Matar v Neutral Bay Foodhall
[1996] IRCA 332
•26 July 1996
DECISION NO: 332/96
INDUSTRIAL LAW - JUDICIAL REGISTRARS - REVIEW of exercise of power - Decision on Notice of Motion ordering joinder of additional respondents - Whether decision reviewable in advance of final determination of the proceeding - Distinction between interlocutory orders given during the course of determination of a proceeding and a decision finally determining a discrete interlocutory application - Merit of the decision to join the applicant for review as a respondent to the principal proceeding.
Industrial Relations Act 1988, ss. 170EE, 347, 376, 377
Industrial Relations Court Rules Order 6 rule 8(1); Order 74 rule 2
GHASI MATAR v NEUTRAL BAY FOODHALL AND OTHERS
No. NI 3953 OF 1995
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 26 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. NI 3953 OF 1995
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: GHASI MATAR
Applicant
AND:NEUTRAL BAY FOODHALL
First Respondent
INDUSON PTY LIMITED
Second Respondent
JOSEPH HEKEIK
Third Respondent
GLEN WILLIAM HICKEY
Fourth Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 26 JULY 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
The order for joinder of additional respondents made by Judicial Registrar Tomlinson on 15 April 1996 be varied by deleting therefrom the order that Joseph Hekeik be joined as third respondent to the proceeding.
Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. NI 3953 OF 1995
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: GHASI MATAR
Applicant
AND:NEUTRAL BAY FOODHALL
First Respondent
INDUSON PTY LIMITED
Second Respondent
JOSEPH HEKEIK
Third Respondent
GLEN WILLIAM HICKEY
Fourth Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 26 JULY 1996
REASONS FOR JUDGMENT
WILCOX CJ: On 10 October 1995 Ghasi Matar filed an application in this Court alleging unlawful termination of employment. He named as his employer "Neutral Bay Foodhall" and stated the period of his employment as 17 August 1991 to 19 August 1995.
Subsequently, Mr Matar applied by Notice of Motion for an order joining three additional respondents to the proceeding. On 15 April 1996 a Judicial Registrar acceded to that application. She ordered that Induson Pty Limited, Joseph Hekeik and Glenn William Hickey be joined as second, third and fourth respondents, respectively.
Within 21 days of that order solicitors acting for Mr Hekeik filed a Notice of Motion seeking review of the joinder order, insofar as it affected their client. This application came before me. The hearing was delayed in order to allow the investigation of the facts and the filing of affidavits, but was eventually completed on 12 July.
Power to review the decision
By way of preliminary point, counsel for Mr Matar contends that the Court has no power to review the Judicial Registrar's decision at this stage. He correctly points out that the Judicial Registrar did not conduct a trial of the proceeding and has not made an order finally disposing of it; she has dealt only with an interlocutory application concerning parties. Counsel says that the power of review given to the Court by s. 377 of the Industrial Relations Act 1988 arises only upon the final disposal of a matter by a Judicial Registrar. As authority for that proposition, he cites the decision of Marshall J in Nixon v Ord Minnett Limited (14 March 1996, not yet reported).
I do not think that there is anything in the Act that precludes review by the Court, at this stage, of the Judicial Registrar's order in respect of the Notice of Motion for joinder of parties. Nor do I think that any of the authorities on s. 377, properly understood, suggests otherwise.
First as the Act itself. Section 376 provides for the delegation of powers to Judicial Registrars in respect of unlawful termination claims. By Order 74 rule 2 of the Court's Rules, there have been delegated to the Judicial Registrars "all the powers of the Court" in respect of such claims. Obviously, these powers include the power to determine a Notice of Motion in respect of joinder of parties. Section 377(1) gives parties a right to apply to the Court - that is, a Judge - "to review a Judicial Registrar's exercise in the proceedings of a power delegated under section 376". Time limits are specified. It is important to note that the subject-matter of the review is the Judicial Registrar's "exercise in the proceedings of a power"; this means the order that the Judicial Registrar made, not any opinions he or she may have expressed during the course of the hearing.
In Nixon, Marshall J reviewed the authorities. It is unnecessary for me to retraverse that ground. The authorities all make it clear that a review relates to the exercise of the relevant power. So the right of review arises only when that exercise is complete. The problem lies in determining what constitutes a relevant exercise of power. In Andrews v Uniting Church in Australia Frontier Services (1995) 60 IR 437 at 442, Gray J expressed the opinion that a ruling on evidence is not subject to review. As I understand his Honour's approach, he accepted that, in making a ruling, a Judicial Registrar is exercising a power delegated by the Rules; but he thought that the relevant power, for the purposes of s. 377(1), is the power to hear and determine the proceeding itself. Consequently, the right of review arises only when that task is complete. At that time, of course, the party seeking review is entitled to reopen all aspects of the hearing before the Judicial Registrar: see Wyndham Lodge Nursing Home Inc v Reader (15 April 1996, Wilcox CJ, Ryan and North JJ, not yet reported).
The view expressed by Gray J is consistent with that taken by Moore J in Hitchcock v Warner Bros Movie World (1995) 130 ALR 337 and by Marshall J in Nixon itself. I respectfully agree with the conclusions reached in all those cases.
It is suggested by counsel that the decisions reached in Andrews, Hitchcock and Nixon are inconsistent with my decision in Foxcroft v The Ink Group Limited (1994) 1 IRCR 215. I do not think they are. Foxcroft concerned an application by an employer for review of a decision of a Judicial Registrar to refuse an application to return a matter to the Australian Industrial Relations Commission for conciliation, a certificate having already been issued by the Commission under s. 170ED(2) of the Act about its inability to resolve the matter by conciliation. After quoting s. 377, I said: "It will be noted that the power of review is not limited to orders finally disposing of a claim. It extends to interlocutory orders." Having considered the matter again, I adhere to this view. As the Rules delegate to the Judicial Registrars "all the powers of the Court" in respect of unlawful termination claims, they plainly delegate the Court's powers to make interlocutory orders in respect of such claims. As s. 377(1) authorises a party to apply for review of the "Judicial Registrar's exercise in the proceedings of a (delegated) power", it obviously extends to review of a Judicial Registrar's exercise of power in connection with an interlocutory application. But the question remains: what is the relevant exercise of power?
It seems to me that there is a clear distinction between a ruling made in the course of a hearing, on the way to determination of a proceeding, and a ruling determining an interlocutory application commenced by Notice of Motion. In each case the ruling constitutes an exercise of delegated power. In each case it is interlocutory in nature, in the sense that it does not finally dispose of the principal proceeding. However, in the first case, the Judicial Registrar makes the ruling only in the course of performing a larger task, the hearing and determination of the proceeding itself. The performance of that task is the exercise of power that is subject to review; so no right of review is available until the task is complete. In the second case, the Judicial Registrar has only a limited task: to determine what orders to make in answer to a Notice of Motion. The trial of the principal proceeding might be taken by someone other than the Judicial Registrar who determined the Notice of Motion. If a Judicial Registrar's task is limited to determining the Notice of Motion, that Judicial Registrar's exercise of power is complete when he or she makes orders in respect of it. A right of review is then available. That was the position in Foxcroft.
It is also the position in this case. As already recited, the applicant made an application for joinder of three additional respondents. His application came before a Judicial Registrar whose only task was to determine that application. That Judicial Registrar may or may not be allocated the trial of the matter; she is certainly not "part heard". She has completed the limited task assigned to her. So her exercise of power is complete and susceptible of review.
Merits of the joinder
The restrictions on termination of employment imposed by Division 3 of Part VIA of the Act are restrictions imposed on employers. Relief may only be granted against an employer: see s. 170EE.
The power of the Court, and so a Judicial Registrar, to order the joinder of an additional respondent depends upon the Court concluding that the person proposed to be joined "ought to have been joined as a party" or "is a person whose joinder as a party is necessary" to ensure the effectual and complete determination of the matters in dispute: see Order 6 rule 8(1) of the Court's Rules. Unless there is evidence to suggest that the person proposed to be joined was the employer of the applicant at the time of termination of the applicant's employment, there is no basis for such a conclusion.
The evidence before the Judicial Registrar regarding the identity of the applicant's employer was scanty. As I have said, in his application, the applicant identified his employer as "Neutral Bay Foodhall". An affidavit was filed in support of the Notice of Motion for joinder. It was not made by the applicant, as might have been expected, but his solicitor Maria Bechara. She deposed to being instructed by the applicant "that he was employed in the business trading as Neutral Bay Foodhall". Although this was apparently a business name, she did not say whether she had made a search of the Business Names Register to determine whether the name was registered and, if so, who was its registered proprietor. Ms Bechara annexed a business card bearing the name "Neutral Bay Foodhall" along the left hand border and, at the top, the words "Joseph Hekeik Director". The address of the shop and its telephone and facsimile numbers were set out below these words. Ms Bechara also annexed a letter from Keith Skinner, the Voluntary Administrator of a company called Palmband Pty Ltd, stating that Mr Matar had been employed by a company called Induson Pty Ltd. Ms Bechara deposed that she was instructed by the applicant "that he understood that Joseph Hekeik owned the business with a person named Glen."
At the hearing of the Notice of Motion before the Judicial Registrar, counsel for Mr Hekeik read an affidavit made by his client stating that he was appointed a director of Palmband and that Palmband was the owner of the business known as "Neutral Bay Foodhall" from 17 August 1994 to 21 December 1995. On 26 October 1995, Mr Skinner was appointed Voluntary Administrator of Palmband. Mr Hekeik said that, prior to that date, staff employed in the business, other than directors, were employed by Induson, a company whose sole function was to act as a service company to Induson and employ staff. Mr Hekeik annexed a Business Names Extract dated 24 November 1995 showing Palmband as the person who had conducted the business since 17 August 1995. Mr Hekeik acknowledged in his affidavit that he worked in the business of Neutral Bay Foodhall but he said he had only a limited role in its administration and no involvement in Mr Matar's employment or its termination.
On the review, additional evidence was adduced. It is unnecessary to refer to it in detail. The evidence now before the Court supports the following findings:
(i)the business of Neutral Bay Foodhall was commenced in 1989 by Tony and Maria Macri. They were the registered proprietors of the business name and the registered lessees of the premises in which it was conducted.
(ii)Mr Matar commenced to work in the business in 1991, while it was still being run by Mr and Mrs Macri.
In 1994 Mr and Mrs Macri sold the business to Palmband. Palmband took over the conduct of the business, became registered lessee of the premises and registered proprietor of the business name.
(iv)At that time Mr Hekeik was not associated with Palmband, or at least not actively so in relation to Neutral Bay Foodhall. The persons who managed the business were Glenn Hickey, the fourth respondent, and a man named Garry.
(v)In early 1995, Mr Hickey told Mr Matar that Garry had sold his "share in the partnership" to Joseph Hekeik. Shortly afterwards, Mr Hekeik appeared at the premises and was introduced to Mr Matar. He told Mr Matar he was "the owner of the business" and gave him the business card previously mentioned.
(vi)At same stage, Induson took over the payment of wages for people engaged in the business. However, Mr Matar was not informed about this until, at the earliest, shortly before his termination. He was paid in cash, delivered in an unmarked envelope. With the exception of the group certificate issued to him for the year ended 30 June 1995, which he may, or may not, have received prior to his termination, all group certificates issued to him during the course of his employment in the business simply showed the employer as "Neutral Bay Foodhall".
(vii)From the time of his introduction to Mr Matar in early 1995 until the termination of Mr Matar's employment, Mr Hekeik worked in the shop, along with Mr Hickey. Both men gave instructions to staff and exercised managerial powers.
On these facts, it seems to me that the position in relation to Mr Matar's employment was as follows:
(a)His original contract of employment was with Mr and Mrs Macri, the proprietors of the business at the time of his engagement.
(b)Mr Matar was aware of the Macris' sale of the business in 1994. He may not have known the precise identity of the purchaser or purchasers; but he knew they were the person or persons then trading under the name "Neutral Bay Foodhall". That person was in fact Palmband.
(c)Mr Matar was content to continue to be employed in the business under its new owner, so he must be taken to have assented to a novation of his employment contract in favour of Palmband. Although Mr Hickey and "Garry" exercised managerial functions, there is no evidence that they held themselves out as owners of the business in their own right, as distinct from exercising control on behalf of the true owner.
(d)Mr Matar was aware of the assignment of "Garry's" interest to Mr Hekeik. But there was never any assignment of the contract of employment. This was unnecessary; the agreement was with Palmband, which continued to operate the business. Although Mr Hekeik used a business card containing the word "director" and, according to Mr Matar, described himself as "the owner", Mr Matar continued to believe that his employer was Neutral Bay Foodhall, whoever that was. As we know, although Mr Matar probably did not, it was Palmband.
(e)There is no evidence that Mr Matar knew anything about the arrangement between Palmband and Induson. He certainly never accepted an assignment of his employment agreement from Palmband to Induson. Until the moment of his termination, Mr Matar's employer remained Palmband.
(f)It follows from the above that there is no basis upon which it can be said that Mr Hekeik was Mr Matar's employer. There was no agreement to that effect. There was an understanding to the contrary.
Counsel for Mr Matar seeks to support the Judicial Registrar's order in connection with Mr Hekeik by reference to the doctrine of undisclosed principal. That doctrine states that an agent who enters into a contract with another person, purportedly as a principal and without disclosing that he or she is acting merely as an agent, may be made liable for the performance of the contract as if he or she were in truth the principal.
I do not think the doctrine of undisclosed principal applies to this case. Mr Hekeik did not make a contract with Mr Matar. He merely joined in the conduct of the business with Mr Hickey; admittedly in a managerial capacity, but on behalf of "Neutral Bay Foodhall". Mr Matar knew his employer as "Neutral Bay Foodhall", whoever that was. If Mr Hekeik was personally carrying on the business of Neutral Bay Foodhall, Mr Matar would have realised, if he had thought about it, that Mr Hekeik, personally, must be his employer. This would be because he was Neutral Bay Foodhall. Equally, however, if Mr Hekeik was not personally carrying on the business of Neutral Bay Foodhall, as was the fact, Mr Matar would have realised, if he had thought about it, that whatever Mr Hekeik was doing in the business he was doing on behalf of the proprietor of that business. He was merely an agent.
In my view, there is no basis for concluding that Mr Hekeik was a person who ought to have been joined as a party to this application or whose joinder was necessary to ensure its effectual and complete determination. He may turn out to be a necessary witness, but he is not a necessary, or proper, party. Insofar as it relates to Mr Hekeik, the Judicial Registrar's joinder order should be set aside.
Costs
Counsel for Mr Hekeik submits that, if his application for review proves successful, the Court should make a costs order in favour of his client. He says the proceeding was instituted against his client "without reasonable cause"; thereby taking the case outside the limitation on the making of a costs order that is imposed by s. 347(1) of the Industrial Relations Act.
In Kanan v Australian Postal and Telecommunications Union (1993) 43 IR 257 at 264-265, I suggested that one way of testing the absence of reasonable cause is to ask whether, "upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success." Applying that test, I cannot say this proceeding was instituted without reasonable cause. That Mr Matar has no prospect of showing that Mr Hekeik was his employer at the time of termination is substantially demonstrated by evidence provided by Mr Hekeik during the course of the proceeding and not previously available to Mr Matar. I do not propose to make a costs order.
I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment of his
Honour Chief Justice Wilcox.
Associate:
Dated:
APPEARANCES
Counsel for the Applicant: C R C Newlinds
Solicitor for the Applicant: M T Bechara & Co
Counsel for the third Respondent: S N Galitsky
Solicitor for the third Respondent: Kemp Strong &
Chippdall
Date of hearing: 12 July 1996
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