves industrial in character.

Your Honours will see them set out there, and since that time unfair and harsh and unconscionable have been put into the one paragraph.

Your Honours, that goes on through the next paragraph and then after that, about the middle of page 199, they say:

There is little force in the argument that because the power has been entrusted to the Industrial Commission, and not to the Supreme Court, it should be circumscribed and confined to agreements which tend to subvert orderly industrial regulation.

Your Honours, I have said two or three times, I think, with respect, that this is a power that the Industrial Commission has had for a long time and one would think that in the time that it has had it would be as long as, or longer, I suspect, than perhaps any of the legal practitioners, perhaps even your Honours, have been in the ‑ ‑ ‑

GUMMOW J:   Yes, but the appetite has grown with eating, has it not?

MR JACKSON:   Your Honour, that can happen, but what one sees also is that it is not just a case of the greedy boy eating everything from the table.  The person who provides the food, namely, the legislature, has been perfectly happy to ensure that the cake is replenished from time to time and that it is one that has perhaps two layers of cream and not just the one.  I think I have referred to that sentence.

KIRBY J:   All these metaphors are all very well but ultimately we have to get to the bottom of what the purpose of the statute is as revealed by its language given that industrial conditions have changed since the statute was enacted and since 88F was enacted and that we now have new circumstances to which, at least in terms of the language, the statute can apply.

MR JACKSON:   Yes.  Your Honour, if I can just say this, that it is common knowledge, of course, that in the time since these provisions were first enacted, the number of persons who are employed – I am sorry, I have used the wrong word.

KIRBY J:   Mr Rothman made the same mistake in the special leave.

MR JACKSON:   Look, what happened to him, your Honour.

KIRBY J:   It is easy to fall into.  Maybe that is the whole point of these cases.

MR JACKSON:   But, your Honour, could I just say, perhaps in my own halting way, that in relation to this the situation has changed dramatically where so many people are not employed or engaged under contracts of employment but many people work in circumstances where they have contracts for services and various arrangements – I intend to mention that in a moment, if I may – and one has to apply these provisions which have been twice enacted since section 88F, at least twice, to the current circumstances as they come about.

KIRBY J:   Do you have any analysis of the differences subsequent to re‑enactments?  Are they material in any way for ascertainment of the, as it were, accumulating purpose of the legislation?

MR JACKSON:   I was going to take your Honours to that in a moment, if I may.

KIRBY J:   Because, as Justice Gummow pointed out, this Court has repeatedly been saying in recent times the starting point is the analysis of the statute.

MR JACKSON:   Your Honour, what has happened is that there has been an affirmation by the legislature in introducing and keeping the provisions going of the ambit of the provision and fixing up things.  I mean, for example, one sees a provision in the statute now which allows, in effect, a more direct way of enforcement of money orders – orders for payment of money which was something for which there was an early difficulty, things of that kind. 

There may be, for example, in cases – this is not one because at relevant times the Corporations Laws – I use that term generically – were State laws.  There may be in some cases, if there were issues with the Corporations Act, the Commission might be exercising federal jurisdiction and different questions might arise.  All I saying, your Honour, is that one does have a situation where for quite a long time orders have been made dealing with shares.  I will come to those in a moment.

Your Honours, could I just stay for a moment with Stevenson v Barham. I referred your Honours to page 200 earlier and page 201. It was said at page 201 in the paragraph commencing in the middle of the page:

It follows, then, that if the contract is one which leads directly to a person working in any industry it has the requisite industrial character – it is a contract “whereby a person performs work in any industry”.

Your Honours will see there a reference to “the relevant jurisdictional fact”.  That is at page 201, five lines into the last paragraph, and then your Honours will see a discussion about what is the jurisdictional fact and so on.  That goes over to the top of the next page. 

The other point I wish to make in relation to what your Honour Justice Hayne was asking me is if one goes back to the statute for a moment, your Honours will see in section 106(2) that the power to find that there was “an unfair contract at the time it was entered into or that it subsequently became an unfair contract” and so on. Now, your Honours, in relation to that, in saying that “The Commission may find that it was an unfair contract at the time it was entered into”, that supports, in our submission, the view, the wider view, in our submission, of section 106(1) and section 107, if one – it is the provision that allows orders to be made which prevent people entering into contracts, which prohibit entry into contracts of a particular kind. That comes about if, as your Honours will see from section 107(1), the Commission may make a further order for the purpose of prohibiting, for example:

(a)      any party to the contract, or

(b)      any other person who is . . . associated with any such party,

from:

(c)      entering into any specified kind of contract whereby a person performs work in an industry, or

(d)      doing any act . . . which may reasonably be construed as being intended to induce other persons to enter into any such contract.

Now, your Honours, that is, in our submission, something which indicates that one of the purposes of the provision – and no doubt this is stop people entering into pro forma contracts – is to deal with contracts which bring about people working in industries.

Your Honour Justice Hayne also asked me a question about the collateral part of it.  I omitted to refer, your Honours, to what has been said in our written submissions about that in paragraph 40.  May I give your Honours the reference to that.  Could I go then to the next question, in a sense, was there an arrangement?  Your Honours, I see the time.  I am afraid I have gone a little longer than I expected to but I would expect to be about 15 minutes, if I may do so.  Some of my learned friends have said they do not expect to be as long as suggested.

Could I take your Honours to the terms of the share sale agreement and your Honours will see that around page 240 in the appeal book.  Your Honours, as I go may I list the provisions on which we place reliance.  This is the issue to which Justice Gummow referred.  They are, I think, although not comprehensively, referred to in paragraph 29 of our written submissions.

Your Honours will see in the share sale agreement that clause 2.1(a) says that completion, and there was provision for a gap in time between the exchange of agreements and completion - that is dealt with by clause 6 of the contract.  Page 246 deals with the time for completion but your Honours will see that clause 2.1(a) says:

Completion will not proceed unless the Buyer is satisfied that before or simultaneously with Completion, Nick Fish has been released from employment with the Company and has entered into an employment contract with the Buyer, on terms acceptable to the Buyer -

Now, your Honours if I could pause at that point, what is contended in the proceedings in the Commission is that the two agreements were related agreements.  He would enter into a contract for employment with the company and the shares were sold.  The two were together.  Now, your Honours, if one is speaking about arrangements then if the arrangement is that the share sale agreement is not to proceed unless he has agreed to be employed why is one able to say, as the Court of Appeal said, that the Commission could not find that the share sale agreement is part of the arrangement that was entered into.  That is the first thing.

The second thing is if one goes then to clause 2.1(c) you will see that another condition is that:

Completion will not proceed unless the Buyer, acting reasonably and in good faith, is satisfied –

that certain key employees –

have not resigned or indicated an intention not to continue employment with the Company after Completion -

Now, your Honours, it is established that it does not have to be a contracting party to be the person whose work is involved - Stevenson v Barham.  So that is another provision.  I would refer also, your Honours, if I may, to clause 2.2(a) which says:

The Seller must use its best endeavours to satisfy the conditions for Completion set out in clause 2.1.

Now, the seller is Mr Fish’s company which owns the shares, but your Honours will see that his company is to make its best endeavours to ensure that he is signed up for employment.  Your Honours will see also clause 2.3:

The Buyer and the Seller must promptly notify each other in writing if any condition for Completion in clause 2.1 is satisfied or cannot be satisfied.

Then there is an ability in clause 2.5 for the buyer or seller to terminate the agreement if they choose, if the condition for completion is not satisfied.

You will see then, your Honours, in clause 3 that the provision for completion is expressed to be “Subject to clause 2”, and then if I could go to clause 4.  Clause 4 is the provision that deals with payment of the purchase price for the shares.  I will not go through the detail of it, but could I just take your Honours to clause 4.8.

Now, 4.8 relates to the shares that the appellant company was to get, or got, in payment of purchase price, to put it shortly.  You will see in 4.8(c) that it said:

The Seller may Dispose of all of the Sol 6 Shares if at any time the Guarantor’s –

and the appellant, Mr Fish, was guarantor of the agreement – I will take your Honours to the provision in a moment –

employment with the Buyer’s Group is terminated, unless termination results from any of the following events -

So one sees a relationship between the two referred to there.  Your Honours, one sees also if one goes then to – I mentioned completions dealt with by clause 6.  If one goes to clause 8.1, in particular 8.1(b), there is a non‑competition clause, and then if one goes to paragraph (c) of page 250 it says:

If the Guarantor’s employment with the Buyer’s Group is terminated by a member of the Buyer’s Group, the restraint . . . cease to apply –

but your Honours will see that there is a relationship between the two agreements.  Then 8.2(a):

The Seller and Guarantor agree that:

(a)      any failure to comply with clause 8.1 would diminish the value of the Shares –

Your Honours, I mentioned earlier that Mr Fish was a guarantor.  That is clause 13 at page 255.  His guarantee, as one might expect, the obligations of his company, but it supports the view that there is a relationship between the two agreements and that the relationship is one whereby they are capable of being part of the same arrangement.

Finally, your Honours, if one goes to clause 14.1, he was required:

the Seller and Guarantor must use their best endeavours to ensure that all Employees and contractors/consultants on contract with the Company remain in the employ of or contracted to the Company.

Now, your Honours, those are the provisions that we submit demonstrate that between the two agreements there is a relationship and it is possible to call that relationship an arrangement within the terms of the definition of “contract”.

Your Honours, there is of course nothing new about looking at the whole arrangement.  May I go to two decisions in that regard.  The first is Hall v Alison Clint Floral Delivery Pty Limited [1971] AR 56, a decision of Mr Justice Sheppard when he was a member of the Industrial Commission – hardly one of those inexperienced industrial judges knowing nothing about commercial law.

Your Honours will see at page 63 that there were three agreements, and I am referring your Honours to halfway down the page.  I do not think I need to go to the detail of the earlier parts of it, but he said:

The design of all three –

speaking about people there –

was that transactions would be entered into which would have the effect of substituting the applicant for Young in the company’s work force.

This was delivering flowers.

The transactions were the contract dated 29^th September, 1970, made between Young and the applicant for the sale of the run –

Young had the run.  He was selling it to Hall.  The second one was:

the assignment to the applicant of Young’s agreement with the company with the company’s consent –

and the third he said then was:

the resulting contract between the company and Hall and a transfer to Hall of shares held by Young in the company.  The combination of these transactions constituted, in my opinion, an arrangement made by the three whereby the applicant was to do work in the transport industry.  It is not correct to look at the dealing between Young and the applicant in isolation.

Your Honours will see then in the passage which goes to the bottom of that page and to about halfway down page 64 that there is a discussion of the nature of arrangement which we refer to your Honours, but then one sees at about point 4 on the page his Honour saying:

The section under consideration here speaks of an arrangement of a particular kind, that is an arrangement whereby a person performs work in an industry, and then confers upon the Commission power to avoid it if it is, for example, unfair . . . In the other, one simply has to determine whether there is an arrangement under which or whereby work is to be done in an industry.  Nothing is said about purpose or effect, but it seems to me to be appropriate to construe the section as applying to any dealing, the purpose of which or the effect of which was to achieve a situation under which a person worked in an industry.

Again, your Honours will see the reference to the purpose or effect, and then two paragraphs further down, you will see he said that the three contracts were an irrelevant arrangement.

CALLINAN J:   Mr Jackson, could I just ask you a question – I am sorry to distract you – but which of the objects of the Act in section 3 would the resolution of this argument resolve or satisfy?

MR JACKSON:   Your Honour, a couple to which it may relate ‑ ‑ ‑

CALLINAN J:   Is the word “relate” deliberately chosen, because at the moment I tell you frankly I have some difficulty in seeing how this case could fall within any of those objects?

MR JACKSON:   Your Honour, could one look, for example, at (h):

to encourage and facilitate co‑operative workplace reform and equitable, innovative and productive workplace relations.

Then you will see that one has to in (b):

promote efficiency and productivity in the economy of the State,

and, your Honour, that is it, I suspect.

CALLINAN J:   They are the best from your point of view?

MR JACKSON:   Yes. Your Honour, could I just say that whilst those are the objects of the Act as stated in section 3, the position that one does see is in relation to section 105 and section 106 that it is a particular jurisdiction headed, “Unfair contracts”. It is the heading of the part of the Act to which it belongs, and it is no doubt, in a sense, a separate provision, a separate part of the Act. The view that one should treat it as somehow related only to employment ‑ because it does cover employment, of course – is rather militated against by a couple of things – when I say a couple, perhaps I should say more than that, but one is the ambit of the terms in the definitions and particularly the way in which the grounds are not only those in (c) and (d), the definition of (a) and (b), and bearing in mind what this Court had decided about the equivalent provisions in Stevenson v Barham.

One sees also, your Honours, the ambit of the remedies that can be given by sections 106 and 107 and also, if one looks at the provisions of the Act which confer jurisdiction – and I think I have referred to some of those already or endeavoured to – that they give jurisdiction in – and your Honour will see section 153(1)(c) which says “proceedings under Part 9 of Chapter 2 (Unfair contracts)”.

CALLINAN J:   Mr Jackson – yes, I am sorry.

MR JACKSON:   All I was going to say about it, your Honours, was this, that the fact that that is to be exercised only by the Commission in Court Session supports the view, we would submit, that what is being done is being to put into a statute, and put in for a long time, a power to deal with these kinds of matters.

CALLINAN J:   Perhaps there is no difference between, say, conciliation and mediation, but one would not think that these are the sorts of disputes that would lend themselves readily to conciliation under, say, section 109.

MR JACKSON:   Well, I do not know, your Honour.  There is quite a trade in it actually, I think.  I think there is quite a trade in it in fact.  I mean, not every conciliation attempt is successful, but some are. 

CALLINAN J:   The baggage in this country for conciliation though is in industrial conciliation of the kind that the industrial tribunals generally deal with.

MR JACKSON:   Well, it is not really, your Honour.  It simply is endeavouring to settle a matter by conciliation, which is a term which endeavours to get the parties to reach agreement – conveying agreement without the person who is a conciliator having to decide it.

CALLINAN J:   Including under subsection (4), a non‑judicial member can ‑ ‑ ‑

MR JACKSON:   May be judicial or non‑judicial.

GLEESON CJ:   Does the long title to the Act have any bearing on any question of construction with which we are concerned?

MR JACKSON:   Well, the bearing that has, your Honour, is that, if anything, it takes one in a number of directions, because the Industrial Relations Act 1991 had within it similar provisions, section 275.

GLEESON CJ:   I wondered if it was related to that phrase that was used by Justice Jacobs in the Court of Appeal that was repeated by Justice Aickin in Stevenson v Barham which talked about an impugned agreement that has an impact on the conditions of employment, that it is the impact of an agreement on conditions of employment that attracts the attention of the legislature.

MR JACKSON:   Well, your Honour, it depends. Sometimes it will, your Honour. Sometimes it will, but not necessarily always. What I mean by that is that if what you had was a contract that was still in being – and could I just say, your Honours, this is a case where the application was made at the time when Mr Fish was still employed. Now, if you had a case of that kind, then it may well be that the exercise of power had that effect, but if one looks at the provisions of section 106(2) and the other provisions that allow the contract to be declared void and completely void, as it were, then it takes away the whole contract or arrangement.

GLEESON CJ:   It is the impact of a contract on conditions of employment that raises the public interest considerations where they come up, is it not?  An imposition of unfair conditions of employment upon one employee may have flow‑on consequences, but it is not easy to see that the price that Mr Fish got for his shares had anything to do with anybody’s conditions of employment, his or anybody else’s.

MR JACKSON:   Your Honour, if one looks at the position of Mr Fish, if it be that the arrangement was one that involved the two aspects of his company selling the shares and him going to work for, to put it shortly, the buyer group, then the conditions of employment that he has under the terms of that will very much depend on what he is getting for the shares, one would expect.

Now, it may be that in the end it is found that it did not but, prima facie, if the two things are entered into together, what you get for one you would expect would influence the other, because he was giving up his own business, selling his business in order to get particular remuneration and the particular office with people related to the buyer.  In those circumstances, the two would, one would expect, to be related. 

If one took, for example, a case where you had, say, a real estate agent’s business which was sold then for 5 million to one of the chains but in relation to it it employed the person whose business it had been before on terms that they would get 500,000 a year plus 10 per cent of commissions.  If it turned out that – assume it would be paid over time – the commissions and so on were nothing like it and there was some misleading in the way it was entered into then there would be nothing to stop the Commission having jurisdiction.  It may not exercise it.  It might say, “You should have done better yourself”, but that is a different question because this is a case stopped in limine.

Your Honours, I was just referring to Hall & Alison Clint.  Could I just say, your Honours, that in terms of remedy, if one goes to page 70, paragraphs (4) and (5) of the orders made related directly to the shares.  The second case to which I wish to go, Ex parte V.G. Haulage Services [1972] 2 NSWLR 81, was also a share case. Your Honours will see the headnote at page 81 where it lists the three written agreements, the third line, to buy a tip truck, “(2) to pay that company $2,500” for contracts and it was a term of that agreement that he “should apply for and be allotted one thousand fully paid redeemable preference shares”. If one goes to page 86, your Honours will see between B and C the paragraph which set out what took place:

He ordered that the contract constituted by the application for shares and the issue of the shares be void ab initio.

Then at the bottom of that page your Honours will see the paragraph commencing after F:

The second main ground upon which the orders are sought is that the Industrial Commission of New South Wales had no power to declare null and void the application for the allocation or issue of the redeemable preference shares –

Justice Jacobs said the application failed on both grounds.  Your Honours will see the last paragraph there:

It is not necessary that the party making the contract or arrangement should actually have performed work -

and then at the bottom of page 87:

Presumably, this is because –

after referring to “unfair, harsh or unconscionable” –

any transaction, leading to work in an industry, which can be so described is regarded as inimical to the purposes of the Act.”

This passage I mentioned to your Honours had picked up in another case I mentioned this morning.  Finally, your Honours, on this point in relation to the shares, you will see at page 88 the paragraph commencing between D and E:

the Industrial Commission, although it could not rectify the register, could adjudicate between the company and the party claiming relief under s 88F –

and that goes on to the next paragraph as well.

Your Honours, the first case, if I can put it that way, on the predecessor section, section 88F, involved a collateral arrangement of the sale of a motor vehicle and the sale of a business.  That case is Agius v Arrow Freightways Pty Limited [1965] AR 77.

Your Honours, could we say that the approach taken by Justice Spigelman at page 409, paragraph 65 is, in our submission, far too narrow.  In large measure it denies work to the term “arrangement” and there is no reason, if one goes to paragraph 66 of his reasons, why an arrangement might not consist of two or more contracts.  The fact that they are contracts, in our submission, does not prevent there being arrangements.  Your Honours, we have referred to that in our written submissions, paragraphs 23 to 28.

Could I say the second aspect of Chief Justice Spigelman’s reasons appears at paragraphs 83 and 87 on pages 414 and 415.  It is to the effect that the power to avoid or vary extends only to those parts of the contracts or arrangements which closely relate to performance of work in an industry.  In an appropriate case that may well be the correct approach to the exercise of the power, but this was a case concerning jurisdiction.

Your Honours, that requires identification of the terms of the contract.  It would be somewhat odd, in our submission, if, having identified the arrangement, only some parts of it could be declared void or varied leaving the remainder in being and the approach taken in this case – it is difficult, in our submission, to see how the observations of his Honour in that regard in this case sit conformably with what he said in MMAL Rentals Pty Ltd v Bruning (2004) 139 IR 377. Your Honours, may I just give the reference of the pages that are involved – pages 380, 399, 400, 401 and 402.

Your Honours, there are two further matters with which I wish to deal.  One of them is the question of the legislative history and we have provided to the Court two volumes which set out the legislative history of the provisions.  Now, what your Honours will see is that it contains the parliamentary debates and the amending provisions, and may I take your Honours very briefly to the most relevant parts.  Tab 7, that is dealing with the introduction of the provision and you will see – if I could go to page 2115 in the right column, the Minister says, about seven lines from the bottom:

Clause 8 contains important amendments to section 88B –

not the particular section, 88B, and it is dealing with a:

new approach to the problem of contracts by bread vendors, milk vendors –

et cetera.  Your Honours, so far as section 88F is concerned, if one goes over to page 2129 your Honours will see in the last three lines on the right column he says:

New section 88F renders any contract relating to any work in any industry liable to be challenged before the industrial tribunals on the grounds –

that he sets out there.  He says at the end of that paragraph, the top of page 2130:

The opposite of each of those propositions would be a fair defence.

These amendments have been found necessary because the restrictions imposed on the contract system in 1957 have not proved adequate to deal with the abuses in the trades already prescribed under section 88B and the additional trades have been prescribed because of the growth of the abuse of the contract system, particularly in the building trades.

Then you will see that is dealt with through the remainder of the paragraph and then towards the end of the paragraph:

The Government will watch the operation of these amendments with great vigilance and if abuses continue despite the amendments, consideration will be given to further amending the legislation.  Equally, the Government will be on the watch for any harsh or unconscionable effects of the operation of these amendments.

Now, your Honours, in 1966 Parliament amended the legislation to provide for the making of moneys and costs orders following the decision in Agius, to which I referred a moment ago ‑ ‑ ‑

GUMMOW J:   Do we have the material on the Legislative Council, the 1959 material on the Legislative Council?

MR JACKSON:   Yes, I think that is the next tab, your Honour.  One sees, your Honour, in relation to it at page 2352 ‑ ‑ ‑

GUMMOW J:   Yes, the first column in 2351.

MR JACKSON:   Yes.

GUMMOW J:   The passage beginning, “Other amendments in this bill”, I think.

MR JACKSON:   I am sorry, I did not catch the part your Honour was referring to then?

GUMMOW J:   Page 2351, first column, last paragraph, “Other amendments”.

MR JACKSON:   Yes, but then, your Honour, I was going to say from there one reads on and when one reads on, at page 2352, the first column, at the end of the second paragraph:

A new section 88F is of general character and renders any contract subject to challenge on the grounds set out in the section.

The point I am seeking to make about it, your Honour, is that both the passages to which I have referred are very widely expressed.  They recognise that if they speak of any contract – of course, it depends on the section, but speaking of any contract, and it is not limited to particular trades or particular occupations, although it may well be that the occasion for its introduction were abuses in particular areas.

HAYNE J:   But is the abuse that is sought to be avoided that identified at 2351, column 1, namely, the use of – they are called legal loopholes – namely, contracts, to enable circumvention of award provisions?

MR JACKSON:   Probably, your Honour, it is probably the other column, the first new paragraph.  Now, that goes on, but the abuse may have arisen in particular areas, but the point is that when one comes to what was done, you will see the particular reference to section 88F is one expressed in very general terms at 2352.  Now, your Honour, one has to take the two together, the occasion and the remedy, and the remedy – one does not always have to use the little hammer to cure some things.  Sometimes a sledgehammer can do the job just as well.

GUMMOW J:   Do we have the text of the Act as it stood after the 1959 amendments?

MR JACKSON:   Your Honour, it is here somewhere.

GUMMOW J:   It may be tab 11.  Yes, tab 11, I think.  It went into Part VIII which is headed “AWARDS”.

MR JACKSON:   Your Honour, if I could perhaps move on.  Your Honours will see that behind tab 9 at page 2665 that there was a further Amendment Act in 1966, and at page 2665 you have in the left column:

The first amendment proposed in clause 5 is to section 88F of the Act.

Then your Honours will see at the bottom of that column:

The Government fully supports the purpose sought to be achieved by the section as it now stands but considers that the existing provisions do not go far enough.

Then your Honours will see that dealt with in terms of remedies at the first new paragraph and the second new paragraph in the right column, and then in that second paragraph halfway through:

In view of the nature of the proceedings that may be taken under section 88F and in consideration of the extension of powers relating to the payment of moneys and the payment of costs the bill proposes that jurisdiction in such matters be restricted to the Industrial Commission.

That was to take away jurisdiction in conciliation committees, so only the Commission was to have it.

GUMMOW J:   In its original form 88F not only could involve the committee but it could involve relief by making an award.

MR JACKSON:   Yes.  Your Honour, what one sees is that over time it has become more directed to court proceedings on the one hand – there have been provisions added to make the jurisdiction more effective and more extensive and cut out the committees and so on.  You will see at page 2668 in the right column about seven lines down the page:

in terms of the amendment any sum of money directed to be paid under section 88F will have the effect of a judgment of the district court –

and can be suitably enforced.  Then at page 2669 left column, about two‑thirds of the way down the page:

The Government believes that the amendments proposed in this bill will bring up to date and further improve this very important Act for the benefit of all members in our community.

Your Honours, if one goes over a page or two to page 2892, in the Legislative Council, the left column there is a reference to clause 5 in the first new paragraph, section 88F, and then the last paragraph on that side:

The Government fully supports the purpose sought to be achieved by this section which was added to the Act in 1959 –

could I just say, your Honours, there is a change in the political complexion of the government between the initial introduction and this time –

but it is felt that the section does not go far enough –

et cetera, and it repeats what was said in the Legislative Assembly. Now, your Honours, it was in 1979 that some minor amendments were made to section 88F. In 1985 the power was inserted to restrain future conduct by a party to the contract or arrangement – that is section 107 now.

If I could go then to the 1991 amendments, which is what is brought in section 275 rather than 88F.  It is in volume 2 of those materials.  If I can go to tab 21, page 11, you will see the heading “VOID CONTRACTS AND REGULATED CONTRACTS”.  It says:

Division 1 continues the provisions of the 1940 Act . . . The Court is also able to make such a declaration –

and so on.  So it is a brief statement there.  In the same book, tab 26, page 3850 – if I could just say, your Honours, this is dealing with a 1995 Bill.  The Parliament was, I think, prorogued and the speeches made in 1995 were adopted when the 1996 Bill was introduced.  Your Honours will see in the left column under the heading “Unfair Contracts” about halfway through it:

The bill introduces some changes to give legislative direction broadly consistent with the comments about the scope of the section made by the Court of Appeal in Walker v Industrial Court of New South Wales . . . In general, the provisions have been redrafted in an attempt to give clearer legislative direction to effect the intended broad sweep of the jurisdiction.

The reference to that case is a reference to Walker v Industrial Court of New South Wales (1994) 53 IR 131. I think, if I may say so, with respect, that your Honour Justice Kirby’s observations are the ones to which reference was being made. At page 133 could I refer your Honours to the paragraph commencing “Whatever doubts may have existed earlier” and then there is an adoption of some remarks of your Honour the Chief Justice.

KIRBY J:   Is this the answer to the intuitive response, is it?  Do you remember Justice McHugh said in the special leave that it was intuitively surprising?

MR JACKSON:   Yes.  It is in a sense, your Honour.  All I would seek to say is that your Honour is reciting, in effect, the history in a fairly uncontroversial way.  At the bottom of that same page you say you have to look at the manner in which the – you do not just look at the original terms.  Then at the top of the next page, the second and third lines:  “the large scope of the statutory preconditions to jurisdiction”.  Then reference to what was said by Justice McHugh and then at page 135, the first new paragraph on the page. 

Finally, your Honours, in this regard, the explanatory note to the 1996 Act can be seen in tab 25 of volume 2 of the materials.  Your Honours will see at page 3 of it paragraph (g) immediately above the heading “Outline of provisions”:

The existing provisions relating to . . . unfair contracts . . . carried forward with a number of changes to streamline and improve their operation.

And at page 6 under the heading “Unfair contracts” you will see the amendments that were made. 

Your Honours, could we just say that neither the evident purpose of the provisions, nor their context, nor the extrinsic material support confining the jurisdiction to only the contracts or arrangements, et cetera, under which work is performed or provisions closely related to it.  There are myriad means by which relationships between employer and employee or worker and contractor are created and regulated apart from the immediate terms of work, collateral to work contracts.  Employment contracts may be

separate contracts or arrangements relating to the employment relationship but which do not themselves involve work or expressed as consideration for work, sign‑on bonuses often expressed by share issue, superannuation, health insurance, discount shares, goods, services, supply of tools, et cetera.

Your Honours, those are the submissions I wanted to make orally.  On the question of the exercise of jurisdiction from the prohibition point of view we would rely on our written submissions.

GLEESON CJ:   Thank you, Mr Jackson.  Yes, Mr Kenzie.

MR KENZIE:   If it please the Court, this matter involved an asserted overall arrangement.  The intersection between this case and Fish in relation to a matter raised by your Honour Justice Kirby this morning is small in terms of what was actually determined.  There was a common issue in relation to a submission about collateral arrangement and therefore the case is caught up with what our learned friend, Mr Jackson, had to say about the question of whether collateral arrangement as well as arrangement was qualified by the word “whereby”, the matter raised by Justice Hayne, but otherwise in terms of the matters actually resolved by the Court of Appeal there is, at least on our understanding, not an intersection and I will need to trouble your Honours briefly to go to those matters that were actually dealt with and those that were not in the Court of Appeal.

Now, if it please the Court, in the interest of time what I would propose to do is to go to not the first matters addressed in our written submissions but essentially the issues raised and determined in the proceeding as to whether the first respondent, that is the company that was incorporated during 1999, could have become a party to the pre‑incorporation arrangement asserted, and the second question of whether the same respondent was amenable to orders based on an application of the principles discussed in Brown v Rezitis on the basis that the company took the benefit of work performed pre-incorporation pursuant to a pre‑incorporation arrangement.  I will come to develop that first if I may and I think I will have to be briefer in relation to other aspects of our written submission.

Could I go briefly, your Honours, to the question of what was actually done and what was not done in the decision in the Court of Appeal to give some flesh to our submission as to what was the basis of the limited order that was made.  The appellants asserted in the Court of Appeal the existence of an arrangement.  That is an arrangement which is the one that we have attempted to capture in paragraph 4.2 of our submissions.  It involved a series of steps which involved the appellant, Mr Batterham, and other individuals originally and which subsequently involved the respondent company when it was incorporated.  That arrangement was one for the performance of work by the first appellant and others in connection with the acquisition and operation of some 41 restaurants. 

The work involved in the arrangement as asserted included the taking of all steps in relation to the negotiation of heads of agreement and the carrying out of various steps, implementing the heads of agreement, as well as what was described by the Court of Appeal as promotion, and the work also involved work performed after the incorporation of the respondent company and it also involved provision being made for what we asserted was remuneration for the work done in the form of an options deed and other matters.  The arrangement which we asserted was one which subsisted until around June 2002. 

We tried to capture that in paragraph 4.2 of our submission, but the importance for present purposes is that what the appellants were putting was that there existed an overall arrangement.  It involved a number of things.  One of those things that I have not yet mentioned involved the incorporation of the respondent company itself as the vehicle whereby the activity that the work was directed to would take matters forward.

That was the way in which the case was presented and persisted with in the Court of Appeal. We asserted that that arrangement was a contract within the meaning of sections 105 and 106 and the Court of Appeal dealt with and rejected arguments that the arrangement was not caught by section 106 because “arrangement” like “contract” had necessary elements of enforceability associated therewith.

In the Court of Appeal the jurisdiction of the Commission in relation to the asserted arrangement was challenged in a global sense by the respondent company on a number of bases.  They included bases which might be said to arise from cases such as Production Spray.  It was asserted that the arrangement as a whole was beyond jurisdiction as it was not one that had a requisite purpose or that there had been a failure to identify any contract or arrangement involving the company which had a relevant purpose and the like.

Could I trouble your Honours to just go to some aspects of the decision to understand the dimensions of what happened and what did not happen, and firstly to the judgment of Chief Justice Spigelman who would not have granted any relief.  His Honour said that there was difficulty with our argument, or the argument of the appellants, that the work relied on either at the promotion, pre-incorporation if you like, stage or the subsequent stage during which Mr Batterham was a director, could be worked in an industry, one of the things that was asserted.

If your Honours look at or go to page 322 of the appeal book you will find the Chief Justice there indicating that there was difficulty with the argument, but he indicated that that matter had not been argued and so was not decided.  You can see that from paragraph 42 on page 322.  So his Honour would not have intervened on that basis and did not intervene on any other basis.

GUMMOW J:   Is there any definition of “work” in this legislation?

MR KENZIE:   No, your Honour.

GUMMOW J:   So it is merely a phrase really, “work in an industry”?

MR KENZIE:   Yes, your Honour.  Could we venture this, there are obvious difficulties, although there have been some suggestions in some of the submissions that work might be divisible, that you might somehow separate the work of a promoter from blue‑collar work and the like.  In our respectful submission, that is a thankless task for relevant purposes.

GUMMOW J:   But does a director of a company perform work in an industry?

MR KENZIE:   Well, your Honour, that is a question - and I was just about to come to that - that was advanced in the Court of Appeal and the Court of Appeal expressed the tentative view that there might be an issue about that and referred to an authority of the Commission which doubted that the work as a director would be work that ‑ ‑ ‑

GUMMOW J:   Paragraph 43?

MR KENZIE:   Yes, your Honour.  But that issue which lurks there, your Honour, has not been decided.  It was one of the things that was not decided.  But can I say this?  It awaits in relation to any subsequent assertion that there was a post‑incorporation arrangement involving work whilst Mr Batterham was a director.  So, your Honours, Justice Handley, with whom the learned president agreed, agreed with the Chief Justice in relation to the issue of work as a director post-incorporation.  You will find that at paragraph 58 on appeal book 324, 325, but their Honours came to a different view in relation to what they described as work done as a promoter prior to incorporation. 

But, your Honours, it is important to understand that that was not because they found that promoter work, or work as a promoter, was not work performed in an industry for the purpose of section 106 nor was it because of any argument that any work performed by the appellant before incorporation or otherwise was performed pursuant to a contract or arrangement that was outside the jurisdiction of the Commission because it did not have as its purpose the performance of relevant work. That is the general argument that was run by the applicant.

If the Court wants to see I will give your Honours a reference to the argument that was run by the respondent.  You will find that at appeal book page 250, paragraphs 8 and 9.  You will see that there was an argument squarely mounted on the basis of Production Spray.  That argument was that no jurisdiction in the Commission existed at all in relation to any arrangement because it did not have a requisite purpose and it was not in fulfilment of anything relevant.

Your Honours might see, just whilst that page is open, that at the top of page 251 there is almost as a side wind, there is introduced right at the top of the page these words:

Indeed QSR was not in existence when work was performed.

So it was raised in that context, but raised in the context of a global attack on jurisdiction.  Now, your Honours, the only reason that the majority intervened or granted relief to the limited extent that they did was because they considered that no relevant contract or arrangement existed prior to the incorporation of QSR, the company, and by relevant contract or arrangement I mean a contract or arrangement which relevantly involved QSR, and you can see this both from the judgment of the Chief Justice at page 324, paragraph 48, his Honour has:

read the judgment of Handley JA in draft.  His Honour concludes that there was no relevant contract or arrangement prior to the incorporation of QSR.

Carrying forward to Justice Handley’s judgment at page 328 at paragraph 68 where his Honour says:

Some of the grounds on which the claimant sought relief depended on the fact that the third opponent was a promoter and director of the claimant.  However these submissions were presented on a global basis without emphasis on the particular difficulties which apply where reliance is placed on a contract or arrangement which pre‑dated incorporation.

So ultimately the Court, by majority, granted some relief which was relief associated with the fact and time of incorporation, and the extent of that intervention and the relief your Honours will, of course, find on page 334 which was the order that was made.  It was directed at an aspect of the relief sought which was – that was relief sought in relation to the option deed which the appellants claimed was reflected remuneration for work, so that this was a case in this regard that differed from Fish in this respect, that the appellants always said, look, this was the arrangement, this was the work and we say that the option deed was a direct remuneration for that work – part of the remuneration for that work.  So it was not a business sale associated with a separate document like Mr Fish’s case.  It was a case in which there was an overall arrangement asserted.

HAYNE J:   Does this not bring you inevitably to the question about is this dealing only with work that is being performed rather than work that has been performed?

MR KENZIE:   It would, your Honour, but once again, like many of the other points that were either advanced or might have been advanced, this one was not advanced and it was not advanced because – there is a considerable amount of authority in relation to the matter going back for ‑ ‑ ‑

HAYNE J:   There may be a lot of decisions in the Commission, I am sure there are, but what is there in the words of the statute or in decisions of this Court that speaks to that issue?

MR KENZIE:   Your Honour, we have not come to our attempt to deal with your Honour’s request in relation to the legislative history.

HAYNE J:   Well, if the point is not taken against you, it is not taken.

MR KENZIE:   No, but, your Honour, when I come to it, can I give your Honours a reference to section 108A and section 108B.  Your Honours will have to go to the later print, Reprint 4, which we gave to your Honours in relation to our submission.  These provisions reflect decisions of longstanding and provide for time limitations in relation to when applications can be made and 108B currently provides that:

An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract.

GLEESON CJ:   Does Reprint No 4 contain the legislation in the form relevant to your case?

MR KENZIE:   Yes, your Honour, we gave Reprint No 4 to that because we wanted to say something about it.

GUMMOW J:   With extras, namely, 108A and 108B?

MR KENZIE:   Yes, your Honour, and we gave that reference to the Court because we got the communication from the Court and 108 was part of our response to the ‑ ‑ ‑

GUMMOW J:   But we can look to Reprint No 4 for 105 and 106 and 107?

MR KENZIE:   Yes, your Honour, your Honours can.  So the point that I was seeking to make at the outset was that the basis of the order, which is on page 334, which went to part of the relief that was sought which was relief in relation to the option deed that was said to be by us part of the remuneration, the order that was made prohibited the Commission from hearing and determining our proceedings:

in respect of the Option Deed of 2 November 1999, commenced by Mr Batterham and [the trustee company] against the claimant, except insofar as those proceedings may be based on a contract or arrangement whereby a person performed work in an industry which came into existence after the incorporation of the claimant and before the execution of the Option Deed.

GUMMOW J:   What is “which” qualifying?  Which came?

MR KENZIE:   The contract or arrangement, in our respectful submission, your Honour.  But what is a bit uncertain about the order, may we say, is that there may be some question as to whether it might be directed only to some attempt to actually get an order that actually went to the option deed itself as opposed to an order seeking to amend the arrangement to reflect an unfairness in the option deed.  There may be a question about that, but the “which” qualifies a contract or arrangement, in our respectful submission. 

Now, of course, your Honours can see immediately that the limited form of prohibition involved a non‑acceptance of the various propositions that were advanced in the Court of Appeal that were said to be destructive of any jurisdiction in the Commission because of the total nature of the arrangement.  In paragraph 88 of the decision on page 333 Justice Handley dealt with this and said:

Although the claimant is not entitled to prohibit the Commission from granting any relief in respect of the Deed in my opinion it is entitled to prohibition quo usque to prohibit the Commission considering the claims of the second and third opponents in respect of the Deed except insofar as they are based on an alleged contract or arrangement with the claimant which existed after its incorporation until the execution of the Option Deed -

which paragraph, I think, confirms the earlier answer I gave to your Honour Justice Gummow. 

His Honour had earlier said in paragraph 83 on page 332 that:

If the Commission were to find that an informal contract or arrangement of the necessary kind came into existence after the incorporation of the claimant and subsisted until the execution of the Deed a finding might be open that the Deed was executed pursuant to this contract or arrangement.  If it did not properly reflect the terms of that contract or arrangement the Commission could consider whether any differences made the Deed unfair.

So there was no issue, so far as the Court of Appeal was concerned, no live issue in terms of the capacity to obtain some relief which affected the deed more generally in some way, and there was certainly no issue that there were matters properly before the Commission in relation to our arrangement that were within jurisdiction.

The reason that the court gave the relief that it did was because it formed the view, in the paragraphs to which I will come, that whilst there may have been a pre‑incorporation arrangement, either the company could not have been a party to such pre‑incorporation agreement or arrangement or – and, really – the company could not relevantly be seen as taking any benefit within the meaning of Brown v Rezitis.

The fact that the majority did not decide that there was no section 105 arrangement either before or after the incorporation of the company is made clear in that in paragraph 65 on page 327 – and I will be saying something about paragraphs 65 and 66 in a moment – Justice Handley discussed pre-incorporation contract or arrangement and said at the start of that paragraph:

Any contract or arrangement prior to the incorporation of the claimant, whereby Mr Batterham performed work, was one made with his fellow promoters.

So he was leaving open the prospect that there was such a contract or arrangement by saying that was with others, and then – I will come back to those paragraphs in a moment if I may – and that after incorporation the majority of course accepted that the Commission had jurisdiction to deal with any relevant arrangement made after incorporation.  That is paragraph 83 that I have read, and paragraph 78 on page 331 – I am sorry to take your Honours back and forward through it, but it is in order to crystallise what was decided and what was not – where his Honour said:

An informant contract or arrangement between the claimant and the promoters –

that is, between the company and the promoters –

with terms relating to the grant of options, may have come into existence on or shortly after incorporation.  If so it could only have subsisted until the execution of the Deed on 2 November.

That paragraph provides the seed of what might be described as the tail of the order made on page 334 because the court said, “If you want to go forward in relation to the deed it’s got to be pursuant to an agreement made (a) after incorporation and (b) prior to the execution of the deed.  So there is the window.  You have got to find an agreement in there to get any relief in relation to the deed.”

It was only because of the matters that are ultimately dealt with in paragraphs 65 and 66 – and if I can ask your Honours to return to those paragraphs.  Mr Jackson has already submitted today that the proper approach in cases such as these, whether they deal with contracts or arrangements, is to identify whether there is a contract or arrangement whereby work was performed in an industry, described in Stevenson as the jurisdictional fact by two members of this Court.

In the present case there does not appear to be any issue at the end of the day that an arrangement, within the meaning of the legislation, existed between at least individuals prior to the incorporation of QSR.  As we say, the Court of Appeal did not have any difficulty with the idea that that may be the case, and it was in relation to that arrangement that the majority addressed matters such as Brown v Rezitis.

Our submission is that the next step should have been for the court to ask whether the respondent after its incorporation either became a party to such an arrangement or took the benefit thereof in the sense discussed in Brown v Rezitis.  Had the court taken this approach it would have been able to see that there was no reason at all to doubt the capacity of the company to become party to a relevant arrangement made prior to its incorporation - I will come back to that - and in any event there was no reason why the company could not be taken to be a person who, on a full understanding of the evidence, took the benefit of the arrangement in the sense contemplated by Brown v Rezitis and that it was not disqualified from falling into that category by virtue of the fact that it did not come into existence until the arrangement was first made.

HAYNE J:   Now, the arrangement of which you speak is an arrangement to perform what work in what industry?

MR KENZIE:   Well, your Honour, the industry could be described in various ways.  Of course none of this has been rehearsed although the point was taken, I acknowledge.  But “industry”, as has already been observed, is defined incredibly broadly.  The legislative history, which I appreciate your Honours have not been taken totally to, shows that amongst other things the definition of “industry” has been broadened and was last broadened in 1996, as the materials will show, to remove references to employers and employees and now provides that an industry includes:

(a)      any trade, manufacture, business, project, or occupation in which persons work, or

(b)      a part of an industry or a number of industries.

Now, the possibilities are obviously many.

GUMMOW J:   Does that definition also do work for the award provisions?

MR KENZIE:   It would, your Honour.  It is a general definition and there would be no reason to believe that – the answer to your Honour’s question is yes.  To answer your Honour Justice Hayne’s question, if I may, the question of what industry might have been the subject of the work that was undertaken by Mr Batterham in promoting and setting up the project and the like, could simply have been that it was work in that project because project is one of the things that is indicated.

HAYNE J:   Well, let it be assumed that there is a relevant industry be it quick service restaurants, food or financial services.

MR KENZIE:   Yes, your Honour.

HAYNE J:   What is the work that was to be performed under this arrangement of which you speak?

MR KENZIE:   Well, your Honour, the work that was asserted to be performed by Mr Batterham was work including the taking of various steps in relation to the negotiation of the arrangement, the heads of agreements and crystallising the heads of agreement so as to produce not only a completed agreement, to get advice in relation to the establishment of the venture and taking steps in relation to the incorporation of the first respondent as the vehicle through which the deal would be facilitated and the obtaining of the finance and various other steps that were necessary to facilitate those steps.

After the incorporation of the company, the work included work as a member of the finance committee and there was work that was undoubtedly performed by Mr Batterham whilst he was a director on behalf of the company.  So there was work of various types that was performed both before and after incorporation and, as we would put it, that if one wants to be impressionistic and perhaps historical about this, one might look impressionistically and say, “Look, that’s the work of a promoter.  It doesn’t look much like what might have been imagined in 1959 but it is work within the statutory definition and the definition has been expanded to accommodate this sort of thing.”

HAYNE J:   You say, do you, that the option agreement that was ultimately struck was – using the word as broadly as I may – payment for remuneration for, reward for, what, promoting the company?

MR KENZIE:   All of the activity that Mr Batterham performed both in setting up and after the setting up of the company.

HAYNE J:   That is to say, is the option agreement something that is struck as a result of what has gone before and has by then been completed?

MR KENZIE:   Some of which has been completed and which is ongoing, yes, your Honour.

HAYNE J:   What is the ongoing?

MR KENZIE:   Your Honour, Mr Batterham continued his activities after the option agreement in November 1999 and continued in his activities until 2002.

CALLINAN J:   Mr Kenzie, is it set out on pager 310 in paragraph 8 which quotes paragraph [22] of the summons:

The total remuneration . . . for work performed, the incurring of risk and forfeiting other opportunities) ‑ ‑ ‑

MR KENZIE:   Yes, your Honour.  The summons attempted to articulate the steps that were taken over the period of time and the development to the situation in which the remuneration for those steps was taken.  Our learned friend, Mr Grieve, submits that the option agreement, as we understand his submissions, was a gratuity.  That is a real question to be addressed.

CALLINAN J:   Mr Kenzie, I do not think anything turns on it here but is there a provision in the Act relating to the reception of evidence because there seems to be a lot of reliance upon pre‑contract negotiations in both this case and Mr Jackson’s case?  As I say, I do not think anything turns on it here, but I would like to know at some stage.

MR KENZIE:   Yes, your Honour.  I do not think there is any reason to proceed on the basis that the rules of evidence would not apply in an Industrial Commission in Court Session proceeding in a proceeding such as 88F in any manner different than they would apply if the Commission was discharging its other functions.

CALLINAN J:   In any event, the case seems to have been argued upon the basis that all of this was admissible.

MR KENZIE:   Yes, your Honour.

HEYDON J:   Section 163(2) says that the rules of evidence apply.

MR KENZIE:   Thank you, your Honour.  Of course, the Industrial Commission in Court Session – I do not want to trespass into Mr Jackson’s ground, save where necessary, but, of course, the same Industrial Commission in Court Session can be dealing with criminal proceedings in relation to occupational health and safety, it can be dealing with contempt and the like.  In 1991 what happened was that the Industrial Commission in Court Session was established as a court and it was given a series of defined powers in the exercise of which the rules of evidence would be expected to apply and do apply.

They do not all emerge from the objects, your Honour.  You will search in vain for the occupational health and safety aspects in the objects of this Act.  They are assigned to the Commission in Court Session by section 153(1)(k) and, of course, by the Act from which they come itself.

GUMMOW J:   Can I ask you this, what is the relation, if any, in express terms between this Act and the Contracts Review Act in New South Wales?

MR KENZIE:   I do not think there is a ‑ ‑ ‑

GUMMOW J:   Neither mentions the other.

MR KENZIE:   I cannot recall, your Honour ‑ ‑ ‑

KIRBY J:   I think the Contracts Review Act, though, is specific to consumers, is it not?

MR KENZIE:   Yes, in terms of scale and scope that is so but, your Honour, referentially, I cannot recall a provision.  Offhand, I do not think so, your Honour.

GUMMOW J:   There is nothing about consumers in section 7, is there?  I have been in plenty of Contracts Review Act cases in which there was not a consumer within cooee, I think.

KIRBY J:   It is two decades since I had the pleasure of reading this Act.

MR KENZIE:   I would like to help your Honour, if I ‑ ‑ ‑

GUMMOW J:   Anyhow, they seem to be sailing along.

MR KENZIE:   Now, your Honour, could I against that background come to the first of the two aspects that were dealt with to the extent that they were in paragraphs 65 and 66 of the judgment of the majority where the question of party and the question of Brown v Rezitis and its applicability was dealt with.

Before doing so, could I ask your Honours to go to Brown v Rezitis 127 CLR 157. Brown v Rezitis was determined back in 1970 and the statutory provisions as they then stood – your Honours have been taken to some of these today – you will find on pages 160 and 161 of the report. You will note that the provision in 88F was comprehensive in the sense that it included the categories of unfairness and the definition in the comprehensive provision, as opposed to the present provision where the relevant definitions are found in section 105 and section 106(1) and (5) deal with the power to vary, declare void and make money orders. So there has been that change. Indeed, there has been a sequence of changes since 1970. There have been two repeals since 1970, but essentially the changes that are material are firstly those and, secondly, of course, at the time of Brown v Rezitis you did not have the provision which is presently subsection (2) which provides 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.

Now, your Honours, it was contended in Brown that the power to make orders under section 88F(3) was limited to the making of orders for payment of money by one of the parties to the contract or arrangement varied or declared void.  Alternatively, it was submitted that the words “in connection with any contract” gave rise to the same result.  Those contentions were rejected. 

It has not been suggested in these proceedings that Brown v Rezitis is wrong. Indeed, our learned friend relies on it, and the same conclusion must follow in relation to current sections 106(1) and (5). So it is necessary to go to the basis or bases on which the Chief Justice, with whom Justices Owen and Windeyer agreed, rejected the contention that the provision was confined. Your Honours, firstly, at the very bottom of 163 his Honour said:

In my opinion, even if the proceedings for the variation or avoidance of the contract or arrangement must be initiated by one of the parties to the contract or arrangement, the parties to the proceedings are not necessarily limited to those parties.

Then his Honour starts to give reasons for that conclusion.  The first thing his Honour says is that:

It must be borne in mind that one of the purposes of the section is to deal with subterfuges, subterfuges which will take the worker out of the relationship of master and servant and therefore out of the operation of an industrial award designed, amongst other things, for the protection of workers in industry.

Now, if I could just pause there.  It has been said in relation to Stevenson v Barham that a literal approach to interpretation was to the fore and we note from, I think, Mr Walker’s submissions in this case that there is a reference to a recent decision of the Court of Appeal, the McDonald’s Case where the same suggestion is made about Brown v Rezitis.  Now, your Honours, section 88F has always carried within it an indication of one of its purposes.  It says so on its face.  It deals with, on its face, the question of avoidance as one of the criteria and it is those matters that Chief Justice Barwick was addressing and he applied not a literal approach, but a reflection of a purposive approach right here when he said:

It must be borne in mind that one of the purposes of the section is to deal with subterfuges –

That is an unavoidable conclusion.  So that is the first thing his Honour said.  His Honour went on to say that those subterfuges might involve persons:

not parties to the contract or arrangement but who are in reality the actors deriving benefit from the making or the execution of the contract or arrangement.

I have emphasised the words “or the execution” because when I come to Justice Handley’s judgment in a moment you will find those words are missing from the quote and I will come to that.  So he refers to that.  Then his Honour referred to the significance of the fact that the power of the Commission ‑ ‑ ‑

GUMMOW J:   I am being slow‑witted, Mr Kenzie.

MR KENZIE:   I am sorry, your Honour.

GUMMOW J:   Section 88F at that stage did not have any equivalent of 108, did it, as to who could apply?

MR KENZIE:   No, your Honour.

GUMMOW J:   Shocking piece of drafting.

MR KENZIE:   Well, your Honour, and I think this ‑ ‑ ‑

GUMMOW J:   It is creating a new jurisdiction and it does not say who the plaintiff could be.

MR KENZIE:   Quite so, your Honour, and may I say this, that in addition to being twice before the High Court, this proceeding managed to find its way to the Privy Council a couple of times too.  One of those cases was a case called Wilson Parking which dealt with the matter and arose out of the problem that your Honour has immediately identified.  It raised the question as to whether an industrial organisation of employees could commence proceedings under 88F.  The Privy Council answered that question in the affirmative.  Now we have section 108 and it provides for who must commence.  It will be noted that there is not a countervailing provision that says who must be the respondent and the like.

GUMMOW J:   No, that is right.

MR KENZIE:   I will come to this, your Honour.  It is relevant to a submission I am about to make.

GUMMOW J:   They never seem to learn in New South Wales how to draft these things.

KIRBY J:   When was section 88F enacted?  What year?

MR KENZIE:   In 1959.

KIRBY J:   My recollection, historically, is that it lay dormant until Mr Handley discovered it and then it started to take off and the profession really found what a goldmine there was here.

MR KENZIE:   There is an element of truth in that.  Mr Handley appeared as junior counsel in Brown v Rezitis and as senior counsel in Stevenson v Barham.

GLEESON CJ:   He appeared in the case that we were told was the first case, Agius.

MR KENZIE:   And Agius, I think, your Honour, yes, 1965 as even more junior a counsel, yes, your Honour.  In any event, accepting immediately what your Honour Justice Gummow has to say about what might have been included in the shortcomings of the section, the Chief Justice was then referring to the significance of the fact that the power of the Commission:

includes a power to declare the contractual arrangements void as from their making, not merely void as between the parties, but absolutely void.

GUMMOW J:   Why would one construe this widely when it is so sloppy? I do not understand it and when it is hedged around with a probative clause. You would construe it narrowly because it has the effect of, on one view of it, excluding the jurisdiction of the Supreme Court in a whole range, it seems, of commercial matters and, indirectly, excluding the jurisdiction of this Court under section 73 if there is no federal jurisdiction.

MR KENZIE:   Your Honour, at some point along the way ‑ ‑ ‑

GUMMOW J:   All these cases should really have been in the commercial list if we are going to be realistic.

MR KENZIE:   Your Honour, at some point along the way ‑ ‑ ‑

GUMMOW J:   Not walled up in the Industrial Commission.

MR KENZIE:   It is not as though these matters have not been considered by Parliament, particularly in recent years ‑ ‑ ‑

GUMMOW J:   But not considered very well if they still cannot work out who the defendant is and write it down in their statutes.

MR KENZIE:   Well, your Honour ‑ ‑ ‑

KIRBY J:   You make the point that Parliament has had several opportunities to say you have got this all wrong; you have expanded this beyond our wildest dreams; we never intended this; cut it back.  They have accepted the approach of the courts.

MR KENZIE: In fact, we will go on to say, when we come to the legislative history, you could not get a stronger case. What actually happened in this case was that in the 1991 Act, 1991 around which time cases like Production Spray and subsequently Majik Markets, the franchise cases were being considered, the new 1991 Act took the word “whereby” out of the legislation and inserted the words “under which” and the 1996 Act, which was punctuated by discussions of the width of the jurisdiction and the matters that your Honour Justice Gummow was going to, which did not escape notice ‑ ‑ ‑

GUMMOW J:   The Parliament can do what they like but I think about section 73 of the Constitution first, as Justice Gaudron used to say often enough sitting here, and the fact is this is an Alsatia built up by State law to disrupt, on one view of it, a national court system dealing with commercial disputes ending in this Court.

MR KENZIE:   Your Honour, one can only go to ‑ ‑ ‑

GUMMOW J:   I am not saying it is invalid but I am saying one reads it with that in mind.

MR KENZIE:   Your Honour, we would not dispute that that is the way in which one might approach matters like this but when Parliament responds consistently ‑ ‑ ‑

GUMMOW J:   Parliament can – anyhow, I will not repeat myself. I was talking about the Constitution. You keep talking about the New South Wales legislature.

MR KENZIE:   Your Honour, the point that I am making is only this, that in 1996 the New South Wales Parliament made an active decision to put back the words that had been considered by the High Court in 1976 into this legislation in Stevenson v Barham and they did so in circumstances where it was quite apparent that they knew what they were doing.

GUMMOW J:   Is there any other State or Territory that has legislation of this sort?

MR KENZIE:   The Queensland legislation has some of the features but certainly nothing that corresponds with this, your Honour.

KIRBY J:   We had better be referred to that.  Of course the irony of this may be that what began as the law taking a wrong turning has become more relevant to social and industrial and “employment” relations by reason of developments that have happened in the meantime since Agius.

MR KENZIE:   I will give your Honour a reference to the Queensland legislation in the morning, if I may.

GLEESON CJ:   Is that a convenient time?

MR KENZIE:   Certainly, your Honour.

GLEESON CJ:   We will adjourn until 10.15 am tomorrow morning.

AT 4.17 PM THE MATTERS WERE ADJOURNED
UNTIL WEDNESDAY, 9 NOVEMBER 2005