Yim v Industrial Relations Commission of NSW - [2007] NSWCA 77

NEW SOUTH WALES COURT OF APPEAL

CITATION: Sin Yong Yim & Tae Sik Kim v Industrial Relations Commission of NSW & Hyun Sung (Marco) Choi [2007] NSWCA 77
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40091 of 2005

HEARING DATE(S): 16 March 2007

JUDGMENT DATE: 4 April 2007

PARTIES:
Sin Yong Yim (First Claimant)
Tae Sik Kim (Second Claimant)
Industrial Relations Commission of NSW (First Respondent)
Hyun Sung (Marco) Choi (Second Respondent)

JUDGMENT OF: Spigelman CJ Mason P Handley AJA

LOWER COURT JURISDICTION: Industrial Relations Commission of NSW

LOWER COURT FILE NUMBER(S): IRC 7002 of 2001

LOWER COURT JUDICIAL OFFICER: Marks J

LOWER COURT DATE OF DECISION: 11 December 2003

LOWER COURT MEDIUM NEUTRAL CITATION:
Choi v Yim [2003] NSWIRComm 425

COUNSEL:
J M Miller (Claimants)
B D Hodgkinson SC, I C Latham (Second Respondent)

SOLICITORS:
B McIntyre, Dibbs Abbott Stillman (Claimants)
H Macken, Beston Macken McManis (Second Respondent)

CATCHWORDS:
INDUSTRIAL LAW - New South Wales - Appeals and references - Finality of decisions - Industrial Relations Commission — appeals from — operation of privative clause – exception under s179(4) of the Industrial Relations Act – refusal by the Full Bench to give leave to appeal on a jurisdictional matter or refusal to decide a jurisdictional matter amounts to a determination on an “issue of jurisdiction”.
INDUSTRIAL LAW – New South Wales – Unfair contracts – Jurisdiction – s106 (2A) of the Industrial Relations Act does not apply when s19B of Schedule 4 operates to exclude it.
INDUSTRIAL LAW - New South Wales - Unfair contracts - Jurisdiction - Whereby a person performs work in any industry under s105 and s106 of the Industrial Relations Act – contract between proprietor and fellow investors is not a contract for the performance of work in any industry.
ADMINISTRATIVE LAW – Prerogative writs and orders – Prohibition – Grounds on which granted – claimant must be directly affected by the course pursued by a tribunal and show that the tribunal is about to act to his or her detriment in excess of its authority.

LEGISLATION CITED:
Industrial Relations Act 1996; s106 (1); s106(2A); s179; Schedule 4 s31B; Schedule 4 s19B
Industrial Relations Amendment Act 2005; cl 8; cl 7
Industrial Relations Commission Rules; Rule 18A(1)

CASES CITED:
Attorney-General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Batterham v QSR Ltd (2006) 225 CLR 237
BEA Systems Pty Limited v Industrial Relations Commission (2005) 63 NSWLR 347
Choi v Yim [2004] NSWIRComm 347
Choi v Yim [2003] NSWIRComm 425
Director-General of Social Services v Chaney (1980) 47 FLR 80
Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180
Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) (2006) 153 IR 310
McDonald’s Australia Holdings Limited v Industrial Relations Commission (2005) 144 IR 219
Mitchforce Pty Ltd v Industrial Relations Commission (2003) 57 NSWLR 212
Old UGC Inc v Industrial Relations Commission (2006) 225 CLR 274
Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476
Ready Mixed Concrete (Victoria) Pty Limited v Federal Commissioner of Taxation (1969) 118 CLR 117
Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82
South Eastern Railway Co v Railway Commissioners (1881) 6 QBD 586
Sydney Water Corporation Limited v Industrial Relations Commission (NSW) (2004) 61 NSWLR 661
The Queen v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Limited (1953) 88 CLR 100
The Queen v Commonwealth Court of Conciliation and Arbitration; Ex parte The Broken Hill Prop Co Limited (1909) 8 CLR 419
The Queen v Ross-Jones; Ex parte Green (1984) 156 CLR 185
Zainal bin Hashim v Government of Malaysia [1980] AC 734

DECISION:
1 The First Respondent is prohibited from hearing or determining the proceedings under s106 of the Industrial Relations Act 1996, being proceedings No IRC 01/7002
2 The Second Respondent pay the Claimants’ costs in this Court.

JUDGMENT:

- 27 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40091/05
SPIGELMAN CJ
MASON P
HANDLEY AJA
Wednesday 4 April 2007

Sin Yong YIM & Tae Sik KIM v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & Hyun Sung (Marco) CHOI

Facts:
The Claimants and the Second Respondent reached an agreement in the form of an incorporated joint venture, called “the Business Agreement”. The Claimants were investors who funded the future operating expenses of the existing business of importing, manufacturing and distributing ginseng products. The Claimants also provided office space for and funds for the wages of the Second Respondent and an employee, who were to perform the work of the joint venture. The relationship broke down. The Second Respondent lodged a claim with the then Industrial Relations Commission alleging that the Business Agreement was an unfair contract within the meaning of s106(1) of the Industrial Relations Act (“the Act”).
The Claimants challenged the jurisdiction of the then Industrial Relations Commission to hear the matter. Justice Marks dismissed the Notice of Motion as premature and found it unnecessary to deal with the challenge to jurisdiction. The Claimants appealed to the Full Bench of the Commission. The Full Bench refused to give leave to appeal on the jurisdictional question. The question of jurisdiction was remitted to Justice Marks who once again rejected the challenge to jurisdiction and dismissed the Notice of Motion.
The Claimants invoke the supervisory jurisdiction of the Court. The challenge to the jurisdiction of the Industrial Court is made on alternative grounds:

that there is no “contract whereby a person performs work in any industry” within the meaning of s106(1) of the Act.
That the relief sought in the Summons was not of a character which could be sought in such proceedings.
HELD:
Per Spigelman CJ, Mason P and Handley AJA agreeing.
Privative clause
1The failure or refusal to finally determine the jurisdictional issue by Marks J is a purported decision on an issue of jurisdiction. [24] [91] [92] [97]
Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 applied.
Batterham v QSR Ltd (2006) 225 CLR 237; Mitchforce Pty Ltd v Industrial Relations Commission (2003) 57 NSWLR 212; Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) (2006) 153 IR 310 considered.
2Section 179(1) and (2) do not preclude this Court from determining this matter by reason of the application of s179(4)(b). The Full Bench of the Industrial Court refused to give leave to appeal from the decision of Marks J. The term “issue of jurisdiction” in the legislation encompasses a situation in which a jurisdictional matter is raised for determination but is not finally decided. [15] [19] [26]-[30] [91] [92]
Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476; Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180; Director-General of Social Services v Chaney (1980) 47 FLR 80; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 applied.
Jurisdictional Issue
3The intention of Parliament when enacting the second sentence of s19B of Sch 4 of the Act was to preserve, against the retrospective effect of the first sentence, the position of litigants who had invoked the jurisdiction of this Court and of the High Court prior to the enactment of the Industrial Relations Amendment Act 2005. As these proceedings relate to a contract made before the commencement of s106(2A), s19B of Sch 4 of the Act operates such that this Court should determine the jurisdictional issue without regard to the effect of s106(2A). [44] [48]-[52] [91] [92]
Batterham v QSR Ltd (2006) 225 CLR 237; Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180; Old UGC Inc v Industrial Relations Commission (2006) 225 CLR 274; Zainal bin Hashim v Government of Malaysia [1980] AC 734; Attorney-General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557 referred to.
Performance of Work
4A contract by a proprietor of a business with fellow investors is not a contract “according to which … in consequence of which or in fulfilment of which” that proprietor performs work. While the Business Agreement envisaged a work relationship, it was not itself a contract “whereby a person performs work” within the meaning of s105 and s106 of the Act. [58] [60] [63]-[64] [91] [92]
Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180 applied
Batterham v QSR Ltd (2006) 225 CLR 237; Old UGC Inc v Industrial Relations Commission (2006) 225 CLR 274; Ready Mixed Concrete (Victoria) Pty Limited v Federal Commissioner of Taxation (1969) 118 CLR 117; McDonald’s Australia Holdings Limited v Industrial Relations Commission (2005) 144 IR 219 considered.
Per Handley AJA
5The contract of employment was with a company which is not party to the proceedings, hence the Industrial Court has no jurisdiction to avoid or vary the employment contracts in the proceedings as constituted. [100]-[102]
Claimants’ Alternative Submission
6Alternatively, the Claimants asserted that the Commission would exceed its jurisdiction even if s106(2A) applied. This matter was not raised before the Industrial Court and this Court should not, as a matter of comity, consider the alternative basis on which the Claimants rely. [72] [91] [92]
Sydney Water Corporation Limited v Industrial Relations Commission (NSW) (2004) 61 NSWLR 661 referred to.
Orders
7An order in the nature of prohibition is discretionary but should issue as of right when a claimant is directly affected by the course pursued by a tribunal and the tribunal is about to act to his or her detriment in excess of its authority. The Claimants in this case satisfy the first limb. The second limb is satisfied only with respect to the performance of work challenge to jurisdiction but not, in accordance with the principle of restraint, with respect to the relief claimed challenge to jurisdiction. [76] [82] [91] [92]
The Queen v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Limited (1953) 88 CLR 100; Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180; Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) (2006) 153 IR 310 applied.
The Queen v Ross-Jones; Ex parte Green (1984) 156 CLR 185; Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; Batterham v QSR Ltd (2006) 225 CLR 237 considered.
8There is no discretionary reason why this Court should refuse prerogative relief. [89] [91] [98]
9 Accordingly the orders are:

The First Respondent is prohibited from hearing or determining the proceedings under s106 of the Industrial Relations Act 1996, being proceedings No IRC 01/7002.
The Second Respondent pay the Claimants’ costs in this Court. [90] [91] [92] [103]

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40091/05
SPIGELMAN CJ
MASON P
HANDLEY AJA
Wednesday 4 April 2007

Sin Yong YIM & Tae Sik KIM v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & Hyun Sung (Marco) CHOI

Judgment

SPIGELMAN CJ: The Claimants invoke the supervisory jurisdiction of this Court with respect to proceedings in the Industrial Court of New South Wales purporting to invoke the jurisdiction of that Court under s106 of the Industrial Relations Act 1996 (“the Act”). The relief sought is twofold. First, an order in the nature of a writ of prohibition to prevent the continuation of the proceedings. Secondly, an order in the nature of a writ of certiorari for the removal of the proceedings to this Court and an order that the proceedings be dismissed.
The Claimants challenged the jurisdiction in the then Industrial Relations Commission. By Notice of Motion filed on 12 November 2003, the Claimants sought an order that the Summons be dismissed for want of jurisdiction.
On 1 December 2003, Justice Marks dismissed the Notice of Motion on the basis that there was an arguable case revealed on the pleadings and that it was premature to characterise the agreement alleged in the pleadings at that stage. He expressly found it unnecessary to deal with what he described as the “principal attack on the jurisdiction of the court”, which could be determined subsequently. (See Choi v Yim [2003] NSWIR Comm 425 esp at [14] and [15].)
The Claimants appealed to the Full Bench of the Commission. The Application for Leave to Appeal and Appeal was expressed to be from the dismissal by Marks J of the Claimants’ Notice of Motion of 12 November 2003.
The Claimants raised two questions in their Application for Leave to Appeal and Appeal:
“(i) Whether Marks J erred in dismissing the Notice of Motion on grounds that the application to strike out the proceedings … was prematurely made.
(ii) Whether Marks J erred in refusing to strike out the proceedings.”
During argument before the Full Bench, the Second Respondent appeared to concede that Marks J was in error in failing to determine the jurisdictional challenge. The Second Respondent expressly stated that the matter ought to proceed on the current pleadings. Notwithstanding an invitation from the Full Bench to do so, counsel for the Second Respondent indicated that no amendment was proposed and that the jurisdictional question could be determined without further evidence. Counsel for both the Second Respondent and for the Claimants urged the Full Bench to determine the ultimate jurisdictional issue.
In the event, the Full Bench did not make any such determination. It resolved to grant leave to appeal and to uphold the appeal, but only on the conceded basis that Marks J erred in holding that it was premature to determine the jurisdictional question.
On 13 October 2004, the Full Bench gave leave to appeal and upheld the appeal solely with respect to (i), set out in [5] above. Accordingly, the Full Bench refused to give leave to appeal with respect to (ii), although both parties had submitted that the Full Bench should decide that jurisdictional issue.
The third step in the proceedings before the Commission was that, upon the remitter, Marks J heard the challenge to the jurisdiction. (See Choi v Yim [2004] NSWIR Comm 347.) His Honour rejected the challenge to the jurisdiction and dismissed the Notice of Motion of the Claimants on 2 December 2004.
There was no appeal from the second judgment of Marks J to the Full Bench of the Industrial Court. Proceedings were commenced in this Court on 21 February 2005.
The Privative Clause
The first matter that requires attention is the jurisdiction of this Court to hear the Application. Section 179 of the Industrial Relations Act (“the Act”) provides:
“179(1)                  A decision of the Commission (however constituted) is final and may not be appealed against, reviewed, quashed or called into question by any court or tribunal.
(2)          Proceedings of the Commission (however constituted) may not be prevented from being brought, prevented from being continued, terminated or called into question by any court or tribunal.
(3)          This section extends to proceedings brought in a court or tribunal in respect of a decision or proceedings of the Commission on an issue of fact or law.
(4)          This section extends to proceedings brought in a court or tribunal in respect of a purported decision of the Commission on an issue of the jurisdiction of the Commission, but does not extend to any such purported decision of:
(a)          the Full Bench of the Commission in Court Session, or
(b)          the Commission in Court Session if the Full Bench refuses to give leave to appeal the decision.
(5)          This section extends to proceedings brought in a court or tribunal for any relief or remedy, whether by order in the nature of prohibition, certiorari or mandamus, by injunction or declaration or otherwise.
(6)          This section is subject to the exercise of a right of appeal to a Full Bench of the Commission conferred by this or any other Act or law.
(7)          In this section:
decision includes any award or order.”
By force of s31B in Sch 4 of the Act, inserted by cl 8 of the Industrial Relations Amendment Act 2005 (“the 2005 Amendment Act”), the new form of s179 applies to proceedings instituted before the commencement of the amendments. The present proceedings are of that character. There was no dispute that s179 in its present form applies to these proceedings.
Section 179(2) has the effect that the manner in which this Court exercised its supervisory jurisdiction, before the Industrial Court made a decision, can no longer occur. (See Solution 6 Holdings Ltd v Industrial Relations Commission (NSW) (2004) 60 NSWLR 558;[2004] NSWCA 200.)
Section 179(4), by reason of the words “This section extends … but does not extend”, operates as a qualification of s179(2) which applies to “proceedings” of the Commission, as well as to “decisions”, to which s179(1) applies.
There was no submission that s179(2) did not apply to the orders sought in this Court. The issue agitated in this Court was whether, relevantly, s179(2) “does not extend” to the first decision by Marks J of 11 December 2003, by reason of the application of s179(4)(b), in view of the decision of the Full Bench of 13 October 2004. The Claimants did not pursue a challenge to the second judgment of Marks J which, as I have noted, was not the subject of any appeal to the Full Bench.
The issue turns on whether the rejection by the Full Bench of the application for leave to appeal from the second aspect of the judgment of Marks J, identified as (ii) in par [5] above, was a refusal to give leave “in respect of a purported decision of the Commission on an issue of the jurisdiction of the Commission”.
An “issue of the jurisdiction of the Commission” had been raised before Marks J. He determined the matter on two bases. The first, namely that the application was premature, was a matter which was the subject of a successful appeal to the Full Bench. The second basis was:
“[15] In these circumstances it becomes unnecessary to deal with the respondents’ principal attack on the jurisdiction of the Court to grant relief in these proceedings namely that the agreement does not fall within s106 of the Act.”
The decision that it was “unnecessary to deal with” a submission, in my opinion, answers the description of a decision on an “issue of the jurisdiction of the Commission”. His Honour rejected the application for an order dismissing the summons for want of jurisdiction.
Leave was expressly sought from the Full Bench with respect to the ‘refusal’ by Marks J “to strike out the proceedings”. Indeed, before the Full Bench both parties urged their Honours to determine the ultimate jurisdictional matter. If the decision of Justice Marks was a “purported decision on an issue of jurisdiction” then the Full Bench has refused to give leave to appeal from that decision.
As I pointed out in Kirk Group Holdings Pty Limited v WorkCover Authority (NSW) (2006) 154 IR 310; [2006] NSWCA 172 at [34], a decision “on an issue of jurisdiction” by a superior court of record would not normally be described as a “purported decision”.
The Industrial Court has jurisdiction to determine whether it has jurisdiction. A decision on an issue of jurisdiction would never be a “purported decision” in the sense considered in the line of cases in this Court to which Parliament was responding. (Commencing with Mitchforce Pty Limited v Industrial Relations Commission (2003) 57 NSWLR 212; [2003] NSWCA 151 esp at [61]-[65], [70]-[73], [90]-[92], [104]-[107].)
There is a rather clumsy use of terminology in s179(4), but the intent is clear when regard is had to the legislative history. (See Kirk Group Holdings supra at [28]-[36].)
When the 2005 Amendment Act was enacted Parliament did not have the benefit of the High Court’s observations on the limited effect of the word “purported”. (See Batterham v QSR Limited (2006) 225 CLR 237; [2006] HCA 23 at [26].) As I indicated in Kirk supra at [31]-[34], this Court should await a Full Bench determination on an “issue of jurisdiction” whether within (a) or (b) of s179(4), but thereafter it was the intention of Parliament by the exception – “does not extend” – that this Court can exercise its supervisory jurisdiction.

The process of reconciliation between a conferral of jurisdiction and a privative clause, required by Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 (see the summary in Mitchforce supra at [68]) supports the conclusion that a failure or refusal to finally determine the jurisdictional issue, relevantly by Marks J, is a “purported decision on an issue of jurisdiction”. The words of the exception, which permit this Court to exercise its supervisory jurisdiction, should not be given a narrow or technical meaning.
The approach to the interpretation of a privative clause was restated, perhaps most relevantly, by the High Court with respect to s179 of the Act in its former terms in Fish v Solution 6 Holdings Limited (2006) 225 CLR 180; [2006] HCA 22 at [33], when the Court quoted from the joint judgment in Plaintiff SI57/2002 supra at [72] referring to “the basic rule, which applies to privative clauses generally … that it is presumed that the Parliament [or, it may be interpolated, a State Parliament] does not intend to cut down the jurisdiction of the courts save to the extent that the legislation in question expressly so states or necessarily implies”.
In the present case that approach leads to the conclusion that it is not appropriate to take a narrow view of the scope of “an issue of jurisdiction”. There is no express statement or necessary implication that there must be an actual determination asserting jurisdiction.
The words chosen by Parliament are not expressed in terms of a determination by the Commission that it does have jurisdiction. The terminology used is “an issue of jurisdiction”. The word “issue” encompasses a situation in which a jurisdictional matter is raised for determination but is not finally decided. That is how it should be interpreted in a clause limiting the scope of a privative clause.
There are statutes in which the word “decision” refers to a final decision of the suit or of an issue. However, the word “decision” is a term of “indeterminate meaning” and may extend to a “determination on any question of substance or procedure”. (See Director-General of Social Services v Chaney (1980) 47 FLR 80 at 100; see also Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335.) The meaning of the word “decision” depends on the particular statutory context.
In s179(4), the use of the words “an issue of the jurisdiction” indicates a broader reach than may “a decision on jurisdiction”. Furthermore, the application by s179(4)(b) to a refusal of leave, indicates that Parliament intended to ensure that the Full Bench had an opportunity to decide the matter, but that the Full Bench did not have to decide it. Leave, of course, could be refused for reasons other than the merits of the case.
For these reasons, this Court is not precluded by s179(1) or (2) from determining the Application.
The Nature of the Proceedings
The critical allegation in the Summons is as follows:
“[23]      In early March 2000 the Applicant and the Respondents reached an agreement (‘the Business Agreement’) by which:
(a)          Yim and Kim would join the Applicant’s business and would become directors of and equal shareholders in KGAC.
(b)          Yim and Kim would invest funds equally and progressively to a joint total of $300,000 during the 2000 calendar year to fund the importation of fresh supplies of ginseng product from Korea, the marketing of that product in Australia and the running expenses of the business.
(c)          Consistent with a business plan previously developed by the Applicant, two new companies would be created with the names ‘Korea Insam Australian Centre’ and ‘Ginseng World’ with the function of the various companies being as follows:
(i)           KGAC would continue to import ginseng products (drinks and medicines) from Korea;
(ii)          Korea Insam Australia Centre would import ginseng powder and juice extract and use those raw materials to manufacture ginseng products in Australia;
(iii)         Ginseng World would handle sales in Australia of products imported into Australia by KGAC and products manufactured in Australia by Korea Insam Australia Centre.
(d)          The Applicant would do all the work necessary to conduct the business including:
(i)           developing new products (including products for manufacture in Australia);
(ii)          arranging for the proposed importation of ginseng products; and
(iii)         marketing of ginseng products, including pursuing the marketing of products to Coles and Woolworths supermarkets (through the broker of supermarket stock, NBN) and to other supermarkets directly).
(e)          The operating expenses of the business to be funded by Yim and Kim, would include:
(i)           a wage of $2,000 per month to the Applicant, until the ginseng business was self-supporting;
(ii)          a wage of $4,000 per month for an employee to assist in the running of the business
together with other offices expenses such as phone, facsimile etc estimated at about $1,000 per month.
(f)           Yim and Kim would provide office space in the premises of Woozoo out of which KGAC could trade and the Applicant could work.
(g)          Yim and Kim would not work in the business of KGAC but would instead continue to remain engaged full time on their own business activities.
(h)          All profits earned by KGAC from the import and sale of ginseng products would be shared equally between the Applicant Yim and Kim.
(i)           All profits earned by KGAC from the import and sale of Ginseng products would be ploughed back into the business to fund further imports until KGAC was once again self-sufficient.”
The pleading outlined the implementation of the Business Agreement as follows:
“[24]      On 21 March 2001, pursuant to the Business Agreement:
(a)          the Applicant’s wife was removed as a director of KGAC and the respondents were appointed as directors and issued with shares such that following 21 March 2001 the shareholding in KGAC was as follows:
Applicant:            one third
Yim:  one third
Kim:  one third
(b)          the Applicant commenced working on the business out of the Woozoo premises.
[25]        From 21 March 2000 the Applicant worked on developing new ginseng products, pursued negotiations with Coles and other supermarkets and undertook other marketing work.
[26]        In late April or early May 2000 the Applicant arranged for the purchase and import of ginseng drinks from the Korean supplier. In particular, the Applicant negotiated the purchase of 2 containers of ginseng drinks from the Korean supplier for an amount of US$46,800 and at that time took up the Free Container Offer so that 3 containers were shipped in response to the order (‘the initial 3 containers’).
[27]        In May and June 2000 Yim and Kim jointly provided funds totalling about $100,000 which funds were used to pay the Korean Supplier for the 2 containers and to pay for freight, customs clearance, GST and other transport charges.
[28]        In July 2000 the initial 3 containers arrived in Australia and passed through customs and were placed in storage in the warehouse of a transport company (‘the Warehouse’).”
Thereafter the relationship broke down in a way that it is unnecessary to recount.
The Second Respondent asserted that:
“[48]      As a consequence of the actions of Yim and Kim:
(a)          The business of the Applicant trading under the name KGAC has been destroyed.
(b)          The Applicant has lost his work and the wage he was to earn from the business in which Yim and Kim had agreed to participate.
(c)          The Applicant has lost the opportunity to share in the profits on the sale of the remaining stock in the initial 3 containers and the stock in the GW container.
(d)          The Applicant has lost the opportunity to share in the future profits of the business in which Yim and Kim had agreed to participate.
(e)          The Applicant has been left with personal responsibility for the monies outstanding to the supplier of the GW containers and with a debt to his mother of $17,000.
(f)           The Applicant’s capacity to continue selling and importing ginseng products has been harmed by the ‘dumping’ by Yim and Kim of the product taken by them and the damage to his reputation and the goodwill he had developed among customers.”
The Second Respondent pleaded his cause of action under s106 of the Act as follows:
“[49] The Business Agreement was a contract or arrangement whereby work was performed in an industry in New South Wales within the meaning of s105 of the Act.
[50] The Business Agreement is an unfair contract within the meaning of s106(1) of the Act in that it is unfair, harsh or unconscionable or has become unfair, harsh or unconscionable as a result of the conduct of the Respondents:
Particulars
(a)          The Respondents, without proper cause and without paying any compensation, unfairly and unjustly excluded the Applicant from the business of KGAC.
(b)          The Respondents have destroyed the business built by the Applicant under the name KGAC.
(c)          The Respondents, in August 2000, ceased paying the Applicant for work performed under the Business Agreement.
(d)          In all the circumstances, the weekly amount payable to the Applicant under the Business Agreement was less than the amount that he ought fairly have been paid.
(e)          The Respondents have taken the whole of the stock of the business of KGAC and converted that stock to their own use contrary to the spirit and intent of the Business Agreement and notwithstanding that 1 of the initial 3 containers was a gift promised to the Applicant well before the Business Agreement was contemplated.
(f)           Contrary to the spirit and intent of the Business Agreement, the Respondents have taken the GW containers and converted that stock to their own use without making any payment for that stock and notwithstanding that:
(i)           The Applicant remains personally responsible for payment to the supplier of the GW containers;
(ii)          The Applicant paid for all freight and other expenses associated with the GW containers.
(g)          Contrary to the spirit and intent of the Business Agreement, the Respondents have deprived the Applicant of the opportunity to share in the profits on the sale of the remaining stock in the initial 3 containers an the stock in the GW containers.
(h)          Contrary to the spirit and intent of the Business Agreement, the actions of the Respondents have deprived the Applicant of the opportunity to share in the future profits of the business in which they had agreed to participate.
(i)           The Respondents have harmed the Applicant’s capacity to continue selling and importing ginseng products and have damaged his reputation and the goodwill he had developed among customers.”
The parties provided this Court with a copy of the Industrial Relations Commission Rules extant at the relevant time. Rule 18A(1) required an application under s106 of the Act to follow Form 12A which provided an Applicant should set out:
“A.         The applicant
               (name, address and occupation)
Whose address for service is:
               (address)
Claims:
(1)An order declaring (specify the nature of the claim whether for avoidance or variation and from commencement or some other time) the (specify the contract or arrangement or condition or collateral arrangement in respect of which the application is made).
(2)An order that (specify any other orders claimed).
B.Summary of matters of fact and law (Pursuant to rule 18A(1), the application must specify in summary the matters of fact and law which form the basis of the application but not the evidence by which those facts are to be proved.
Such summary must contain sufficient information to allow the Commission to carry out its duty to conciliate under section 109 but shall be a succinct summary).
C.The award, agreement or determination (if any) by reference to which the claim or any part of it is based:
D.Particulars of the manner in which any amount claimed is calculated:
E.The person against whom relief is claimed (the respondents):
(names and address)
In accordance with par A of Form 12A, the Summons for Relief sought:
“1 A declaration that the Business Agreement as defined herein is an unfair contract within the meaning of s106(1) and s105 of the Industrial Relations Act, 1996 (‘the Act’).
2 An order pursuant to s106(1) of the Act declaring the Business Agreement (as defined herein) void.
3 An order pursuant to s106(5) of the Act that Respondents pay to the Applicant a sum $452,000.
4             Such further or other order as the nature of the case requires.
5             Interest.
6             Costs.”
Pursuant to par D of Form 12A, the Second Respondent gave the following particulars of the calculation of the amount claimed:
“Wages not paid to the Applicant since July –
say 5 months  $ 10,000
The cost value of the free container in the initial
3 containers  $ 50,000
Loss of share of profits on the sale of the stock from
the initial 3 containers and the GW containers              $ 65,000
The cost value of the GW containers including
freight other import costs  $ 77,000
Loss of opportunity for future wages and future
Profits and in respect of damage to goodwill and
reputation – say  $250,000
Total:  $452,000”
Pursuant to par E of Form 12A, the Applicant sought relief only from the Claimants. No relief was sought from the company Korea Ginseng Australia Pty Ltd (“KGAC”), which has never been a party to the proceedings. On the pleadings, the proposed extension of the business through two new subsidiaries was not implemented. Accordingly, only the original corporation, KGAC, is relevant.
The “Business Agreement” alleged is an incorporated joint venture whereby certain venturers invest cash into an existing business and the Second Respondent continues to operate that business. The elements in the pleading which suggest the performance of work include:

The obligation that the Second Respondent will do all the work necessary to conduct the business ([23](d));
Amongst the operating expenses which the new investors (the Claimants) would fund was a wage to the Second Respondent and a wage for an employee ([23](e));
The provision of office space where the Second Respondent “could work” ([23](f));
The assertion that the Second Respondent has lost his work and wages ([48](b));
The assertion that the contract was an unfair contract by reason that the Claimants ‘ceased paying’ the Second Respondent for work performed ([50](c));
The assertion that the weekly amount payable to the Second Respondent was less than a fair amount ([50](d));
The claim for payment of five months wages following termination; and
The claim for loss of future wages, rolled up with a claim for loss of future profits.
The Jurisdictional Issue

The challenge to the jurisdiction in this Court is made on alternative grounds. First, the Claimants contend that there is no “contract whereby a person performs work in any industry” within the meaning of s106(1). Secondly, the Claimants contend that the relief sought in the Summons was not of a character which could be sought in such proceedings.
As to the first basis of challenge, the Claimants referred to the possibility that, if this Court fails to intervene, they will be faced with proceedings of a distinctively different character. This arises by reason by the 2005 Amendment Act which inserted a new s106(2A) in the following terms:
“106(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.”
By cl 7 of the 2005 Amendment Act the following transitional provision is inserted as 19B of Sch 4 of the Act:
“19B Section 106(2A), as inserted by the Industrial Relations Amendment Act 2005 applies to a contract made before the commencement of that provision and to proceedings pending in the Commission at that commencement that have not been finally determined by the Commission. However, s106(2A) does not apply to any proceedings pending in any other court or tribunal on that commencement.”
The Claimants contend that, pursuant to the second sentence of the new s19B, this Court would determine the matter of jurisdiction by applying the reasoning of the High Court in the trilogy of cases on the Act: Solution 6 supra; Batterham supra and Old UGC Inc v Industrial Relations Commission of New South Wales in Court Session (2006) 225 CLR 274; [2006] HCA 24.
The Claimants also submitted that if the proceedings were to continue in the Industrial Court then the matter would fall to be determined on a basis which includes s106(2A). This was a consideration which was said to have relevance on discretion, but it also poses another difficulty for the Court.
The jurisdiction of this Court invoked by the Claimants is a supervisory jurisdiction. A decision has been made which it may be possible for this Court to quash by means of an order equivalent to certiorari. However, this Court would not make any such order unless accompanied by an order of prohibition. Certiorari alone would be futile because it would leave the proceedings on foot in the Commission. Nevertheless, the jurisdiction of this Court is a jurisdiction to prevent the Commission exceeding its jurisdiction.
The difficulty is that the Parliament has, by reason of the first sentence of the new s19B, extended the powers of the Commission under the Act by introducing a new question of fact.
The issue falls to be determined on the interpretation of the words “does not apply” in the second sentence of s19B set out above. In my opinion, this phrase should be understood to mean that this Court, or indeed the High Court, should proceed to determine any matter in proceedings before it as if the jurisdiction of the Industrial Court was based on the original form of s106.
This was in fact what occurred in the High Court in the abovementioned trilogy of cases which were argued after the enactment of the 2005 Amendment Act. It was not, it appears, submitted in the High Court that the jurisdictional issue determined by that Court was in any way affected by the new s19B. The High Court affirmed, or issued for the first time, orders in the nature of prohibition.
This approach, in my opinion, reflects the correct interpretation of the words “does not apply”. The nature of the jurisdiction capable of being exercised by this Court was, to the knowledge of the Parliament, limited to a supervisory jurisdiction, as the very same Act – the 2005 Amendment Act – affirmed. The intention of Parliament when enacting the second sentence of the new s19B was to preserve, against the retrospective effect of the first sentence, the position of litigants who had invoked the jurisdiction of this Court and of the High Court prior to the enactment of the 2005 Amendment Act which extended the powers of the then Industrial Relations Commission with retrospective effect to cases instituted in that court prior to the amendment.
The injustice associated with retrospective legislation which impinges upon citizens who have already exercised their legal rights by instituting proceedings has long been acknowledged. (See Zainal bin Hashim v Government of Malaysia [1980] AC 734 esp at 742; Attorney-General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557; [2005] NSWCA 261 esp at [48]-[66].) The interpretation of the words “does not apply” in the way I have proposed above accords with this principle.
In my opinion, this Court should determine the jurisdictional issue without regard to the effect, if any, of s106(2A) of the Act.

As to the second basis of challenge, the Claimants rely on the fact that notwithstanding references to the inadequacy of the “wage”, the relief actually sought was limited to compensation for breach of the agreement or for the effects of its termination. It was submitted that the proceedings were defective in the same way as the proceedings considered by this Court in Sydney Water Corporation Limited v Industrial Relations Commission (NSW) (2004) 61 NSWLR 661; [2004] NSWCA 466.
54 The second basis for a jurisdictional challenge has never been raised before the Industrial Court. This is understandable because Sydney Water was handed down on 1 December 2004, the day before Justice Marks’ second decision.
Performance of Work
Prior authority, both in this Court, in the High Court and in the Privy Council, on the interpretation of s106 has now been superseded by the joint judgments of the High Court in Solution 6, Batterham and Old UGC supra.
The High Court said in Solution 6:
“[18] The Act is concerned with matters industrial. The power given to the Commission be s106(1) to declare wholly or partly void or to vary certain contracts should be understood as hinged about the reference to performance of work in any industry. The first inquiry required by s106(1) is whether a person "performs work in any industry". What may be declared wholly or partly void or varied is any "contract" whereby a person performs that work.
[19] Because ‘contract’ is given the extended definition that has been noted earlier, it must be understood as extending to any arrangement or related condition or collateral arrangement of the requisite kind, namely, a contract or arrangement whereby a person performs work in any industry. But what must be identified is the set of arrangements (leaving aside, for the moment, whether those arrangements are or may be contractual or otherwise) according to which (that is, ‘whereby’) a person performs the relevant work. What may be declared void or varied is any part of those arrangements: the arrangements in accordance with which a person performs work.
[20] It is to invite error to begin by identifying what contracts or arrangements are related one to another. It invites error because it suggests that it is appropriate then to ask whether any of that interlocking set of arrangements made provision for the performance of work in an industry, and to treat any and every aspect of the interlocking arrangements that have been identified as amenable to the powers given to the Commission under s106. And that is the way in which much of the argument advanced on behalf of those parties who were applicants in the Commission proceeded.”
The Court went on to say:
“[41] … Performance of work in an industry is the hinge about which s106 turns. It is the arrangements (contractual and non-contractual) whereby a person performs work in an industry that the Commission may avoid or vary. That is, it is the arrangements (contractual and non-contractual) according to which a person performs the work (or in consequence of which or in fulfilment of which a person performs that work) which may be avoided or varied.”
(See also Batterham supra at [13]; Old UGC supra at [25].)
It is, in my opinion, consistent with the High Court’s reformulation of the approach to s106, to conclude that a contract by a proprietor of a business with fellow investors, such as the alleged “Business Agreement”, is not a contract “according to which … in consequence of which or in fulfilment of which” that proprietor performs work. Plainly work is envisaged to be performed, but that is not enough.
The Agreement did specify what was called a “wage”, but which was payable only “until the ginseng business was self-supporting”. This indicates clearly that the Second Respondent’s involvement was as a joint venturer rather than as a person performing work. This is reinforced by the fact that the so-called wage was half that provided to the only other envisaged employee. The Business Agreement did not deal in any other way with the performance of work.
The contract said to be unfair in the present case is pleaded as a single oral agreement. It is an arrangement amongst investors, two of whom would invest additional funds and the other would retain his shareholding in the business, albeit reduced to one third of the total shares. The joint venture vehicle was to be the company, KGAC. That company would employ, or rather continue to employ, the Second Respondent. The “Business Agreement” as pleaded merely envisaged, but did not establish, the work relationship. It was not, to use the words of s106(1), a contract “whereby a person performs work in (an) industry”.
In his second judgment, Marks J sought to distinguish the facts of Solution 6 as analysed in this Court. (The High Court judgment had not been delivered.) I am, with respect, unable to agree.
The position is, in my opinion, the same as with the Share Sale Agreement considered in Solution 6. That agreement contained a precondition to completion to the effect that the pre-existing employment contract of the senior executive would be renewed with the new company. Even such a precondition was not enough to characterise the Share Sale Agreement as an agreement “whereby” a person performed work in an industry.
In this case, as in Solution 6, the agreement amongst investors envisaged but did not establish, the required relationship. The work to be performed by the Second Respondent was to be performed in consequence of or in fulfilment of the contract between him and KGAC. The Business Agreement pleaded is the means by which KGAC was to be put in funds for, inter alia, that purpose and identified, in a manner relevant to investors in a joint venture, the anticipated outgoings.
Accordingly, the Business Agreement relied upon in these proceedings is not a contract within s106(1) of the Act for much the same reasons as the High Court determined that the contract in Solution 6 did not satisfy the test it propounded in that case. The Business Agreement envisaged an employment contract between the Second Respondent and KGAC, but was not itself a contract “whereby a person performs work”.
To characterise the Business Agreement as an agreement “whereby a person performs work” is to “understate its nature to the point of misdescription” to apply Kitto J’s apt phrase from Ready Mixed Concrete (Victoria) Pty Limited v Federal Commissioner of Taxation (1969) 118 CLR 117 at 185, as did Handley JA in McDonald’s Australia Holdings Limited v Industrial Relations Commission (NSW) (2005) 144 IR 219; [2005] NSWCCA 286 at [98].
The Claimants’ Alternative Submission
Mr J M Miller, who appeared for the Claimants, submitted that the Commission would exceed its jurisdiction, even if s106(2A) applied. He submitted that the pleaded “Business Agreement” did not deal in any way with the conditions of employment or how the work would be carried out. Furthermore, he submitted, any work was to be carried out for the joint venture company not for the Claimants as parties to the Business Agreement. He acknowledged that the agreement fixed a form of remuneration described as a “wage”. However, he submitted that the absence of any other provision for the conditions of employment indicated that “the performance of work” was not a “significant purpose” of the “contractual arrangements” made by the Second Respondent.
Mr Miller directed attention to the fact that the Second Respondent would obtain a one third share of the profits. It is also pertinent to note that the “wage” payable to the Second Respondent was only payable “until the ginseng business was self-supporting”. Where remuneration, save in a transitional period, is to be by way of a share of the profits unrelated to the performance of work, then it could be concluded that the performance of work is not “a significant purpose of the contractual arrangements”.
Furthermore, the Business Agreement, which is clearly a contract, may not be characterised as a “related condition or collateral arrangement”.
The test propounded by the High Court in Solution 6 differs from the test found in earlier High Court authority, which focused on whether the transaction “leads directly to the performance of work”. At the time that the 2005 Amendment Act was enacted, Parliament was acting on the basis of the prior authority in the High Court, as applied and explained by this Court in a number of cases, including Solution 6. The 2005 Amendment Act preceded the trilogy of cases referred to above.
The new s106(2A) was directed to this Court’s reasoning that the context of the legislative scheme confined the power under s106(1) to aspects of a contract or arrangement which are “closely relate[d] to the performance of work” (Solution 6 supra at [80] and [83]) or which relate in some reasonably direct manner to the performance of work (at [87]). The reformulation of the test in Solution 6 in the High Court differs from this formulation.
Clearly s106(2A) is a new element which must be included in the context to which the High Court had regard when interpreting the reference to the performance of work as “the hinge” of the jurisdiction.
This matter has not been fully argued. The case can be determined without considering the Claimants’ alternative argument. Anything this Court would say would be obiter. The matter was not raised before the Industrial Court and this Court should not, as a matter of comity, consider the alternative basis on which the Claimants rely.
Orders
In Solution 6 (60 NSWLR 558 at [133]) I referred to the High Court judgment in The Queen v Australian Stevedoring Industry Board: Ex parte Melbourne Stevedoring Co Pty Limited (1953) 88 CLR 100 at 118-119 where the High Court in a joint judgment said: “while prohibition is not a writ of course, it is a writ which goes as of right”.
My judgment in Solution 6 at [135] proceeded on the basis that an order in the nature of prohibition was discretionary but should issue “almost as of right” referring to The Queen v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 194, referred to with approval in Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82 at 89 [5], 106 [51], 137 [149].
The significance of the formulation in the Melbourne Stevedoring case – which does not have the qualifying “almost” – was emphasised by the High Court, with respect to this jurisdiction of the Industrial Relations Commission. In Batterham v QSR Limited supra the joint judgment said:
“[28] … [I]n the light of this Court’s decision in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100, the Court of Appeal was right to grant the relief it did, and right to grant that relief when it did. As was pointed out in the Melbourne Stevedoring Case (at 118-119), prohibition is not a writ of course but ‘it is a writ which goes as of right when the prosecutor is directly affected by the course pursued by a tribunal to which the writ lies and the prosecutor shows satisfactorily that the tribunal is about to act to his detriment in excess of its authority’. And again, as pointed out in the Melbourne Stevedoring Case (at 119), the privative clause shows that to defer the grant of the remedy until the Commission decides whether it has jurisdiction, if QSR is otherwise entitled to it, ‘may and perhaps must operate to the prejudice’ of QSR. Proceedings in the Commission having taken the course they had, there was a real likelihood of an order being made in excess of the Commission’s jurisdiction. And that being so, the Court of Appeal was right to grant the relief it did.”
Two issues are posed by the formulation in the Melbourne Stevedoring case. First, whether the person seeking relief is “directly affected by the course pursued by a tribunal”. There can be, and was, no suggestion other than that the Claimants in the present proceedings have satisfied that test. The second issue is whether the Claimants have shown “that the tribunal is about to act to [their] detriment in excess of its authority”.
It is with respect to this second limb of the Melbourne Stevedoring formulation that this Court should manifest the principle of restraint, derived from a number of authorities including judgments of the High Court (see the cases referred to in Solution 6 supra at [136]-[137]) and which this Court has indicated, since the amendment of s179, will normally apply. (Kirk Group Holdings supra at [47].) Accordingly, this Court will require that it be clearly established that the Industrial Court is “about to act to [the] detriment [of the Claimants] in excess of its authority”.
The present proceedings concern the first of the decisions made by Marks J. Nevertheless, it is appropriate to take into account subsequent events.
The first such matter is the second decision of Justice Marks where his Honour distinguished Solution 6 (in this Court) and dismissed the Claimants’ Notice of Motion.
Furthermore, this Court was informed that the proceedings had been listed for hearing in the Industrial Court, however, the hearing was vacated because the Second Respondent is serving a term of imprisonment. There was no suggestion in this Court that even at that late stage the Second Respondent had indicated any intention to amend his Summons. As I have noted above, when this matter was before the Full Bench, counsel for the Second Respondent expressly abjured the invitation of the Full Bench to amend the Summons.
On this basis, in my opinion, the test in Melbourne Stevedoring is satisfied, with respect to the first basis upon which the Claimants challenge the jurisdiction of the Industrial Court.
As to the second basis, i.e. the Sydney Water point, this has never been agitated in the Commission, notwithstanding the fact that the matter was set down for hearing without any amendment of the Summons. I am not prepared to conclude, in accordance with the principle of restraint, that the Industrial Court is about to act to the detriment of the Claimants in excess of its authority in this regard.
The position is, however, otherwise with respect to the first basis of challenge.
The cause of action identified in par [50](d) that the wage payable under the Business Agreement was “less than a fair amount”, would clearly fall within s106 of the Act. Whether any such matter could be raised in proceedings in which the employer company, KGAC, was not a party is a moot point.
If necessary and appropriate this Court could issue an order in the nature of a prohibition quoad and confine the order to the threatened excess of jurisdiction, by leaving the claim for inadequate remuneration. This is a long established jurisdiction. (See the cases set out by Brett LJ in South Eastern Railway Co v Railway Commissioners [1881] 6 QB 586 at 605-606; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Broken Hill Prop Co Limited ((1909) 8 CLR 419 per Isaacs J at 421 and the authorities referred to in Sydney Water supra at 675.)
However, it is not necessary to consider such an order. The Second Respondent made no claim for any payment based on the alleged inadequacy of the amount. The Second Respondent was given an opportunity both before Justice Marks and in the Full Bench to amend his pleadings and/or adduce further evidence and expressly refused to do so. Nor was there any such amendment after the matter was set down for hearing. Although raised on the pleadings, this claim has not been pursued by way of any prayer for relief.
There is, accordingly, no reason for this Court to confine any order in the nature of prohibition.
The proceedings in this Court have not been pursued with any diligence. Counsel for the Claimants explained the delay in this Court by reference to two matters. First, the fact that the proceedings challenging the judgment of this Court in Solution 6, and the other cases, may have rendered the result futile. The High Court handed down the trilogy of judgments in May 2006. The second matter raised by counsel for the Applicants concerned the fact that, in accordance with the requirements of the Act, a process of conciliation, which obviously has not succeeded, continued in the Commission.
There is, in my opinion, no discretionary reason why this Court should refuse relief.
The orders I propose are:
1 The First Respondent is prohibited from hearing or determining the proceedings under s106 of the Industrial Relations Act 1996, being proceedings No IRC 01/7002.
2 The Second Respondent pay the Claimants’ costs in this Court.
MASON P: I agree with Spigelman CJ and with the additional remarks of Handley AJA.
HANDLEY AJA: In this matter I have had the benefit of reading the reasons for judgment of the Chief Justice in draft. I agree with the orders he has proposed, and with his Honour’s reasons, but wish to add some brief additional remarks.
Section 179(4) of the Industrial Relations Act 1996 as amended in 2005 provides:
“This section extends to proceedings brought in a court or tribunal in respect of a purported decision of the Commission on an issue of the jurisdiction of the Commission, but does not extend to any such purported decision of:
(a)the Full Bench of the Commission in Court Session, or
(b)the Commission in Court Session if the Full Bench refuses to give leave to appeal the decision.”
As the Chief Justice states the language of the sub-section is clumsy and compressed. Section 179(1) protects decisions of the Commission and sub-s (2) protects proceedings in the Commission. Sub-section (4) extends the protection conferred by sub-s (1) to a purported decision of the Commission on an issue of jurisdiction but it does not apply when the case is within the exception. The sub-section should be interpreted as meaning:
“This section extends to proceedings brought in a court … in respect of a purported decision of the Commission, but does not extend to [proceedings brought in a court … in respect of any] such purported decision …”
The question for this Court is whether the Full Bench’s refusal of leave to appeal from the first decision of Marks J attracts the exception in sub-s (4). It will do so if that decision of Marks J was “a … decision … on an issue of … jurisdiction”, and if the proceedings in this Court are “in respect of” that decision.
If the Commission clearly had no jurisdiction in this case the refusal of Marks J to decide this was an implied decision that the Commission may have jurisdiction, and that this could be confirmed at a trial. If the Commission clearly did not have jurisdiction a refusal to so decide involved a threatened exercise by the Commission of a jurisdiction it did not possess.
It is therefore clear that the first decision of Marks J was a decision on an issue of jurisdiction. The remaining question is whether the proceedings in this Court are proceedings “in respect of” that decision. Unless restrained by the context the phrase “in respect of” has a very wide meaning but there is nothing in the context here which requires a narrow one. The ordinary meaning would permit this Court to restrain excesses of jurisdiction at an early stage once the Commission has had an opportunity to consider the question, if it has refused to decide it or has decided that it has or may have jurisdiction. Words intended to preserve this Court’s supervisory jurisdiction should not be given a narrow or technical meaning.
I agree with the Chief Justice that prerogative relief should not be refused on discretionary grounds. A decision to that effect would give the opponent the benefit of s 106(2A) in the Commission and widen its jurisdiction when the claimants are otherwise entitled to the decision of this Court based on the jurisdiction the Commission had before that amendment.
The Chief Justice has referred to some of the relevant considerations affecting the exercise of this Court’s power to refuse prerogative relief on discretionary grounds. I would add others. In my judgment s 106(2A) would not confer any effective jurisdiction on the Commission over the merits of the claims of breach of contract and in tort outlined in the opponent’s documents filed in the Commission. The claimants have not hitherto relied on Sydney Water Corporation Ltd v Industrial Relations Commission of New South Wales [2004] NSWCA 466; 61 NSWLR 661 but they would certainly do so if proceedings continued in the Commission.

The only claim based on the contract of employment was for unpaid wages at the contract rate. This would not attract the Commission’s jurisdiction which depends on an order being made which avoids or varies the contract or arrangement. The contract of employment was with Korea Ginseng Australia Pty Ltd (the company) which was not a party to the proceedings in the Commission.
If the Commission has jurisdiction over a particular contract etc and the parties to that contract are parties to the proceedings an order avoiding or varying that contract will have its intended effect. If the other party to the contract is not a party to the proceedings it will not be bound by any order of the Commission and a purported order avoiding or varying the contract will be ineffective. The other party will not be bound by the order, and the contract in its original form will remain in force.
The Commission has no jurisdiction therefore to avoid or vary the employment contract with the company in the proceedings as presently constituted. Moreover the company cannot be added as a respondent because the 12 months time bar in s 108B has long since expired and cannot be extended: BEA Systems Pty Ltd v Industrial Relations Commission [2005] NSWCA 227; 63 NSWLR 347.
The orders proposed by the Chief Justice should be made.

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AMENDMENTS:

05/04/2007 - Headnote spelling change - Paragraph(s) Heading

LAST UPDATED: 5 April 2007