Re Dingjan & Ors; Ex parte Wagner

[1994] HCATrans 188

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IN THE HIGH COURT OF AGSTRALIA

Office of the Registry

Melbourne	No Ml03 of 1993
In the matter of -

An application for a writ of prohibition and a writ of

certiorari against THE

HONOURABLE PAUL MUNRO, Senior

Deputy President of the

Australian Industrial

Relations Commission, and THE

AUSTRALIAN INDUSTRIAL

COMMISSION

First Respondents

and

A.J. & S.L. DINGJAN

Second and Third Respondents

and

M.K. & M.U. RYAN

Fourth and Fifth Respondents

and

Wagner	87	2/2/94
MASON CJ BRENNAN J DEANE J DAWSON J TOOHEY J GAUDRON J McHUGH J

TRANSPORT WORKERS' UNION OF

AUSTRALIA

Sixth Respondent

Ex parte -

D.R. & V.M. WAGNER

Prosecutors

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 2 FEBRUARY 1994, AT 10.00 AM

(Continued from 1/2/94)

Copyright in the High Court of Australia

MASON CJ: Yes, Mr Rose.

MR ROSE: If the Court pleases, at the adjournment I was

submitting that although one can attempt general

interpretations of the expression "relating to the

business of the corporation", its scope can only be worked out in concrete cases. My friend, Mr North,

submitted that on the basis of Redfern v Dunlop it

must be characterized as a law with respect to the

business of the corporation and that such a law is one with respect to the corporation. But if that

submission were not accepted and if there can be

cases falling within the expression where the law is outside section Sl(xx), then my submission was

that it could be read down as was done in Huddart

Parker and Reg v Wright to preserve those classes

of applications that are within power.

In those two cases the reading down was made

in relation to employment in the physical

operations of stevedoring for interstate and

overseas shipping. Those operations were accepted

as clearly within the trade and commerce power, and

the Court said it was unnecessary to decide where

the outer limits of the power might lie.

I was submitting that the present case

concerns contracts of a class that are within the scope of the corporations power on the basis that the subcontracts contain obligations to perform

physical operations essential for the business of

the corporation. In paragraph 2(b) of our outline

we have referred to the fact that the logs were, it

Wagner 88 2/2/94

seems, owned by the corporation, the transport was

to its mill, the very activity that the corporation

had arranged in the course of its business for the

principal contractor to do.

The class that we submit is within the scope

of the corporations power on that basis is not, of

course, limited to subcontracts or delivery to a

corporation's factory of raw materials. It would

include other subcontracts, for example a
subcontract for the repair of a manufacturing
company's machinery. In this general class of case

the connections that make the law one with respect

to the corporation's business are, in our

submission, enough to make it a law with respect to

the corporation.

Our submission is that there is no

justification in the cases for the submission by my

learned friend, Mr Jackson, for limiting

section Sl(xx) to laws that are regulating or

protecting the corporations themselves or laws that

have some other kind of effect upon them. It is

sufficient if the subcontracts, as in this case,

have the kinds of connection that exist in this

kind of case with the company's business.

DAWSON J:  What is the kind of connection which you say is

enough in this case?

MR ROSE:  The fact that the subcontract is dealing with the

activity of delivering the company's logs to. its

mill for the purposes of its business, as my

friend, Mr North, put it, in terms of the lifeblood

of the company, and that is a sufficient

relationship with its business.

DAWSON J:	So that under the corporations power any supplier of a corporation can be regulated and the law will
be a law with respect to a constitutional
corporation?
MR ROSE:	If the supplier has a contract with the

corporation, of course, there would be no

DAWSON J: Well, whether he had a contract or not, if She is

supplying, is that not enough in your test?

MR ROSE:  Yes, in our submission, at least in the case where

the - my submission only goes so far as contracts

for the transport of goods, as in this case, that

are owned by the corporation to its mill. It is

unnecessary, in my submission, to consider cases

that may be a little further removed in terms of

supply. Indeed, it is unnecessary to decide what

would be the case here if the subcontracts were for the transport of the company's logs from the forest

Wagner 89 2/2/94

coups to the principal contractor's depot ~nd then

the principal contractor - - -

DAWSON J: But the test you are positing is, so long as the

goods which are supplied are supplied to a

constitutional corporation, that is enough to

regulate the supply. That is what you are saying,

is it not?

MR ROSE: With respect, I have not gone that far,

Your Honour. I have limited it to the case of

contracts for the transport of the corporation's

goods which it already owns. I am not dealing with

the case of actions of supplying the goods before

the corporation becomes the owner of them. We are

dealing here with goods that are owned by the

corporation at the time they are being transported.

DAWSON J: All right. Any carrier that delivers goods owned

by a corporation is able to be regulated under the

corporations power. Do you say that?

MR ROSE: Yes, Your Honour.

DAWSON J: Well then, I understand.

MR ROSE:  If it is the carriage of goods at least to the

corporation's operations, as distinct from - - -

DAWSON J:  So that that means the whole carrying business,

because most carriers would deliver to

constitutional corporations, is able to be

regulated under the corporations power.

MR ROSE:	Yes, Your Honour.
DAWSON J:	I see.

DEANE J: But why do you say that? Here we are concerned

with contracts, not the carrying business. We are

concerned with a contract for the carrying of the

corporation's goods.

MR ROSE:  Yes, Your Honour. I had understood His Honour

Justice Dawson to be talking of contracts for

the - - -

DEANE J:	No, he said, "the whole carrying business".
MR ROSE:	I am sorry, I understood him to be talking of the

contracts involved in achieving those results for

the corporation.

DAWSON J:  It extends to the regulation of the contracts

which the carrier makes for the purpose of carrying

out his obligations to the constitutional

Wagner 90 2/2/94

corporation; not contracts with the constitutional

corporation but with others.

MR ROSE: With others, yes, Your Honour.

DAWSON J: Which would embrace the whole of his business.

MR ROSE:  If it is within the limits of the kind of

situation we have here.

DAWSON J: Yes. It probably goes beyond that, does it not?

MR ROSE:  It may do so, Your Honour, but it is not necessary

to go to those cases which may be more remote.

DAWSON J:  It enables you to test the connection which you

say is sufficient.

MR ROSE: But if one goes to examples that are further

removed, one has different considerations before

one.

DAWSON J:  And it may throw some light on what you say is a

sufficient connection. Anyway, I understood that.

BRENNAN J:  What are the other considerations in the case of

more remote or tenuous connections?

MR ROSE:  Perhaps it is only repetitive to say that it is

the fact that they are more remote. If, for

example, one has not physical operations but

financial transactions relating, several stages

removed, one may find that fact is too remote from

the corporation to come within the power.

BRENNAN J:  The difficulty I am having with this, Mr Rose,

is that if you fasten upon the business of a

corporation as the nexus with the power, you are

really putting corporations into the same situation

as any other person who carries on business, and

saying that so long as one of the persons to whom

the transactions take place is a corporation, then

the whole of that area of activity can be
regulated. It is not singling out corporations or

discriminating for or against them, is it?

MR ROSE:  My submission is that the law does not have to be

characterized as one for regulating the

corporation; it need not have an effect upon the

corporation itself. The link is - - -

BRENNAN J:  And yet it can be a law with respect to the corporation?

MR ROSE:  Yes, indeed. But any law that can be described as

a law with respect to the business of the

corporation is a law with respect to the

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corporation. The latter is the wider class, which

includes everything within the former.

BRENNAN J: Yes, I see.

MR ROSE:  The close connection of the kind I have referred

to is enough to achieve that result. I do not

think I can add anything more to what was said by

my friend Mr North generally - - -

DAWSON J:  It is not a law with respect to the business of the corporation we are concerned with. It is a law

with respect to something which relates to the

business of the corporation.

MR ROSE:  The constitutional issue fundamentally is whether

it is a law with respect to the corporation and my

proposition was that, with respect, that - - -

DAWSON J: Yes, under the particular statutory provision we

are only concerned with the relationship with the

business of the corporation, are we not?

MR ROSE:  Yes, and my earlier submission was that as a

matter of construction, this plainly relates to the

business of the corporation. For that one can use

the statutory interpretation aspects of Huddart

Parker and Reg v Wright, where they both held that

the stevedoring operations, not by the shipping
company but by the stevedoring company, were
physical operations in relation to the commerce by

sea conducted by the shipping company.

So, as far as that statutory question is

concerned, my submission is that those cases

establish that the sort of contract here is one

with respect to the business of the corporation.

The constitutional question is whether, to the full extent of that interpretation, it is a valid

provision, or, if not, whether it can have some

valid applications and be read down so as to

preserve those applications.

DAWSON J: Yes.

MR ROSE: There was some reference, if the Court pleases, to

the question of the constitutional validity if the

legislation purports to apply to terminated

contracts. We make no submission on the

interpretation question, but on the constitutional

issue it would be our submission that a law can

deal with expired or terminated contracts. So, for
example, under the trade and commerce power in

relation to waterside workers in overseas shipping

the Commonwealth could legislate with respect to

unfair dismissals and reinstatement even though the

contracts would ex hypothesi have been terminated.

Wagner 92 2/2/94

In the case of the marriage power, which was

mentioned yesterday by Your Honour Justice Gaudron,

in our submission, the power is clearly available

in relation to matters arising from a past

marriage. I may have misunderstood Your Honour's

suggestion but, in our submission, we would

respectfully disagree with it if it implies that

the established Commonwealth power to legislate in

respect of past events having a sufficient

connection with a constitutional subject-matter is

somehow in question.

There is, of course, the unresolved question

in relation to ex post facto criminal laws arising

from the War Crimes case, but our submission would

be that in the civil area the fact that the

circumstances to which the law relates are

past - - -

GAUDRON J: But, does your submission go so far as to say

that if a carrier once - if a person, like the

respondents once was in a contractual relationship

with another for the supply of goods or services to

a constitutional corporation that thereafter you

can regulate that first person's business?

MR ROSE:  In relation to the contracts that had that

connection but not - - -

GAUDRON J: Well, I do not understand your submission to

have been so limited. I understood your submission

to be that if there were a contract then you could

regulate, not merely the contract, but you could

regulate other aspects of the activities?

MR ROSE: If I did give that impression, I am sorry,

Your Honour; I was not - - -

GAUDRON J: And indeed with a contract, it is very difficult to say you are regulating a contract which has come to an end if what you are doing is creating a new

one for the future.

MR ROSE: There might be an analogy, Your Honour, in

relation to reinstatement of dismissed employees.

If the legislation is dealing with independent

contractors rather than employees, one has a

similar situation. We would say that the power

extends to adjusting, subject to the

section Sl(xxxi) point - but as far as the positive

powers are concerned, they would extend to

legislation dealing with the rights and obligations

that arose out of that past contract. It is no

part of my submission, Your Honour, to suggest that

given a contract - - -

Wagner 93 2/2/94

GAUDRON J: But you are talking about something more than

the rights and opiigations that arose out of the

past contract, are you not? You are talking about

creating new obligations for the future.

MR ROSE:  And if they are created by reference to the past

contract, considerations which arise from that or

relate to that.

GAUDRON J:  And confined to the matters involved in that

contract?

MR ROSE:  They would have to be related to that contract,

yes, Your Honour.

GAUDRON J:  And confined to the general area of the

contract?

MR ROSE:  I would think so, Your Honour, yes.

GAUDRON J:  Why? To make it a law with respect to

corporations?

MR ROSE:  I think one would probably find as a matter of the

statutory power that it was limited to

considerations that had regard to the - - -

GAUDRON J: Forget about the statute. As a matter of

constitutional principle, confined to matters dealt

with in the contract?

MR ROSE:  I think if one moved away from those one could be

losing the connection with the corporation. But if
one is dealing with, for example, the level of
remuneration paid for the activity of delivering

the logs in the past period - - -

GAUDRON J:	So the constitutional connection on your submission is not simply that there was a contract
which related to the business?

MR ROSE:  The legislation would have to be more confined

than dealing with anything that came within that

description.

DAWSON J:  Why do you restrict it to contracts? I mean why

would not a law which says, "Any carrier who

supplies a corporation shall pay X dollars to his

employee" be in the same position as the law here?

What has contract got to do with it?

MR ROSE:  That may follow from a decision that the

subcontracts here are within power.

DAWSON J:  Or that the carrier shall only use vehicles of a

certain horsepower, or that he should paint them

red or green.

Wagner 94 2/2/94

MR ROSE:  Once one goes into those things it is getting away

from things that have any connection with the

business of the corporation, the delivery of the

logs to the corporation and various other factors

involved in that delivery.

DAWSON J:  I can understand the law saying, "Sure, supply",

but the payment of a certain amount once the

contract is ended to one of the contractors seems

to be a long way away, does it not, $25,000?

MR ROSE:  In my submission, it would be relating to the

remuneration under the contract.

DAWSON J: Under a contract which has ended - what has that

got to do with the corporation?

MR ROSE:  The fact, in my submission, that it was a contract

for the delivery of the corporation's logs.

DAWSON J:	The delivery has been done.
MR ROSE:	Yes, but in my submission one could have

legislation giving an employee in overseas

stevedoring a higher rate of pay - - -

DAWSON J:  Let us talk about this one though. The contract

has ended, and what the Commission orders is that

some money be paid under a contract that has ended.

MR ROSE:  The example Your Honour is proceeding to give was

of a past contract by a stevedore in overseas

shipping, and postulating legislation which after

the contract has ended legislates for a higher

entitlement for the worker. In our submission,

that would be possible.

DAWSON J: Higher entitlement retrospectively?

MR ROSE: Retrospectively, yes, because the contract did

have the required connection with overseas trade

and - - -

DAWSON J: What is the connection? How can you have a

connection with a trade that is ended?

MR ROSE:  But if it is held to be outside power it would

follow really from that, with respect, Your Honour,

that there could be no retrospective -

DAWSON J:  No, no, take this case. The subcontractors have

ceased to be employed, their obligations to deliver

to the corporation have been completed, and then

subsequently the contractor is ordered to pay a

certain sum of money.	What effect can that have on
the corporation?

Wagner 95 2/2/94

MR ROSE: Well, my submission is not that validity depends

upon some effect upon the corporation.	My
submission fundamentally is that it is
sufficient - - -

DAWSON J:  Then how is that a law with respect to the corporation?

MR ROSE: Well, the submission, Your Honour, is that it is

sufficient to have a connection of the kind that we

have here if they are ongoing contracts and, if the

contracts have been terminated, well that same

connection which it had in the past is still

sufficient. Otherwise one would - - -

DAWSON J: The connection is a contract which has ended. It

has got nothing to do supply, nothing to do with

ongoing relations. That is the connection?

McHUGH J:  Do you not have to rely on the retrospective

power of the Commonwealth, go back to the situation

as it was before the law was passed. Is that not the way you have to answer my brother's question?

MR ROSE: With respect, Your Honour, it might just be a

matter of the form, then, of the law.

McHUGH J: Well, there are no contracts so there is nothing

to operate on at the moment, so it has to operate

retrospectively, has it not, or not at all?

MR ROSE: Well, it is a matter of form as to whether the law

says this Act shall be deemed to have commenced

five years ago, so it is deemed to have commenced

before or at the time when the contract was still

in operation. That would be one way to do it and

would overcome the objections that

His Honour Justice Dawson is raising, but my

submission would be that the law does not need to

be in that form.	It would be sufficient to create
a future obligation by reference to the past

contract as, for example, with an overseas

stevedore's rates of pay. But with the contract

having been terminated, my submission is the

Commonwealth would be able to pass a law that says

the employer shall pay the employee an extra $100 a

week or whatever for that past period. I think

that it is really a matter of form what the

substance of it is that the past connection is

sufficient.

If the Court pleases, if I can pass to some

brief submissions in relation to judicial power.

In our outline we had mentioned, in addition to the broad criteria required by section 127A, that there is also section 90 of the Act. I do not think that

Wagner 96 2/2/94

section 90 has been mentioned yet but I can draw

the Court's attention to it:

In the performance of its functions, the

Commission shall take into account the public

interest, and for that purpose shall have

regard to:

(a) the objects of this Act; and

(b) the state of the national economy and the

likely effects on the national economy of any

award or order that the Commission is

considering, or is proposing to make, with

special reference to likely effects on the

level of employment and on inflation.

It may be of little practical importance in

view of the fact that section 127A(7) requires the

Commission to exercise its powers in a way that furthers the objects of this Act as far as practicable. When Your Honours look at the objects of the Act in section 3, Your Honours will see that

they are very wide indeed, including such things as

the state of the economy.

So it may be that section 90 is of little

practical significance but nevertheless our

submission is that se~tion 127A does not exclude

section 90 in express terms and that there is no sufficient basis for regarding section 127A as a

code and that, therefore, section 90 provides some

extra considerations in addition to those matters

referred to in section 127A which include - as my
learned friend, Mr North, pointed out - matters

that are not ones that are within the limits of

judicial power.

So far as Peacock's case is concerned, which

we mentioned in the last paragraph of our outline,

our submission is that that is distinguishable.	We
would respectfully not adopt my friend Mr North's

submission that in the alternative it should be

overruled. Our submission would be that Peacock's

case is distinguishable.

McHUGH J: Peacock's case seems to be in favour of the

Commonwealth. They seem to mention it in just

about every case.

MR ROSE:  We mention it, Your Honour, I think on issues that

were not raised in the case because we say the

actual decision would be inconsistent, for example,

with certain propositions put about acquisitions of

property, I think was the last time we might have

mentioned it to Your Honours.

Wagner 97 2/2/94

But Peacock's case was limited to the review

of contracts by a court where the contract had

become impossible of performance or inequitable

because of the circumstances of the war or the

impact of the legislation.

As far as review here under section 127A is

concerned, as far as review on the ground of public

interest is concerned, there was nothing, of

course, comparable in Peacock's case. The criteria

there did not include a public interest criterion. the factors that are mentioned here in

section 127A(4)(c) about skills development and, in

Peacock's case, the Court had enforcement powers.

But that would be far from conclusive as a

difference, of course.

As regards review on the grounds of harshness

or unfairness, our submission is that that is a

function of a kind that, in many contexts, and this

is one, can be given either to a court or to a

non-judicial tribunal and, as my friend, Mr North,

has pointed out, there are the wider criteria, even

without section 90.

Some reference was made yesterday to the issue of acquisition of property, at least in the case of

contracts that have already expired or been

terminated before the Industrial Relations

Commission decision. To the extent that variation

involves extinguishment of rights, the issue has
been reserved, of course, by the Court, in several

cases heard last year, in particular, Mutual Pools,

and the Court has the Commonwealth argument on

those issues. But perhaps the present matter can be disposed without getting into those particular aspects, because even if any form of property is

acquired here, where the grounds are harshness or

unfairness, the acquisition, if there is one, would

be outside the kinds of acquisition at which

section Sl(xxxi) is directed. Our outline does not deal with that so it was

not on our list of authorities, but if I can refer

the Court to Attorney General v Schmidt, 105 CLR,

and a reference in the Tape Manufacturers' case,

176 CLR at page 510, where the Court spoke of

legislation providing for:

a genuine adjustment of the competing rights,

claims or obligations of persons in a

particular relationship or area of activity,

it is unlikely that there will be any question

of an "acquisition of property" within

s 51(xxxi).

Wagner 98 2/2/94

But, even if that solution is not accepted, an

acquisition would.not be invalid by reason of

section Sl(xxxi) since it would be, in our

submission, on just terms if the grounds for the

unfairness. If I draw Your Honours' attention to

review are that the contract is harsh or unfair.

section 127B(2) of the Act, it explicitly says

that:

An order may only be made for the purpose of

placing the parties to the contract as nearly

as practicable on such a footing that the

ground on which the opinion is based no longer

applies.

And that, in the case of harshness or unfairness,
would, in my submission, remove any objection that

the process is one in which just terms are not

provided. Where the ground of review is that the

contract is that the contract - - -

BRENNAN J: 

Mr Rose, I think I raised the matter yesterday,

but I must confess I would be concerned about the
absence of any 78B notice to agitate this point as
a ground of determination of this case. But for my
part, at the moment though, though I take the force

of your citation from Tape Manufacturers, I think I

should say that it seems to me to be a large

question to assume that because harshness or
unconscionability is invoked that somehow or other
that is the key which opens the mystical door of
just terms. After all, there may be property

rights which are existent and it may be harsh or

unconscionable that they should in law exist, but

so long as they exist in law, for a statute to take

them away, it seems to me that compensation must be

paid.

MR ROSE: 

In the absence of a 78B notice on the issue, it is

difficult to say more.

BRENNAN J: It is perhaps unnecessary to say more but I

thought, as I had raised the matter yesterday and

as you had raised that argument now, I should make

that observation.

MR ROSE:  Thank you, Your Honour. Perhaps I could just

conclude by saying so far as review on the public

interest ground is concerned, it does not really

arise here. Because the particular decision was

made on the ground of unfairness, not on the public

interest ground, section 127A(2)(c) can be excised

by a blue pencil severability. If the Court

pleases, that concludes my submission.

MASON CJ: Thank you, Mr Rose. Mr Jackson.

Wagner 99 2/2/94

MR JACKSON:	If the Court pleases, may I, before turning to the substantive submissions we wish to make, say
two things.  The first is simply to give the Court
a reference that I said I would give, and that is
to the parts of the record which contain the places
where Justice Munro indicated his assumption or
view that the contract had come to an end. They
are pages 85 and 86 in two passages.
DEANE J:	What does that mean in the sense in which you are

using it, "the contract had come to an end"? For

example, one can rescind a contract by reason of

repudiation and sue for breach which means the

contract has come to an end in one course but

rights arising by reason of the contract persist.

The other end is where the contract has been

performed, is buried and nothing remains by way of

action or otherwise.

MR JACKSON:  Your Honour, it is the larger sense, meaning by

that that the contract had come to an end in terms

of the obligations of either party to perform or be
paid, for example, thereunder. The reason for the

underlying debate, if I can put it that way, about

when it happened was that there was a question in

effect whether our side was entitled to terminate

as peremptorily, if I can use the expression, as we

did, and in the result it was not necessary for

Justice Munro to resolve the question of the

precise date at which there was an effect of

bringing to an end of the contract, but he assumed

something that accorded with all the possible
views, that being relevantly that it had not

occurred prior to the lodgment of the application to the Industrial Relations Commission but it had occurred before the making of the orders which he

made.

DEANE J:  I am not sure that that answers what I was asking,

and that is is it a case where any rights arising

out of breach, for example, or alleged breach had

come to an end? Or is it a case where all that can

be said is the contract had been terminated, that

rights arising by reason of the terms of the

contract and alleged non-performance, for example,

persisted?

MR JACKSON:  Your Honour, we would say both.

DEANE J: So, it is the latter; that is, the contract was

dead and buried with no rights of any sort?

MR JACKSON: Well, the contract was dead. Its Lazarus like

capacity derived, if at all, from the Act.

DEANE J: Well, does your submission turn in any way on -

let me give you an example. Say there was a term

Wagner 100 2/2/94

of extraordinary harshness which had not been

performed by the party under the obligation and
because of that lack of performance the other party

had treated it as repudiation and rescinded and was

.suing for damages for the failure of the first

party to perform the extraordinarily harsh term, is

your argument that the fact that the contract had

come to an end would, as it were, bring to an end

any constitutional power or linkage that would

otherwise exist?

MR JACKSON: Well, Your Honour, what we would say is this:

the first thing I should say, Your Honour, is that

the Act itself does recognize that orders made

under it will not be to the prejudice of other

contractual rights. There is a specific provision

to that effect, I just cannot recall precisely

which one it is but it is a concluding provision

of, I think, section 127B. Now, Your Honour, I

mention that in passing.

The second thing is that our submission in relation to the termination of the contract has two

aspects. The first is that it is a pure question
of construction unrelated to validity - that is the
first aspect - and that question is simply whether
the terms of the statute are framed to enable the

making of an order under the provisions in

circumstances where the contract has come to an

end. What I mean by that, Your Honour, is to say

that the contract is one in respect of which no

further performance by either party, according to

its terms, is required.	What I mean by that,
Your Honour - - -

DEANE J:  I follow that, which means you are saying as a

matter of construction the contract could not be

varied to remove the harsh term notwithstanding

that damages were being sought for non-performance

of that harsh term.

MR JACKSON:	Yes.
DEANE J: That is the matter of construction.

MR JACKSON: That is the construction point.

DEANE J: Well, now then, my next query is in terms of

constitutional power which has been debated. You

would rely on termination as having the effect of

removing it from power, even if, as it were, the

party bound by the harsh term to deliver goods in

the course of business for a corporation was being

sued for breach of the ·harsh term.

MR JACKSON:  Yes. Your Honour, we put that in two

ways - - -

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DEANE J:  I am not suggesting it is right or wrong, I just

want to understand.

MR JACKSON:  Yes. Your Honour, could I say that we put it

in two ways. The first is that the question of the

relationship of the statutory provision to the

corporations power depends to some extent on what

the statutory provision does. There are two

relevant possible views. View one is that power is

conferred to make orders in respect of contracts

which have, in the sense which I was meaning, come

to an end. If that is so, one has to examine

whether the power, both in respect of contracts

that are alive and those that are dead - I am

sorry, I should say that gives one view of the

ambit of the legislation. The question then is

whether legislation so construed is within

section Sl(xx).

The second possible view is that the statute

does not give power as a matter of construction in

respect of contracts that have come to an end. In

that case one looks at the operation of

section Sl(xx) in relation to the provision. But,

Your Honour, those things are, in a sense, the

first aspect of the constitutional question. The

second aspect of the constitutional question is

that if one - and it may simply be, in effect, the

other side of the coin or putting the same thing in

a different way - is simply to say that where one

has a provision which in respect of contracts of

the particular kind, the only connection with the

corporation being that their contracts in relation

to - and I will come back to that in a moment.

That itself demonstrates the absence of any

specified sufficient connection in terms of section

Sl(xx).

Having said that, I gave Your Honours a wrong

reference to the pages in the first place. I said

pages 85 and 86 and I think I should have said 65

and 86.

The second preliminary matter, as it were, I

wish to mention is that some of the submissions

made by our learned friends dealing with the

circumstances of the dealings between on the one

hand the contractors and subcontractors and the

company on the other, appear to be based upon

situations which had obtained at times prior to the

coming into being of the contract between TPFH and

the prosecutors. There had been different

arrangements which had prevailed prior to - and I

will give the precise date in a moment - the middle

of 1992.

Wagner 102 2/2/94

What happened, broadly speaking, at that time

was that the relationship between the mill and the

subcontractors up to that stage had been one which

I suppose some might describe as being in a sense a

little pcternalistic because there had been direct

payments to subcontractors of the amounts to which

they were entitled from people in our position, no

doubt, those being payments which were then

subtracted from amounts that might become due to

us. There were other dealings in which the mill

dealt directly with persons with whom it had no
direct contractual relationship. But that was

changed at about that time because at about that time what happened was that the mill took itself

away from doing all that and simply had a written

contract with us and with people in our position,

and the contract and the practices then adopted

made it clear that the only dealings of the mill

were dealings with us, and how we arranged our

affairs by the use of employees, subcontractors or

whatever, was entirely a matter for us.

That that is so appears, if I could take

Your Honours briefly to it, from a number of references, the first in a passage which commences

at the top of page 80 and goes through to page 81

line 17. Your Honours will see particularly the

terms of the letter of 3 March 1992 which are

extracted on page 80, and one sees particularly

paragraphs 3, 4 and 5 of that. Then at the top of

page 81 one sees the part of the letter urging -

co-operation in a smooth transition to the new

arrangements.

Then again on page 81 line 4:

After June 1992 TPFH paid haulage rates direct

to the harvest contractor; in Mr Wagner's

practice this amount was paid without

deduction to his subcontractors.

At all times prior to June there had been the

exercise of control, and so on.

Your Honours, at page 93, the paragraph

commencing at line 23, Your Honours will see

reference to the same matter. The particular

contract which was entered into Your Honours will

see in the early part of the record and in

particular at about page 12 where it commences.

Then one sees at page 15, clause 4.1, the

obligations of the contractor were there set out.

Your Honours will see 4.l(a) the sole responsibility; 4.l(b) sole responsibility and so

on.	Your Honours will see, clause 4.3 at page 16,
4.4, 4.5 and 4.6 through to 4.8.	The position, as

Wagner 103 2/2/94

appears from the affidavit at about page 7 and

going on from there dealing with the arrangements

that take place, is that the prosecutors are

carrying on pursuant to that contract, even though they do not have as subcontractors to them the two
classes of respondents.

Your Honours, those are the two preliminary

matters I wish to deal with. Could I come then to
the corporations power. The first thing we would

wish to say about it is this, and it relates in a

sense to a question of reading down. We would

attack the broad proposition that seemed to be

underlying much of what was said on behalf of the

other sides. We would submit that an enactment is

not valid because in some of its applications it

would operate in such a way as to be valid.

If an enactment, leaving aside the question of

the Acts Interpretation Act and reading down, not

being an enactment which contains severable parts

to allow distinct operation - and I am meaning

subsections and so on - if an enactment is broadly

expressed to cover situations some of which are.

valid and some of which are not valid, then the

enactment is invalid. It is saved by, if it is

Acts then becomes a question whether one can do that,

saved at all, the provisions of the

and may I come back to that issue in just a moment.

But, Your Honours, in the present case what

one sees - turning more specifically to the term,
"in relation to" - is that the use of the term "in

relation to" that one sees in Redfern v Dunlop

Rubber, for example, the usage there shows the

validity, we would submit, of the proposition we

have advanced, namely, that the term, "in relation

to", takes its own meaning from the context in

which it appears. But the argument on behalf of

the respondents really seeks to make the term, "in	relation to", a term having constitutional meaning.	It makes it, in a sense, a constitutional term,
having a fixed meaning which when applied to any
power is a guarantee of validity.
Now, Your Honours, that really, in our submission, cannot be right with an expression of
that kind. And, Your Honours, if one looks at the
legislation in Redfern v Dunlop Rubber,
110 CLR 194, Your Honours will see from the
provisions of section 4, that appear set out
immediately under the headnote on page 194, the
nature of the relationship that was contemplated was made apparent by the various provisions that
are there set out. I do not want to read it out at
all, but Your Honours will see the various

Wagner 104 2/2/94

provisions and the effect on trade of a particular

kind that was required and, Your Honours, the

existence of those qualifications gave some

intelligible meaning to the term, "in relation to".

Your Honours, the argument on behalf of the

respondents treats the head of power, in our

submission, as being not laws with respect to

corporations of the three kinds specified in

section 5l(xx), but rather as giving power to make

laws with respect to contracts relating to the business of constitutional corporations of the

three kinds. And Your Honours will recall the

argument on behalf of our learned friends which

said, and said expressly, it is sufficient for

there to be a contract which is in relation to the

business of a corporation, sometimes in relation to

the corporation. Once you have that it is then

possible to legislate for anything in relation to

that contract. Your Honours, to say that is, with

respect, to put in a new subparagraph or a new

placitum in section 51, because it means that the
subject of the power is not corporations, the
subject of the power is contracts in relation to
corporations or in relation to the business of a
corporation.

Now, Your Honours, that is why, in our submission, it is right to say as

Your Honour Justice Brennan said in Fontana Films,

(1981-1982) 150 CLR, at page 222, at about

point 3 - and I say this by way of contrast - as

Your Honour there said:

It is of the nature of the power that it is a

power to make law with respect to corporate

persons, not with respect to functions,

activities or relationships.

And, Your Honours, a similar expression was adopted

by six members of the Court in The Incorporation	Case, New South Wales v The Commonwealth, (1989-	1990) 169 CLR 482, at page 497, where Your Honours,
with the exception of Justice Deane, said:

The power conferred bys 5l(xx) is not

expressed as a power with respect to a

function of government, a field of activity or

a class of relationships but as a power with

respect to persons, namely, corporations of

the classes therein specified.

And, Your Honours, what the argument on behalf of

the respondents and the Commonwealth, in our

submission, seeks to do is to substitute for the

requirement that the law be with respect to

corporations. A possibility that one can say the

Wagmer 105 2/2/94

law is with respect to a subject that is relation

to corporations.

Now, Your Honours, if that is so, then the

ambit of the power is extremely wide, of course,

but we may also say in relation to it,

Your Honours, that the requirement that the laws be

laws with respect to corporations, as distinct from
laws with respect to things having a relationship

with corporations, is really what underlies what

one has seen in the decisions of the Court so far

in relation to the corporations power, namely the

fact that one has to identify some effect in

relation to, if I could use the expression, some

effect in relation to the corporation which does

something to the corporation in order for the

conduct or conduct proscribed to be within power.

What I mean by that, Your Honours, is that it

is clear that the corporations power extends,

putting it at its narrowest, to laws which govern

the activities of corporations themselves. It is

clear that it extends to laws which protect

corporations. It is clear that it extends to laws

which advance corporations. It is clear that is

extends to laws which prevent persons doing things

in relation to corporations which may be

deleterious to the corporations, or lead

corporations into conduct which is otherwise

proscribed. By the last category I refer, for

example, to laws which impose criminal liability

upon persons concerned in the management of

companies.

But having said all that, Your Honours, what

appears from that is that the reason why, in our

submission, those laws are all laws that are valid

is because there is a relationship which can be

properly described as being a law with respect to

the corporation. Unless one can see that the test

adopted by the law is something which has some

effect upon or concerning the corporation, the law,

in our submission, is not one which satisfies the

test, and the test is not satisfied by picking up

from cases, such as Redfern v Dunlop Rubber, the

term in relation to a term of ambulatory meaning

and giving it a constitutional effect.

Your Honours, one perhaps related matter is

this. One submission that was made on behalf of

the respondents by my learned friend, Mr North, was
that the relationship, in fact, between the

activity proscribed by the Act and the corporation

was that it represented the underlying notion,

perhaps value, that the corporation is not to

benefit from the unfair activity. The difficulty

with that proposition, Your Honours, is, first, it

Wagner 106 2/2/94

is nowhere expressed in the Act. The second is

that the operation of the Act is such that neither

the existence of the unfair activity nor an order

made to rectify it is necessarily likely or may

have any effect at all upon the corporation.

What I mean by that, Your Honours, is this: if

one takes a case where a person who is a

subcontractor has entered into a contract which is

unfair, in some respect, as between him and the contractor, then it does not follow at all that that unfairness has any effect upon the corporation

for which the services are to be provided. Nor

does the making of any order have any necessary or

identifiable effect on the corporation. A law,

properly framed, might be framed in such a way as
to cover some such cases, but the statute does not

provide that as being the test and the problem is

that it provides no test.

Your Honours, could I come then to one matter

arising from our learned friends' submissions. It

is paragraph 5 of the respondents' written

submissions where it is said that:

Given thats 127C(l)(b) is a law with respect

to corporations, it is no objection that the

law does not impose obligations on

corporations.

Your Honours, we do not dispute the proposition.

Indeed, I rather thought that was part of our

original submissions when we referred to CLM and

Fontana and Fencott v Muller. There is no question

about that. But what one has to see, at the end of

the day and, indeed, at the start of the day, in a

sense, is that the law is one which is a law with

respect to corporations in some way.

Your Honours, could I move then to another matter and that is the reference made and the

reliance placed on The Herald and Weekly Times v

the Commonwealth, 115 CLR 418. The principal

burden of that case is that it is to the same

effect as, for example, Fairfax v the Commissioner

of Taxation and Murphyores v the Commonwealth,

namely that if the Commonwealth has power to grant

a licence or the Commonwealth has power to prohibit

something such as the export of goods or the import

of goods and in such a case, in the absence of any

other restriction on the power, then the

Commonwealth is in a position where it can lift the

prohibition or grant the licence upon terms which

are not limited to terms which it could have

imposed directly under some head of power. The

power to relieve from a prohibition, for example,

is not limited by the subjects of Commonwealth

Wagner 107 2/2/94

constitutional power. Your Honours, that is

decided by the tw0 cases to which I referred, as

well as Herald and Weekly Times itself.

There is one other aspect though of Herald and

Weekly Times and it is this:  in addition to the

provisions which provided for conditions upon which

licences might be held, there were also provisions

making it an offence for there to be contravention

of some of the shareholding requirements in various companies. All that was held in that case was that

there was a sufficient relationship between such a

requirement and the possibility of control of the

television licences, a matter plainly enough

related to the subject of the constitutional power.

This case decides no more than that.

Your Honours, the reliance placed also on

Huddart Parker v the Commonwealth, 44 CLR 492, in

our submission, does not advance the case for the

respondents at all because that case appears to be

dealing with events which clearly could be
described as being in trade and commerce of the

relevant kind. They are events occurring in that

trade and commerce and, in those circumstances, the

provisions of the laws were plainly enough, in our

submission, within power.

Your Honours, could I move from that, then, to

the question of judicial power. The first thing I

want to say about that is, of course, that

Precision Data v Wills itself recognizes that cases, including cases like this, will often fall

on one side of the line or another. It is not

accurate to say, in our submission, that Precision

Data Holdings v Wills means that every case in

which there is to be some determination of the

position for the future is one which will be

decided on the basis of there not being judicial

power.

That that is so appears in 173 CLR at

page 190, the bottom of the page. It is the
passage commencing:

In some situations, the fact that the object of the determination is -

et cetera. Your Honours will see the passage goes

down to about point 7 on page 191, and Your Honours

will see, in our submission, that the Court's
reasons recognize, in our submission, that there

may be cases of which the present is a possible

one. To put it mildly for the moment, where a law

may be conferring judicial power, even though it

provides for the adjustment of rights in the future

Wagner 108 2/2/94

questions of whether the particular law is or is

not.

In relation to that, may I say a couple of

further things. The first is that one of our

learned friend's submissions was that it was said
public interest, in the sense used in the

Industrial Relations Act, is not normally taken

into account by the courts and that one could find

an intelligible reason why the third ground in

section 127A had been taken out when the

jurisdiction was given by the amending Act to the

new court. But, Your Honours, the position, of

course, under the Act, both before and after is

that there are three possible grounds upon which
the matter may come before the Industrial Relations

Commission - I am sorry, I am putting that badly.

Prior to the amendment there were three

grounds: unfairness, harshness or against the

public interest. Now there are only two. But the

grounds of harshness and unfairness are absolutely

unchanged and, Your Honours, as a matter of fact,

in this case no claim was made in the end that the

contract was against the public interest, it was

simply a case where it was found to be unfair in

two respects.

So, Your Honours, one cannot say there has been a massive change by the enactment of the new

Act and to use that to say it has taken away the

public interest aspect which made the matter

non-judicial.

We would refer also to Peacock v Newtown

Marrickville and General Co-operative Building

Society No 4, 67 CLR 25, and to the dicta which

appear in it as supporting the view that provisions

of the kind presently in question are provisions

which give rise to exercises of judicial power.

May I refer Your Honours particularly to page 35.

Your Honours will see the paragraph numbered 2 in
the judgment of Chief Justice Latham.	I would also

refer Your Honours to page 37 to the paragraph

numbered 4 and to page 45 at the bottom of the

page, the last paragraph, and going over to

page 46, about point 3 or point 4, and finally to

page 54, the second paragraph on the page.

Your Honours, turning then to the question of the contract being at an end, the third ground, may

I say just one further thing in relation to it.

What appears from page 132 of the record in

relation to one of the groups of respondents, at

lines 20 to 21, is that it was not expected that

they would resume work under the terms of the

Wagner 109 2/2/94

contract as. varied, and that is no doubt the reason

for the $25,000.

Finally, coming to the question of reading

down, the approach taken by Justice Munro at

pages 76 to 77 where he set out the way in which he

would read it down does, with respect, appear to be

based on the wrong view of the words of the

relevant statutory provision.

Your Honours have seen the passage; I will

not go to it again, but Your Honours will recall
that he had set out a provision which included the
words "for the purpose of the business of the

corporation" or something to that effect from the

immediately following provision, and he seemed to

have added that in. Your Honours will see at 76 to

77 that the fair inference is that by his

comparison of the provisions that he is treating it

as containing them.

Could I say, however, that in relation to

reading down, one has to bear in mind two

provisions of the Acts Interpretation Act. The

first, of course - I say first not in any sense of priority - but the first is section 15A, but also,

Your Honours, one has to bear in mind that

section 2 of the Act says that the Act applies
subject to any contrary intention.

Two questions really arise in consequence of

that. The first, speaking broadly, is that if

there is to be a reading down on whichever of the

two bases one might ordinarily adopt, there still

has to be some intelligible basis for doing it.

One cannot just pick a provision which has an

apparently broad operation and say in relation to

that, "This is the one", without any legislative

hint in that regard, "This is the one that we will

select". It is easier, of course, if one is

dealing with a kind of "blue pencil" provision, but

here one is not.

The second thing is, and this relates to the

particular statute, that if one looks at the terms

of section 127C what one might think is that the

legislature in section 127C(l) is, in effect,

setting out the intended possible operations that

the Act is to have, and if one of them fails that

paragraph goes.

Now, Your Honours, may I take you to it for

just a moment. Your Honours will see that the

attempt is made in paragraphs (a), (b) and (c) to

cover, as it were, the position in relation to the

participation of constitutional corporations in the

subject-matter, broadly speaking, of the Act.

Wagner 110 2/2/94

Now, Your Honours, the legislature having

conveyed the intention that the Act is to apply in

those three circumstances, it is, in our

submission, with respect, inappropriate, there

being no indication by the legislature that any of

those provisions is to be read down, is

inappropriate, in our submission, for the Court to

be asked to itself read down those provisions by

reference to some other criteria. One would have

thought, Your Honours, using the language of

section 2(1) of the Acts Interpretation Act, that

the intention of the legislature that was being

demonstrated by section 127C(l) was that the Act

was to have each of those operations. If one was

outside power, well then, to put it shortly, tough

luck, that one went, but the others remained and

Your Honours, I must say I cannot take the point

beyond that, but that is our submission; that is

the intention demonstrated, we would submit, by the

Act.

Your Honours, those are our submissions.

MASON CJ:  Thank you, Mr Jackson. The Court will consider

its decision in this matter.

AT 11.10 AM THE MATTER WAS ADJOURNED SINE DIE

Wagner 111 2/2/94