Resarta Pty Limited v Ronald Stanley Finemore

[2002] NSWSC 75

CITATION:	Resarta Pty Limited & Ors v Ronald Stanley Finemore [2002] NSWSC 75
FILE NUMBER(S):	SC 6082/2001
HEARING DATE(S):	18/02/02
JUDGMENT DATE:	21 February 2002
PARTIES :	Resarta Pty Limited (First Plaintiff) Toll (FHL) Limited (Second Plaintiff) Toll Holdings Limited (Third Plaintiff) Ronald Stanley Finemore (Defendant)
JUDGMENT OF:	Einstein J

COUNSEL :	Mr AC Archibald QC, Mr CM Caleo (Plaintiffs) Dr AS Bell (Defendant)
SOLICITORS:	Clayton Utz (Plaintiffs) Atanaskovic Hartnell (Defendants)
CATCHWORDS:	Courts and Judicial System - Cross-Vesting - Order sought to transfer proceedings - First set of proceedings brought in the Supreme Court of Victoria - Second set of proceedings brought in the Industrial Relations Commission of New South Wales - Whether Industrial Relations proceedings should be removed into the New South Wales Court of Appeal and then cross-vested to the Supreme Court of Victoria - Whether special circumstances in terms of specialist nature of Industrial Relations Commission jurisdiction exist to warrant order - Disparate approaches to cross-vesting applications - Whether further guidance warranted by Court of Appeal
LEGISLATION CITED:	Industrial Relations Act 1996 Jurisdiction of Courts (cross-vesting) Act 1987 Supreme Court Rules Trade Practices Act 1974
CASES CITED:	Bruning v Kingmill (Australia) Pty Ltd (1998) 44 NSWLR 180 Heath Group Australasia Pty Ltd v Hanning [1999] NSWSC 719 James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357 Macquarie Bank Ltd v Bell [1999] NSWSC 957 Minproc Ltd v Killinger [1999] NSWSC 564 Premier Sports Australia Pty Ltd v Dodds [2001] NSWSC 707 Winron Pty Ltd v Shell Company of Australia Ltd (1996) 66 IR 64 Wood v Boral Resources (NSW) Pty Ltd (unreported, 28 October 1993, NSWSC, BC 9302189)
DECISION:	Proceedings to be removed to the Court of Appeal.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Thursday 21 February 2002

6082/01 Resarta Pty Limited & Ors v Ronald Stanley Finemore

The Disputes

1 The parties to three relevant sets of proceedings are presently locked into disputes concerning relationships between on the one hand, Mr R S Finemore who over some 40 years had commenced and through his company group had built-up a trucking business, and on the other hand, a group of companies (" the Toll Group") which launched and succeeded in a takeover offer for the Finemore group.

2 The first set of proceedings ["the Victorian Supreme Court proceedings"] were commenced by the Toll Group on 10 October 2001 upon the filing in the Supreme Court of Victoria of a Writ and Endorsement of Claim and Summons for Directions. Mr Finemore was the first defendant to those proceedings. Two companies are also joined as defendants.

3 The second set of proceedings ["the Industrial Relations Commission proceedings"] were commenced by Mr Finemore on 19 November 2001 upon the filing in the Industrial Relations Commission of New South Wales in Court Session of a Summons for relief under section 106 of the Industrial Relations Act. The Toll Group are the respondents to those proceedings.

4 The third set of proceedings ["the cross-vesting proceedings"] are the proceedings commenced by the Toll Group in this Court on 21 December 2001 by the filing of a summons seeking orders pursuant to the Jurisdiction of Courts (Cross-Vesting)Act 1987 ["the Cross-Vesting Act"] for the removal of the Industrial Commission proceedings to this Court and for the further transfer of those proceedings once removed to this Court, to the Supreme Court of Victoria.

The Notice of Motion

5 Upon the first return date of the cross-vesting proceedings, Mr Finemore obtained leave to file a notice of motion seeking an order pursuant to Part 12 rule 2 (1) (b) of the Supreme Court Rules for the removal of the proceedings into the Court of Appeal.

6 During argument Mr Bell of counsel for Mr Finemore submitted that the question to be decided or determined was:

"Should the Industrial Relations Commission proceedings be removed to the Supreme Court of New South Wales and cross-vested to the Supreme Court of Victoria".

7 The further submission is that special circumstances exist which render it desirable to make an order removing the proceedings into the Court of Appeal. These circumstances are said to throw up the following particular question which it was submitted was now appropriate in the light of different approaches taken by judges of the Equity Division to applications of like nature to that now for determination in the cross-vesting proceedings:

"What weight should be given to the fact that the proceedings sought to be cross-vested are proceedings before the Industrial Relations Commission in Court Session, a court of equivalent status to the Supreme Court of New South Wales, a court whose decisions are final and from whose decisions there is no appeal to the Court of Appeal, and a court whose jurisdiction under Part 9 of the Industrial Relations Act 1996 cannot be exercised by the Supreme Court of New South Wales?"

The issues being litigated

8 The issues pleaded in the Victorian Supreme Court proceedings raise a number of close questions concerning matters which commonly come before the Commercial List in both this Court and the Supreme Court of Victoria. Factual and legal questions go to matters concerning claims for equitable compensation, claims to damages under the Trade Practices Act and the Fair Trading Acts in both States, claims made pursuant to and questions of the proper construction and application of sections of the Corporations Act, and questions of whether or not particular contracts or agreements were void or voidable and if the latter, whether they have been properly avoided.

9 The issues raised in the Industrial Relations Commission proceedings centrally concern claims pressed pursuant to Part 9 of the Industrial Relations Act1996 dealing with unfair contracts and the power of the Industrial Commission to declare such contracts void or varied. The factual issues concern whether or not the conduct of the Toll Group is unfair, harsh and unconscionable. Questions of whether or not a Service Agreement and an Employment Agreement were unfair at the time they were made or have become unfair by reason of the conduct of the Toll Group are raised. The relief sought includes claims for compensation on a number of heads including compensation for salary, compensation for loss of use of a motor vehicle, compensation for annual leave and compensation for long service leave.

Late November 2001 to 31 December 2001

10 On 21 November 2001 Mr Finemore and the second Defendant in the Victorian Supreme Court proceedings filed a summons in the Victorian proceedings seeking to transfer those proceedings to the Supreme Court of New South Wales pursuant to sub-section 5(2) of the Cross-Vesting Act. The summons was heard on 30 November 2001 and was dismissed.

11 A compulsory conciliation took place before the Industrial Relations Commission on 30 January 2002. As at 13 February 2002 the conciliation process had not been completed and no certificate had been signed by the Commission to the effect that the matter is incapable of settlement prior to hearing.

12 Importantly the Toll Group on 31 December 2001 filed a Reply to the Summons filed in the Industrial Relations Commission proceedings which repeated verbatim, the separate claims which had been raised by the Toll Group regarding the employment arrangements in the Victorian proceedings. The Reply runs for 90 paragraphs and clearly repeats often verbatim, the allegations which had been made in the originating process in the Supreme Court.

13 For all their elegance and the care with which the sundry pleadings have been drafted, these forensic manoeuvres are by no means a new development. The very problem which is now sought to be removed to the Court of Appeal concerns the disparate approaches taken to such cross-vesting applications by first instance judges of the Equity Division of this Court. Even without referring to those decisions by name, the central considerations which cause difficulty are readily apparent. On the one hand it seems clear that the jurisdiction under Part 9 is, by the Industrial Relations Act 1996, conferred solely on a specialist court, namely the Industrial Court, established primarily to deal with matters relating to industrial relations. As McClelland CJ in Eq pointed out back in 1993, it is clear that the legislature considered it appropriate that the wide discretionary powers arising under the predecessor to this Part should, at least primarily, be exercised by a Court whose members have specialised knowledge and experience in the area of the industrial relations. On the other hand, the Cross-Vesting Act empowers the Supreme Court of New South Wales to make orders in matters transferred to it under the Act which the Industrial Relations Commission could make under section 106 of the Industrial Relations Act. Hence the difficulty which must face any judge hearing a cross-vesting application of the nature here before the Court. What are the considerations which such a judge should take into account and what is the emphasis to be given on such applications in terms of the weight to be given to the specialist nature of the Industrial Court? And in what fashion is such a judge to weigh the countervailing considerations which arise where Corporations Act and other issues arise such as are commonly dealt with in the Equity Division of the Supreme Court of New South Wales or in the Commercial Lists of that Court and of the Supreme Court of Victoria?

The Toll Group’s submissions

14 Mr Archibald QC for the Toll Group put the following summary submissions:

“1. There are no “special circumstances” such as would warrant removal to the Court of Appeal of the plaintiff’s summons dated 21 December 2001. In light of the whole body of authority, there is no continuing controversy on any issue of principle that warrants the attention of the Court of Appeal.
2. It is common ground that, in the circumstances stated in section 8(1)(b) of the Cross-Vesting Act, the Supreme Court has power to order the removal of a proceeding from the IRC. There is, accordingly, no dispute as to issues of jurisdiction, strictly so called, cf. James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357.
3. The questions proposed by the defendant reveal that the area of contention between the parties concerns only the appropriate weight to be given to particular discretionary factors. No question of principle requiring the attention of the Court of Appeal or permitting any meaningful answer has been, or can be, distilled.
4. The first question proposed by the defendant does no more, in effect, than ask whether the plaintiffs should be granted the relief they seek. It is not a question of law. The second question is directed to the weight that should be given to certain facts – a determination which, at present, is made by the members of the Equity Division without encountering any dilemma of conflicting authority in each and every transfer application that comes before them: see Heath and Macquarie Bank. No judgment of the Court of Appeal in this case could offer relevant guidance for all cases dealing with such issues.”
Dealing with the issue

15 I accept that it is quite clear that disparate approaches have been taken by single judges of the Equity Division in relation to cross-vesting applications of the nature earlier referred to. There is indeed authority for this proposition in the form of the judgment of Young J. in Minproc Ltd v Killinger [1999] NSWSC 564, 25 May 1999, unreported, Butterworths Cases 9903022:

"10 An initial problem is that there is to be found in the Industrial Relations legislation the flavour that the Commission is the sole court that should consider applications of this nature.
11 This problem has been considered by this Court on previous occasions. There are two tranches of cases, the first dealing with a whether this Court could grant an injunction to protect people pending an application under section 106 of the Industrial Relations Act, the second as to whether such application could be transferred into this Court, usually with a view to being transferred to the Federal Court, which could exercise some other jurisdiction under provisions of the Trade Practices Act 1974. After some hesitation, this Court decided that there was jurisdiction to do that despite the general flavour of the Industrial Relations Act; see Winron Pty Ltd v Shell Company of Australia Ltd (1996) 66 IR 64 and Bruning v Kingmill (Australia) Pty Ltd (1998) 44 NSWLR 180 at 182. The profession really should assume that the decision in Bruning is this Division's last word on the matter until the Court of Appeal determines otherwise "
[emphasis added]

16 The authorities bear out the fact that these disparate approaches have been the order of the day. Without purporting to analyse in any detail at all, the sundry decisions of relevance, it is convenient to simply note the following:

· Wood v Boral Resources (NSW) Pty Ltd (unreported, McClelland CJ in Eq, 28 October 1993 - Butterworth Cases 930-2189); this is the principal decision relied upon by counsel for Mr Finemore in support of the proposition that the Equity Division, at least through the then Chief Judge in Equity, held that it would be anomalous if the mechanism of the Cross-Vesting Act were to be used to transfer proceedings properly pending in the Industrial Court to which its specialised nature was highly relevant, to a Court of relevantly un-specialised jurisdiction or composition.

· Winron Pty Ltd v Shell Company of Australia Ltd (1996) 66 IR 64 determined by consent by Young J, the now Chief Judge in Equity.

· Bruning v Kingmill (Australia) Pty Ltd (1998) 44 NSWLR 180 a decision of Hodgson J, the then Chief Judge in Equity who saw it as appropriate to distinguish the proceedings from the decision in Wood upon the basis that there was no substantial overlap between the issues in the relevant two sets of proceedings, no suggestion of forum shopping and a consensual application.

· Minproc (supra) a decision of Young CJ in Eq.

· Heath Group Australasia Pty Ltd v Hanning [1999] NSWSC 719 (unreported, Austin J, 19 July 1999, Butterworths Cases 9904057); where Austin J very closely examined Chapter 2 Part 9 of the Industrial Relations Act, adding at paragraph 24:

"Bruning v Kingsmill Australia Pty Ltd is authority for the view that s 9(b) confers jurisdiction on the Supreme Court of New South Wales in respect of matters removed to that Court under s 8, and that the Supreme Court consequently has all of the Commission’s powers to hear and determine a proceeding under s 106 of the IR Act. In Minproc Ltd v Killinger [1999] NSWSC 564 Young J followed Bruning’s case, observing (in effect) that the profession should assume that the Equity Division will follow Bruning unless the Court of Appeal determines otherwise. Some earlier observations by McLelland CJ in Eq in Wood v Boral Resources (NSW) Pty Ltd (No 4980/92, 28 October 1993, unreported) and by Young J in Winron Pty Ltd v Shell Co of Australia Ltd (1996) 66 IR 64, which suggest some doubt as to whether the Supreme Court had jurisdiction to deal with a proceeding under s 275 of the former Industrial Relations Act 1991 after an order for removal under s 8, do not fully explore the question and in my opinion, to the extent that those doubts are inconsistent with the reasoning in Bruning’s case, Bruning’s case is to be preferred.”

· Macquarie Bank Ltd v Bell [1999] NSWSC 957 (unreported, Hodgson CJ in Eq, 22 September 1999) electing to follow Bruning.

· Premier Sports Australia Pty Ltd v Dodds [2001] NSWSC 707, (unreported, Palmer J, 15 August 2001)

17 Although I readily accept that the problem which has arisen in the disparate decisions does not concern jurisdiction but rather concerns the appropriate exercise of a discretion, it does seem to me that the matter is of sufficient significance and importance to the profession to warrant consideration by the Court of Appeal. Special circumstances do exist warranting the removal of the proceedings to the Court of Appeal where Mr Finemore seeks to put an argument which the Chief Judge in Equity has stated is not available other than in the Court of Appeal. Cross-vesting decisions being unappellable (section 13 of the Cross-Vesting Act), the only manner in which consideration to the issue may be given by the Court of Appeal is by way of removal.

18 I accept as of substance the submissions put by Mr Bell to the effect that fairness dictates removal in the circumstances of the present proceedings where the argument which his client wishes to put (on any view, a respectable argument having commanded the strong approbation of McClelland J) may, as a practical matter, effectively be foreclosed to Mr Finemore by virtue of the observations of Young J. in Minproc and the recent pronouncements on the issue by other members of the Equity Division, especially Austin J in Heath and Hodgson CJ in Eq in Macquarie Bank v Bell.

19 It is clear that a review of the cases in the area discloses a diversity of views as to the significance or otherwise to be attributed to the fact that the proceedings sought to be removed and cross-vested are pending in the Industrial Relations Commission. The only practical way of providing authoritative guidance on this question to single judges of the Court and to practitioners is for the matter to be removed to the Court of Appeal. Such guidance was recently given in respect of unique procedural features of another specialist tribunal, namely the Dust Diseases Tribunal, in James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357.

20 Clearly the number of recent cases seeking the removal and cross-vesting of proceedings pending in the Industrial Relations Commission show that the questions sought to be raised on the removal application are of high practical significance.

21 It is at least arguable that as a consequence of the approach taken in Heath in terms at least in a certain character of cases, of the lessening of significance to be attached to the specialist expertise of the Industrial Relations Commission, a degree of encouragement will have been given leading to further applications for the removal of proceedings from a Court of equivalent status to the Supreme Court of New South Wales. Considerations of comity properly owing to the Industrial Relations Commission holds a relevance as it seems to me, on the general question of the removal of the proceedings to the Court of Appeal for authoritative guidance.

Short Minutes

22 In those circumstances I am disposed to make the order sought in paragraph 1 of the motion. Short minutes of order should be brought in by the applicant.

I certify that paragraphs 1 - 22
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on Thursday 21 February 2002

___________________
Susan Piggott
Associate

21 February 2002

Last Modified: 03/11/2002