Traderight (NSW) Pty Ltd v Bank of Queensland Ltd

[2008] NSWSC 543

CITATION:	Traderight (NSW) Pty Ltd & Ors v Bank of Queensland Ltd [2008] NSWSC 543
HEARING DATE(S):	16 May 2008
JUDGMENT DATE :	5 June 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
DECISION:	Strike-out motion dismissed.
CATCHWORDS:	INDUSTRIAL RELATIONS – JURISDICTION – UNFAIR CONTRACTS – SUMMARY DISMISSAL – whether agreements relating to acquisition of agency business arguably within jurisdiction of s 106 Industrial Relations Act 1996 (NSW) – change in law after decision in Fish v Solution 6 Holdings Ltd.
LEGISLATION CITED:	Australian Securities and Investments Commission Act 2001 (Cth) Fair Trading Act 1987 (NSW) Industrial Relations Act 1996 (NSW) – s 106 Trade Practices Act 1974 (Cth)
CATEGORY:	Procedural and other rulings
CASES CITED:	- Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319 - Barataud v Chipperfield (No 3) [2006] NSWIRCom 249 - Batterham v QSR Ltd (2006) 225 CLR 237 - Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180 - General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 - Kennett & Anor v Mayrana Pty Ltd (No 4) [2006] NSWIRComm 357 - Mayne Nickless Ltd v Industrial Relations Commission [2004] NSWCA 359 - News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 - Old UGC Inc v Industrial Relations Commission of NSW in Court Session (2006) 225 CLR 274 - Stevenson v Barham (1977) 136 CLR 190 - Williams and Humbert Ltd v W&H Trademarks (Jersey) Ltd [1986] AC 386 - Wirraway (NSW) Pty Ltd v Ultra Tune Australia Pty Ltd [2006] NSWIRCom 300
PARTIES:	Traderight (NSW) Pty Ltd (First Plaintiff) Bronwyn Smith (Second Plaintiff) Geoffrey Versace (Third Plaintiff) Smith Partners Developments Pty Ltd (Fourth Plaintiff) Verich Holdings Pty Ltd (Fifth Plaintiff) Bank of Queensland Ltd (Defendant)
FILE NUMBER(S):	SC 4284/07
COUNSEL:	N.A. Cotman SC (Plaintiffs) A.R. Moses (Defendant)
SOLICITORS:	McCabe Terrill (Plaintiffs) HWL Ebsworth (Defendant)

4284/07 Traderight (NSW) Pty Ltd & Ors v Bank of Queensland Ltd

JUDGMENT
5 June, 2008

Introduction

1 This is a Motion by the Defendant under UCPR 14.28(1)(a) to strike out a large part of the Plaintiffs’ Amended Statement of Claim as disclosing no reasonable cause of action. The application raises the vexed and much agitated question of the extent of the jurisdiction conferred under s.106 of the Industrial Relations Act 1996 (NSW) (“IR Act”).

2    The Plaintiffs entered into a number of related contracts with the Defendant whereunder the First Plaintiff provided financial services to the public as agent for the Defendant. The Defendant says that none of the contracts in respect of which the Plaintiffs seek relief are contracts “whereby a person performs work in any industry”, so that the Plaintiffs’ claims under s 106 IR Act are doomed to fail and should be struck out.

3 The Plaintiffs say that there is, at the least, an arguable case that one of the subject contracts is a contract whereby a person performs work in an industry, and the other contracts are collateral to it, so that relief may be given in respect of all contracts pursuant to s 106(2A) IR Act.


History of the proceedings

4    In order to appreciate the context in which the question arises it is necessary to go into the history of the proceedings in a little detail. 5    The First Plaintiff (“Traderight”) entered into an Agency Agreement with the Defendant (“the Bank”) in August 2004. The Agreement set out the terms upon which Traderight “will operate a Branch of the Bank and, in connection with the operation of the Branch, will assist the Bank in the provision of the Bank’s Banking Products and Services to the Bank’s customers as the Bank directs” : Agency Agreement, Recital B. 6 The Second and Third Plaintiffs, Ms Smith and Mr Versace, are directors of Traderight and are parties to the Agency Agreement. They have also guaranteed Traderight’s performance of the Agreement. The Fourth Plaintiff (“Smith Partners”) and the Fifth Plaintiff (“Verich”) are shareholders of Traderight and are controlled by Ms Smith and Mr Versace respectively; they guaranteed Traderight’s performance under the Agency Agreement and charged their assets in support of the guarantee. 7 Mr Steven Bridgman, a director of Traderight, was also a party to the Agency Agreement. However, he is not a party to these proceedings. 8 The Agency Agreement required Traderight to acquire and fit out premises and to employ staff to operate its business in accordance with the Bank’s specifications. To finance the acquisition of the business and its operation, Traderight borrowed money from the Bank under a Facility Agreement. The Plaintiffs gave security in support of this borrowing. 9 Traderight has expended a considerable sum of money in acquiring premises, setting up its business, and operating it pursuant to the Agency Agreement. However, the agency business has failed. 10 On 29 September 2006, Traderight, Ms Smith and Mr Versace commenced proceedings against the Bank in the Industrial Relations Court of New South Wales (“IRC”) seeking relief under s.106 IR Act. One of the principal grounds for claiming relief was an allegation that the Bank had made a number of misrepresentations to the Plaintiffs as to the profitability of the proposed agency business. The Plaintiffs claimed that the misrepresentations had induced them to enter into the Agency Agreement and the collateral agreements, and that the various agreements had now become harsh and unfair in their operation. The Summons filed in the IRC sought orders declaring void the Agency Agreement and the related guarantees and securities and, in the alternative, compensation for losses suffered by Traderight and payment to Ms Smith and Mr Versace “as fair recompense for work and services” . 11    On 30 September 2006 the Bank terminated the Agency Agreement and on 25 October 2006 it gave notice to the Plaintiffs demanding payment of all monies owing under the Facility Agreement and the Agency Agreement. It also called up the securities given in support of the Facility Agreement. 12    On 31 October 2006 the Bank filed its Reply in the IRC proceedings. Paragraphs 2 and 3 of the Reply asserted that the contracts the subject of the proceedings were not contracts “whereby a person performs work in an industry” for the purposes of s 106 IR Act, so that the IRC had no power under s 106(5) to grant the relief claimed. The Reply denied many of the facts asserted in the Plaintiffs’ Summons. 13 On 20 December 2006 the Bank commenced proceedings against Traderight, Ms Smith and Mr Versace in the Supreme Court of Queensland claiming debts due under the Facility Agreement, the Agency Agreement and the various guarantees and securities. Somewhat curiously, the Bank also sought injunctions restraining the Plaintiffs from pleading in their IRC proceedings that the Bank had made misrepresentations inducing the Plaintiffs to enter into the Agency Agreement and the collateral agreements. 14 The Plaintiffs filed their Defences in the Queensland proceedings on 17 January 2007. On 21 January 2007 the Bank commenced proceedings in this Court seeking to have the IRC proceedings cross-vested and transferred to the Queensland Supreme Court to be heard together with the proceedings which it had commenced in that Court. 15 On 29 June 2007 this Court, by consent, made orders cross-vesting the IRC proceedings and the Queensland Supreme Court proceedings to this Court, to be heard together. 16 The Plaintiffs filed an Amended Statement of Claim on 12 October 2007. The Bank requested Further and Better Particulars on 17 October; they were provided on 27 November 2007. The Bank filed this strike-out application on 11 December 2007. It has not yet filed a Defence to the Amended Statement of Claim. 17 The Bank’s Notice of Motion, as amended, seeks a declaration that s 106 IR Act does not permit the granting of any relief to the Plaintiffs in respect of the Agency Agreement and the related contracts. It also seeks an order striking out the relief claimed under s 106 IR Act and the relevant paragraphs in the Amended Statement of Claim supporting the claim to that relief. 18 An interlocutory application seeking a declaratory order that a plaintiff’s claim to final relief is not available is procedurally unsound and is unnecessary. If the Court comes to the conclusion that the Amended Statement of Claim discloses no reasonable cause of action for relief under s 106 IR Act the Court will simply order that the relevant paragraphs of the pleading and the prayers for relief be struck out, without leave to re-plead.


The parties’ submissions

19 Mr Moses of Counsel, who appears for the Bank, acknowledges that in order to succeed in this application the Bank must surmount a very high hurdle. It must show that the Plaintiffs’ claims for relief under s 106 IR Act are so obviously untenable that they cannot succeed: a claim should not be struck out if there is a real question to be tried, whether it is a question of fact or law: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, at 129. Although the Court may decide a difficult question of law on a strike-out application, even if it involves hearing extensive argument, the Court will not usually do so unless resolution of the question of law will either bring the proceedings to an end or else substantially reduce the scope of the trial: Williams and Humbert Ltd v W&H Trademarks (Jersey) Ltd [1986] AC 386, at 435-6. 20 Mr Moses, in a thorough and helpful argument, submits that the law relating to the scope of the jurisdiction under s 106(1) IR Act has now been made clear by the High Court in a series of cases decided at the same time, namely, Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180, Batterham v QSR Ltd (2006) 225 CLR 237, and Old UGC Inc v Industrial Relations Commission of NSW in Court Session (2006) 225 CLR 274. The law as there laid down, Mr Moses says, makes it clear that none of the contracts or arrangements in respect of which s 106 relief is sought in the present case can be categorised as one “whereby a person performs work in any industry” within the meaning of those words in the section. 21    Mr Moses says further that it is clear from Solution 6 , Batterham and Old UGC that even if the Court finds that some particular provisions of the Agency Agreement required the performance of work and impacted upon the conditions of employment, nevertheless the jurisdictional power under s 106(1) reaches no further than those particular provisions so that no relief under the section can be granted in respect of the remainder of the contractual provisions. In particular, he says, it must be clear that no relief under the section could be granted in respect of contracts for the provision of guarantees and security. In this regard, Mr Moses relies particularly on the decision of Brereton J in Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319, at [122] and [124]. 22 Mr Cotman SC, who appears for the Plaintiffs, submits in an equally helpful response that:


– the Agency Agreement does indeed directly require the performance of work in an industry, namely, the financial services industry;

– while the contracts other than the Agency Agreement may not directly require the performance of work in an industry, they are contracts collateral to, or related to, the Agency Agreement so that they are within the reach of s 106, as expanded by the recently inserted s 106(2A) IR Act;

– the Plaintiffs have claimed relief not only under the IR Act, but for misleading and deceptive conduct under the Trade Practices Act 1974 (Cth), the Fair Trading Act 1987 (NSW) and the Australian Securities and Investments Commission Act 2001 (Cth), and at common law and in equity. All claims for relief are founded upon the same substratum of facts and circumstances so that even if the claims for relief under s 106 IR Act are struck out, the trial will still proceed on the same facts and will not be materially shortened;

– the Bank’s strike-out application is premature because it is made before discovery and the filing of evidence have placed before the Court all of the facts relevant to the issue of what, if any, work has been performed in an industry and how that work is related to the terms of the Agency Agreement.


The jurisdiction under s 106 IR Act 23 The following principles for the ascertainment of jurisdiction under s 106 IR Act may be ascertained from the majority judgments in Solution 6 ([18]-[20] and [41]), Batterham ([13]), and Old UGC ([25]):


– the first enquiry is whether a person has performed work in an industry;

– the second enquiry is what, if any, are the contractual terms or other arrangements “whereby” that work has been performed in the sense that the work is the consequence of, or in fulfilment of, the contractual terms or other arrangements;

– the third enquiry is to examine whether the contractual terms or other arrangements whereby the person performs work are harsh, unfair or unconscionable;

– if such terms are found, the fourth step is to decide what relief, if any, should be granted in respect only of those terms or arrangements, because jurisdiction under s 106 extends no further than to the terms or arrangements whereby work in an industry is performed.

24    While the law in relation to the first three steps in the enquiry as to jurisdiction remains as stated in Solution 6 , summarised above, the law in relation to the fourth step is no longer so clear. 25    The High Court in Solution 6 upheld the decision of the Court of Appeal that s 106(1) conferred no jurisdiction to interfere with those parts of a contract, or of related contracts, which did not directly lead to the performance of work in an industry. However, even before the appeal to the High Court had come on for hearing, the New South Wales Government had put in train an amendment to the IR Act in order to reassert the breadth of the s 106 jurisdiction, and to free it from the restrictions imposed by the Court of Appeal. 26 On 17 November 2005, nine days after the hearing of the appeal to the High Court in Solution 6 , the Industrial Relations Amendment Bill 2005 was introduced into the New South Wales Parliament. The Explanatory Note states that the objects of the Bill were, inter alia:
“(d) to clarify so much of the decision of the Court of Appeal of the Supreme Court [in Solution 6] that limited the unfair contracts jurisdiction of the Industrial Relations Commission with respect to related conditions or collateral arrangements that are not work-related, so as to make it clear that the jurisdiction extends to any related conditions or collateral arrangements (such as superannuation arrangements, share option agreements or franchise agreements) so long as the contract to which they are related or collateral is a contract whereby a person performs work in an industry and the performance of work is a significant purpose of the contractual arrangements made by the parties.”
27    The Second Reading Speech makes the position even plainer (at p.2):
“In Solution 6 , the Court of Appeal held that the Commission may only declare void or vary a collateral arrangement or related condition that itself leads directly to the performance of work. This interpretation of the section significantly narrows the scope of the Commission's unfair contracts jurisdiction. It is problematic because an arrangement that leads directly to the performance of work may consist of a formal work contract as well as related agreements, which, if themselves, may not lead to the performance of work. If this interpretation were continued, and a person's total package were not reviewable, then the Commission's unfair contracts jurisdiction would be narrowed to a significant extent for employees and independent contractors. It would then be open to unscrupulous employers to ensure that the contract for work was minimalist and carefully quarantined from other aspects of the relationship that are set out in different documents, or entered into at different times.”
28 In accordance with the object stated in the Explanatory Memorandum and the Second Reading Speech, the Bill introduced a new s 106(2A). The amending Act commenced on 9 December 2005. Section 106 now relevantly reads:

“(1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

(2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as:

(a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and

(b) the performance of work is a significant purpose of the contractual arrangements made by the person.

(3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time.”
29    The judgments of the High Court in Solution 6 , Batterham and Old UGC , which were d­elivered on 18 May 2006, refer in passing to the newly introduced s 106(2A), but they do not give that section any consideration because the judgments of the lower Courts the subject of the appeals were delivered before the amending Act had become law: see e.g. Solution 6 at [45]. 30 However, the judgment in Azzi , upon which Mr Moses relies, was delivered in April 2007, after s 106(2A) had come into operation. The learned trial judge states the law as to the reach of the s 106 jurisdiction to “collateral contracts” as it was decided in Solution 6 , without referring to the new s 106(2A). To that extent, and with great respect, I do not think that I can rely on the judgment in Azzi in this case. 31 Although s 106(2A) has not yet received a great deal of judicial consideration, there are some useful decisions which should be noticed. The Full Bench of the Industrial Relations Court in Wirraway (NSW) Pty Ltd v Ultra Tune Australia Pty Ltd [2006] NSWIRCom 300 observed, at [51], purely as obiter, that “on its face [s 106(2A)] appears to re-state the broader approach adopted, prior to the Court of Appeal’s decision in Solution 6 ”. See also to the same effect per Schmidt J in Kennett & Anor v Mayrana Pty Ltd (No 4) [2006] NSWIRComm 357, at [46]. 32 In Barataud v Chipperfield (No 3) [2006] NSWIRCom 249, the Full Bench considered the effect of s 106(2A) on the decision in Solution 6 . At [36] their Honours said:
“Section 106(2A) empowers the Commission to declare void or vary any ‘related condition’ or ‘collateral arrangement’ to a contract whereby a person performs work in an industry, even if the related condition or collateral arrangement does not relate to the performance of work, so long as the performance of work is a significant purpose of the contractual arrangements made by the person. In our view, this latter condition requires a factual assessment of the contractual arrangements, viewed as a whole, to determine whether the performance of work could be described as a significant purpose .” [Emphasis added.]
33    In Kennett (supra), the applicants sold a business to the respondents. The applicants claimed that in addition to the sale agreement the parties had agreed that the applicants would be employed in the business after it had been sold. The respondents denied such an agreement. The respondents filed a Notice of Motion to strike out the applicants’ claim relating to the sale agreement on the ground that, in the light of the decision in Solution 6 , it was clear that the Court lacked jurisdiction. 34    Schmidt J, who had been a member of the Full Court in Barataud , had to deal with the Notice of Motion in the rather unusual circumstance that the parties had agreed that all of the evidence in the proceedings would be filed and the Court would deal with the jurisdictional issue on that evidence at the commencement of the trial. The Court therefore had far more evidence relating to the jurisdictional question than is usually available when a party files a Notice of Motion to dismiss summarily a s 106 claim for want of jurisdiction shortly after the proceedings are commenced. 35 Her Honour referred to the passage from Barataud which I have quoted above. Her Honour considered that it was necessary to have “a thorough understanding of the facts” – to use a phrase taken by her Honour from the dissenting judgment of Kirby J in Solution 6 at [68] – to determine whether the employment agreement alleged by the applicants was sufficiently related to the sale agreement for the purposes of jurisdiction under s 106. Further, to determine whether the performance of work was a significant purpose of the overall contractual arrangements between the parties, as required by s 106(2A)(b), her Honour considered that it would be necessary to examine facts which, her Honour accepted, could include evidence from the applicants as to whether they would have entered into the sale agreement but for the alleged promise of subsequent employment (at [88]). 36 I think that it is fair to say that the development of the law as to the interpretation of s 106(2A) is in its early stages. One interpretation of s 106(2A)(b) could be that the Court has regard only to the purpose of the contract or of the arrangements as objectively determined from the terms of the contracts or arrangements as seen in the context of their surrounding circumstances, much in the same way as the Court determines the interpretation of a contract according to the principles of the common law: see, for example, per Gleeson CJ in News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563, at [18]. 37 Another possible interpretation could be that, as performance of work by a person is “the hinge about which s 106 turns” ( Solution 6 at [41]), the Court may receive the evidence of a person who entered into a contract or arrangement and also performed work as to his or her subjective intention in doing so: see South Sydney District Rugby League Football Club per Callinan J, at [212]. The latter interpretation was applied by Schmidt J in Kennett at [83]. 38 The interpretation of s 106(2A) is not yet settled. Both as a matter of policy and discretion, it seems inadvisable that I decide an important question of statutory interpretation without a full hearing at which all the relevant facts are found. 39 In the present case, of course, there is not yet any evidence of the subjective intent or purpose of any of the Plaintiffs, particularly Ms Smith and Mr Versace, in entering into any of the contracts in respect of which relief is sought. If such evidence is admissible, injustice may be done to one or other of the opposing sides if the availability of relief under s 106 is finally determined without receiving that evidence.

Whether the Agency Agreement arguably qualifies under s 106

40    It is necessary to examine the Agency Agreement in some detail to ascertain whether, at least arguably, it leads with sufficient directness to a person performing work in an industry. I use the neutral expression “with sufficient directness” because it is not easy – indeed, it may be impossible – to define in a neat formula applicable to all cases exactly what nexus is required between the terms of a contract or arrangement and the performance by a person of work in an industry. 41    In Solution 6 , the Court gave consideration to what had become almost an accepted formula for the nexus between contract and work as a result of the decision in Stevenson v Barham (1977) 136 CLR 190. At 201, Mason and Jacobs JJ said that a contract “whereby a person performs work in any industry” had to be one “which leads directly” to the performance of such work. In Solution 6 , the majority judges said at [28]:
“The description of a contract as ‘one which leads directly to a person working in any industry’ is not without its difficulty. What is meant, in this context, by ‘directly’ ? As Lord Diplock, giving the advice of the Privy Council in Caltex Oil (Aust) Pty Ltd v Feenan , pointed out, this, and other glosses on the section, must not be permitted to divert argument away from the words of the statute in an attempt to ‘construe’ the words in which judges express their reasons for reaching a conclusion in a particular case. To divert attention in that way is wrong. And even the gloss on the word ‘whereby’ offered in Caltex Oil (in consequence of which or in fulfilment of which), like the gloss offered earlier in these reasons (according to which), must not be misunderstood as necessarily solving every difficulty that may be presented in seeking to apply the statutory language.”

At [51] in Solution 6 , Kirby J said:
“In deciding whether the propounded ‘arrangements’ are ones whereby a party performs work in an industry, there is no way that a correct conclusion can normally be reached except by examining closely the details of those arrangements. Necessarily, this takes the decision-maker beyond the text of any written contract. It demands a most thorough understanding of the parties’ relationships.”
42    I particularly note these remarks as the Plaintiffs in the present case plead that work in an industry was performed not only under a contract, namely, the Agency Agreement, but also under “an arrangement” so as to invoke the jurisdiction in s 106(1): see, for example, Amended Statement of Claim (Pleading and Particulars), paras 4(f), 5(f), 297, 306, 309 and 310. 43 Underlying the passages from Solution 6 which I have quoted is the theme that whether or not a contract or arrangement is one “whereby” work is performed is, in many cases, a matter of impression derived from a close examination of the terms of each particular contract or arrangement and the effect that they have on the work which is actually done, or to be done, in each particular case. Sometimes it may be clear from the contract alone that it can have no bearing on whether anyone does any particular work in any industry. There may be a case, like Solution 6 , in which the contract presupposes, without expressly requiring, that someone thereafter is going to perform work otherwise there would be no point in, for example, purchasing a business under the contract. In other cases, the impact of contractual terms or arrangements on the performance of work may not be so clear. This, in my opinion, is such a case. 44 It is necessary to give some examples of terms in the Agency Agreement which, in certain factual circumstances, could lead to the conclusion that the Agency Agreement is a contract whereby a person has performed work in an industry. 45 I preface this examination by emphasising that it is not a jurisdictional requirement of s 106 that a person performing work in an industry be a contracting party: see Mayne Nickless Ltd v Industrial Relations Commission [2004] NSWCA 359, at [46] and [54]; Azzi (supra) at [121]. 46 Recital B of the Agency Agreement records that the parties (including Ms Smith and Mr Versace) have agreed that Traderight will operate a branch of the Bank and will assist the Bank to provide services to its customers “as the Bank directs” . 47    Recital C provides:
“This Agreement sets out the terms of the agreement between the Bank, the Agent and the directors of the Agent for the operation of the Branch and associated matters.”
48    Clause 2.1 requires Traderight to disclose to the Bank the insolvency of a director and whether a director or employee has a criminal record or has done something which may lead the Bank to conclude that Traderight is not fit and proper to act as the Bank’s agent. 49    By Clause 3.1, the Bank appoints Traderight to operate the branch, to manage a specific number of tasks, and to “perform any other tasks in connection with the operation of the Branch as directed by the Bank” . 50    Clause 3.2 prohibits any change in control of the Board of Traderight without the Bank’s consent. 51    Under Clause 3.3 the Bank must approve any engagement or dismissal of staff employed by Traderight and may impose conditions on its approval. 52    Clause 7.1 provides:
“Compliance
The Agent must ensure compliance with the Bank’s policies, practices and procedures as set out in any written instructions, directions, notices, bulletins, communications, correspondence, letters, circulars or oral instructions from a person of appropriate authority.”

Clause 10.2 provides:

“Branch Manager

(a) The Agent will appoint a Branch Manager for the Branch.

(b) The Branch Manager will be a director or shareholder of the Agent.

(c) The Agent will ensure that the Branch Manager is responsible for the day to day operation of the Branch.

(d) The Agent will obtain the approval of the Bank before appointing the director or shareholder as the Branch Manager.

(e) The Agent will obtain the written approval of the Bank before any change in the identity of the Branch Manager.”


Mr Bridgeman was the Branch Manager appointed pursuant to this clause.

Clause 10.3 provides:
“Expertise
Any Personnel engaged by the Agent must meet any standards as to qualifications, experience, training and personal attributes required by the Bank.”

The definition of “Personnel” includes directors of Traderight.

53    These clauses are sufficient to demonstrate, in my opinion, that it is, at the very least, arguable that under the Agency Agreement the Bank was able to require not only the employees of Traderight but also Mr Bridgeman, Ms Smith and Mr Versace to have certain qualifications and to perform their duties in a manner and to a standard directed by the Bank. The Bank also had power to direct employees to be dismissed. It is, at the very least, arguable that these provisions and others to like effect not only directly envisaged but directly required persons, including Mr Bridgeman, Ms Smith and Mr Versace, to perform work in the financial services industry in a way which complied with the Bank’s directions. 54    At this stage of the proceedings, without the benefit of a full exploration of the facts and looking only at the pleadings in the Amended Statement of Claim and terms of the Agency Agreement, I find it impossible to conclude that Mr Bridgeman, Ms Smith and Mr Versace, at least, did not perform work in an industry in fulfilment of, or consequent upon, some of the terms of the Agency Agreement. 55    It follows that I cannot find with sufficient assurance to satisfy the test in General Steel Industries that no term of the Agency Agreement could come within the jurisdiction of s 106. In this conclusion I adopt the approach taken by Schmidt J in Kennett at, for example, [70] and [75]. 56 If I cannot conclude that no part of the Agency Agreement is within the jurisdiction of s 106, I cannot conclude that the Plaintiffs must fail in their claim that the remainder of the Agency Agreement and the other contracts in respect of which they seek relief under the section are also amenable to the jurisdiction, by virtue of s 106(2A). All contracts were obviously entered into at or about the same time and in order to bring to fruition the Plaintiffs’ venture into the agency relationship with the Bank. There must, at the very least, be an available argument that all such contracts are collateral to, or related to, the terms of the Agency Agreement whereby work was performed, and that the performance of that work was a significant purpose of the overall contractual arrangements made by the Plaintiffs.


Conclusions

57 For the above reasons, I am unable to accept Mr Moses’ submissions that it is clear beyond reasonable argument that neither the Agency Agreement nor any of the other contracts could fall within the jurisdiction of s 106 IR Act so that the claims founded on that section should be struck out. 58 Further, I accept Mr Cotman’s submissions that striking out the s 106 claims would not substantially reduce the factual issues for trial. In that circumstance, in the exercise of discretion, I decline to determine difficult questions of statutory and contractual interpretation in an area of law which is in a state of flux, without a full investigation of the facts.


Orders

59 I note that the Plaintiffs do not press a claim under s 106 IR Act for damages for breach of contract and that they will amend the pleading accordingly. I need make no order in that regard at this stage. 60 The Defendant’s Notice of Motion is dismissed. I will hear the parties as to costs.
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