Re Dingjan & Ors; Ex parte Wagner

[1994] HCATrans 187

~

~ ... ~,

IN THE HIGH COURT OF AUSTRALIA

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	1	1/2/94
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 TUESDAY, 1 FEBRUARY 1994, AT 10.16 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC: If the Court pleases, I appear with my

learned friends, MR R.J. BUCHANAN, ~ and

MR P.M. KITE, for the prosecutors.	(instructed by
Blake Dawson Waldron)

MR A.M. NORTH, QC: If the Court pleases, I appear in this

matter with MR C.M. MAXWELL for the second to

sixth-named respondents both inclusive.

(instructed by Ryan Carlisle Thomas)

MR D.J. ROSE, QC: If the Court pleases, I appear with my

learned friend, MR E. WILLHEIM, for the

Commonwealth Attorney-General intervening in

support of the second to sixth respondents.

(instructed by the Australian Government Solicitor)

MR D. GRAHAM, QC, Solicitor-General for Victoria: May it

please the Court, I appear with my learned friend,

DR C. HOWARD, for the Attorney-General for the

State of Victoria intervening in support of the

prosecutors in relation to the first ground of the

order nisi. (instructed by the Victorian

Government Solicitor)

MASON CJ:  The Deputy Registrar has certified that she has

received a letter from the Australian Government

Solicitor dated 9 August 1993 advising that the

first-named respondents do not wish representations

to be made on their behalf and will abide by any

order of the Court save as to costs.

Yes, Mr Jackson.

Wagner 2 1/2/94

MR JACKSON:  Your Honours, may I hand to the Court copies of

our outline of submissions.

MASON CJ: Yes, Mr Jackson.

MR JACKSON:  Thank you, Your Honours. Your Honours, as is

apparent from the terms of the order nisi, which

appears at page 3, there are three grounds upon

which it is contended that the Industrial Relations

Commission had no jurisdiction to make the orders

in question. Two grounds involve constitutional

issues concerning first the corporations power,

section Sl(xx), and secondly, judicial power,

chapter III. The third involves a question of

construction of the Industrial Relations Act,

namely whether there is power to make an order of

the kind in question after the relevant contract

has come to an end.

Your Honours, could I say in relation to that that the resolution of that question may have an

effect upon the ambit of the other provisions which

are relevant to the constitutional aspects, and

that is the underlyi1~g reason why that question is

to be found amongst the issues the subject of the

order nisi.

Your Honours, may I deal first, and I can do

so very briefly, with the underlying facts and the

relevant statutory provisions. Your Honours, the

proceedings are concerned with three provisions of

the Industrial Relations Act 1988; they are

sections 127A, 127B and 127C. Your Honours, those

provisions were introduced into the Industrial Relations Act by a 1992 amending Act No 109 of

1992.

Your Honours, could I say that they have been

further amended by the Industrial Relations Reform

Act 1993. The amendments made by the 1993

enactment do not affect, directly, the resolution

of the present case but they may, perhaps, have

some relevance to the second issue arising, namely

judicial power.

Your Honours, could I just say one further

thing concerning the provisions generally before I

turn to them more specifically, and it is that

there is contained in the reasons of Justice Munro

in the Industrial Relations Commission, at page 63,

a passage where he sets out, or purports to set

out, the terms of the relevant provisions. Now,

Your Honours, there is an error on a critical

matter in the way in which he has set them out.

Your Honours, could I just say that if Your Honours

are reading his reasons at any point, it can be, as

we have found, confusing. Your Honours, the error

Wagner	1/2/94 appears at page 63, at about line 40, where he sets
out section 127C(l)(b). Now, in subparagraph (b)
the concluding words are:

for the purposes of the business of the

corporation.

They should not be there, they are not part of the

Act. So· the provision reads:

in relation to a contract relating to the business of a constitutional corporation.

Simpliciter.

MASON CJ: That phrase appears in (c) but it has been

imported into (b) as well in the judgment.

MR JACKSON:  Yes, Your Honour, and the importation may or

may not - perhaps we would say it did; the other

side might say it did not - seems to have affected,

perhaps infected, some of the approach taken by

Justice Munro in relation to the way in which he

"justified", if I could use that expressicn in

inverted commas, the validity of the Act to the

extent to which he touched upon it.

I see Your Honours have copies of the Act

together. The relevant provisions, if Your Honours

want to look at them somewhere else, may be seen in

a folder of relevant provisions which we have

provided the Court with, and under tab 1 the

provisions may be seen.

Could I perhaps go first to the commencing

provision which is of relevance, and that is section 127A(2). If Your Honours go to that

provision Your Honours will see that it

contemplates that an -

application may be made to the Commission to

review a contract on -

one or more of three grounds which are there set

out:

(a) the contract is unfair;

(b) the contract is harsh;

(c) the contract is against the public

interest.

The persons, and the only persons who may make such

an application are those referred to in the next subsection, 127A(3), and they are the parties to

that contract, or -

Wagner 1/2/94

an organization of employees of which the

independent contractor -

a term to which I will come -

is a member; or

(c) an organisation or association of

employers of which the person contracting for

the services is a member.

Your Honours, the phrase "person contracting for

the services" in 127A(3)(c) might, if it were

considered in isolation, perhaps be somewhat

ambiguous, but in the context it seems clearly

enough to mean the person for whom the services are

to be provided under the contract.

Could I go then to section 127A(4). In

reviewing the contract, the Commission may consider
the matters set out there, including any matter

that it thinks relevant - that is paragraph (e).	I
will come back to the terms of that a little later
when dealing with the questi:m of judicial power.

Your Honours, the first event which follows

the Commission's consideration of the contract on
the review, referred to in subsection (2), is that
if it forms the view that the contract falls within
one of the three descriptions referred to in

section 127A(2), it is required to record that

opinion. That appears from section 127A(5).

The matter is not left, however, with there

being only such moral suasion - if I could use that

expression - as might result from the expression of the opinion there referred to. Because in addition to recording the opinion the Commission is given

further powers and they are to be seen in

section 127B. The powers are to make orders, as

Your Honours will see in subsection (1), and the

orders which may be made are to set aside the

contract in whole or in part, or to vary it.

Your Honours will see that there set out.

Could I take Your Honours for just a moment to the concluding words of section 127B(l) (a).	The
words Your Honours will see there are:

as the case may be -

They seem to reflect the particular reference in

127A(5) to "the whole or part of the contract". A

limitation upon the ambit of the power to set aside
or vary, referred to in section 127B(l), is

provided for by section 127B(2), and Your Honours

will see that the order must:

Wagner 1/2/94

be made for the purpose of placing the parties

to the contract as nearly as practicable on

such a footing -

et cetera. Your Honours, the ground referred to in

127B(2) is, of course, that referred to in 127A(2).

Now, Your Honours, could I ask Your Honours to

note also, and it is relevant to the third ground,

the question of construction, that section 127B(4)

provides that the:

order takes effect from the date of the order

or a later date -

to be specified in it. And the Act, unlike other

Acts or many other Acts or types of Acts, does not
contain any retrospectivity provision such as a
provision saying that an order may be made
notwithstanding that the contract has otherwise
expired, or a provision saying that an order may be

made setting aside or varying the contract

ab initio.

Your Honours, the provisions to which I have

referred so far are perfectly general in their

terms. They simply speak of contracts without
themselves, and I mean the provisions to which I

have so far referred, without themselves requiring

that the contract have any particular

characteristic or without themselves identifying

the connection between those provisions on the one

hand and any relevant constitutional power on the

other.

Those matters are dealt with, or sought to be

dealt with, by other provisions, and if I could

identify them first and then go to their terms.

In relation to the characteristics of those contracts which attract the operation of the

provision, that aspect is dealt with by section
127A(l). I will come to its terms in a moment.	In
relation to the connection between the provisions
on the one hand and a head of constitutional power on the other, one goes to section 127C.

Could I deal with them in that order, and I

will deal if I may, first, with the characteristics

of contracts which attract the provision and then

go to the relevance to constitutional power under

127C after I have referred, I will be able to do so

very briefly, to the facts which are material for
the present case.

Your Honours, turning in particular to section 172A(l), Your Honours will see that the

Wagner 6 1/2/94

contracts to which the provisions apply must

satisfy three requirements.	The first is that the
contract must be:

a contract for services -

the second is that the contract must be:

binding on an independent contractor -

and, thirdly, the contract must:

relate to the performance of work by the

independent contractor -

There is a negative provision, and it is that

which is contained in paragraph (a)(ii), the

contract must not be for work to be performed by

the independent contractor for the other party's

private and domestic purposes.

Now, Your Honours, as is apparent from

paragraph (b) of the definition of contract a:

condition or collateral arrangement relating

to such a contract -

is also within the definition. The terms

"condition" and "collateral arrangement" are not

defined. The term "independent contractor" is not

defined exhaustibly but, as Your Honours will see

from subsection (lA) an independent contractor must

be a natural person.

Your Honours could I come then to the orders

which were made in the present case. The orders

which were made appear in two places in the record. The first is at page 145 in relation to the second

and third respondents. I wonder if I could just

indicate to Your Honours the passages of it which

are potentially material to identify its nature, and then attempt to give a very short summary of it. Your Honours will see at page 145

lines 18 to 20 the order varying the contract. The terms of the variation are set out in that page and

the next, and then page 147. Then Your Honours

will see on page 147, paragraph (6), there is to

paid, in effect, a lump sum of $25,000, and

Your Honours will see in paragraph (7) on the same

page:

that these terms shall be effective from the

date of the ..... order -

and take place:

Wagner 1/2/94

notwithstanding any repudiation, or breach or
purported termination of the original contract

occurring prior to that date -

Your Honours will see at paragraph (B)(3) at

the bottom of page 147 the:

order shall take effect from 22 July -

The other order in relation to the fourth and

fifth respondents appears at page 149. It does not

contain a provision for payment of the money sum

but, Your Honours, perhaps I could simply say that

a broad summary of the effect of the two orders may

be seen at page 10 of the record, paragraph 23.

Could I go to the basic facts which are involved.

They are relatively simple and they are set out in

paragraphs 1 to 18 at pages 6 to 9.

Could I invite Your Honours to look first at

paragraphs 1 to 8 inclusive and, as Your Honours

will see from those paragraphs, the prosecutors

carry on business in partnership; they are not

incorporated. That is paragraph 1. The second and

third respondents carry on business in partnership;

they too are not incorporated - paragraph 2. A

similar situation obtains in relation to the fourth

and fifth respondents - paragraph 2.

Now, 95 per cent of the income of the business

is logging and carting of wood. The wood goes to

woodchip mills at Triabunna and Tamar - that is

paragraphs 3 and 4 - and also to other sawmills.

The employment of employees and the engagement of

subcontractors is dealt with in paragraphs 6 to 8.

I should perhaps have mentioned, as Your Honours

will see at the top of page 7 in the second and

third lines on the page, the prosecutors carry on

other business as well.

Your Honours, if one goes then to paragraphs 9

to 17, may I make some observations concerning

them. The first is that those paragraphs do not

deal with one of the two woodchip mills to which I

referred earlier, the Tamar Mill; that is because

one is looking in those paragraphs, particularly

paragraphs 16 and 17, at the position of the

respondents, and they were engaged in relation to

supply to Triabunna, not Tamar.

The second thing is that the work done for

TPFH, as Your Honours will see from paragraph 10,

is over Crown land or private property. Each area

to be logged is described as a "coupe",

paragraph 11. Both prime logs and pulpwood are

harvested; that is paragraphs 12 and 13. The

pulpwood logs, Ln effect, form the residue, after

Wagner 1/2/94

the prime logs have been identified and taken out

for the saw mills,· and the pulpwood goes to

Triabunna to be made be made into pulp; that is

paragraph 12. Saw logs go to saw mills for

Australian use, pulpwood goes to woodchip which

goes overseas. That is paragraph 15.

Your Honours, it appears from page 100, in

Justice Munro's decision, that so far as the

respondents are concerned, the saw logs were, in

effect, the cream on the cake, and the ability to

cart saw logs was the thing that gave rise to the

particular difficulties, and the saw logs, of

course, are for Australian use. I should add one

thing: paragraph 18 asserts that the prosecutors

terminated their agreements with the respondents

on 9 February 1993.

Now, Yours Honours, so far as the position

concerning the decision of Justice Munro was

concerned, he did not make a finding as to the

particular date or dates on which agreements came

to an end, but he assumed, for the purposes of his order, that the agreements had come to an enJ, the relevant time being after the applications had been

made to the Commission but before he made the

orders in question. I will give Your Honours a

reference to that a little later.

Your Honours, in short, the applicants had

contracts to supply wood to mills. They

subcontracted part of the work to the respondents.

No corporation is a party to the relevant contract

and no contract to which a corporation was a party

was challenged in the proceedings. Your Honours,

may I turn then to the questions of validity, and

could I deal first with the corporations power.

Now, Your Honours, the Act by section 127C,

seeks to base the validity of the provisions on a

number of grounds, and may I take Your Honours to section 127C(l). Your Honours, may I excise, if I

may, from consideration some of them immediately.

It is clear, of course, that paragraphs 127C(l)(e)

and (f) have no relevant application for present

purposes, nor has 127C(l)(a), because neither

subcontract is one to which a constitutional

corporation - a term defined to include, as

Your Honours will see in subsection (2):

a corporation to which section Sl(xx) of the

Constitution applies -

because neither subcontract is one to which a

constitutional corporation is a party.

Wagner 1/2/94

Now, Your Honours, for similar reasons,

section 127C(l)(c) has no relevance because there

is no contract to which a constitutional

corporation is relevantly a party. Perhaps I

should just say one more thing about 127C(l)(c),

and it is this, the ground covered by 127C(l)(c)

would, prima facie at least, appear to be covered

also by 127C(l)(a). Now, it may be that

paragraph (c) is included as a possible basis for
reading down in the event that (l)(a) is invalid,

but Your Honours, I would simply mention there

seems to be some overlapping.

Your Honours, could I also say in relation to 127C(l)(d), it was not suggested before the

Commission, if I can put it this way in the first

place, that paragraph (d) was germane. That

appears from page 64, at lines 15 and following, at

about point 3 on the page. Your Honours, in our

submission - if I could just say in passing - that

is, we would submit, clearly right because the work

which was the subject of the subcontract was not,

if I could use the words of C(l)(d), "in trade or

commerce" of the kind referred to section Sl(i).

It was simply work done in Australia to provide the

raw material from which any form of trade might

thereafter take place. Now, Your Honours, the

basis which then is relevant for present purposes

is paragraph (b), that is,

a contract relating to the business of a

constitutional corporation.

Your Honours, there are several features about the

provision which should be noted. The first is

that, unlike paragraphs (a) and (c), it does not

require that a corporation be a party to the

contract.

The second, Your Honours, and a very important

matter in our submission, is that there is no

expressed requirement that the unfairness,

harshness or being against the public interest of

the contract, any of those three events which

attracts the jurisdiction, as it were, have any

effect upon the business of the corporation or that

that harshness, unfairness et cetera have had any

effect of any kind upon the corporation.

Your Honours, if one looks at it from another

slightly later temporal point of view, later in

temporal terms point of view, there is no

requirement that the making of the order by the

Commission will have any effect upon the business

of the corporation or otherwise affect it in any

way at all. So that, Your Honours, the only

connection, or the only criterion, which the

Wagner 10 1/2/94

statute adopts as being that which might establish

a relationship between the corporation and the

contract in question is that the contract relate to

the business of the corporation. That expression

is capable of covering a wide range of

relationships, some close, some remote.

I want to say, really, two things. The first

is the narrow question of the ambit of the concepts

covered by "in relation to". The second is to go

on from that to say that there is no case on the

corporations power which goes so far and, in our

submission, the Court should not go so far.

Your Honours, may I deal with the first of

those things, namely the meaning of the term "in

relation to". The adoption by the statute of that

criterion means that what has been adopted is a

term which inherently, if considered in isolation,

is one which is vague and indefinite and one in

respect of which, in the particular case, no

guidance can be derived from the context.

May I just say something about the use of the

expression first generally and secondly in
constitutional contexts. Speaking about the term

generally, the essential absence of definition

provided by the term when there is no relevant

context was discussed by members of the Court in

Tooheys Ltd v Commissioner of Stamp Duties, (1961)

105 CLR 602. In that case there was an exemption

from stamp duty provided for instruments relating

to the services of apprentices, clerks and
servants. Your Honours will see the provision, or

the exemption in the headnote at the end of the

first paragraph. In dealing with that provision

Justice Kitto, at page 616 about point 8, discussed the meaning of the term and in effect the need for context and the difficulty occasioned by the use of

that term in a passage commencing about point 8 on

616 and going through to 617 about point 6.

Your Honours will see after quoting from Rein v

Lane, Mr Justice Blackburn concludes at about

point 6 on 617 by saying:

This was to construe the expression "relating

to" in a narrow sense, but one dictated by the

evident purpose of the provision.

At page 618, about point 4, His Honour is

quoting from, I think, the same reasons for

judgment and appears to adopt a passage commencing:

It is, I apprehend, in accordance with the

general rule of construction -

Wagner 11 1/2/94

to put it shortly, that one has to look at the

context and related matters.	Your Honour3, that is
the first passage.	More directly to the ~oint one

sees at page 620, about point 6, where

Justice Taylor used the expression which I adopted

a moment ago:

There can be no doubt that the expression

"relating to" is extremely wide but it is also

vague and indefinite.

Your Honours, at the bottom of that page and to

about point 3 on page 621, he refers to the need

for the context to give it some meaning.

May I refer also, Your Honours, to

Justice Menzies at page 623 at about point 6 where he agreed with Justice Walsh in the Full Court and

also with the judgment which Justice Kitto had

delivered. Then at page 624 Justice Windeyer at

the bottom of that page referred to the elastic character of the phrase "relating to". Then he refers to the - that goes up to the top of the next

page.

Your Honours, all that demonstrates of course

is really the two broad propositions that the term

"in relation to" does not by itself convey a particular meaning but it is a term which is

inherently elastic and one needs to have - it

covers a wide range of things. Its particular

meaning is to be derived from the context.

Your Honours, in a constitutional context the

term has been used on occasions and if one sees a

constitutional context where the legislative power

relates to a subject-matter, for example, trade and

commerce with other countries, and the context

otherwise assists, the term may provide a

sufficient nexus.

That is demonstrated by Redfern v Dunlop Rubber Australia Ltd, (1964) 110 CLR 194.

Your Honours, in that case the question at issue
was whether section 4(1) of the Australian

Industries Preservation Act 1906 was valid. Its

terms may be seen at the bottom of page 194 and

what Your Honours will see was that it referred to

people entering into a contract or being a member

or engaged in a combination, and one then sees the

expression:

in relation to trade or commerce with other

countries or among the States - (a) in

restraint of -

Wagner 12 1/2/94

and so on. Your Honours, one can see, if one is

looking at a subject-matter such as trade and

commerce with other countries or trade anc commerce

among the States, that it is something which of its

very nature differs it from the wider range of,

say, trade and commerce. It is a subject-matter,

one can intelligibly say, conduct occurring in

relation to trade and commerce. That the context

provided a sufficient connection may be seen in the

judgment of Chief Justice Dixon at page 208

commencing at about point 6 on the page.

Your Honours will see the passage commencing:

The first part of s 4(1) expresses by the words "in relation to trade or commerce" the

limitation of the class of act which it

prohibits.

Note he refers to the elasticity of them. Then,

Your Honours will see that in the remainder of that

paragraph he finds a sufficient connection in the

particular terms of the statute.

Your Honours, to the same effect, one sees

Justice Taylor at page 213, and it is the first

half of the paragraph commencing on that page going

down to the sentence:

So understood the section would appear to be

within power.

And Justice Menzies at page 219, the passage

commencing at about point 7 on the page, the

sentence:

Parliament has power, subject to express

limitations, to forbid -

et cetera, and he adopted the test of direct

relationship.

Justice Owen at page 231, at the bottom of

that page at point 9:

The answer is, in my opinion -

and then going over to the top of the next page, he

really combines there two separate questions with

which the Court was dealing. And I should,

perhaps, just add - and I do not think I need to

take Your Honour to the reference - that in

Seamen's Union of Australia v Utah Development Co,
(1978) 144 CLR 120, at page 139, Justice Gibbs
picked up the expression used by Justice Menzies in

Redfern v Dunlop Rubber, the need for direct

connection.

Wagner 13 1/2/94

The problem in the present case is that the

context gives no guide and, Your Honours, there is
no elucidation of the basis of any possible
connection. It is not possible to say, in our

submission, that direct, rather than indirect is involved, it is not possible to say that it must

have an adverse effect on the business of the

corporation, the Act does not provide any

particul~r test for saying that.

TOOHEY J:  Mr Jackson, I am not clear at the moment whether

in this discussion you are fastening on to the
words "in relation to a contract" in paragraph (b),

or "contract relating to the business", or both?

MR JACKSON:  Your Honour, I was dealing with the second of those, "contract relating to". The first

expression "in relation to'', simply seems to be

saying that section 127A and Bare concerned with.

That is the sense in which that terms is - - -

TOOHEY J:  From your point of view would it matter if the

words "in relation" were not there?

MR JACKSON:  No, I think not, Your Honour. One might need

to have some different connective, but - - -

TOOHEY J:  In other words, if it is simply read that the two

sections, 127A and 127B, applied to a contract,

would have the same effect, in your submission.

MR JACKSON:  Yes, Your Honour. The core issue is the term

"relating to the business of" which is referred to

in that provision. The point that I am seeking to

make about it, Your Honour, immediately, is that

one looks to section 127A and Band one sees that

what is required for the provisions to operate is

that there be one of the three categories of

conduct, to put it loosely, or circumstances there

referred to, so far as concerns the subcontract.

Parties to the subcontract are not constitutional

corporations.

The conduct which is engaged in or the

circumstances may have no beneficial effect, a
deleterious effect, who knows, upon the business of

the corporation. Simply all it has done, in

effect, is to select the existence of the business

of the corporation as the kind of peg on which the

legislation is sought to be hung.

Your Honours, could I just say before going to the cases on the corporation's power two further

things. The first is this, that no further

elucidation of any connection is provided by two

other provisions to which I should refer.	The
first is section 127A(4).	I mentioned it before

Wagner 14 1/2/94

but I did not go to the detail of it. Your Honours

will see that the matters there referred to do not

touch upon, or they say nothing about the

relationship between that contract and the

corporation.

The other thing is that if one looks at

127A(7) which says:

The Commission must exercise its powers under

this section in a way that furthers the

objects of this Act as far as practicable -

and one looks at the objects of the Act which are

set out in section 3 behind tab 8, Your Honours

will also see that they do not touch upon the

issue.

The last two things are these: the possible

remoteness from the corporation is emphasized also

by the extended definition of "contract" which is

contained in paragraph (b) of section 127A(l). It

is easy to think of many examples. It could be

houses provided for subcontractors, or

accommodation, or too many cockroaches, all sorts

of things. There are a lot of possibilities

covered by it with no way of deciding what the

relationship is to the corporation.

The last thing I would like to say before

going to the cases is this: if the position

contrary to the third submission we wish to make

about the power to make an order after the contract has expired, if contrary to that submission the Act

has the effect of permitting an order to be made
even when the contract has come to an end then,

Your Honours, the relationship between that

contract and the business of the corporation, the

contract having come to an end in the first place,

seems even more attenuated.

Your Honours, I made a submission a moment ago

that none of the cases on the corporations power

has gone so far, and I will come to the cases in a

moment in a summary which we have attempted to do

for the Court. But could I just say that a

consideration of the cases on the corporations

power since Strickland v Rocla Pipes shows that

whilst the Court has taken a wide view of first, the corporations which are within the concept of trading or financial corporations; and secondly,
whilst the Court has taken a wide view of laws

which may be laws with respect to such

corporations, accepting those things, the Court has

yet required that the law demonstrate a sufficient

connection with what is after all the subject of

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the power, that is, the corporations referred to in

section Sl(xx).

Your Honours, in relation to what I have just

said, the Court has, in particular, treated as valid laws, laws which regulate or control the

activities of corporations or those dealing with

corporations, and laws which advance or protect
corporations. But, Your Honours - to use the

expression again, I think it is the last time I

will use it - no case has gone as far as the

present legislation seeks to do.

The modern cases on the corporations power, as

I said a moment ago, commence with Strickland v

Rocla Concrete Pipes Ltd, and in the course of

decisions since then there have been observations

by members of the Court on the ambit of the power. Your Honours, we have endeavoured to extract those

observations in a summary, which I think

Your Honours' tipstaves will have, which headed

'Ambit of the Corporations Powers - Observations in

High Court Decisions'. Could I just say something

before turning to it? What emerges from the

observations which have been made is that, indeed

as one might expect, the power is to be exercised

with respect to the corporations. Now, laws of

that kind, of course, may operate to regulate in
one way or another the conduct of persons who are
not section Sl(xx) corporations in their dealings

with corporations, but there has to be some

identifiable nexus, some identifiable relationship

with the corporations.

Could I invite Your Honours to look at this

document. Could I just indicate the structure of

it. Your Honours will see at the top of page 2 a

reference to Strickland v Rocla Pipes, and there

are similar references to other cases since then.

In some cases, if one looks for example at page 4,

you will see in paragraph B that Mikasa is simply

noted because it does not contain discussion of the

ambit of the power, and that occurs also, for

example, on page SE, where the Western Australian

Football League case is referred to. Your Honours,

the cases on the corporations power have, since

Stickland v Rocla Pipes, really dealt with the two

central issues that arise under section Sl(xx),

that is, what corporations fall within in, on the

one hand; secondly, what are laws with respect to

those corporations. Your Honours, it is the second

aspect with which we are concerned.

Could I go then to page 2 to the references to

Strickland v Rocla Pipes. In paragraph 1 we refer

to the fact that there were really two aspects of

that case and it is in relation to both those

Wagner 16 1/2/94

aspects that one finds observations being made

about the ambit of the power. Your Honours, in

paragraph 2, we refer to Chief Justice Barwick's

reasons, and he expressed the view the provisions

of the Australian Industries Preservation Act were

valid because they:

"regulated and controlled" the activities of

those corporations.

Now, Your Honours will see the passages set out

then at paragraph 2 and paragraph 3, and you will

see the references to "regulating and controlling" as being the applicable test, in his view, in that case.

In paragraph 4 Your Honours will see some

qualifications set out which His Honour added.

First but not every law which refers to

section Sl(xx) corporations:

is necessarily a law with respect to the

subject matter";

Then a qualification in paragraph (b) which may

perhaps have been eroded somewhat with the passage

of time, and paragraph (c) a reference to a

sufficient:

connexion between the topic and the law.

Your Honours, if I could just pause at that

point to take Your Honours to the concluding page

of it at page 13 what one sees again is a similar

observation made by the Court, made by six members

of the Court, in The Incorporation Case that:

"The power conferred by -

the provision -

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 -

and, Your Honours, that view recurs in the earlier

decisions to which I will come.

Could I go then back to page 3 paragraph 5.

Your Honours will see that Chief Justice Barwick

regarded the provisions of the Trades Practices Act

in that case as being invalid because they were

expressed to apply to all persons, whether

corporations or not, and were incapable of being

"read down".

Wagner 17 1/2/94

Paragraph 6, Justice Menzies, a law "governing

the conduct of its business" of the corporation was

valid.

Paragraph 7, Justice Windeyer, I will just refer Your Honours to what is set out there, and

then if I could go to paragraph 9 Your Honours will

see in what Justice Walsh said, he expressed the

view in the fourth line on page 4 of this summary

that:

They are not laws with respect to trading corporations ..... They are laws in which the personality of whose whom they bind is not

significant as an element in the nature or

character of the laws.

In paragraph 10 he referred to the fact that:

It is not enough to attract that description

that ..... they apply to those corporations, as

well as to other corporations and to natural

persons.

Now, Your Honours, to paragraph 11, Justice Gibbs

held that the power empowered Parliament to govern

and regulate the trading activities "for the

purpose of preserving competition in trade".

His Honour, of course, held the view that the power

did not permit laws with respect to the non-trading

activities, for example, of trading corporations.

Yours Honours, if I could go then to

paragraph Cat the bottom of page 4, in relation to

the St George County Council case, the issue was

whether the Council was a trading corporation but

some dicta came from Chief Justice Barwick about

the power, and you will see at the top of page 5

it:

includes the control of the corporate

activities of the corporation ... ".

Your Honours in the next case, The Queen v

Australian Industrial Court; Ex parte C.L.M.

Holdings Pty. Ltd, Your Honour the Chief Justice

gave the principal judgment. The first of the two

passages material, Your Honour treated provisions

which were directed to corporations requiring them

not to engage in particular kinds of conduct or
activity or which related to transactions in which
the corporation was the party as valid. And it is
that case, Your Honours, which is, in effect, the
start of the cases in relation to the corporations

power which deals with the appropriate relationship

between the power and laws which affect the conduct

of persons other than a corporation. That dealt

Wagner 18 1/2/94

with the case where a natural person was knowingly

concerned in or party to an offence by the

corporation and then, it was held by the Court that

was a valid law.

Your Honours, if I could move then to

paragraph Fon page 5, Trade Practices Commission v

Tooth & Co. there was a particular species of

exclusive dealing specified in section 47(9)(a) of

the Trade Practices Act. That was proscribed if

engaged in by a s.Sl(xx) corporation.

Your Honours will see two quotations from

reasons of members of the Court, and in paragraph 3

Your Honour the Chief Justice said:

It is a law which regulates the trading

activities of a corporation.

Now, Your Honours, one comes then to one of

the major cases, page 6G, "Actors and Announcers
Equity Association of Australia v Fontana Films Pty

Ltd" and, Your Honours, in that case, laws

governing the conducts of others persons which

might cause harm to the corporation were held to be

valid. Your Honours, could I refer in paragraph 2

on page 6, in effect to the second sentence in that

quotation:

the conduct ..... is conduct designed to cause,

and likely to cause, substantial loss or

damage to the business of a trading

corporation -

no reason why such a law should not be within

section 21(xx).	Your Honours, paragraph 3, at the
bottom of page 6:

What it does is to forbid conduct which has

for its purpose -

and will have the specified effect, and,

Your Honours, at page 7, still in paragraph 3,

immediately before the reference to Fairfax v

Federal Commissioner of Taxation:

the connexion with corporations forms a

crucial component of the law -

and that is expanded upon in the next paragraph.

In paragraph 4, Your Honour the Chief Justice said,

in the first sentence:

the primary object ..... is to protect the

trading activities of the ..... corporation.

The conducts described is enjoined only when -

Wagner 19 1/2/94

and Your Honour specified there. And,

Your Honours, in paragraph 5 Your Honour expressed

a view about the laws which would or would not fall

within the protection aspect of section Sl(xx).

Your Honours, I shall not read it out, but may I

invite Your Honours to read that passage

particularly because - and Your Honour drew

attention to the fact that the law must in the end

be a law with respect to corporations. It must

satisfy that test. And Your Honour, at the

conclusion of the first paragraph on page 8:

The law does not operate directly upon

corporations -

the law Your Honour was giving as an example -

and it cannot be characterized as a law about

them.

Your Honour Justice Brennan quoted in part in

paragraph 6 that:

it was not enough that a law imposed duties

indifferently -

And then, Your Honours, in paragraph 7, Your Honour

referred to the fact that:

The section is concerned with the rights of

corporations, not with their duties, and such

discrimination as the law effects flows from

the conferring of protection -

and it was "the obverse of the ..... Rocla Pipes

Case".

And Your Honour said on page 9, the second

paragraph on the page:

If corporations are the special beneficiaries

of the protection which the law affords, it is

not to the point to say that the law is not
expressed to bind them.

And Your Honour, in the next paragraph, the one

referred to as being at page 219 point 2, referred

to the fact that one looked to the nature of the

"rights, powers or privileges" to inquire whether

the Act discriminated, in effect, in favour of

corporations.

Now, Your Honours, could I refer also to the

three passages referred to in paragraph 8, and if I may do so, at the top of page 10, the last sentence of paragraph (b):

Wagner 20 1/2/94

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.

Your Honours, coming then to paragraph I,

Fencott v Muller, that dealt again with the

ability:

to impose a civil liability on natural persons

who were involved in a contravention by a

corporation -

Could I refer particularly to the bottom of

page 10, the last five or six lines, and then to
paragraph 3 on page 11 to the principal judgment in

the case, all of which requires there be some

connection with the corporation which has some

effect in one way or another in relation to the

corporation.

I invite Your Honours to read paragraphs 3 and

4 in relation to that, and then at page 12 in

relation to The Tasmanian Dam case, we extracted

two passages from that which emphasize the need for

the law to be with respect to the corporation. Finally, Your Honours, if I could come then to

page 13 to the passage to which I referred earlier,

that the law must in the end be a law with respect

to the corporations.

I should perhaps say that if one looks at

those cases, one finds for example, various

observations which we have not quoted which simply,

in effect, paraphrase the terms of section Sl(xx)
but the passages which we have selected seem to be

the ones which discuss the ambit of the power in

some way other than simply repeating it. So that,

Your Honours, what we would submit is there has to be some identifiable relationship with the

corporation and if I could use the expression

again, the existence of a section Sl(xx)

corporation, in our submission, cannot just be a

kind of inert hatpeg on which one tosses the hat of

legislation. So we would submit that the provision

is not supported by section Sl(xx).

Could I go then, Your Honours, to the second

basis upon which the order nisi was granted, namely

that sections 127A and 127B involve the conferral

of judicial power on a non-judicial body. That

issue turns fundamentally on the nature of the

power being exercised by the Commission.

Your Honours, I say that because the provisions

have been drafted in a way which has some

similarities to the scheme which was adopted in

Wagner 21 1/2/94

Precision Data Holdings Pty Ltd v Wills, (1991)

173 CLR 167.

Your Honours, if I could go to page 184 of

that case, what Your Honours will see is that the

Australian Securities Commission was empowered to

apply for a declaration that unacceptable conduct
or an unacceptable acquisition had occurred and

then for orders of the nature referred to in

section 734(2) which appears at page 185, about

point 6. That was held not to be a conferral of

judicial power.

Your Honours, the principles adopted by the

Court may be seen at a passage which goes from

page 188, about point 7, through to page 190,

towards the bottom of the page. The first matter

to note in relation to the potential application of
the principles of that case to the present case is
that in a case such as the present, the applicant
for an order is not some public body but a party to

the contract or the person who is that party's

representative or~anization, if I can put it that

way.

Your Honours, at page 190, about point 2, in

Precision Data Holdings Ltd v Wills, Your Honours

will see particular reference being made to the

fact that:

The Commission alone can institute proceedings

before the Panel and invoke an exercise of its

authority.

Could I also say in relation to Precision Data

Holdings Ltd v Wills - perhaps I should have said

the provision which governs the persons and the

only persons who may apply in the present case is

section 127A(3).

Could I also say in relation to that case that

the object of the decisions which might be made by
the panel were to ensure an efficient competitive

and informed market. The orders which might be made from the provisions there referred to were

designed to that end. Your Honours, although there

may have resulted an adjustment of the legal rights

and obligations of individuals, the purpose of the
adjustment was incidental to the maintenance of the

desired market.

The next feature is that attention was drawn

in Precision Data Holdings Pty Ltd v Wills to the

fact that an important matter was whether one would

only look at the existing circumstances or would

look at circumstances in the future. In the

Wagner 22 1/2/94

present case, the tests i~volved seem to relate to

circumstances which are existing at the time of the

hearing, and to require the Industrial Relations

Commission to consider issues with which courts are

not unfamiliar.

Could I in that regard take Your Honours

briefly back to the Act, and in particular to

section.127A(2), where Your Honours will see that

the issues to be decided are whether -

(a) the contract is unfair;

(b) the contract is harsh;

(c) the contract is against the public

interest.

Secondly, if one goes to section 127B(l), the

orders that are to be made are orders setting aside
or varying the contract. If one goes to
subsection (2), those orders may only be made for
the purpose there set out, that is, to take away

the ·mfairness, harshness or against the "public

interestness", as it were.

McHUGH J:  Mr Jackson, in substance what is the difference

between the powers conferred by these sections and

the ordinary arbitration power that the Commission

exercises? When it makes a first award it looks at

the various contracts of employment, comes to the

view in general terms that they are unfair or they

are harsh, and it makes awards which vary those

contracts, sometimes sets them aside completely.

MR JACKSON: There are a number of differences, Your Honour.

The first concerns the ambit of operation of the

provisions. What I mean by that is that - I

suppose it does not really matter whether one is

talking about federal or State arbitration

provisions relevantly, but what is being done is to

determine what the award provisions should be in

respect of the present and the future, not just for

persons who are presently employees, nor

necessarily for persons who are presently

employers, but for a range of people setting - and

I have used the term inaccurately - a common rule,

a rule applicable in respect of that occupation,

that employment or that employment in a particular

areas, something along those lines. So it is

quasi-legislative in that sense, Your Honour.

By contrast, this of course relates to

circumstances, or present provisions relate to

circumstances - - -

Wagner 23 1/2/94

McHUGH J: Well, could I just stop and remind you, of

course, that you cannot have a common rulA

federally.

MR JACKSON:	No, Your Honour - well I understand - - -
McHUGH J:	So you can only bind parties to the dispute.

MR JACKSON:  I know, Your Honour. I am conscious of that,

but what I was seeking - I said I used the term

somewhat inaccurately because the common experience

of large numbers of disputes in the federal

jurisdiction, of course, is that the requirement

for interstateness, and the size of the
organizations involved, will very frequently have

the result that the award is one which covers a

very large number of employees. And, whilst its

provisions may have differences resulting from

geographical changes, the fact of the matter is

that very many federal awards cover large numbers

of employees. So, Your Honour, I should not have

used the expression at all, I suspect, and I fell

into the trap which I myself had created.

Your Honour, having said that, that is what I

seek to convey, that an award will apply not just

to persons who are employees, but to persons who

may become employees in the future of those

employers. Now, very frequently, of course, one

way or another, a simple dispute about whether the

existing award should be made applicable to new

employers will bring new employers in as well,

assuming that interstateness can be obtained.

Your Honour, that is the first thing. One

compares that with the present provisions, one sees

they are limited in a number of ways. The first is

by the persons who may be the applicants, or may be

the parties to it, only the persons who are parties

to particular contracts. The second is that there

has to be a finding of a particular kind, as

referred to in those three provisions, before the
order can be made.	The third is that the order

that can be made is only one which can take away

that effect.

Now, Your Honour, in that regard there are

significant differences between power of that kind

and the power to arbitrate. Your Honour, in

particular, all that one has to have for there to
be jurisdiction founded to make an award is that

there be a dispute. Now, the provisions that may

be made to settle the dispute may be provisions

that go beyond the particular matter that gave rise

to the dispute and also, Your Honour, there is

really no requirement that the event which gives

rise to it, to the dispute, be one in which one

Wagner 24 1/2/94

party is acting unfairly, or harshly or is acting

against the public interest. There may simply be a

difference of view.

McHUGH J: Yes, but this legislation, if it is otherwise

valid, creates rights for the future. It does not

declare past rights and it does not seek to enforce

past rights.

MR JACKSON: Well, Your Honour, I was about to say, in

effect, so too one might say to very significant

provisions of the Trade Practices Act which confer

jurisdiction on the Federal Court. Your Honour,

could I say in that regard - may I come to that in

just a moment?

McHUGH J: Yes.

MR JACKSON:	What I want to say first was this, that broadly speaking the tribunal in the present case, or the
Commission, is required to find facts, it must do so because, Your Honours, what has to be done is
that the Commission must, section 127A(S), form the
opinion that the grounds are established, record
the opinion and then, if it does find those facts,
it must make an order.

McHUGH J: But what is the difference between this sort of

case and the Tasmanian Breweries case?

MR JACKSON: Well, Your Honour, it is, I suppose, in a sense

a question of degree, but what one sees in the
present case is that the - Your Honour, it becomes

a question of the particular legislation, no doubt,

but the Tasmanian Breweries case supported, of

course, and was close to the legislation it was

involved in Precision Data v Wills. A significant

difference, Your Honour, one might think, is that
the only persons who are parties in the present

case are persons who are the parties to the

contract, or their representatives.	One does not
see that any public body can bring the issue to the

attention of the Commission.

McHUGH J: 

An organization of employees can.

MR JACKSON: 

But one sees, Your Honour, in relation to that

that the organization of employees has to be one in
relation to which there are two things. First of

all, the person has to be a member or have agreed

to become a member. Secondly, it has to have his

consent to do it.  Your Honour, that takes away

much of the public aspect of it because one could
understand there being a view that a body which was

created pursuant to federal statute, if I can put

it that way, might be given some public role.

Wagner 25 1/2/94

But if one sees that the role is one which is

not to be performed of its own motion but is only

to be performed by consent of a person who is a

party to a contract only in relation to that

contract and the decision having no general effect,

then it becomes very difficult, in our submission,
to say that the organization is doing any more than

acting as agent. It simply gives in effect a wider

range of persons who may be agents than, say, a

person or his solicitor.

Your Honours, what I was going to say was that

the Commission is required to find those facts and

it is required to apply to those facts the test

which has been prescribed by the legislature, and

that of course is a test which may involve an

exercise of judicial power. Could I in that regard

say this, that in our submission the jurisdiction

which is being exercised by the Commission is not

relevantly distinguishable from that which is

exercised by the Federal Court under section 87 of

the Trade Practices Act 1974.

Could I in that regard take Your Honours to

tab 9. By way of introduction to it, Your Honours

will see, I think, the first page under tab 9 is
Part IVA dealing with unconscionable conduct.

Section 51AA sets out the proscription that:

A corporation must not ..... engage in conduct

that is unconscionable -

under the general law. Then section 51AB on the

next page in subsection (1) says that:

A corporation shall not ..... in connection with the supply or possible supply of goods or service ..... engage in conduct that

is ..... unconscionable.

The factors to which the Court may have regard in

determining whether conduct is relevantly

unconscionable are set out in section 51AB(2).

Now, Your Honours will see that the factors there referred to have a passing resemblance to the

terms of section 127B because you will see the

reference in paragraph (a) to:

the relative strengths of the bargaining

positions -

paragraph (d):

whether any undue influence or pressure was

exerted on, or any unfair tactics used

against -

Wagner 26 1/2/94

then, Your Honour, paragraph (e):

the amount for which, and the circumstances

under which -

those provisions being ones which have language

similar to that in some of the provisions to which

I have referred in the present case.

Your Honours, having said that, one then goes

to section 87 which Your Honours will see a few

pages over and, in particular, Your Honours will

see section 87(1). It is the page numbered 143 at

the top of the page. Your Honours, what one sees

is that section 87(1) operates in these

circumstances:

where, in a proceeding instituted under, or

for an offence against, this Part, the Court

finds that a person who is a party to the

proceeding has suffered, or is likely to

suffer, loss or damage by conduct of another

person that was engaged in ..... in
contravention of a provision of Part IV, IVA
or V, the Court may ..... make such order or

orders as it thinks appropriate against the

person who engaged in the conduct or a person

who was involved in the contravention ..... if

the Court considers that the order or orders

concerned will compensate the first-mentioned

person in whole or in part for the loss or

damage or will prevent or reduce the loss or

damage.

Your Honours, to rather similar effect is 87(1A)

and then one goes from there to the particular

orders that may be made. If one goes to
section 87(2) at page 145, the orders are in

87(2)(a):

(a) an order declaring the whole or any part

of a contract made ..... to be void and, if the

Court thinks fit, to have been ab initio or at

all times on and after such date -

as the Court may specify.

(b) an order varying such a contract or

arrangement in such manner as is specified in

the order and, if the Court thinks fit,

declaring the contract or arrangement to have

had effect as so varied on and after such

date -

et cetera.

Wagner 27 1/2/94

(ba) an order refusing to enforce any or all

of the provisions of such a contract;

(c) an order directing the person who engaged

in the conduct or a person who was involved in
the contravention constituted by the conduct

to refund money or return property -

(f) an order directing the person who engaged
in the conduct ..... to supply specified

services -

et cetera. And then:

(g) an order, in relation to an instrument

creating or transferring an interest in land,

directing the person who engaged in the

conduct ..... to execute an instrument that:

(i) varies, or has the effect of varying, the

first-mentioned instrument;

(ii) ..... terminating or otherwise affecting,

the operation or effect of the first-mentioned

instrument.

Now, Your Honours, those provisions are

different in some respects, of course, from those
presently involved. But clearly the effect of

setting aside and varying, which operate in futuro

and which operate in relation to conduct which is
conduct which will have a continuing operation,

those are provision which clearly have been thought

to operate as an exercise of judicial power. And,

Your Honours, the provisions are not, in our submission, in any way materially different from

the provisions presently in question.

Your Honours, could I say also that there are

many instances where jurisdiction to make orders

which have a future effect - and I am not talking

about traditional forms of orders - where

jurisdiction to make orders having a future effect

in terms of varying, existing, contractual

arrangements, and varying in the sense of the Court

creating a new situation, not just in joining,

giving specific performance or damages but creating
a new contractual situation are provided for in

various statutes.

In our outline of submissions we have set them

out.	I do not really propose to take Your Honours
through them one by one.	May I invite

Your Honours, however, to look to them and one does

see there that on many occasions there has been a

power given by the - Your Honours, I should say all

the provisions are set out in the extracts that

Your Honours have in that book, but what we would

submit in relation to those is that they are

Wagner 28 1/2/94

provisions which empower the taking into

consideration of very wide considerations indeed.

I would refer particularly, Your Honours, to, for

example, the provisions of the Industrial Relations

Act which we have quoted, dealing with the

amalgamation of organizations where there is a

provision for the Court - if any difficulty arises,
the Court can make such order as it thinks fit,
dealing with, in effect, the future of the

organized bodies, or the amalgamated bodies.

The point I am seeking to make is that if one

looks at the particular provisions they are

instances where a number of things are apparent.

The first is that there are existing legal

arrangements. The second is that the Court is

given a power to alter those arrangements for the

future. The third aspect of it is that the

circumstances which are relied on founding the

jurisdiction so to do are those which are expressed in very broad terms and terms in many cases broader than, in a sense, one sees in the present case.

BRENNAN J: But is there any case wheie there is a power

conferred upon the Court to alter existing

arrangements otherwise than to ensure that the

person against whom the power is made conforms to

some statutory norm?

MR JACKSON: The answer, Your Honour, is yes, I think. For

example, I referred earlier to the amalgamation

provisions of the Industrial Relations Act.

Perhaps if I could take Your Honours to those for

just a moment?

Your Honours, in tab 8, if one goes to

section 253ZC which is at the page numbered 162, it

is the provision to which I referred earlier:

Where any difficulty arises in relation

to the application of this Subdivision to a

particular matter, the Court may, on the

application of an interested person, make such

order as it considers proper to resolve the

difficulty.

BRENNAN J:  I do not know what that means, of course,

without knowing the nature of the difficulties that
may arise, but it would be a peculiar power to

confer upon a court to give it a jurisdiction to

alter rights of property in particular which is not

linked or conditioned upon the need to achieve a

legitimate statutory object. I am not suggesting

this is necessarily against you, Mr Jackson, but it

just seems to me that if these are the kinds of

arguments that you are advancing, one needs to

understand whether or not court powers can be

Wagner 29 1/2/94

conferred which are not reasonably incidental to

the fulfilment of a legal criterion which otherwise

lies within power.

MR JACKSON: First if I could say the point I am seeking to

make, and then perhaps if I could answer what

Your Honour has beeen putting to me. The point we

are seeking to make is that one can find

significant - I am sorry, perhaps I will start one

stage back, and it is this: an argument that is

put against us no doubt, and Your Honour

Justice McHugh mentioned it earlier, is the fact

that the power is one which is expressed to
operate, in effect, in futura; indeed, the Act
requires that it operate in futura. The second

aspect of it is that of its very nature it involves

an alteration of existing rights.

Your Honour, I was really addressing my

submission to those aspects of it in the sense of
saying that it is not an unusual thing to find that

by reference to broadly expressed criteria, such as

harshness, unconscionability and so on, one sees a

Federal Court empowered to make an order which wil~

have a future operation and which will alter, for

example, the existing contractual or perhaps
property rights. Having said that, that is the

point to which the submission was directed and I

was giving a number of instances.

When one comes to some provisions, of course,

what one sees is perhaps the legislature is at

least at the edge of what can properly be regarded

as judicial power, because one would think that

somewhere near the heart of judicial power,

although the ambit of, for example, a discretion

may be widely expressed, must be the notion that it

is not to be exercised, if I could use a somewhat

dated phrase, by whim or caprice.	It is to be
exercised as a power which is judicial.	The judge
must exercise his or her power judicially.

Your Honours, the operation of that in particular cases may be difficult; it may easy, but that

seems to be something which lies at the heart of

it.

Now, Your Honour, having said that, no doubt

one then has to see, if one is looking at a very

wide power, is it one that simply provides for

there to be no restriction, expressed or implied,

necessarily by the statute which confers it.

Your Honour, without seeking to advance a view on

Industrial does see in relation to it is that it operates in

the validity of the provision in the

circumstances where the occasion for the exercise

of power is a d~fficulty arising in relation to the

Wagner 30 1/2/94

application of the subdivision to a particular

matter.

Now, Your Honour, we have not given

Your Honours the whole of the provisions, but they

are provisions dealing with the amalgamation of

organizations created under the Act. Now, it may

be that perhaps the provision would have to be read

down to some extent, to say that the difficulty is

one which is capable of resolution by the

application of some identifiable test to it, but

the point I am seeking to make about it simply is

this, Your Honour, that it is a provision - the

particular provision is one which really is perhaps

the widest of the various provisions to which we

have given references, but what Your Honours will

see about it is that it is indeed one of a number

of provisions which do have that effect.

Your Honour, I do not want to become involved - - -

BRENNAN J: Well, the problem is this, is it not: your

argument is going to be - is, as I understand it -
if you find a broad power to affect existing rights

and obligations, exercised, in other words, in

futuro, by reference to broad considerations, that

that is a power which, more likely, is to be

categorized as judicial than non judicial. My

question was designed to discover whether it is not

so much the scope of the order-making power that is

relevant, but the criterion by reference to which

it is to be exercised, or becomes exercisable?

MR JACKSON:  Your Honour, what I would seek to say in

relation to that is this, that one is not concerned

in the, we would submit, particular case, with what

cases might lie, in effect, at the limit of

judicial power. What one does have in the present

situation is that there is a test which is

expressed in the statute, involving unfairness,

harshness or against the public interest. All of

those being concepts with which - Your Honour, I

will not use the hackneyed expression, "the courts	deal every day", but they are tests commonly to be
seen and used in courts. Your Honour, if I could
just give one example. In, for example, the contempt case, Hinch, the Court made an observation
to that effect, that the question of the public
interest is one of the matters with which the
courts are accustomed to deal, or deal every day, or something like that.

Your Honours, if one sees both under the

general law and its statutes jurisdictional tests,

I mean jurisdictional as those founding the

exercise of power, which are expressed by reference
to concepts of harshness, unfairness,

unconscionability and things of that kind, one sees

Wagner 31 1/2/94

it in inequity, one sees it under, for example, the
provisions of the Trade Practices Act.

The point I am seeking to make about that is that one sees in the present case a statute which

adopts tests which are not unfamiliar to courts. It adopts remedies which may not have been very

much in use before the statutory provisions came in but, at least, since the moratorium Acts came in in the 1930s there have been provisions of statutes

allowing courts to vary the terms of existing

contracts and vary, or bring contracts to an end in

futuro.

Your Honour, all I am seeking to say about it

is that the type of thing that the Commission does

under the present Act is not something that is any

more a non-judicial activity. I do not know that I

can advance what I want to say about that any more

than than.

Your Honours, could I say - - -

McHUGH J: But in relation to the cases you have just been
talking about except in relation to section 253ZC

Industrial Relations Act example, when a contract is unconscionable or that the property of the parties to the marriage should

in the the orders of the

be divided just and equitably. But here, what

happens is that the Commission simply records its

opinion; it does not make any declaration, it does

not find any facts. It records an opinion, and

when it records its opinion it then is empowered to

make orders for the future.

MR JACKSON: Well, Your Honour, could I just say in relation

to that - no, perhaps I could say a number of
things. The first is this, that Your Honour

compared it with a finding that conduct, for

example, is unconscionable or something like that.

Well, that does not seem very different from, if

one looks at section 127A(2), the application is to

review on any of the following grounds. Now, the

three grounds are set out there, Your Honour -

McHUGH J: It makes no declaration, it just records an

opinion.

MR JACKSON: Well, Your Honour, in some respects, no doubt,

it is a question of the effect of the recording of

the opinion but, Your Honour, if the situation

remained at that point - Your Honour perhaps I

could put something differently.

The mere fact that the legislature chooses not

to give one of the two things that the Commission

Wagner 32 1/2/94

can do an effect which is binding as between the

parties does not mean, Your Honour, that the other

thing th~t it empowers the Commission to do is not

binding. The other thing it empowers the

Commission to do is that it empowers the Commission

to make an order.

McHUGH J: It is an order for the future, so as to what has

happened in the past, no matter what the Commission

does, tnese particular parties could go to the

Supreme Court of Tasmania and enforce their rights as they existed the moment before the Commission

made its orders. What is more, the Supreme Court

of Tasmania could come to a conclusion quite

contrary to the recording of the opinion by the

Commission.

MR JACKSON:  Your Honour, no doubt there might be a mild

but, with respect, passing degree of happiness on

our side if that were the case. However, the

concept of setting aside the whole of the contract,
or perhaps more accurately the concept of varying

the contract, might well have the effect that the

effect of the variation may be to operate ent!.rely

prospectively but the nature of the variation may be such as to take away the content of the rights

that existed or accrued up to that time. They

might exist, they might be enforceable, but they

might be worth nothing.

So, Your Honour, to say that it operates in

the future is true but, at the same time, the
operation and the fact that so too may so many of
the orders that might be made, for example, under
section 87(2) of the Trade Practices Act.

Your Honour, it is very difficult, we would submit with respect, to draw any real distinction between

the provisions of the Trade Practices Act and the

provisions of this law.

McHUGH J:  But look at this case from the converse. Court: you would raise your eyebrows, would you Supposing this power was conferred on the Federal

not, and wonder whether or not this was an exercise

of judicial power by the Federal Court?

MR JACKSON:  Your Honour, that is what I

McHUGH J: Recording an opinion and then making declarations

or changing rights as to the future.

MR JACKSON:  Your Honour, could I just say that is what I am

about to go to next actually, because the Act has

been amended to confer this jurisdiction on the

Federal Court.

Wagner 1/2/94

Could I go then to the amending Act. Your

Honours will see the amending Act behind tab 2.

The amending Act establishes the Industrial

Relations Court, so that is the "court" to which

reference is made. Your Honours, one sees then on

the second page of the extract, page 138,

section 71 and section 72. Your Honours,

section 71 amends section 127A and, in particular,

what You'r Honours will see is that it cuts out one

of the grounds upon which application could be made

to the Commission, the ground which it cuts out

being paragraph (2)(c) of section 127A(2).

Your Honour, what that means is that whilst

one may still apply for review on the ground the

contract is unfair or the contract is harsh, it is
quite separate grounds, one cannot apply on the

ground the contract is against the public interest.

The second thing, Your Honours, is that the

jurisdiction is given to the Court. The third

thing is that paragraph (4)(c) which was the one

that referred to the "development of the skills of

employees" et cetera, no longer is applicable.

So that one sees that the other provisions

remain applicable. There is still to be opinions
recorded and orders made, the only difference being

that one of the underlying factual grounds is no

longer there. There are two there rather than

three. One does not have to look at "adverse

effects on the development of the skills of

employees" .

Your Honours, if I could perhaps answer what

Your Honour put to me.	Your Honour says it would
be surprising, would it	not, to see a court having
to maybe do those sorts	of things. Well,
Your Honour - - -

McHUGH J:  You might have a stronger argument next time

round.

MR JACKSON: Well, Your Honour, could I just submit in

relation to it that of course all that one sees is

that there has now been another Act added to the

list of Acts, in our submission - an Act having
some immediate relevance - an Act added to the list

of Acts in which powers having the characteristics

to which I referred earlier have been conferred on

courts.

Your Honours, could I say one other thing.

There is a decision of the New South Wales Court of

Appeal in which Your Honour Justice McHugh

participated in which it was held that the

provisions of s~ction 88F of the Industrial

Wagner 34 1/2/94

Arbitration Act 1940 - held by Your Honour - did

not confer judicial power. That is Minister for

Youth and Community Services v Health and Research

Employees' Association of Australia, (1987)

10 NSWLR 543.

Your Honours, the provisions of section 88F, Your Honours will see behind tab 10 and the

observations which Your Honours made appear at the

bottom of page 559 about letter G where Your Honour

expressed views - and it goes on to the next page

to letter C - which have, with respect, some

similarities to the questions Your Honour has been

putting to me, and may I, in respect of those, give

the imperfect answers that I sought to give to

Your Honour earlier. Could we refer particularly,

however, to what appears between A and Bon
page 560 where Your Honour referred to the fact:

That a stranger to a contract can obtain an order that the contract is void is itself an indication that the Commission is not exercising judicial power -

and, of course, Your Honour, the position in the
present case is that a stranger cannot apply for an

order.

McHUGH J:  The New South Wales Industrial Commission could

exercise the power of its own making.

MR JACKSON:  Yes. Your Honour, I should also say of

course, that in respect of the Trade Practices Act,

many of the forms of relief are forms of relief

which can be obtained at the instance of the Trade

Practices Commission itself, as well as of parties.

Could I say one other thing perhaps, and that

is that if one looks at section 127A(4) in relation

to the time at which the events occur which may

found an exercise of jurisdiction, Your Honours, if

one looks at subsection (4) then one would think

that paragraph (a) refers to the situation, not at

the time the court is dealing with the matter, but

at the time when the contract was entered into.

Secondly, in paragraph (b), that appears to refer

to the time the contract was entered into.

Paragraph (c) may be debatable about whether it

refers only to that time. Paragraph (d) perhaps is

capable of referring to both, and no doubt

paragraph (e) is wide but the ultimate question is

that which is referred to in subsection (2),

whether the contract is unfair, et cetera. And,

Your Honours, one can see in looking at subsection

(4) that there is a requirement that one look at

the situation in the past. It is not just a case

Wagner 35 1/2/94

of saying what is the situation now, and that was a

matter to which Your Honour adverted in tltat case.

Now, Your Honours, may I move then to the

third issue and that is the question whether an

order can be made in circumstances where the

contract is already at an end. Your Honours, the

view adopted by the Commission was that a contract

could be reviewed even though it had come to an

end. In our submission, the Act is not so

expressed. If one goes first to section - the
definition of "contract", Your Honours will see
that it refers to a contract, in section

127A(l)(a)(i), that:

is binding on an independent contractor.

Your Honours, could I pause to say, in some

circumstances of course, the term "is" refers to a contract which is or was, but what I am seeking to

say is that if one looks at the provisions, in

toto, one sees that the better view, in our

submission, is the order cannot be made in respect

of a contract that has come to end.

Your Honours, the first reference is the expression in the definition of "contract":

a contract ..... is binding on an independent

contractor.

The second, Your Honours, is this: if one goes to

127A(2), one sees that the founding of jurisdiction

on the basis that:

(a) the contract is unfair;

(b) the contract is harsh;

(c) the contract is against the public

interest.

One goes then to 127B and Your Honours will see,

first of all in subsection (1), the forms of order

which may be made, that is, it is a contract: setting aside the whole or part of the

contract, as the case may be;

(b) an order varying the contract.

If the contract has come to an end, those are

unusual expressions to use, particularly when

subsection (4) says:

An order takes effect from the date of the order or a later date specified in the order.

Wagner 36 1/2/94

The Act also contains no provision w~ich

indicates that it might operate retrospec~ively

and, Your Honours, it is common to see in

legislation which is intended to have sucn an

operation, that is conferring a power to vary a

contract when the contract already has come to an

end, that there be specific reference to it.	May I
take Your Honours very quickly to relevant
provisions.	The first is to the Trade Practices

Act itself and Your Honours will see that, behind

tab 9, and in particular I wanted to refer

Your Honours to section 87(2)(a) and in the last

three lines, one of the forms commonly used to

achieve this result, that is:

to be void and, if the Court thinks fit, to

have been void ab initio or at all times on

and after such date before the date on which

the order is made as is specified in the
order.

Then a similar form is used in the next paragraph, 87(2)(b), in the last few lines:

and, if the Court thinks fit, declaring the

contract or arrangement to have had effect as

so varied on and after such date before the

date on which the order is made as is so
specified.

Your Honours, if one goes to the Industrial Relations Act 1991 of New South Wales, section 275,

which appears behind tab 11, in subsection (1)

Your Honours will see that:

The Industrial Court -

of that State -

may make an order declaring wholly or partly

void, or varying, either from its commencement

or from some other time, any contract or

arrangement -

et cetera. There is again specific reference. And

Your Honours, subsection (3) was a power to order a

payment of money in connection with contracts

declared wholly or partly void.

BRENNAN J:  Mr Jackson, what would be the constitutional

power which might support the making by an

administrative body of an order which would have

the effect of undoing the proprietary rights that

follow from a completed contract?

MR JACKSON: There are really two aspects to what

Your Honour has put to me. One, the second

Wagner 37 1/2/94

question, in effect, is a section Sl(xxxi)

question.

BRENNAN J:	Yes.
MR JACKSON:	The earlier one is really just simply - I do

not mean the answer is simple but the question is,

in a sense - a question of the ambit of the power

to legislate retrospectively, because retrospective

legislation inevitably, to be effective - and

Your Honours, Polyukhovich, for example, seems to

say, as other cases have done, that Parliament can

do so. Retrospective legislation, inevitably, has

the effect of altering the legal regime in respect of events of the past, and one aspect of that must be the ability, or the rights to property.

Now, Your Honour, that brings one then to the

second question. I hope I have answered

Your Honour in relation to the first aspect of it,

but the second question would then be whether it

would be a case to which section Sl(xxxi) applies,
and that is the point, Your Honour, at which the
sometimes difficult issue which would arise would

be whether there had been a acquisition of property

and, Your Honour, the absence of an acquisition

would probably be the - - -

BRENNAN J:  But this would be between the parties to a

contract.

MR JACKSON:	Yes, Your Honour.
BRENNAN J:	And the contract, ex hypothesi, is complete, so

that it has done its work; its rights are

discharged by performance, or otherwise, and the

parties are in their respective positions. The

operation, retrospectively, upon contractual rights
of the power must be to divest one and vest the

other with something.

MR JACKSON:  The answer, Your Honour, is in a sense, with

respect, yes and no. It really depends a little on

the particular contract. What I mean by that is

that it may well be the situation that if one had

an order that said, "You enter into a contract

under which this property will be transferred from

A to B", then that would seem to have the effect that there would be an acquisition of property by

reason of the law.

More difficult questions arise where what is set up is a contractual relationship which does not

involve a transfer of property in that relatively

simple sense, but may involve the performance by A

of obligations towards Bin the future and of B

towards A. It ~ay be that although a contract has

Wagner 38 1/2/94

been entered into and it may be that there has been
an acquisition of property, but what I am seeking

to say is that in some cases what would be acquired may well not be property. In other cases, the fact

that one had contractual terms as between A and B

may well have the result that the terms upon which

that acquisition would occur would be terms which

would be regarded as just. The last thing I said

may acquire particular significance in

circumstances where the foundation for the making

of the order is unfairness, harshness or injustice.

BRENNAN J: It raises a very big question, it seems to me.

DAWSON J:  The corporations power has disappeared at this

point, has i?

MR JACKSON:	Yes, Your Honour.
DAWSON J:	On the basis that you cannot retrospectively, as

it were, revive a connection which has ceased to

exist? In other words, if the contract is in
relation to the business of the corporation and it

has come to an end, by reviving or altering the

rights of the parties you do not re-establish that

relationship.

MR JACKSON:  When I answered Your Honour Justice Dawson, I

did not make myself clear. The answer I was giving

a moment ago to Justice Brennan was one that

related to what I was really saying was the second

aspect of it, the two aspects being: would it be

within power to do it in the first place, that is,

under some head of power other than

section Sl(xxxi)? But if the legislation under

that provision brought into operation an

acquisition of property the question would then be

whether Sl(xxxi) applied.

DAWSON J:  But Sl(xxxi) would at the one time supply the

power perhaps and also the restrictions.

MR JACKSON:  Your Honour, it may. Could I just say, getting

back to what Your Honour Justice Dawson asked me,

the point we adverted to and said we would come to
in relation to the corporations power was that
there is a question of construction in a sense
involved in relation to these powers which relates
to the corporations power. If it be that orders of
the kind made in the present case are orders which
can be sustained, that is, orders made in respect

of contracts which have already come to an end,

then what that demonstrates is that the

relationship, such as it may be, between the

corporation in relation to 127B is tenuous. The

subcontract which related to it is at an end, yet

the contract is revived after the funeral is over.

Wagner	1/2/94
DAWSON J:	You do put that point?

MR JACKSON:  Yes, Your Honour. The pallbearers are at the

wake and the coffin opens.	Your Honours, I was
going to refer to -

McHUGH J:  Your argument, if correct, must also have

consequences for the scope of the power to vary the

contract as well in the future.

MR JACKSON: Yes, Your Honour, it does. It has probably

practical rather than legal consequences.

MCHUGH J:	Yes.
MR JACKSON:	I was going to refer Your Honours - I am not

sure whether I did in the end - to section 275 of

the -

MASON CJ:	You did.
MR JACKSON:	May I move on then to a provision which

preceded it which is the Contracts Review Act 1980

of New South Wales behind tab 12, section 14.

Your Honours, section 14 is at page 8 and
Your Honours will see another form used in

section 14:

The Court may grant relief ..... in relation to a contract notwithstanding that the contract

has been fully executed.

If I could give Your Honours two further

references; one is to the Industrial Relations Act

of Queensland, 1990, section 39(1) which appears

behind tab 14. Your Honours will see in the third

and fourth lines that it allows the Industrial

Commission to:

vary, ab initio or from some other time, the

terms and conditions -

of a contract on the grounds which are set out on
the bottom of that page and the top of the next

page. In South Australia there is the Industrial

Relations Act 1992 which Your Honours will see is

behind tab 13. It is section 39(4) on the

second-last page behind that tab. Your Honours

will see in subsection (4)(a) that the Commission

may:

(a) set aside the contract ..... from the

inception of the contract or from some later

time;

I should have referred also to one other provision of the Act presently in question, and

Wagner 40 1/2/93

that is to section 127B(3), which allows the making

of interim orders to preserve the position of

parties to a contract. So that if the power to

make an order would otherwise go then it may be

that section 127B(3) might keep it alive.

Your Honours, those are our submissions.

Could I say simply two further things. The first

is that Your Honour Justice Brennan asked me a

question about the criteria to be applied in

relation to the various exercises of judicial power

in the several statutes. Your Honours, if there is

something more we want to say about that I wonder

if we could give Your Honours a note, or perhaps I

might say it in reply?

BRENNAN J:	Thank you.
MR JACKSON:	The second thing is that the appropriate orders, we would submit, are those which are
foreshadowed by the order nisi.
MASON CJ:	Mr Solicitor for Victoria?
MR GRAHAM:	May I hand to the Court a written submission on

behalf of the intervener, the State of Victoria.

If the Court pleases, we have reduced our

submission to writing and I do not propose to read

it but simply to draw the Court's attention to one

or two aspects of it and to adopt it as our

submission, if the Court may allow us to follow

that course.

MASON CJ: Yes.

MR GRAHAM:  I should say in advance, that in relation to

ground 1, we adopt the submissions already advanced

by our learned friend, Mr Jackson, and simply then

go to one or two aspects of the written submission.

Firstly, under the heading "Introduction" in paragraph 1, we would simply highlight the point

that the terms of section 127C of the Industrial	Relations Act and the subject-matter of
sections 127A and Bare such that no constitutional power other than those indicated by
section 127C(l) - for example, section Sl(xxxv) -
can be invoked to support them. It is clear that
section 127C(l)(a), (b) and (c) are based solely
upon the corporations power.
The second point we would seek to emphasize is that made under the heading "B. Initial Question of
Construction". In paragraph 1, it is perhaps an
obvious point but nonetheless we would draw
attention to it. Unlike section 127C(a) and (c),
paragraph (b) is not expressly confined to
contracts to which a constitutional corporation is

Wagner 41 1/2/93

a party. Given the express provisions in this

respect in paragraphs (a) and (c), it is not

possible to confine paragraph (b) by implication to

contracts to which a constitutional corporation is

a party.

In the next three paragraphs we cover ground which my learned friend, Mr Jackson, has already

covered, and I will not take the Court to those

paragraphs. Under heading "C. Corporations Power"

again, we cover ground which my learned friend has
covered in relation to past decisions of this Court

in relation to section Sl(xx). In paragraph 2

under that heading we have endeavoured to identify

strands of judicial views that have been given in

relation to the scope of section Sl(xx) and we draw

attention to the fact that in Concrete Pipes it

appears to have been accepted by all of the members

of the Court that a law which regulates or controls
the trading activities of a trading corporation is
within power. We give references to that case and
to Actors Equity and the Dam case, indicating where

those views have been expressed.

At the top of page 5 we submit that the

passages from the judgments cited above indicate

that those Justices, other than Your Honour

Justice Brennan, considered that the power

conferred by section Sl(xx) was generally confined

to the enactment of laws of the kind which they

held to be valid, but Your Honour Justice Brennan

appears, we would say with respect, to have left
open the question whether the power was more

extensive.

Your Honour the Chief Justice in Actors

Equity, with whom Sir Keith Aickin agreed, and

Mr Justic Murphy, took a wider view as to the scope

of the power and Your Honour Justice Deane

expressed similar views to those expressed in

Actors Equity in the Tasmanian Dam case.

Your Honour the Chief Justice indicated that a law However,

must have a substantial connection with the

relevant head of power and a real relationship with

the subject-matter of the power, in this case the

corporations power. Your Honour Justice Deane

indicated, in line with what Sir Garfield Barwick

had said in the Concrete Pipes case, that it does
not necessarily follow that every law which

commences a trading corporation shall, or a trading
corporation shall not, is a law with respect to
trading corporations.

Now, moving on to heading D, my learned

friend, Mr Jackson, has already taken the Court
through the form of section 127A(2) and the scope
of that section and the range of contracts to which

Wagner 42 1/2/94

it applies. The point we would emphasize is that

none of paragraphs (a), (b) and (c) of
section 127A(2) is expressed to confine its
operation to contracts by which the corporation
takes the benefit of the provision which is harsh

or unfair or against the public interest. In other

words, it is not confined in any way to regulate or

control the activities or affairs of the trading

corporation.

We make a similar point in the next paragraph,

a contract which is held to be against public
interest, or which is harsh or unfair, may be harsh
or unfair or against the public interest in its
application, or operation in respect of non-
corporate parties to the contract, but have no
relevance or effect in such regard to the trading

or financial or foreign corporation.

DAWSON J:  How was that affected by the fact that the contract has come to an end? Does that emphasis

the point? Because even if there was some

relationship, however tenuous, once the contract
has come to an end that relationship is ceased, and

if you then vary the obligations of the parties by

requiring one to pay money or whatever it might be,

even though the contract has come to an end, does

that re-establish any relationship which

existed - - -

MR GRAHAM:  We would submit not, Your Honour, and although

we had confined our scope of our intervention to

ground 1, it became apparent a few minutes ago that
ground 3 contained within it a constitutional

point. Once the question of construction is

answered to the effect that the jurisdiction to

vary includes contracts already completed, then the

question arises, at least in relation to

section 127C(l)(b), whether there is sufficient

nexus between the subject-matter of, the power and

the concluded contract which is linked to the power

simply by the reference to the business of the
corporation.	Once the contract is over it is hard

to see in many cases how the nexus would continue

if it is simply by reference to the business of the

corporation, and in so far as that is part of the
issues in this case we would respectfully adopt the

suggestion of Your Honour's question that the power

does not extend so far.

I think that really we have covered the additional points that we wish to make under that

heading. Finally, we would conclude on the last

page, expressing our submissions as to the validity

of paragraph (b) of section 127C(l). If we are

taking our analysis of the narrower view that has

been adopted by some Justices of the Court of

Wagner 1/2/94

section 5l(xx), then we would submit that on no

view could section 127C(l)(b) be supported. Even

on the wider view that has been espoused by some of

the members of this Court, if one looks at the

breadth of the scope of section 127A(2), then even

on that broader view of Sl(xx), paragraph(b) could

not be supported. If the Court pleases, those are

our submissions.

MASON CJ:  Thank you, Mr Solicitor. Mr North?

MR NORTH:  Might I hand to the Court, Your Honour, an

outline of our submissions. The first matter to

which we draw attention is the general approach the

Court has had in interpreting section Sl(xx). In paragraph l(a) of our submission we cite those

cases that stand for the proposition that

section Sl(xx) is a plenary grant of power, should

be liberally interpreted, not narrowly or

pedantically, and that the words should be

construed with all the generality which the words

used admit. I will not take Your Honours to the

specific passages, suffice to say they support that

propositior .. Then of course, Your Honours, the

width of the words "with respect to" contained in

section 51 are relied upon. They are, as it was

said in the Bank Nationalization case, apt to

confer as wide a legislative power as can be

created. They are words of wide import.

Additionally, if the Court pleases, we rely on

the course of decisions in this Court which have,

in our submission, approached the matter of
section Sl(xx) in an expansive way.

McHUGH J: Is that right? All the decisions have done is filled in the meaning of the words "with respect

to", have they not?

MR NORTH:  Yes, Your Honour, and have done it in

circumstances where the - there was an opportunity,

in an order to say section 45D was invalid because	for instance, in Fontana to give a narrow decision
the connection between the operation of the Act and the business of the corporation was not sufficient.
I mean, it was open and it was not adopted and that
is the only point we seek to make.

DEANE J:  But your statement in (b) - and I do not mean to

delay you, must be really one of the most

questionable statements that has ever been made.	I
can think of lots of words that could confer a
wider legislative power.

MR NORTH:  Your Honour, we are simply citing the passage

from that case at 186, point 2.

Wagner 44 1/2/94

DEANE J: Well, I was· really suggesting that the statement

is plain silly.

MR NORTH: Well, Your Honour, it might be best for it to be

confined to the proposition that "with respect to"

is an extremely wide grant of power.

DEANE J: Yes, well nobody would quarrel with that and you

would not need authorities.

MR NORTH: Well, Your Honour, I will be satisfied with that,

if Your Honour pleases. If I could move to the

substantive and centrepiece of our argument,

Your Honour, and that is that section 127C(l)(b) is

constitutionally valid because it contains within

itself a definition which ensures that that result

follows and that is by the use of the words

"relating to the business of a constitutional

corporation". I mean the words "relating to" are

an internal definitional link to the constitutional

power, which guarantees validity.

DAWSON J: Are the words "in relation to" wider than the

words "with respect to"?

MR NORTH: Probably not, Your Honour. In this context, in

our submission, the words "relating to" have a

definite meaning and that, we say, emerges from the

decision in Redfern.

McHUGH J:  But is there not a problem with that argument in

any event? Simply because a law is with respect to

the business of a corporation does not mean that it

is a law with respect to the corporation, does it?

MR NORTH: Well, Your Honour, in Redfern the Court was

prepared to say that a law with respect to an

agreement in relation to trade and commerce was

constitutionally valid because the "in relation to"

or - - -

McHUGH J: Yes, but that is because the trade and commerce

was the head of power, but this is not going to be

with respect to a corporation, it is going to be

with respect the business of a corporation.

MR NORTH:  And Your Honour, we say nothing turns on the

insertion of the words "business" there. One can

read it as if it meant relating to the corporation,

a contract relating to the corporation. And,

Your Honour, in our submission the clear position

is that in order to reject our argument the Court

has to overrule Redfern. Can I take the Court to

Redfern in some more detail than our learned
friends do because, as I say, we say in Redfern the

Court use, in effect, the argument of internal definition to uphold the provision.

Wagner 45 1/2/94

McHUGH J:	But they are dealing with two different matters. Sl(xxi) deals with the law with respect to a
person. Sl(i) is dealing with laws with respect to
a sum of activities.

MR NORTH: With respect, Your Honour, so what? In terms of

the internal definition it just matters not. What

this section we are now concerned with is saying is
the only matters that are caught are those that

relate to, have a direct effect on corporations.

McHUGH J:  I notice you have the term "direct effect" in

your written submissions. What do you mean by

that? Legal effect? Economic effect? Social

effect? What do you mean, because I think for my

purposes you will have to define that expression

with some precision to get your argument running?

MR NORTH:  Your Honour, it is a direct practical effect. It

has been acknowledged in the cases before this

Court that a practical effect is sufficient. In

our submission, in the definition of "direct

effect", one could aptly include the word

"practical".

McHUGH J: Well, what is the practical effect in this

particular case on the corporation?

MR NORTH:  Your Honour, where do we start? The contract in

this case was found by the Commission to be a key

element in the operation of the business of the

mill. The direct effect and relevance of the

contract was that the subcontractors carted to the mill its lifeblood, its very central manufacturing tool, the timber. Your Honour, not only that, the mill registered the subcontractors - - -

McHUGH J:  I understand that, but supposing the service

station proprietor has a contract with the fellow

or woman on the petrol pumps. Does that relate to

the business of Shell or Mobil? Would you say a

contract between them relates to a constitutional

corporation?

MR NORTH:  Your Honour, the question in each case is going

to depend on the link, the indicia in the contract

and the relevance that they have to the

constitutional corporation. Your Honour, we only

need to point in this case to show a classical case

of direct effect. Your Honour, in this case, the

subcontractors were doing work which ordinarily one

would imagine employees of the mill would do, and

the mill was conversely directly engaged in the

administration of the subcontract. It set the

rates, the licenses for the carriers were linked to

this particular business, the mill approved any

transactions fo~ the purchase of equipment by the

Wagner 46 1/2/94

subcontractors. I mean, it really was as if these

people were part of the business structure of the

corporation.

This case is a clear case of direct effect or

involvement. The mill in this case had a right to

inspect the equipment that the subcontractors used.

The mill had a policy of last on first off, and it

applied it to the subcontractors. I mean, whatever

the outer bounds, this case, in our submission, is

a clear example, and was so found by the Commission at page 83 of the appeal book, as being really just

a manifestation of the business of the corporation.

BRENNAN J: That cannot say anything about constitutional

validity as such, can it? Let us assume that there

were none of those rights on the part of the mill

and that the only relationship was that the

independent contractors here dumped the logs in the

mill yard.

MR NORTH:  Yes.

BRENNAN J: That is all, and it may be that on some days

employees of the prosecutors did it, on other days

independent contractors did it, so that the only

relationship is that.

MR NORTH:  Yes, Your Honour.

BRENNAN J: Sufficient or not?

MR NORTH:  Your Honour, obviously the facts that you have

given me are very truncated but if one makes the

assumption - - -

BRENNAN J:	I intend them to be as attenuated as that.
MR NORTH:	Yes, Your Honour. Well they never would be in

real life because, for instance, one thing that

might be important might be what the business of

have previously said, that that dumping of the logs	the mill is; to what extent it can be said, as I
was the supply of the lifeblood of the business of the corporation. I mean those are nice factual issues which do not arise in this case but, for instance, if the only business that Your Honour's imaged mill did was to process logs delivered by
the independent contractors, and it depended on them and, as is here, they were licensed by the
authorities to cart only for that mill and the mill reserved a right to inspect and to assign the sub-contractors to others, the relationship is
immediate and direct and, in our submission, so
closely related to the business of the corporation that a law which regulates that contract can hardly

Wagner 47 1/2/94

be said to be insignificantly attached to the

affairs of the corporation.

BRENNAN J: 

Why would the facts that I have put to you take

the case outside the ambit of the language of the
section?

MR NORTH:  They probably would not, Your Honour. They would

probably be within.

BRENNAN J:  So that if, for example, we change the facts and

we say that there is a delivery by an independent

contractor of premixed concrete, and the

manufacturer of the concrete is a private

individual, the independent contractor is a private

individual, and it is delivered first to this

building site then to the next.	On one building
site there is a corporation.	On the next there is
an independent builder.	One of those contracts is

subject to the Act; the other is not.

MR NORTH:  Your Honour, with respect, that depends on

whether the dumping of the logs is analogous to the

delivery of the cement, or ~he concrete-and,

Your Honour, if what Your Honour has in mind in

relation to the building site is just a delivery of

concrete on a project, other questions might arise. I mean, you are not there talking about a delivery of the lifeblood of the recipient corporation,

necessarily. I mean it is just, Your Honour, a

question of fact in each case, and all we say is

that you could not have a stronger case to

demonstrate the direct link, as you have in this

case, and one ought to test the parameters of the

section, in our respectful submission, by the facts

of this case where the relationship is very close.

MASON CJ:  Mr North, we will adjourn now and resume at 2.15.

MR NORTH: If Your Honour pleases.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

MASON CJ: Yes, Mr North.

MR NORTH:  Can I take the Court to the Redfern case,

110 CLR 194. We seek to make good the proposition

that we say that case stands for, that a law which

on its face defi~es its operation as in relation to

Wagner 1/2/94

a constitutional head of power is valid by reason

of the internal definition. If I could take the
Court firstly to the first page, 194, at the bottom

of the page section 4 of the Australian Industries Preservation Act is set out and the relevant words

that were considered were in subsection (1):

Any person who ..... makes or enters into any

contract ..... in relation to trade or commerce

with other countries or among the States -

then of a certain character is guilty of an

offence. The question was whether, in the chance

that those words "in relation to trade or commerce

with other countries or among the States" were wide

enough to refer to totally intrastate agreements,

the law was bad. Can I take the Court to page 208

at point 6 where Chief Justice Dixon says:

As may be supposed, the attack takes the general ground that they are outside the trade

and commerce power. It appears to me to be

completely clear thats 4(1) creating the

offence i5 valid. The first part of s 4(1)

expresses by the words "in relation to trade

or commerce" the limitation of the class of

act which it prohibits. No doubt the words

"in relation to trade or commerce with other
countries or among the States" are somewhat
elastic but it must be borne in mind that the
contract or combination must be in restraint
of or with intent to restrain trade or

commerce. Truly these words include in their

natural meaning intra-State as well as

inter-State commerce, but the words following

"in relation to" are themselves explicitly
limited to the words "trade or commerce with
other countries or among the States". It

therefore means on its literal construction

that there must be a restraint or intention to

restrain trade or commerce in the contract or

combination and that the contract or

combination must be in relation to inter-State

or overseas trade and commerce. This, in my

opinion, makes it completely clear that the

law is dealing with trade and commerce with

other countries and amongst the States.

Your Honours, in our submission, by parity of

reasoning there is just no ground for saying that

127C(l) (b) is outside power. It is internally

defined by reference to the constitutional power.

Mr Justice McTiernan and Mr Justice Kitto agreed

with the Chief Justice. That appears at page 210.

Wagner 49 1/2/94

Can I next take Your Honours to page 230 to

the judgment of Mr Justice Owen commencing at
point 6:

The attack upon s 4(l)(a) is based, in the first place, upon the use in it of the

words "in relation to". The constitutional

power is to make laws "with respect to"
inter-State and overseas trade or commerce and

a law expressed to be made "in relation to"

such trade or commerce, covers, so it is put,

a wider field than the Constitution permits.

I cannot agree that this is so. "A power to

make laws 'with respect to' a specific subject

is as wide a legislative power as can be

created.	No form of words has been suggested
which would give a wider power."	Nor do I

agree with a further submission that the

Commonwealth Parliament's power to forbid contracts or combinations in restraint of trade is limited to contracts or combinations

relating only to overseas or inter-State

trade. Contracts or combinations in restraint
of inter-State or overseas trade may, in my
opinion, be made the subject of legislation by
the Commonwealth Parliament, notwithstanding

the fact that they may also relate to

intra-State trade. The words ins 4(l)(a) "in

relation to trade or commerce with other
countries or among the States" sufficiently

confine the operation of the section to the

classes of contracts and combinations with

which it is constitutionally competent for the

Commonwealth Parliament to deal, namely those

which relate to overseas and inter-State trade

or commerce. And, if they do so relate, it is
not, in my opinion, to the point to say that

they relate also to intra-State trade or

commerce.

Now, the remaining judgments each seek to give

some further definition to the words ''in relation

to" although - "relating to".	Can I first take the
Court to the judgment -

BRENNAN J:  Mr North, before you proceed, do you support

that last sentence that you cited from the judgment

of Justice Owen?

If they do so relate, it is not, in my

opinion, to the point to say that they relate

also to intra-State trade or commerce.

MR NORTH:  Yes, Your Honour.

BRENNAN J: Is there anything to support that proposition,

any other authorities to support that proposition?

Wagner 50 1/2/94

MR NORTH: Well, Your Honour, there is - - -

BRENNAN J:  The law, in other words, covers something within

constitutional power, it matters not that it also

covers something which is outside constitutional

power. Is that right?

MR NORTH:  Yes, Your Honour. It is valid in so far as it is

within constitutional power.

BRENNAN J: Only "in so far" or totally?

MR NORTH: Well, Your Honour, totally because the context of

this final line is the previous half page in which

His Honour is at pains to say that the effect on intra-State trade and commerce about which he is

concerned is one in a context in which that effect

is a by-product or result of an agreement which is

properly characterized as in relation to overseas

and interstate trade and commerce.

He is talking there, with respect,

Your Honour, about agreements which are in relation

to interstate and overseas trade and commerce

which, however, have a relationship with intrastate

trade as well, but they obtain their character from the relationship with overseas and interstate trade

and commerce, as I understand him, Your Honour.

Mr Justice Taylor, at 213 point 2, at the

commencement of the paragraph:

In relation to these matters several questions arise. First and foremost is the

question of the meaning of the words ins 4(1)

"in relation to trade or commerce ... among the

States" and it is, I think, convenient to deal

with this point at once. The purpose of the

section is to destroy contracts which operate
in restraint of, or made with intent to,

restrain trade or commerce and to render

unlawful any such contract or the formation

of, or the participation in, any combination

having that effect or formed with that

intention. But the operation of the section

is restricted to contracts and combinations

"in relation to trade and commerce with other countries or among the States". To my mind a contract or combination is, within the meaning

of the section, in relation to such trade and

commerce where it can be seen that, according

to its tenor, the contract will operate

directly on some activity which constitutes

some part of such trade or commerce or where

it appears that the designed activities of the

combination will so operate. So understood

the section would appear to be within power.

Wagner 51 1/2/94

So there is there a meaning given to the words "in

relation to" which will operate directly on some

activity which constitutes some part of such trade

or commerce and, by parity of reasoning in this
case, in our submission, the words, "relating to"

mean a contract or agreement which operates

directly on some activity which constitutes some

part of the activity of the corporation and that is

precisely what the impugned section says in terms.

Can I take the Court to page 219 at point 5,

the judgment of Mr Justice Menzies. He says in

relation to Huddart, Parker v Moorehead and earlier

cases on the same section:

It seems to be that the assumption made in

these earlier cases was correct and thats

4(1) was valid because the only contracts and

combinations with which it was concerned were

"in relation to trade or commerce with other
countries or among the States". That being
so, it was unnecessary to consider reading
into pars (a) or (b) any limitation to
restrict the intents there referred to the
restraint of inter-State or overseas trade or
to the detriment of or injury to such
Australian industry as fell within the
description of inter-State or overseas trade
or commerce. Parliament has power, subject to

express limitations, to forbid the making of

any contracts or the engaging in any

combination in relation to overseas or

inter-State trade if the phrase "in relation

to" involves, as I think it does, that what is

forbidden is directly related to inter-State

or overseas trade or commerce so that the law

is with respect to that trade or commerce. At

times the argument before us proceeded as
though the power conferred upon Parliament by

s Sl(i) of the Constitution is no more than a

power to be used for the protection or

development of inter-State or overseas trade
and commerce or the benefit of those engaging

therein. The power is not so restricted. It
is a power to make laws with respect to

overseas trade and commerce and, subject only

to express limitation, it extends to
forbidding inter-State or overseas trade or
commerce itself or anything occurring in or

directly affecting such trade or commerce.

So His Honour has a view of the words "in

relation to" which confine it to a direct
relationship between the contract and the subject

of the power in that case, or a direct affect on

the top of page 220.

Wagner 52 1/2/94

Mr Justice Windeyer, at page 229, at point 2, about four lines from the top of the page:

To determine whether a contract or combination

is one in relation to overseas or inter-State
trade or commerce, its full legal effect must,

of course, be considered. It must fall fairly

within that description. The connexion with

overseas or inter-State trade of commerce must

not be so remote or insignificant that there

is no real relationship.

Now, His Honour in saying that, four lines further on, says:

I agree in what has been said by other

members of the Court on the two aspects

mentioned above -

In our submission what Redfern stands for is that

the words "in relation to" mean that there is a

direct relationship between the contract in that

case and the subject of the constitutional power,

trade and commerce, and conseq1ently transposed

into this case the words "relating to" in

127C(l)(b) mean that the contract must have a

direct effect on the business of the constitutional
corporation, or a direct relationship with it, and

if that be so, then it is completely clear, by

reason of internal definition, that the subsection

is within the corporations power. Because on that

view the - - -

McHUGH J:	How do you define "business" in this section?
MR NORTH:	I am sorry, Your Honour?
McHUGH J:	What is the business of the corporation?

MR NORTH:  The business, Your Honour, is what trading corporations do. Can I take Your Honour to the

Fontana case in volume 150.	Your Honour, no doubt,
recalls that case, perhaps painfully.	One argument
that Your Honour as counsel put was that

section 45D was beyond power in that it prevented,
prohibited, concerted conduct which damaged not the
trade of the corporation or the corporation, but

its business, and that there was to be drawn a

distinction between business and trade where trade

was narrower than business, and the legislation was

unconstitutional for that reason.

The Chief Justice, at page 185 to that

argument said, commencing on the first line:

In my opinion, the fact that the provision in

question refers to "business" rather than

Wagner 53 1/2/94

"trade" does not take it outside the power.

It is the business of the trading corporation

to trade, and its business is its trading.

And then, a few lines further:

It would be "narrow or pedantic" ..... to view

the provision now in question as other than a
law.for the protection of the trading
activities of a trading corporation formed

within the limits of the Commonwealth.

In any event, since Tasmanian Dams the

requirement of an effect on trading activities is

in itself not required so long as the activity is

for the purpose of trading and where, as in this

case, the effect is on a contract relating to the

business, it is hard to see that that would not be

at least a contract for the purpose of trading.

McHUGH J: Supposing a contract affects the price of the raw

materials which a constitutional corporation

purchases. Is that contract between, say, the

grower and the wholesaler subject to 127C?

MR NORTH:	Your Honour, there probably would not be a direct effect in that case on the business of the - it
might there be said it was rather more an indirect
effect.

McHUGH J: This term "direct" is an elusive concept in the

best of contexts. How do you define "direct"?

MR NORTH:  Your Honour, it was good enough for Redfern.

McHUGH J: But that was in the era of legal operation, and

Mr Justice Windeyer expressly referred to the legal

operation. This contract does not have any legal

effect whatsoever on a constitutional corporation.

MR NORTH:  But it has a practical effect, Your Honour.

McHUGH J: Yes, I know, but practical effect is just - it

records a result; a decision reached on intuitive

grounds. It does not help you very much. How does

it affect it in a practical sense?

MR NORTH:  In this case?

McHUGH J: Yes, this particular contract between the

prosecutor and the respondent.

Well, in a practical sense, Your Honour, it affects it by being the way in which it gets its lifeblood.

Wagner 54 1/2/94

McHUGH J: It does not, at all. They have got an agreement

with the prosecutors to supply particular logs. If they do not supply it, it is a breach but that does not really affect them.

MR NORTH:  Your Honour, the operation of the contract serves

to get its raw material there, but if Your Honour

is not satisfied with that, in this case there are

legion examples of direct effect in terms of the
mill in the course of its business operation

intervening in the carriage operation by carrying

itself insurance costs. Paying itself the carriers

pay. It undertook the obligation of the head

contractor to make the payment to these carriers up

to a point in time, not throughout but up to a

point in time. It had a role in approving -

McHUGH J: But that is different? It is the contract that

has got to relate to the business of the
corporation, not what the contract or the
constitutional corporation does in relation to one

of the contractors or subcontractors.

MR NORTH:  Your Honour, if the contract said thct the

carrier will be liable to inspection by the mill of

its equipment, if the contract said the mill will

undertake the responsibility of making the payment

otherwise due from the head contractor, then

Your Honour would be satisfied and, in fact, those are the facts.

McHUGH J:	I am not sure about that at all, because I think there is a real distinction between saying that
something is in respect to the business of a
corporation and saying it is with respect to the
corporation.  Now, I cannot see at the moment, and
you may be able to persuade me otherwise, that this
has got anything at all to do with respect to the
constitutional corporation.
MR NORTH: Well, Your Honour, I can do no more than to draw

Your Honour's attention to the facts as I have.	I
mean, if those facts are not good enough - - -

McHUGH J:  But it does nothing to the constitutional

corporation.

MR NORTH:	They only have the practical effect of getting to it everything it needs to be a trading corporation.
If that is not enough, then no case will fall
within.
McHUGH J:	But you will not accept that anything that affects what the corporation does or can do is
within this section.

Wagner 55 1/2/94

MR NORTH: It has to be a direct effect, that flows from

Redfern, Your Honour, but where it is, then it is

"in relation to" and thereafter one gets to a

question of application of the Act to the facts in

a particular case. In our submission, that is not

relevant to this Court, save in respect of the

facts of this case and, as I have kept saying, in

this case one could not imagine a closer

relationship between the contract and the business

of the mill. Can I move, Your Honours, to

paragraph 5 of the outline?

DEANE J:  Mr North, can I take you back to what

Justice McHugh has been raising with you. Are we

concerned on this application with the question

whether the contract was a contract relating to the
business of a trading corporation in whatever be
the relevant sense? In other words, can that

finding, on your approach, be challenged in these

proceedings by prerogative writ?

MR NORTH:  No, Your Honour, we

DEANE J: Or is it challenged, because I did not - - -

MR NORTH:	It is not challenged as a matter of fact.
DEANE J:	Was it challenged before the Commission or
MR NORTH:	Whether the contract - - -

DEANE J: Whether, assuming everything was within power, the

contract was a contract relating to the business of

the trading corporation in the relevant sense,

whatever that might be.

MR NORTH:  There was certainly a debate about the issue of

definition. Your Honour, I am reminded that at

page 71 of the appeal book the Commission certainly

addresses the issue and makes findings on the

facts. Whether they were controverted, apart from

the legal issue, I do not know, Your Honour, but we

will have a look. In any event, our learned

friends have not raised that as a matter of

contention before Your Honour.

DEANE J: Well, not so far, anyway.

MR NORTH:  No. In one sense, Your Honour, our argument is

enhanced by the facts of this case but does not

depend on them because we say that the subsection

lives by reason of the internal definition

sanctioned by the case of Redfern, whatever the

facts, and the facts in an individual case will be

the subject of findings as may be necessary. But,

this is a challenge to the validity of the

Wagner 56 1/2/94

subsection and it must fail because it is almost as

if the section said, in its terms, "We hereby

legislate by declaration that this is within

constitutional power,". That is a clumsy way of
putting it but it is tied to the corporations power

directly, we would say.

DEANE J:  But what if, within the context of the definition

of contract and the words of the clause, one

accepted your interpretation of the meaning of

subclause (b) or of clause (b) but was of the view

that it was not self-evident on the material before

this Court that the contract fell within that

narrow meaning of clause (b), is it for us to

pursue the question or is the question whether the

contract does fall within that narrow approach

simply irrelevant for the purposes of these

proceedings?

MR NORTH:  Your Honour, it is not raised in the order nisi,

we would say.

MASON CJ: It is not a ground taken.

MR NORTH:	Not a ground taken.
DEANE J:	I just want to be clear on it because it is the

sort of thing that causes problems when one comes

to write a judgment.

MR NORTH: It is not raised, Your Honour.

DEANE J:	Thank you.
BRENNAN J:	Mr North, could I just ask you a question about

the construction of 127C(l)(b) on a hypothetical

basis. If that paragraph was drawn as follows, "In

relation to a contract relating to the business of

(1) a constitutional corporation; (2) any other

person", would the provision be valid?

MR NORTH:  Your Honour, it would be valid as to

subsection (1) in any event. If it were not
relevant in relation to subsection (2),
subsection (1) would be affected by section 15A.

Is Your Honour asking me about subsection (2)

specifically?

BRENNAN J:  What I am endeavouring to do is to draw

attention to the proposition that you have there of

business of a constitutional corporation as being your linchpin; not the corporation itself but its business. A relationship with the business is on

your argument sufficient to establish validity.

MR NORTH:  Yes.

Wagner	57	1/2/94
BRENNAN J:	Why should that be so?	Why is it that if you

have got a relationship with the business of a

corporation, that it is therefore a law with

respect to the corporation?

MR NORTH:  Your Honour, for the reason that Your Honour

expounded in Fontana, 150 CLR at 221, in relation

to this same argument about whether business was

wider than trading.	Your Honour said this at about
point 8:

A trading corporation is one whose

trading activities "form a sufficiently

significant proportion of its overall

activities as to merit its description as a

trading corporation", to adopt the test which

Mason J expressed with the concurrence of

Jacobs Jin Reg v Federal Court of Australia;

Ex parte W.A. National Football League. The

business of a trading corporation therefore

includes a proportion of trading activity

sufficiently significant to identify the

corporation as a trading corporation. A
provision which protects the business of such

a corporation necessarily protects its trading

activity, which is the subject matter that has

been held to provide a sufficient nexus with

the power in earlier cases.

That was Fontana where the issue was the

protection of the business by the provisions of

section 45D. Here we have a series of sections

concerned with the business of the corporation to

the effect that the corporation shall not benefit

from contracts of the particular nature, namely,

unfair contracts. To answer Your Honour's question

the reference to business is to an activity so

integral to the nature of a trading corporation

that a statutory provision directed to that

activity is in its effect directed to the

corporation as defined in 5l(xx).

BRENNAN J:	Thank you.
MR NORTH:	Can I take the Court to paragraph 5 of our

outline. It was, of course, part of our learned

friend's argument that one of the vices of this
subsection was that it did not relate to a contract

to which the constitutional corporation was a

party. We put in paragraph 5 that if the Court

accepts the analysis we have so far made that

internally by definition this is a law with respect

to corporations, then it is no objection that the

law does not impose obligations on corporations.

The first reference we rely on is the Fontana

case, 150 CLR 16~. Section 45D of the Trade

Wagner · 58 1/2/94

Practices Act was held to be a law with respect to corporations because it protected the business of

the corporations.	It did so by imposing
prohibitions on others.	Can I take the Court to
page 183 at point 2:

Of course, the law in the present case does not regulate or govern the activities of trading corporations; it regulates the

conduct of others. But the conduct to which

the law is directed is conduct designed to
cause, and likely to cause, substantial loss
or damage to the business of a trading

corporation formed within the limits of the

Commonwealth. I can see no reason in

principle why such a law should necessarily

fall outside the scope of s Sl(xx). A law may

be one with respect to a trading corporation,

although it casts obligations upon a person

other than a trading corporation.

And, in this case the law casts obligations on

non corporations by reference to the connection

between the contract between those parties and the

constitutional corporation. Indeed, one can adapt

His Honour Chief Justice Gibbs' words at 183 to the

current case by changing the references to "causing

loss" to references to conferring a benefit, so

that the conduct in this case to which the law is

directed is conduct designed to confer a benefit to

the business of the trading corporation within the

limits of the Commonwealth.

McHUGH J:	How does it do that?
MR NORTH:	By directly relating to the business of the trading corporation.
McHUGH J:	So how does it confer a benefit?

MR NORTH: Well, Your Honour, providing in a common case for

the supply of goods and services to the trading

corporation.

McHUGH J:	I thought you were talking about this case, 1278.
MR NORTH:	Yes, Your Honour.  I am talking about the current

factual situation. It can be said that the contract

between the contractor and the carrier confers a

benefit on the corporation by its practical

operation by reason of the fact that, as a result of its execution, the mill obtains its timber and

what this legislation is doing is, by imposing

obligations of review of that contract, it is

conferring a benefit on the corporation. Indeed,

that is the way it relates to the corporation.

Wagner 59 1/2/94

That is the way it has an effect on the corporation.

McHUGH J:  I am sorry, I am not following this very well.

How does it confer the benefit on the corporation?

MR NORTH:  Your Honour, because it is a contract, the result

of the execution of which is the delivery of

timber - - -

McHUGH J:  But this is the legislation that has got to

confer the benefit on the corporation. That is

what the legislation - 45D conferred the benefit on

the corporation; how does this legislation confer

any benefit on a constitutional corporation?

MR NORTH:  Your Honour, it is the subject-matter of this

legislation, namely the contracts between the two

other parties which have a beneficial impact on the

corporation, and regulating it, that is the

contract, is tantamount, in our submission, to

regulating the corporation.

The second reference which, in our submission,

justifies the law's involvement with the contract

to which the corporation is not party, is Fencott v

Muller, 152 CLR.	Can I take the Court to page 583,
at point 9:

Since corporations must necessarily act

through human agencies, it is open to the

Parliament to provide for sanctions against

although it casts obligations on persons who are not themselves corporations -

natural persons whose conduct brings about the trading corporations

contravention of the law by the corporation.

and we say here, this being a law with respect to

corporations because it provides in its terms for a

relationship between the contract and the

corporation, it is not to the point that in that

capacity it casts obligations on the parties to

that contract, namely an obligation or an exposure
to review, just in the same way as in Fencott the

law exposed the participants in the damage-causing

conduct to a liability to damages, and we rely on

the majority judgment at 598 point 8:

It was submitted that a provision which

confers a right of action against a natural

person "involved in a contravention" is not a

law with respect to corporations but a law

with respect to natural persons. Conceding

thats 52 validly regulates the conduct of

corporations and that contravention of s 52 by

Wagner 60 1/2/94

a corporation exposes it to civil as well as

criminal liability, it was argued that the casting of the net of civil liability over

persons "involved" in the contravention does

not affect the corporation's rights and duties

and therefore is not a valid law.	The
argument is too narrow.	Once it is accepted,

as it now is, that the corporations power

extends to the regulation of the trading

activities of trading corporations, it

necessarily follows that, in some

circumstances at least, the power must extend

to the imposition of duties on natural
persons.

And then the reasons why in the case of damages for contravention in that case were set out but, in our

submission, the principle remains the same whether

there is being considered action by persons,
natural persons, on behalf of corporations or, in

this case, the activities of parties to a contract

which directly affect a corporation.

BRENNAN J:	What happened if the carrier in this case delivered the solid logs to one factory and the
pulp logs to another? One of the factories was
owned by a corporation, the other by a partnership.
There is one contract.  How does it work?
MR NORTH:	Your Honour, if it can be said that the

contract - the fact-finding tribunal would have to

determine whether the contract can be properly

described as relating to the business of the
corporation and if it was a contract which was

severable in its terms so that one could easily see

that certain provisions related to the corporation

side and the others did not, then there would be no

difficulty. On the face of it, Your Honour, one

would have thought there would be no difficulty if

there were a series of terms which were applicable

to both forms of delivery but the contract said the

delivery will be to A and B, then in so far as it

was to B, the non-corporation, the terms of the

section would simply not apply. But in so far as

the contract did relate to deliveries to A, they

would.

BRENNAN J:  And if the business was sold so there was only

one mill, the business was sold by a partnership or

to a corporation or by a corporation to a

partnership, does jurisdiction attach or disappear?

MR NORTH:	I am sorry, Your Honour, which business is sold?
BRENNAN J:	The business of the corporation to the relevant

phrase.

Wagner 61 1/2/94

MR NORTH:  Yes.

BRENNAN J: If the mill - let there be only one mill for the

purpose of this - - -

MR NORTH:	Yes, Your Honour.
BRENNAN J:	If the mill is owned by a partnership and was

sold to a corporation or vice versa, it belongs to

a corporation and is sold to a partnership, does

jurisdiction or power either attach or disappear

accordingly?

MR NORTH:  One would have thought so, yes, Your Honour. I

mean the - - -

BRENNAN J:  It makes one wonder whether one can characterize

this as a law with respect to business or a law

with respect to corporations.

MR NORTH:  I am sorry, I do not really follow Your Honour's

point.

BRENNAN J: It is one thing to say that it has a

relationship with business, but to say that one

gets the nexus to a corporation by identifying the

corporation as the owner of the business to which

the relationship is had, seems to be extremely

tenuous.

MR NORTH:  Your Honour, those are the terms of the section

and there is no difficulty in application of them.

BRENNAN J:  No difficulty in application but the manner of

application seems to indicate that the fact that

the corporation is the owner of the business is utterly adventitious in terms of constitutional

power.

MR NORTH:  Your Honour, if my answers to Your Honour about

the changing application of the right to review, to

the section, is correct then, Your Honour, on the
contrary the fact that the corporation, or the
business of the corporation - business of the

corporation - is the discriminating factor, to use

words that, I think, Your Honour has used in these

cases, is really critical. It is the factor which

determines the application of the section.	I mean,
quite a different response would have been

appropriate if my answer to Your Honour's question
was that the section applies whether the - once the
business has been owned by a corporation, the
jurisdiction of the Commission, in effect,

continues even if there is a sale to a partnership.

Then, I accept that the relationship with the

business of the corporation would be tenuous, but

that is not the result for which we would contend,

Wagner 62 1/2/94

Your Honour, and one which does not, with respect, seem to emerge from the words of the subsection at

all. It could not have an effect, in our
submission, in that situation.

The final matter to which we seek to go - this is in paragraph 6 of the outline - is to answer our

learned friend's proposition that one cannot
characterize the subsection as a law with respect

to corporations because the criteria upon which the

Commission's opinion is formed might have nothing

to do with the constitutional corporation at all.

In other words, the unfairness in the contract might be something totally unrelated to the business of the corporation. Your Honour, it is

our submission that the nexus is provided by the

contract itself being of a particular variety and

it is none to the point that this particular

criteria, this particular consideration, is what

activates the Commission's inquiry. The grounds of

review, in our submission, need not themselves

relate to the business of the corporation once the subject-matter of the legislation is properly seen

as within power because it relates to the business

of the corporation, and we rely on -

DAWSON J:  I do not follow that at all. Does that not mean

that it is just too wide? I mean, if what is being done does not relate to the corporation at all, and it has been done under this power, surely the power

is too wide?

MR NORTH:  No, Your Honour, in our submission because the

Act operates on the contract which relates to the business of the corporation and it can be seen that

that subject-matter is within power, then the way

in which -

DAWSON J:  I do not follow that. You are looking at what is

done, and it is done under a power to do it. And

if what is done does not relate to the corporation

or even to the business of the corporation at all,	surely the power is too wide and is not supported
by anything in the Constitution.

MR NORTH:  Your Honour, if that was so then the two cases to

which we would now take Your Honour would have been

decided in different ways, because we say, with

respect, that the process is to characterize the

Act by reference to its subject-matter, then if the

subject-matter is dealt with in such a way as does not itself touch the corporation it is none to the

point.

DAWSON J:  What you are saying to the Commission is, you can

rearrange contracts which relate perhaps to

constitutional corporations, or the business of

Wagner 63 1/2/94

constitutional corporations, but the rearrangement

may have nothing to do with the business at all.

MR NORTH: Absolutely, Your Honour, we do say that and we

say that you can do that because the link is the

fact that the law - - -

DAWSON J: There is no link between what you are doing and

the business of the corporation. That is

hypothesize.

MR NORTH:  Well, there is, Your Honour. The link is that it

is an Act with respect to a contract that has a

particular relationship with this corporation.

That is what gives the constitutional power. It

does not matter that the Act itself - - -

DAWSON J:  I do not follow that.

MR NORTH: Well, can I approach it by taking Your Honour to

the two authorities, we say they are examples of
this process of reasoning. In Herald and Weekly

Times, 115 CLR 418, there there were a series of laws which stipulated criteria for ownership and

control of TV stations. They were held within the

broadcasting power, even though the criteria by

which control was to be judged did not themselves

relate to broadcasting. For instance, there was, I

think, at its widest a provision which said that a

person may not hold a prescribed interest. A

prescribed interest was defined as including the

lending of money, or the holding of debentures in a

TV station.

The law was with respect to the control of TV

stations, it did not matter that the subject-matter

of the criteria - that is, lending money - did not

itself relate to the broadcasting power. It was

put, Your Honour, in this way by Mr Justice Menzies

at page 439, at point 5:

The power of Parliament to make laws with

respect to television services ..... extends to

determining the description of those who will

or may obtain licences to conduct television
services and the circumstances in which a

licence, having been granted, will or may be

determined.

The basic limitation upon this aspect of the Parliament's power for which the

plaintiffs here contended was, in substance,

that Parliament could not, in formulating such

descriptions and circumstances, prescribe

conditions not in themselves having a real

connexion with the conduct of television

services so.that, for instance, whereas

Wagner 64 1/2/94

Parliament could deny a television licence to

a person because of a conviction for blasphemy

or obscenity - convictions bearing upon the
suitability of a person to conduct a
television service - it could not deny a
licence to a person because of a conviction
for manslaughter or housebreaking -
convictions having nothing to do with the

suitability of a person to conduct a

television service. To recognize a limitation

of this sort would be to depart from

well-established canons of constitutional

interpretation and would be contrary to

authority.

There are a couple of references and then:

A law for the granting of, or for the revoking

of, a licence to conduct a television service

is itself, without any further requirement, a

law with respect to television services. It

was inevitably conceded thats 6(l)(b) of the

Wireless Telegraphy Act, forbidding the

transmission of messages by wireless

telegraphy without authority, is a valid law

and it seems to me that if Parliament can

prohibit any person from conducting a

television service, it must follow that

Parliament can also determine the persons to

whom, and the conditions upon which, authority

to transmit will, or may be, given and may be

held, and it is not necessary for validity to

find in any criterion which Parliament has

adopted something which, in itself, relates to

television services. Parliament can give and

Parliament can take away upon its own terms.

DAWSON J: 

But there the connection is, even if it is at the

outer limits, plain enough. There is a connection
between the ownership of a television licence and

television services, but there may be no connection

with what is done by the Commission under this

power, prescribing greater payment or whatever it

might, particularly retrospectively - no connection

between that and the business of a constitutional

corporation.

MR NORTH: 

No, but, Your Honour, it is done in the context.

DAWSON J: It is done in a context of a contract which may

have some relationship, but it is what is done that

is important.

MR NORTH:  No, Your Honour, but it must have some

relationship. With respect, that is vital in the

characterization of the law. I mean, the context

in which the Commission does this is what gives

Wagner 65 1/2/94

character to the law.	What it then does in
relation to that - - -

DAWSON J: Let me put it this way: not every aspect of the

contract will have a relationship to the
constitutional corporation or the business of the

constitutional corporation.

MR NORTH: That may be so, Your Honour.

DAWSON J: But that is within the purview of the power if it

is to be found to be harsh and unconscionable, or

whatever the formula is.

MR NORTH: It would not, Your Honour, be - to the extent

that the contract does not relate to the business

of the corporation, it would not be the subject of

this subsection.

DAWSON J:  The power is not a power to rearrange the

contract to the extent that it impinges upon the

business of the constitutional corporation. It is

a wider power than that.

MR NORTH:  That is so, Your Honour, but it only applies to a

contract of that description.

DAWSON J: True, but it is the power that you are looking at

to see whether that is authorized by the

Constitution and if it extends beyond that

relationship then it extends beyond the

constitutional power.

MR NORTH:  Can I take Your Honour to Huddart Parker to see

if I can persuade Your Honour more easily through

that example because - - -

McHUGH J:  But do these cases really help? I mean you are

trying to segregate certain elements. You have to

look at the effect of these sections as a whole.

You want to stop here and say, "That relates to a	corporation; therefore this is with respect to a
corporation and we can just ignore these sections
over here." But you have to look at the power
which is conferred by these three sections to see
whether in substance they are laws with respect to
corporations.

MR NORTH:  Your Honour, was it a law with respect to trade

and commerce in Huddart Parker, 44 CLR, where

regulations were made under the trade and commerce

power, it was said, providing for preference for

unionists in the selection for stevedoring work?

McHUGH J: Yes, because you were dealing with the actors in

commerce, people who were engaged in commerce.	You
can say that they shall not be employed if they

Wagner 66 1/2/94

have criminal records, or if they have blue eyes,

or what?

MR NORTH: If you are dealing, Your Honour, as here - - -

McHUGH J:  But that is not this case.

MR NORTH: This case is contracts which directly affect

constitutional corporations.

McHUGH J: That is part of what happens.

MR NORTH: That is what we say attracts the constitutional

power. Your Honour, put it this way: the

Parliament could legislate to say, for instance,

that corporations shall not enter into any

contracts in relation to their business, clearly

within the corporations power.

McHUGH J: Supposing 127B or 127A said that the parties to a

contract within 127C(l)(b) had to make an annual

donation to a kindergarten. Would that be a law

with respect to corporations just because of 127C?

MR NORTH: 

Your Honour, it would have to fall within the

category of directly relating to the business of
the corporation.

McHUGH J: 

I am assuming that there is a contract between

parties that relates to the business of a

constitutional corporation. You seem to think that

once you get that nexus that is the end of the

matter; you can do anything in relation to the

actors.

MR NORTH:  Yes, Your Honour. The subject-matter of the

legislation is the contract with direct

relationship. The power that is given to the

Commission directly operates on that matter which

is the subject-matter of the nexus. In

Your Honour's example of the kindergarten donation,

it does not.

McHUGH J: It is not, I appreciate that. But it seems to me

there is no stopping point logically if what you

say, "Well, it is irrelevant what you do to the

contract. You can do anything you like whether it

has anything connection with the constitutional

corporations business or not."

MR NORTH:  We do say that and we say it, Your Honour, we

say, on the authority of the Herald case and of

Huddart Parker, and can I take Your Honour to the -

apart from the facts, to a statement of the

principle in Huddart Parker.	Mr Justice Dixon, as
he then was, at point 3:

Wagner 67 1/2/94

Once the power over the matter is established,

it becomes irrelevant how, or upon what

grounds, or for what motives it is exercised.

And, further down at about point 6:

In my opinion the provision contained in the regulation -

that was preference for unionists and stevedoring

work:

is an exercise of legislative power directed

to the determination of the question who shall

be preferred for the purpose of doing such

work. It is true that the provision adopts a

description of the persons who are to be so preferred which has no apparent relation to

any characteristic of inter-State or overseas

commerce.

That is union membership:

No doub~ it is also true that such a

description was adopted because of the

industrial consequences of requiring

preference to members of an organization bound

by an award. But these features of the law do

not appear to me to deprive it of its

character of the law with respect to trade and

commerce with other countries and among the

States. It obtains that character from the

circumstance that it directly regulates the

choice of persons to perform the work which

forms a part of or is an incident in

inter-State and external commerce.

Now, in our submission, the relationship between
the power given to the Industrial Relations

Commission and the contract is no less direct than

was the link between the regulation requiring preference for Waterside Worker Federation members	and the trade and commerce power.
Can I move now to the question of the conferring of judicial power. Can I take the Court
to paragraph 7 of our outline on page 2. In our
submission the statutory scheme in 127A-C is relevantly indistinguishable from that in Precision
Data. The grounds upon which, or the essential
basis upon which Precision was decided were the points made in paragraphs (a) and (b) of
paragraph 8 in our outline, the first one being the
point that the Commission, the panel and the
Commission here, we would say, did not adjudicate
disputes about existing rights but determined what
new legal rights and obligations should be created,

Wagner 68 1/2/94

and our learned friend has taken Your Honours to

Precision and I will not take the Court back.	We
have included a reference to the Vista case in 67 ALJR 604 for the purpose of showing a recent decision of this Court in the reinstatement

jurisdiction of the Commission which again restates

the proposition that the function of creating new

rights is one of the key indicia of non-judicial

decision making.

In our submission, what the Commission does

here, exactly as the panel did in Precision, is to

create new rights by setting aside, or varying, an
existing contract, and in that sense the case is

indistinguishable. But, what is critical, in our

submission, and what our learned friends really

avoided was an emphasis on the following relevant

parts of the section 127A to C, which demonstrate
that the basis upon which decisions are made by the

Industrial Relations Commission depend on policy,

depend upon subjective evaluation, are entirely

non-judicial factors, and I refer the Court to

section 127A(2). Let it be accepted that

subsections (a) and (b) are matters which in a

curial context might give rise to judicial power;

(c) does not. What court, in consideration of

unfair contract-type jurisdictions, takes into

account contrariness to the public interest? And

Your Honours will have noticed that in the transfer

of this jurisdiction to the Federal Court that

ground is excised and that is, we say, a matter of

particular importance.

Then, if one goes to 127A(4), again let it be

accepted that subparagraphs (a) and (b) are matters

which are not unfamiliar in unfair contract cases in the courts, but (c), (d) and (e) have no place

in such a jurisdiction. (c) relates to the adverse

effect on the development of skills in an industry;

(d) relates to the comparison with employees doing

the same work and, (e) is "any other matter that

the Commission thinks relevant", and, in our

submission, again, that is a matter which
ordinarily is the type of consideration peculiar to

non-judicial decision-making.

In each of those features, in our submission,

taking into account the public interest, taking

into account matters which it thinks relevant,

having - I should have said also 127A(7), that is
reference to the furthering of the objects of the

Act. The objects include such things as promoting

industrial harmony and cooperation amongst parties

involved in industrial relations, et cetera.

Now, those considerations of policy, lack of

identifiable objective criteria, were all matters

Wagner 69 1/2/94

which existed in precision and which led the court

to say, at page 190 point 7 and 191 point 6, that

the panel was not exercising a judicial power. It

had to take into account the public interest, and

Your Honours will see that requirement set out at

page 184 point 8. It also had to take into account
all other matters that it thought relevant and, at 187 point 6, it had to take into account the policy matter of the desirability of ensuring the

acquisition took place in an efficient market

place.

Our learned friends, in our submission, in a

nit-picking way, selected one item of s{gnificance

as differentiating the Precision case from this,

and that was that in Precision it was the ASC that

could initiate proceedings, whilst here it is the

parties.

In our submission, to highlight that is to

misread the thrust of Precision.	Can I take the
Court to page 190 in 173 CLR at point 3.	What the

Court was concerned about when it adverted to the

ability of the ASC alone was the issue whether the

panel was determining existing rights or creating

new rights, and one indicator of the fact that it

was creating new rights was the fact that a party,

a stranger to the transaction and a public body,

could take the proceedings. But, Your Honours, it

was in support of the proposition that the panel
was creating rights rather than enforcing existing

rights that that was a relevant matter. Indeed, in

Precision the parties to the conduct were required

to be given a hearing, and that appears at 185

point 3 which sets out section 733(5):

The Panel may only make a declaration

under subsection (3) if it has given each

person to whom the declaration relates an

opportunity to appear at a hearing before the

Panel and to make submissions and give

evidence to the Panel in relation to the

matter.

In the statutory scheme now under consideration,

although the right to make application is given to

parties, it is also given to organizations of

employees and employers under 127A(3)(b) and (c)

albeit with the consent of the parties to the

contract. We submit, with respect, that the

provisions of 127A(6) are a further indication of

the fact that the Commission is concerned with

creating rights. It is entitled under

subsection (6) to form its opinion on any ground

referred to in the Act, even if that ground was not

canvassed in the application. So that the

Commission itself is given a role which is

Wagner 70 1/2/94

independent in a particular respect and which is

therefore, in that respect, comparable to the role

of the ASC in the Precision case.

In general response, we say, to this point

about who can activate, is that it emphasizes

something which was one of the factors and not an

outstanding factor in the Precision case. Now, in

paragraph 9, we seek to answer the point that

merely because the jurisdiction is to render

contracts unenforceable, that in itself indicates a judicial power. We draw attention to the fact that

in Precision, at 186 point 5, the panel had a power

to do exactly that. It is under section 734, which

starts on the previous page, subsection (2)(ix).

It had a power to make any order necessary to

protect the rights and the interests of persons

affected, and one particular order it had power to

make under (ix) was:

an order cancelling, or declaring to be

voidable, an agreement or offer that was made

after the commencement of this section and

trat relates to a takeover scheme or takeover

announcement, or to a proposed takeover scheme

or proposed takeover announcement, or is
otherwise connected with the acquisition of

shares.

In paragraph 9 of our outline, we rely on the

Tasmanian Breweries case as an example of a

tribunal held not to be exercising judicial power

where the power that it was given was a power to

make determinations which had an ultimate effect of rendering agreements unenforceable. Finally, can I take the Court to the decision of Mr Justice McHugh in the Minister for Youth and Community Services

case, (1987) 10 NSWLR 543, at page 560.

MASON CJ:  We were taken to that this morning.

MR NORTH:  Yes, Your Honour, I am not sure that it was to

this particular passage. Yes, it was in

particular, Your Honour, and I am not sure that

these words were read, on page 560, about four or

five lines down:

Moreover, I think that the Commission can

exercise its power under s 88F in a case

where, although the contract was not unfair or

harsh or unconscionable or against the public

interest at the time of its making, subsequent

events have made it so. The jurisdiction of

the Commission to void or vary a contract,

independently of the circumstances which

existed at the time of its making, indicates

conclusively in my opinion that the power

Wagner 71 1/2/94

conferred bys 88F is not an exercise of

judicial power.

It is for those reasons, if Your Honours please,

that we contend that the provisions in this case

are relatively indistinguishable from the Precision

case and therefore do not involve the conferring of

judicial power.

In relation to the application of the Act to terminated agreements, in our submission, the

Commission was right in its view of the sections as

meaning that so long as the contract existed at the

time that the Act was passed, or came into

existence thereafter, it is covered by the Act.

Our learned friend accepted that the

expressions used in the Act were capable of
providing that meaning. That being so, that is

really the point of our paragraph 11. We then

argue really the mischief rule for the view that

the interpretation that should be - - -

McHUGH J: 

But what is the mischief tnat would be overcome

by giving it an operation in relation to contracts
that had come to an end? The contracts would be at
an end; they would not be against the public

interest.

MR NORTH: 

Yes, Your Honour, but the mischief would be the

mischief referred to in that Becker case which I
think was the mischief that Your Honour argued for.

McHUGH J: 

No doubt that is right, but that was in a -

section 88F gave the New South Wales Industrial

Commission power to vary a contract void ab initio.

If you had such a section in this legislation, you

might be on strong ground but the fact that the
order takes effect from the date of the order or a

later date seems to indicate that it serves no

useful purpose.

MR NORTH:  No, far from it, Your Honour. Let me first

address the mischief point. If the contract had to

be in existence at the date the order was made,

then what respondent to the application would ever

leave on foot a contract after an application were

made?

McHUGH J:  He might be confident that it was not harsh,

unfair or against the public interest.

MR NORTH:	He would take the risk but he would be much - - -
McHUGH J:	But if he terminates it, what public purpose is

served? The contract has gone - - -

Wagner 72 1/2/94

MR NOP.TH: This purpose, Your Honour: if there has been

unfairness or contrariness to the public interest

that has occurred and can be rectified by an order

varying the contract - - -

McHUGH J:	But the hypothesis is the contract is gone.
MR NORTH:	I am sorry, Your Honour, it does not because if

the va~iation has the effect that the termination

is invalid, in other words, if the term is

extended, a variation - if the legislation applies

to contracts that have been terminated, the order

for variation can itself provide either what you

can view as a resurrection or alternatively a

continuity. It can vary the contract so its date

of expiration is in the future.

BRENNAN J:  I confess I just do not understand legal frames

of reference in which that submission can be made.

We are not speaking about a contract in respect of

which a unilateral attempt to terminate it is made

and the attempt fails for want of acceptance by the

other side, we are speaking about a terminated

contract, which means there are no longer any legal

rights or obligations arising ex con tractu.

MR NORTH:	Yes, Your Honour.
BRENNAN J:	We are therefore speaking about two parties who

were in contractual relationships and who now have

their respective property. How can a retrospective

order operate except in relation to the property of

those parties?

MR NORTH:  I accept, Your Honour, that it does. It does

operate in relation to the property of those

parties, but, Your Honour, I ask rhetorically: Why

can it not?

BRENNAN J: Because of Sl(xxxi).

MR NORTH: Well, that is a different issue, Your Honour.

BRENNAN J: It is the issue which seems to me to be - - -

MR NORTH:  That issue depends, with respect, on whether the

circumstance of the making of a variation order

amounts to an acquisition, and - - -

BRENNAN J: It does, does it not?

MR NORTH: Well, Your Honour, very arguably not, but can I

put the position frankly to Your Honour, that is

not a question that we anticipate, it was not

raised by our learned friends and we would, as our

learned friends did, ask the Court to reserve our

position for a short written note on it. Because,

Wagner 73 1/2/94

I mean, the initial response would be that a

variation after termination - - -

BRENNAN J: That is meaningless, though, is it not? There

are no rights between parties.

MR NORTH:  But, Your Honour, it is a variation - Your

Honour, in saying that, confines vision to the

instant,· to the present instant, but if there is

an

BRENNAN J:  To the rights existing between the parties who

are the subject of the application.

But that, with respect, is not the only

temporal circumstance which need be in issue. If
we extend the meaning of the provision, if it were

to say as we say the proper meaning is, "An order

for review can be made and a contract varied in

circumstances where the contract has already been

terminated", Your Honour would have to give some

meaning to that, and no doubt the meaning would be

that the terms of the contract as it. existed before

it was terminated could be varied so as to have a

present effect. That is what this means. There is

no magic, in our submission, and no insuperable

hurdle by the fact that the contractual rights and the parties' rights have been frozen or terminated at a particular point in time if the operation of
the Act was specifically directed to a time when
that contract was still alive. That is what we say

the meaning is.

BRENNAN J:  I have no wish to delay you, but we are looking

at the question of the constitutional power, and we

look first of all at the interpretation of the Act,

its operation.

MR NORTH:  Yes.

BRENNAN J:  And if its operation, whatever the form of words

may be, is of the kind that you were just referring

to, its legal operation is to take parties who have
no legal relationship between themselves and to

affect their rights.

MR NORTH:  Yes, that is so Your Honour, and

BRENNAN J: So, it seems to me to be at the heart of the

question of retrospectivity at least that there is

either a likelihood or a prospect of a Sl(xxxi)

inhibition against doing so.

MR NORTH:  Your Honour, as I understand what Your Honour

says, the characterization point, the 52(~x) point,

is different from the - - -

Wagner	74	1/2/94
BRENNAN J: Utterly different.

MR NORTH:  Yes, and as to that, which is what I understand

Your Honour to be now raising, again we say,
Your Honour, that if the Court accepts that what

makes this section within power is its reference

to, and operation on contracts of a particular

kind, then it matters not that in dealing with the

subject-matter of the power there is taken a

circumstance where those contractual rights have

ended. I mean it just does not matter, it just

does not destroy the nexus because the nexus

derives from the fact that the contract did exist
and was of a certain character. That is the way we

put it, Your Honour.

GAUDRON J:	I must say I have some difficulty with that, particularly in seeing that there is a
constitutional nexus when the contract has come to
an end. If I put it another way: you cannot deem
things to be within constitutional power, that is
well established. Now, it seems to me you cannot
resurrect things so as to bring them within
constitutional power.
MR NORTH:	No, Your Honour, we are neither deeming nor

resurrecting.

GAUDRON J:	No, I know.
MR NORTH:	What we are saying is that the power is attracted

by the fact that at one time, in the past, frankly

acknowledged to have been in the past, a

circumstance existed, a contract existed of a

particular type, and - - -

GAUDRON J: But, I am not too sure that that is sufficient.

If I was once a married woman, am I a married woman

still for the purposes of the marriage power, or

the like?

MR NORTH:	Your Honour, we do not say that there needs to be any continuity of that state for the subsection to
be valid.  We say that the subsection is within
power, even if it operates on a contract which does
not any longer exist. We do not try and resurrect
it or deem it, we say, "Yes, in the past there was
a contract" but, in regulating corporations, you
can say, "That was a relationship you had and is
over."
GAUDRON J:	But you are not regulating the corporation and

this is what you are not doing. When you come to

127C you are simply not regulating the corporation.

MR NORTH:  Your Honour, that is, of course the argument we

have had and we say we are and Your Honour says we

Wagner 75 1/2/94

are not, and we say we are by reference to Redfern

and I cannot - - -

GAUDRON J:  You may have a law with respect to, even though

you are not regulating the corporation.

MR NORTH:	You are regulating here the affairs of the corporation by casting obligations on others in an
analogous way to the way section 45D worked,
benefiting the corporation by obligations imposed
on others. Here you are benefiting the corporation by creating an obligation on the contracting
parties to be subject to review.

GAUDRON J: Could I put my difficulty to you more precisely,

and it assumes the validity of 127C(l)(b) and it
assumes that, as a matter of ordinary language, the

section relates to contracts which have come to an

end.

MR NORTH:	Yes.
GAUDRON J:	I have two difficulties and I am putting them to

you so that you will be clear in your mind that I

see them as problems. Firstly, if you come to the

view that there is no constitutional nexus once the

contract has come to an end, do you read down the

ordinary word of contract? That is one way. The

second question is, is the question whether there

is a constitutional nexus, when the contract has

expired, raised by the application to this Court?

MR NORTH:  To deal with the first question, Your Honour, can

one read down the section - - -

GAUDRON J:	Or does one read down?
MR NORTH:	Must one? If there is a constitutional problem

about reading the section as relating to terminated

contracts -

GAUDRON J: It would only be in relation to C(l)(b).
MR NORTH:	Yes.

GAUDRON J: But it would not be a problem with respect to

the other subsections or paragraphs.

MR NORTH: It may be the same problem. If it is the same

problem then, of course, there is a uniform reading down, we would have thought, and that would provide

no difficulty for the application of section lSA.

Indeed, all one would do would be to adopt the

alternative meaning put by our learned friends

which they say inheres in the wording of the Act.

Wagner 76 1/2/94

As to Your Honour's seco~d question, the

point -

GAUDRON J: That assumes that you do not read it down but,

rather, that you would approach the question as a factual one saying it simply is not a contract in
relation to the business because it has come to an

end.

MR NORTH:  Yes. No, well, I think the same answer is I gave

earlier in relation to the scope of the grounds

applies, that the factual question -

GAUDRON J:  Why are we bound by those grounds if we raise

the matter with you now and you have got an

opportunity to argue it?	Why is the Court confined
by it?

MR NORTH:	I suppose only, Your Honour, because those are the matters upon which the - - -
GAUDRON J:	On a constitutional issue.

MR NORTH:  Yes. have come to the Court to argue, but more Those are the matters ·vhich the parties

importantly there have been section 75B notices and

it may well be that if other grounds had been

Your Honour, that it is only matters which are clearly before the Court that - - -

raised there might have been the interests of other proposition,

GAUDRON J: It seems to me that that matter has been before

the Court right from the moment that the argument

opened up. It has been out in the open that there

is a difficulty about categorizing a contract that

has come to an end as one in relation to the

business of a constitutional corporation.

MR NORTH:  Yes, I am sorry, Your Honour. The construction

issue is raised but its constitutional impact has
not been raised.	I was rather thinking that

Your Honour was referring to the factual question

whether this was a contract which related to the

business not because of its status as being

terminated but by reason of its other

characteristics.

GAUDRON J:  By reason of its being terminated.

MR NORTH:  I accept, Your Honour, that that issue is before the Court; I do accept that. Your Honour, those

are the submissions for the second to sixth-named

respondents.

McHUGH J: Just before you sit down, assuming that you are

able to read 127(l)(b) in a way that would make

Wagner 77 1/2/94

some contracts which come within its terms

constitutional but others that came within its

terms were outside Sl(xx), have you got any

arguments about severability?

MR NORTH:  Your Honour, our argument would be that it could

be read down if the problem was the termination

point.

McHUGH J: Quite apart from the termination point. I know

you say you read it as directly affecting the

business of a corporation.

MR NORTH:  Can it be read, for instance, as in relation to a

contract - - -

McHUGH J: There may be some contracts which directly affect

the business of a constitutional corporation which,

when you looked at them in concrete terms, could be

said to be with respect to the constitutional

corporation, yet others that were not.	I do not
know whether that is possible.	I suspect it is.

MR NORTH: 

Your Honour, if that were the case, we say the

section is constitutional, and it then is a
question for the Commission to determine in the
short time before the jurisdiction goes to the
court what factual cases answer that description.

But that would not lead, in our submission, to a

conclusion that the subsection was

unconstitutional, only that on its proper reading

it was constitutional and the proper reading would have to be applied in whatever circumstances arose

before the Commission.

McHUGH J: Supposing he took the view that Parliament

intended it to refer to all contracts that related

to the business of a constitutional corporation,

but nevertheless some contracts were within and

some were without - what then?

MR NORTH:	Your Honour, that would mean accepting the proposition that 127C(l)(b) did not read such that
"relating to" means "direct effect on", but it had
a wider meaning. In that case, in our submission,
section 15A of the Acts Interpretation Act would
cause that subsection to be read down to accord with the constitutional limit, that is to say, it
would require it to be read as necessitating the
direct effect, and that is just by operation of
15A, if Your Honour pleases.

DEANE J: Deputy President Munro did read it down, did he

not?

MR NORTH:  Yes.

Wagner 78 1/2/94

DEANE J: Well, what do you say about the way he read the

section down into validity?

MR NORTH:  Your Honour, it is precisely the interpretation that we contend for.

DEANE J: If you look at pages 76 to 77 it is somewhat

narrower than you contend for in that he reads it

down as a matter of construction by reference to

the surrounding clauses.

MR NORTH:  Your Honour, I took the expression at the top of

page 77 to be really an adoption of the direct

effect test.

McHUGH J: But, see, he has tested 77's influence by the

misstating of the section, is it not? The words:

for the purposes of the trading activities -

or it arguably is.

MR NORTH: Well, Your Honour, it is not certain that that

second sentence on the top of page 77 ~eally

carries over from the misquoting because that would

be a perfectly proper observation on the

construction for which we contend. Indeed, it is

narrower in the sense that it confines 127C(l)(b)

to contracts which have a purpose related to the
trading activities of the corporation.

Your Honour, the critical description, in our

submission is, starting on the bottom of page 76:

That requirement would appear to be satisfied

if the contract subject to review directly

relates to the business of the corporation in

the sense of having a basic or relevant

connection with it.

At page 74, Your Honour, in dealing with words

"relating to", at line 5, he refers to the

Victorian Full Court decision and talks about:

"a nexus of substance and not tenuous".

And, of course, then he sets out the Redfern case

and the relevant judgments from it. And at

page 76, at line 17, refers to Court's emphasis in

Redfern:

on the directness and degree of the

relationship demanded by section 4(1).

Then, Your Honour, at line 34, by reference to the

incidental power, which does not seem to be

correct, but he does at least find that the words:

Wagner 79 1/2/94

should be construed to require an emphasis

upon direct and relevant connection with the

object of the power.

So, in our submission, looked at in the broad,

what His Honour does do is apply the Redfern direct

effect type test. I ought to draw attention to the

final paragraph of our outline where we refer to

the fact that as His Honour found, in this case,
that the contracts in this case were certainly

alive at the time of the application being made,

even though terminated before the determination of

the matter, and that is what gives rise to our

mischief rule, the chances of avoidance by persons

immediately after the issue of the application.

Your Honours, save for the question of the

acquisition point which we would seek leave to

deliver a short note on in a time limited by the

Court, those are the submissions.

MASON CJ: In seven days.

MR NORTH:	Yes, Your Honour.
MASON CJ:	Mr Rose.
MR ROSE:	If the Court pleases, may I hand up copies of our

outline.

MR ROSE:  If the Court pleases. The outline overlaps very

considerably with the arguments submitted by my
learned friend Mr North, and to the extent of the

overlap I shall not be repeating what he said. It

might be convenient to begin with the question of

severability in reading down that Your Honour

Justice McHugh addressed a few moments ago to my

friend. We have listed some relevant authorities

in paragraph 5 on page 3 of the outline, and in

particular the Huddart Parker and Reg v Wright

cases are, in my submission, of considerable

assistance - Huddart Parker in 44 CLR.

If Your Honours will look at 44 CLR at page 512, half-way down the page, gives the definition

of "transport worker" which was fundamental to that

legislation and it was in very broad terms, that:

"a person offering for or engaged in work in
or in connection with the provision of
services in the transport of persons or goods
in relation to trade or commerce by sea with
other countries or among the States".

And several of Their Honours in that case saw that there could be problems arising from the width of

that expression. For example, His Honour

Wagner 1/2/94

Justice Dixon at page 512, he goes on about two- thirds of the way down that page:

It may be that the verbiage "in or in

connection with ..... has such a vague and

general meaning that persons are included who
are not concerned in overseas or inter-State
commerce or its incidents, and further that

the subject of "employment" extends -

et cetera. But then he decided that section 15A of

the Acts Interpretation Act applied because it was intended, he thought, that the provision should be

applied distributively so that if it had some

invalid applications as travelling beyond power it

could nevertheless have those applications in which

it was within power as he held in that case.

Justice Rich also takes the same approach to

section 15A and also Justice Evatt.	I have listed
the references in the outline there.

A similar question arose in Reg v Wright,

93 CLR 528, where section 34 of the then

Stevedoring Industry Act is set out at the bottom of page 528. Again, it is in very broad terms,

purported to give the court power:

to regulate industrial matters in connection

with stevedoring operations insofar as those

operations relate to trade and commerce with
other countries or among the States -

And at page 544 the Court, in a unanimous judgment, addressed that question that the

expression might travel beyond power, and held that

even if it did so it could be applied

distributively and so was left to apply as it

validly could do so, they held, in relation to the

engagement of stevedoring labour. Your Honours

will see that in the complete paragraph on

page 544. Again, it was section 15A of the Acts

Interpretation Act which provided the solution.

DEANE J:  I do not understand that process of reading down.

Obviously one can understand how in a section 92

case you say invalid to the extent that, but how do you read down a statutory provision to say, as this

seems to be saying, it only applies to the extent

that a valid statutory provision could not be

framed to - I have put it back to front, I think,

Mr Rose, but I think you appreciate the problem of

comprehension I am having.

MR ROSE:  The Court there did apparently infer a

parliamentary intention that it was to be an

exercise of the trade and commerce power so far as

it could go within whatever that category may have

Wagner 81 1/2/94

been marked out by the statutory language, just as

in Russell v Russell, the other case which was

mentioned, in 134 CLR. Various paragraphs there of

the Matrimonial Causes Act could not operate to

their full extent, but the Court discerned an

intention that those paragraphs should operate so

far as they could have been drafted on the basis of

the marriage power.

DEANE J:  What is the restriction that is being imposed as a

matter of reading down?

MR ROSE:  It was not necessary for the Court in Huddart

Parker or Reg v Wright to say where the limits lay.

It was only necessary for them to say that it could

be read down and that the case that they were

dealing with was quite clearly on the right side of

the line, so to speak.

DEANE J:	But you do not have to define the line.
MR ROSE:	You do not have to define the line.  In fact they

said that in exactly those terms. It is

unnecessary to decide where the - I do not think

they said dividing line, but that was the effect of

it. It think it was at page 544 in Reg v Wright.

DAWSON J: But you have to be able to posit a dividing line,

do you not?

MR ROSE:  If one concludes that constitutionally it cannot

go to the full scope of the statutory language but

that there is an area within that field that could

be the subject of constitutional legislation, then

there is a dividing line. One does not have to

decide where it is if one can form the conclusion.

DAWSON J:	But one has to be able to point to it. The Court may not have decided where it was but one has to be
able to point to it. It must be something that is
capable of existence.
MR ROSE: With respect, Your Honour, it would not be

necessary for the Court to say where the dividing

line was if it was - - -

DAWSON J: It may not be necessary, but it is necessary as a

possible exercise, is it not? It has to be

possible to do so.

MR ROSE:  And indeed, one would submit that it

DAWSON J:  It may be impossible. I think that is what

Justice Deane is suggesting too, because this

operates in a negative way.

Wagner 82 1/2/94

MR ROSE:  In my submission, it would be possible, given

cases that raised a variety of issues.

DAWSON J:  Where would you say it should be?

MR ROSE: Within the limits of a law with respect to

corporations and that the outline endeavours to

establish, as a matter of construction, the

subcontracts here would be contracts relating to
the business of a corporation because of the very
close connection they have, in particular, that the
subcontractors are doing the very work that is
required of the principal contractors of delivering

to the mill the logs owned by the corporation

themselves.

DAWSON J:  But that is this particular case.

MR ROSE: This particular case and no doubt one could go

beyond -

DAWSON J:  But we are talking about general provision. You

say that it should be contracts which have a direct

effect on the business of a constitutional

corporation and to the extent that they have a

direct effect; would that be what you are saying?

MR ROSE:  No, no. My submission, Your Honour, it is not a

test of direct effect upon the corporation, it is a

question of a sufficient connection with the

corporation.

DAWSON J:  We know that, but we are trying to suggest what

is a sufficient connection.

MR ROSE:	And it is difficult to define words such as
"direct" and "sufficient" - - -

DAWSON J: Well, can you suggest a better formula?

MR ROSE: In my submission, these subcontracts here are

clearly within the concept of - - -

DAWSON J: What, you read it down so as to apply just to

these types of contracts?	How do you define these
types of contracts?

MR ROSE:  In terms of the factors that we have listed there,

Your Honour. It is not necessary for us to, in my

submission, to say whether or not the legislation

can validly operate beyond the category of

contracts of which these are an example. It is

only necessary to - - -

BRENNAN J: Are you not saying that in paragraph 1? Any

contract with a "direct and immediate

relationship", or is "directly concerned"?

Wagner 83 1/2/94

MR ROSE: As a matter of construction, yes, Your Honour. If

we did not have any constitutional issues my

submission would be, as a matter of statutory

construction, that that would be the interpretation

one would put on the provision as -

BRENNAN J: That is statutory construction. Do you need any

further reading down?

MR ROSE: Probably not, Your Honour. The point I would

emphasize is that the relationship need not be one

of effect upon the corporation. It can be one of a

connection of some other kind as we have in this

case. It may be other kinds of connections would

suffice, but the connection that exists in the case

of these subcontracts is, in our respectful

submission, a connection of a kind that makes the

contract one, not only as a matter of construction,

one relating to the business of the corporation,

but it means that the law as a matter of

characterization could be described as a law with

respect to the business of the corporation, just as

in Huddart Parker and R v Wright, the contracts

there were characterized as laws with respect to the shipping, the transport of the goods by sea.

That was so in both of those cases. They concerned

contracts, not with the shipping company, but

contracts with stevedoring companies.

DAWSON J:  What if you took the view that the legislature is

not really interested in corporations at all, but
it was merely using the corporations power as a

device to regulate this particular sort of

relationship? If that were so and it is intending

to use the corporations power to its full extent

for that purpose, can you read it down?

MR ROSE: It is sufficient, in our submission, that the law

is limited to contracts having that immediate

connection with the business of a corporation. To describe it as legislation which is really dealing

with business in a general sense and just, I think	adventitiously was the word used a little while
ago, just adventitiously as applied to
corporations, one could say the same about the
Trade Practices Act which was an issue in Fontana
or in Concrete Pipes.

DAWSON J:  What I am suggesting is that it is a law dealing

with the contractual relationships of independent

contractors, and because that would be beyond power

by itself the corporations power is used as a peg

on which to hang the legislation. Now, if you took

that view, and it is an available peg, that is all

right, but what I am putting to you is can you in

those circumstances read it down if the actual

method adopted goes too far?

Wagner 84 1/2/94

MR ROSE:  I think if one did take that view, that it was

just a peg, that it would really be a way of saying

that it was not truly a law with respect to

corporations.

DAWSON J:  No, no, it may be, but that was the only way in

which the legislature could get at, for want of a

better term, this type of contractual relationship.

MR ROSE:  If one can accept that the law is in part a law

with respect to corporations, then reading down is

available. It would not be available, of course,

unless in the first instance you characterize the

law as one with respect to corporations, and when

one - - -

DAWSON J: That half a peg is better than no peg.

MR ROSE:  When one finds the language in terms of using the

constitutional subject as mere pegs, it is usually

in the course of an argument which leads to the

conclusion that it is not really a law with respect

to that subject-matter but a law with respect to

something else.

DAWSON J: Well, perhaps "peg" is the wrong word. It was

the only available power to do something which

really is not - well, I suppose that presupposes -

really related to - - -

MR ROSE:  The question is whether it is characterizable as a

law with respect to that subject-matter.	The fact
that it is the only available power, in my

submission, does not affect that. If one thinks

back to cases like, I think, Mikasa v Festival

Stores, the argument there was that the

Commonwealth had used the corporations power and

the interstate trade power, and that was held

valid. It was plain on the face of it that the

Commonwealth was going as far as it could in what it regarded as its available powers. It did not

stop the characterization of the legislation as a	law with respect to interstate trade and commerce	in regard to those paragraphs and trading and
financial corporations in relation to those
paragraphs that were applied to the business
practices which were targetted under the provisions
of the Trade Practices Act there.
So, the fact that it is limited to the business of corporations, in my respectful
submission, does not prevent it from being
characterized as a law with respect to corporations.

DAWSON J:  But it may make the reading-down process more

difficult.

Wagner 85 1/2/94

MR ROSE: Well, one would read it down so far as one needs

to, to bring it within the power.

DEANE J:  What about the way Justice Munro read it down

which, as I would follow it, is in the context of

the definition of contract, to read it down
effectively to a contract in respect of work of an
independent contractor done for the purposes of the
business of the trading corporation? Is there a

permissible process that gets to that result?

MR ROSE:  One looks at the subject-matter of the decision,

the particular contract.

DEANE J: That seems to be at the heart of what clause (b)

was concerned with, if one accepts Justice Munro's

approach, but one then has, if it is a reading-down

process, to identify the steps from which you, or

by which you read down. I am not quite sure what

they are.

MR ROSE:  If one is dealing with the law manifestly based

on the corporations power, for example, and one

takes the approach that the statutory provision is

intended to be applied distributively, then one reads it down so as to leave standing all those

cases that would be within the corporations power

if the legislation had been explicitly tailored

around them. So one can imagine a whole series of

particular applications and one asks, if a special

law were made on each one of those applications, would each of those separate laws be valid, be a law with respect to corporations?

So, one cannot go, in my submission, beyond

that process, if one is dealing with a distributive

application approach, of asking what the nature of the law is in its purported application to each of those circumstances and that, in my submission, is

precisely what the Court did in Huddart Parker and

Reg v Wright and, perhaps to a lesser extent, in

Russell v Russell.

I have mentioned that Huddart Parker and Reg v

Wright involved cases where the contracts were not

with the body - - -

MASON CJ:  Mr Rose, the Court will have to adjourn now. We

will adjourn until 10 o'clock tomorrow.

AT 4.23 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 2 FEBRUARY 1994

Wagner 86 1/2/94