Australian Co-operative Foods Limited v SW & JD Reilly & Sons Pty Limited

LEGISLATION CITED: Industrial Relations Act 1996 Workplace Relations Amendment (Work Choices) Act 2005 (Cth)

Agar v Hyde (2000) 201 CLR 552 Azzi & Ors v Volvo Car Australia Pty Ltd [2007] NSWSC 319 Batterham v QSR Limited (2006) 225 CLR 237 Brown v Rezitis (1970) 127 CLR 157 Caltex Oil (Australia) Pty Ltd v Feenan and Others (1980) 1 NSWLR 724 Caltex Oil (Australia) Pty Ltd v Feenan and Others (1981) 1 NSWLR 169 Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales (2009) 255 ALR 131 Crewdson v NSW Department of Community Services (2003) 131 IR 217 Euphoric Pty Ltd v Ryledar Pty Limited (2002) 117 IR 1 Fish and Another v Solution 6 Holdings Limited (2006) 225 CLR 180 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 CASES CITED: Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and Others (1991) 28 NSWLR 443 McDonald's Australia Holdings Ltd v Industrial Relations Commission of New South Wales (2005) 144 IR 219 Nagle (T/as W D and J L Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8 Old UGC v Industrial Relations Commission of New South Wales (2006) 225 CLR 274 Production Spray Painting & Panel Beating Pty Ltd and Others v Newnham and Others (1991) 27 NSWLR 644 Sin Yong Yim and Tai Sik Kim v Industrial Relations Commission of New South Wales and Anor (2007) 162 IR 62 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 Stevenson v Barham (1977) 136 CLR 190 SW & JD Reilly & Sons Pty Limited v Australian Co-operative Foods Limited [2009] NSWIRComm 176 T D Preece & Co. Pty Ltd v Murton (2007) 165 IR 396 Virtue v NSW Department of Education (1999) 92 IR 428 Wirraway (NSW) Pty Ltd and Anor v Ultratune Australia Pty Ltd [2006] NSWIRComm 300

Mr P Kite SC with Ms S Piedade of counsel (Appellant) Addisons Commercial Lawyers LEGAL REPRESENTATIVES: Mr A Britt of counsel (Respondent) W.H. Parsons & Associates

CORAM: WALTON J, Vice-President STAFF J BACKMAN J

AUSTRALIAN CO-OPERATIVE FOODS LIMITED v SW & JD REILLY & SONS PTY LIMITED

Application by Australian Co-operative Foods Limited for leave to appeal and appeal against a judgment of Justice Marks given on 29.10.2009 in Matter No IRC 2463 of 2002

1 These proceedings concern leave to appeal and an appeal against the judgment and orders of his Honour Justice Marks delivered on 29 October 2009: SW & JD Reilly & Sons Pty Limited v Australian Co-operative Foods Limited [2009] NSWIRComm 176. In the judgment, Marks J dismissed a notice of motion brought by the appellant (the respondent below). The principal argument on the motion was that the Court lacked jurisdiction to take any further steps in the proceedings on the basis that the impugned contract, the Supermarket Delivery Contract ("SDC"), between the parties was not a contract within the meaning of s 106 of the Industrial Relations Act 1996. In dismissing the motion, his Honour determined that it was not the appropriate time to resolve that jurisdictional issue. 2 The appellant identified three main questions for consideration in the appeal. These are: (a) whether it was the appropriate time for the determination of the appellant's motion; (b) whether the Supermarket Delivery Contract is a contract to which s 106 of the Act applies; and, (c) whether the primary judge should have decided that, on its proper construction, cl 1(a) of Schedule 1 of the Act was of no relevance to the question of whether the Supermarket Delivery Contract was a contract within the meaning of s 106 of the Act. 3 The proceedings were commenced by the respondent (the applicant below) on 1 May 2002 by way of summons for relief. The respondent sought, unsuccessfully, to amend its summons on 2 November 2004. A further application to amend was brought by way of notice of motion filed on 7 November 2005. That application was granted subject to the provision of further particulars and the reservation of the appellant's jurisdictional challenges to the amended summons. On 18 April 2006, the respondent filed an amended summons for relief. Marks J determined the appellant's motion by reference to that amended summons. 4 In his judgment, Marks J noted that the respondent had filed all of the affidavit evidence upon which it intended to rely for the purpose of the substantive proceedings, other than some expert evidence. His Honour also acknowledged the parties' agreed position which was that for the purposes of the interlocutory application all of the evidence filed in the proceedings should be taken at its highest in favour of the respondent in determining whether or not the Court had jurisdiction to deal with the proceedings. 5 The parties, during oral hearing on the appeal, advised the Full Court that all of their evidence, including evidence in reply, to be relied upon in the substantive proceedings below, had been filed by the second day of the hearing, except for two expert reports, the subject matter of which concerned the question of valuation. According to the respondent, the two outstanding expert reports were relevant to the issue of whether there was some work performed in an industry, that is, driving trucks and delivering milk. 6 In his judgment, Marks J analysed the terms of the SDC in some detail. His Honour prefaced that analysis with a brief description of the preliminary provisions of the contract: [5] The Contract is made in the form of a deed dated 9 June 1998. The respondent is described therein as "Dairy Farmers" and the applicant as "the contractor". Recitals to the deed refer to the fact that the applicant as contractor currently distributes Dairy Farmers products "under a regulated arrangement pursuant to the New South Wales Dairy Industry Act and Regulations which protects the contractor and Dairy Farmers from competition." A further recital indicates that the milk industry is to become "legally deregulated on or before July 1998 …" and that as a consequence "the commercial arrangements between customers, suppliers and contractors will be subject to and determined by market forces and exclusive territories will not be possible." There is then reference to the fact that Dairy Farmers had "developed a supermarket distribution format" and that it had agreed "to appoint the contractor to distribute the Dairy Farmers Products to designated supermarkets for the Term and on the terms and conditions set out in this agreement. The Contractor will act as a reseller of the Dairy Farmers Products up to deregulation, and thereafter except where otherwise agreed between the parties will be paid a commission for delivery of the Dairy Farmers Products in accordance with each customer's requirements." [6] There is a reference in the definition section to "the elected representatives of the Contractor" to mean "any person or persons who are elected by Dairy Farmers Contractors to represent them in dealings with Dairy Farmers in accordance with any procedure determined by Dairy Farmers in consultation with the Contractors …." The following additional definitions are relevant:

"the Manual" means the manual specifying the standards and procedures which Dairy Farmers requires of Contractors, as amended from time. "the Operator is an individual approved and accredited by Dairy Farmers who has completed the training prescribed by Dairy Farmers for Operators and who is employed by the Contractor to drive the Vehicle or otherwise assist in servicing the Designated Customers of the Business." "the Standards means the prescribed standards of health, safety, refrigeration, delivery, storage, customer service and performance as specified by Dairy Farmers in this Agreement and the Manual." 7 Under the terms of cl 9.1, the contractor was bound to adhere to the provisions of the Manual as amended from time to time. The parties agreed that the matter should be determined upon the basis that the Manual formed part of the SDC. 8 The appellant submitted, without demur from the respondent (except for a matter of emphasis at paragraph (a)(vi)), that his Honour made the following factual findings: (a) The Contract: i. Is a deed dated 9 June 1998; ii. Describes the Respondent as the contractor; iii. Gives the contractor in clause 2.2 the exclusive right to deliver the Appellant's products to the designated customers iv. Imposes a principal responsibility for the performance of the contract on the contractor by clause 13.1[16]; v. Is for a term of 2 years and thereafter shall continue unless terminated; vi. The manner in which it is intended to operate is provided by clause 6; vii. Contemplates that contractors will, in order to perform the work that is required to be undertaken by contractors, engage persons who are described as 'operators'. The definition of operator in clause 6 contemplates the employment of an operator by the contractor to drive a vehicle or otherwise assist in servicing customers. Thus the contractor is required to appoint an operator and notify the Appellant of that appointment; viii. Requires both contractors and operators to wear uniforms provided by the Appellant. ix. Generally provides for the payment of remuneration by way of commission; x. Clause 9 (Adherence to System, Image and Standards) impacts upon the obligations of contractors and operators; xi. Requires the Appellant by clause 10 to train contractors, assume all financial and accounting management functions and is obliged to provide uniforms for operators; xii. Imposes obligations on contractors concerning vehicles to be used by the contractor by clause 11; xiii. Specifies certain responsibilities of the Contractor by clause 13; xiv. By clause 14 passes risk to the contractor of the Appellant's products upon collection from a distribution centre; xv. By clause 15 is required to maintain records of dealings and deliveries with customers and imposes recording obligations on the Appellant also; xvi. By clause 16 requires the contractor to comprehensively insure the vehicle and all drivers of the vehicle; xvii. Requires the contractor to indemnify the Appellant against any loss or damage arising out of the performance of its obligations under the contract and in respect of any person employed, engaged, hired or authorised to act on behalf of the contractor in the operation of the business; xviii. Deals in clause 18 with transfers and assignments; xix. Deals in clause 19 with death and permanent disability. Its provisions "arguably transcend" contractors who are natural persons and refer also to the death or permanent disability of an operator; xx. Deals at clause 20 with termination; xxi. By clause 23 specifies that the parties are independent proprietors and denies any relationship of partnership, agency, joint venture or employment; xxii. When read together with the Manual creates uncertainty in the manner in which it is intended to govern the work to be performed by contractors and in particular individuals in circumstances where the contractor is incorporated; xxiii. Contains provisions that assume that contractors are individuals or are capable of being construed as indicating a requirement for personal exertion on the part of a contractor including 6.2, 9.3, 9.4, 19.1, 20.3(a) and 20.3(b); xxiv. Contains provisions that are capable of being understood as contemplating that those who perform work will be engaged by the contractor including 6.4, 13.4, 16.1, 20.3(a); xxv. The provisions of the Supermarket Delivery Contract and Manual create some degree of uncertainty as to whether or not the contract creates by its terms personal obligations on the contractor to perform work; xxvi. Does not seek to deal specifically with the discharge of the obligations imposed personally on an individual in circumstances where the contractor is incorporated; (b) Stephen William Reilly is a director of the Respondent; (c) The Respondent was incorporated in 1979. Its sole directors and shareholders are Mr Reilly and his wife; (d) Mr Reilly's 2 sons were directors of the Respondent for part of 1999; (e) The Respondent is a trustee for the Reilly Family Settlement Trust; (f) The Reilly Family Settlement Trust has a number of beneficiaries including Reilly Family Investments Pty Ltd which was incorporated in 1995; (g) Mr Reilly and his wife are directors of Reilly Family Investments Pty Ltd; (h) Mr Reilly, his wife and his two sons are shareholders of Reilly Family Investments Pty Ltd; (i) There are other corporate entities referred to by Mr Reilly but their relationship with the Respondent is not clear. They are all owned and controlled by members of the Reilly family; (j) In 1992 the Respondent commenced delivering non regulated milk products for Murrumbidgee Dairy Products; (k) Prior to deregulation Mr Reilly performed the majority of delivery work for the Respondent and it employed persons part time to assist on weekends to do the supermarket deliveries. Mr Reilly did all the deliveries for the route trade. The part timers only did the supermarket deliveries. Mrs Reilly has always attended to administrative tasks; (l) When the Respondent commenced business it had one truck which expanded to three trucks prior to 29 October 1997; (m) On the basis of the totality of the evidence Mr Reilly personally performed driving work and other associated duties associated with the discharge by the Respondent of its obligations under the Supermarket Delivery Contract; (n) On the evidence, Mrs Reilly was personally involved in the administrative work associated with the Supermarket Delivery Contract; (o) There is thus work of a kind that would normally be the subject of personal exertion by an employee or independent contractor; (p) There is very little if any affidavit evidence that is indicative of the nature and extent of any relationship between the Respondent and Mr Reilly; (q) The Respondent relies solely on the Supermarket Delivery Contract; (r) Some contractors of the Appellant are individuals, some are incorporated. 9 The respondent accepted the factual findings made by his Honour as submitted by the appellant. In addition, the respondent contended that his Honour made further findings of fact: (a) As to the Supermarket Delivery Contract, it (1) provides that the Appellant had "developed a supermarket distribution format" and that it had agreed "to appoint the contractor to distribute the Dairy Farmers Products to designated supermarkets for the Term and on the terms and conditions set out in this agreement" (2) provides that the Contractor will act as a reseller of the Dairy Farmers Products up to deregulation, and thereafter except where otherwise agreed between the parties will be paid a commission for delivery of the Dairy Farmers Products in accordance with each customer's requirements. (3) provides for a definition of the "the Manual", "the Operator" and "the Standards" (4) provides that prior to the commencement date the Contractor and all Operators must satisfactorily complete any initial training program and obtain all necessary permits or licences (5) provides that the Contractor shall ensure that the Vehicle is suitable for use in the Business, meets the specifications of Dairy Farmers as set out in the Manual, complies with any relevant laws or regulations, and is correctly outfitted and sign written in accordance with the Appellant's image (6) provides that prior to the commencement date the Contractor shall appoint an Operator and notify the Appellant of that appointment and (7) refers to "the principal of the business" which one might assume is a reference to the directing and controlling mind of the incorporated entity and such a person is required to be involved in the distribution operation on a day-to-day basis which would seem to imply one of personal involvement by the "franchise owner"

(b) Clause 1.4 of the Manual sets out the duties and Responsibilities of Supermarket Contractors and these appear to impose a personal responsibility for the performance of work on the Contractor and;

(c) The Contractor is bound to adhere to the provisions of the Manual;

(d) The Contract is inelegantly framed in that parts of its provisions are directed to circumstances where a Contractor is an individual and parts of its provisions apply to circumstances where a Contractor is incorporated and does not seek to deal specifically with the discharge of the obligations imposed personally on an individual in circumstances where the contractor is incorporated;.

(e) When the Respondent commenced trading, it bought a "small milk wholesale and home run at Bilgola Plateau" and later expanded its activities by entering into a number of agreements with Dairy Farmers for the supply of dairy products including white milk through wholesale distribution, "home runs" and supermarket deliveries;

(f) The Respondent usually employed one driver on Saturday to do the weekend delivery for the supermarkets;

(g) Up until 29 October 1997, the Respondent had three trucks;

(h) Mr Reilly worked on average worked on average 12 to 16 hours per day;

(i) Any employees of the Respondent were part time and numbered two and worked 2 to 3 hours per day;

(j) The presentation made to prospective franchisees by the Appellant in September 1997 under the heading "Commitment" stated that "to maximise the net worth strength, Franchise Owners are expected to devote their full-time attention to the Franchise Business;

(k) A presentation made in February 2007 by the Appellant specified the duties of the contractor to unload and check orders, pick up empty crates and damaged product, return empty crates and damaged product, unload empty crates and that deliveries were required up to seven days per week;

(l) The undated document entitled "Franchise Information" under the heading "Eligibility to be a Dairy Farmers Franchise Owner" states that owners

"should be an incorporated legal entity where possible. The principal of the business must be involved in the distribution operation on a day-to-day basis. Dairy Farmers Franchise Owners have a responsibility for the ongoing development of new business opportunities. They must also play a hands-on role delivering products to customers on a daily basis. Like any small businessperson, the Franchise Owner will be responsible for a multiplicity of tasks including staff management, promotion of the product range and collection of accounts. Deliveries, made from early in the morning, can be strenuous work and the pace is constant throughout the year. Determination and physical fitness are prerequisites for a Franchise Owner."

(m) The work of driving of vehicles in order to deliver milk products of the Respondent is work in an industry and the Appellant did not argue to the contrary...

10 After considering the terms of the SDC and Mr Reilly's affidavit material, his Honour remarked that "Mr Reilly did personally perform driving work and other duties associated with the discharge by the applicant of its obligations under the Contract with the respondent". 11 His Honour then reviewed the line of authority dealing with interlocutory "strike out" applications and observed that, in accordance with the authorities, such applications should not be entertained by a court until the "appropriate stage" has been reached in the proceedings. His Honour's observation relied upon the well-known passage in Nagle (T/as W D and J L Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8 (at 11-12). In that judgment, a Full Bench of the Industrial Court conducted a review of the authorities which set out the relevant principles to be applied by a court entertaining a challenge to jurisdiction, and concluded: We would draw from those authorities the proposition that whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings, that is, where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, it seems to us, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such a determination to be made. 12 His Honour also referred to General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 where Barwick CJ referred to various expressions of the test applied to summarily terminate an action ("so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not advert of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense"). 13 In Agar v Hyde (2000) 201 CLR 552, Gaudron, McHugh, Gummow and Hayne JJ, remarking on the various expressions of the appropriate test to be applied in a challenge to jurisdiction at an interlocutory stage, said (at [57]): ... all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way. 14 Marks J, in adopting those observations, said (at [44]): ... I observe that, in accordance with well established authority, the respondent bears a heavy onus in convincing the Court that there is "a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way. 15 His Honour then directed his attention to the principles governing the exercise of jurisdiction under s 106 of the Act by first considering the respondent's submission that the work performed in an industry was the driving of vehicles in order to deliver milk products of the respondent. His Honour found (at [50]) that taking the evidence at its highest "it could not be argued that this was not work performed in an industry as contemplated by s 106(1). Indeed, the respondent did not argue to the contrary". 16 Marks J also addressed the issue of identification of the contract "according to which a person performs the work (or in consequence of which or in fulfillment of which a person performs that work)", the latter quotation having been extrapolated by his Honour from the judgment of Spigelman CJ (with whom Allsop P and Tobias JA agreed) in Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales (2009) 255 ALR 131 at [124], and the joint judgment in Fish and Another v Solution 6 Holdings Limited (2006) 225 CLR 180 (at [19]). 17 Marks J applied this formulation of the second limb of the jurisdictional requirement under s 106 as follows: [51] It is then next necessary to identify what was the contract as defined pursuant to which that driving work was performed. Again, it is not controversial that the proceedings are directed to the involvement of Stephen William Reilly, a director of the applicant. This in turn leads to an enquiry as to which of a number of possible contracts or arrangements was the contract or arrangement pursuant to which Mr Reilly performed the driving work. The logical possibilities are either the New South Wales Supermarket Delivery Contract between the applicant and the respondent or any other contract or arrangement between Mr Reilly and the applicant pursuant to which he drove the vehicle in order to effect the deliveries of milk products which the applicant was required to carry out pursuant to the Supermarket Delivery Contract. 18 Attention was then directed by his Honour to the facts, followed by a re-statement of his earlier view that the facts supported a conclusion that there was, on the evidence, identified work of a kind that would normally be the subject of personal exertion undertaken by a employee or an independent contractor (at [57]). 19 The next stage of the inquiry was approached by his Honour in the following way: [58] However, it is then necessary to identify the contract or arrangement according to which or in fulfilment of which that work was performed. I have previously observed at [51] that logically the Supermarket Delivery Contract is only one possible contract or arrangement that may fall within s 106. A difficulty which confronts me in determining these proceedings is that there is very little if any evidence contained in the affidavit material that is indicative of the nature and extent of any relationship between the applicant and Mr Reilly. Perhaps this is explicable because the applicant seeks to rely only on the Supermarket Delivery Contract as forming the basis of the proceedings. In circumstances where there is simply a paucity of evidence about any relationship between Mr Reilly and the applicant, and the applicant relies solely on the Supermarket Delivery Contract, it is difficult, if not impossible, to examine the totality of the circumstances which apply to the work performed by Mr Reilly. The applicant relies solely on one particular specified contract. The respondent says that this is not a contract that attracts jurisdiction under s 106. The respondent can support its case by proving either that the Supermarket Delivery Contract cannot by its terms come within s 106 thereby denying jurisdiction, or that there is some other contract or arrangement that falls within s 106 and that therefore the Supermarket Delivery Contract does not. [59] The respondent says that the relevant and appropriate contract is one between Mr Reilly and the applicant but concedes in submissions that there is little or no evidence about any such contract or arrangement. It seems to me that unless it can be determined that the Supermarket Delivery Contract can in no sense be a contract of the kind that comes within s 106, then it would be inappropriate to accede to the respondent's motion because to do so would amount to a strike out on the equivalent of a "no case to answer" basis. This, in my opinion, would be an inappropriate step to take by way of an interlocutory application. Furthermore, if the respondent is to assert, as I understand it to do, that there is another contract or arrangement that falls within s 106 or, at the least, is the one which is the source of the work performed by Mr Reilly, then the burden of establishing that other contract or arrangement will arguably fall on the respondent. [60] The respondent has filed evidence in the proceedings. However, I have not been referred by either party to that evidence for the purpose of these interlocutory proceedings. Whether and to what extent that evidence goes to the establishment of any alternative contract or arrangement between Mr Reilly and the applicant that comes with s 106 is unknown to me. [61] Given the uncertain state of the evidence about any alternative contract or arrangement, I conclude that I am unable to carry out any required examination of the totality of the circumstances that may allow determination as to whether there are any competing contracts or arrangements of the requisite kind and, if so, which of them might apply in all the circumstances. This conclusion would in turn militate towards a determination that the appropriate stage has not yet been reached in the proceedings for this particular issue to be concluded. It would be preferable that the matter proceed to a final hearing before this matter is determined. [62] Accordingly, it is now necessary to determine whether I am able to conclude, for the purpose of these interlocutory proceedings, that the Supermarket Delivery Contract cannot be characterised as a contract within s 106. 20 After conducting an analysis of the provisions of the SDC and the Manual (the terms of which his Honour said were comprehended within the SDC), his Honour determined that those provisions created (at [70]): [s]ome degree of uncertainty as to whether or not the Contract by its terms creates personal obligations on the contractor to perform work. Of course, this sits uncomfortably with circumstances where, as is the case in these proceedings, the contractor is an incorporated entity. The Contract is, in my opinion, inelegantly framed in that parts of its provisions are directed to circumstances where a contractor is an individual and parts of its provisions apply to circumstances where a contractor is incorporated. Moreover, the Contract itself in its terms does not seek to deal specifically with the discharge of the obligations imposed personally on an individual in circumstances where the contractor is incorporated. 21 His Honour concluded, in resolving to dismiss the motion: [71] Although I am required to take such evidence as has been adduced in the proceedings by way of affidavits and material annexed or exhibited thereto at its highest in favour of the applicant, it is not appropriate in my opinion to speculate as to what the effect of the overall evidence in the proceedings might be if they were determined by way of a final contested hearing. My reading of the affidavit and other material does not lead me to conclude with any degree of certainty as to how the contractual arrangements between the applicant and the respondent played out in terms of the performance of work by Mr Reilly (and assuming that any work performed by Mrs Reilly is irrelevant for the purpose of proceedings). In these circumstances, I am unable to determine, on the basis of such evidence as has been adduced for the purpose of this interlocutory application, that the Supermarket Delivery Contract may not be a requisite and relevant source whereby work was performed by Mr Reilly. [72] Given these difficulties, I am unable to determine at this stage of the proceedings that if the matter went to trial in the ordinary way, that there is a high degree of certainty about the outcome. Furthermore, it is not clear to me whether and to what extent Mr Reilly undertook some entrepreneurial role involving the performance of "senior managerial positions" nor is there sufficient evidence about the nature and size of the applicant's operations. (See per Spigelman CJ in Caterpillar at [140]). 22 An additional issue raised in the proceedings below concerned the question of whether Mr Reilly was a deemed employee of the appellant. It was submitted by the respondent that such a deemed relationship created the necessary industrial flavour so as to bring the SDC within s 106. Marks J declined to deal with this additional issue. His Honour's reasons for so declining were that because it was not the appropriate time to determine the appellant's motion it was also not appropriate to determine the "deemed employee" issue at a preliminary stage. LEAVE TO APPEAL 23 On the question of leave to appeal under s 181(1) of the Act, the parties raised an issue as to the correct characterisation of the nature of the present appeal. According to the appellant, the judgment under appeal constitutes an interlocutory decision involving a question of the Court's jurisdiction which affected its substantive rights. According to the respondent, Marks J made no conclusive determination in respect of the jurisdictional issue, and the present appeal is properly characterised as an appeal from a decision not to make a jurisdictional decision. The respondent, in oral submissions, also sought to draw an analogy between the judgment of Marks J which, it was said, did not have the effect of ultimately denying or otherwise finally affecting a substantive right, and the Full Court judgment in Crewdson v NSW Department of Community Services (2003) 131 IR 217. 24 We do not consider the judgment in Crewdson assists the respondent in the present context. 25 That judgment concerned an interlocutory appeal involving "what was in substance a procedural application to re-open an issue that had previously been determined against the appellant": Crewdson (at [21(2)]), per Walton J, Acting President, with whom Haylen J and Curtis AJ agreed. 26 The passage of the judgment in Crewdson, which is applicable in this matter, and with which we agree, was as follows (at [19]): However, as was intimated in the passage from the judgment of Jordan CJ set out above, a clear distinction must be drawn between an appeal from a decision involving "an exercise of discretion on a point of practice or procedure" and an appeal from a decision involving "an exercise of discretion which determines substantive rights" (or conclusively determines such rights): see also the observations of the Full Bench in Lahoud v Lahoud where it was held "Where an interlocutory decision affects substantive rights leave may be more readily granted". I should add the observation of the majority in Gerlach that "if it is plain that wrong principle was applied by the judge considering the application, it may well be that leave should be granted": at [13]. 27 Whilst the judgment of Marks J did not determine substantive rights of the parties per se, his Honour did determine that the jurisdictional issue raised by the appellant should not be determined as a threshold issue. 28 As a matter of principle, the jurisdictional issue should have been determined as a preliminary issue where, to adopt the reasoning of Wright J in Virtue v NSW Department of Education (1999) 92 IR 428 at 447, the "circumstances will conveniently admit so". These circumstances must include proceedings where the "facts, either established by evidence or plainly agreed terms, enable the court to determine what the contract or arrangement is, or, at least, the parameters of the contract or arrangement" (at 448). 29 We consider that those principles, as we will discuss below, have not been correctly applied in this case, and that the correction of that error requires the grant of leave to appeal.

WHETHER IT WAS THE "APPROPRIATE TIME" 30 The errors of principle which we have identified in the judgment commence with his Honour's analysis of what we have referred to as the second limb of the inquiry into the jurisdictional issue, namely, the identification of the contract "according to which (that is, "whereby") or person performs the relevant work" (see Fish at [19]). 31 His Honour characterised the inquiry as concerning "which of a number of possible contracts or arrangements was the contract or arrangement pursuant to which Mr Reilly performed the driving work". His Honour then referred to the "logical possibilities" for the existence of such a contract or arrangement as being "either the New South Wales Supermarket Delivery Contract between the applicant and the respondent or any other contract or arrangement between Mr Reilly and the applicant pursuant to which he drove the vehicle in order to effect the delivery of milk products". According to his Honour, the appellant was required to support (or establish) its case by proving "either that the Supermarket Delivery Contract cannot by its terms come within s 106 thereby denying jurisdiction or that there is some other contract or arrangement that falls within s 106 and that therefore the Supermarket Delivery Contract does not". 32 There was, however, no reliance placed by the parties on an alternative contract or related condition or arrangement pursuant to which, or whereby, the respondent could be said to be performing work. The only contract before Marks J for consideration was the SDC. It was that contract which the respondent sought in its amended summons to have declared wholly or partly avoided, or varied. 33 Some reliance was placed by his Honour on the fact that the Court had not been referred by either party to the respondent's evidence filed in the proceedings. In this regard, his Honour remarked: Whether and to what extent that evidence goes to the establishment of any alternative contract or arrangement between Mr Reilly and the applicant that comes within s 106 is unknown to me. 34 All the evidence said to be relevant to the jurisdictional issue, however, had been filed in the proceedings. All the evidence to be relied upon in the substantive proceedings had been filed except for some expert evidence which Marks J was advised would only be relevant in the event the Court found that it had jurisdiction. Following an adjournment of the hearing of the appellant's motion, to allow the respondent the opportunity to file any further evidence upon which it wished to rely in respect of the issue of the performance of work, the respondent accepted that an appropriate stage had been reached in the proceedings for the Court to consider the motion. The appellant's application on the motion, therefore, proceeded on the basis that all of the respondent's evidence-in-chief, as well as some additional material which had been filed by Mr Reilly after the adjournment of the motion, was to be taken at its highest in favour of the respondent. Moreover, the evidence upon which the parties wished to rely on the jurisdictional issue was identified and directed to his Honour's attention. This evidence included three affidavits sworn by Mr Reilly for the purposes of the appellant's motion. 35 Given that Marks J had before him all of the evidence relied upon by the parties being relevant to the jurisdictional issue, and given that it was the parties' joint position that it was the "appropriate time" in which to decide the issue, it was incumbent upon his Honour to consider, by reference to that evidence, whether the SDC was amenable to s 106. The possible existence of some other alternative contract or arrangement not squarely raised by either party was not a relevant line of enquiry. 36 This conclusion must result in the appeal being upheld in this respect. It does not follow, however, that the matter should be remitted. The parties to the appeal submitted, that if the appeal were to be upheld, the balance of the issues raised by the appellant on the appeal should be determined by the Full Bench. Having regard to our conclusions that the jurisdictional question is appropriately poised for determination and factors of convenience and cost, we propose to adopt that course (see T D Preece & Co. Pty Ltd v Murton (2007) 165 IR 396 at [29] and T D Preece v Industrial Court of New South Wales (2008) 177 IR 172 at [41]).

IS THE SUPERMARKET DELIVERY CONTRACT A CONTRACT TO WHICH s 106 APPLIES? Appellant's Submissions

37 Mr P Kite, of senior counsel, with whom Ms S Piedade, of counsel, appeared, made, in summary, the following oral and written submissions: (1) There were two questions that the Court must consider in order to determine whether a contract is one whereby work is performed in an industry for the purposes of section 106 of the Act. First, the Court must consider whether a person performs work in any industry. Having identified the work performed, the next, and second, issue for the Court is what is the contract or arrangement according to which or in fulfilment of which or in consequence of which that work is or was performed. It is only that contract or arrangement which the Court may declare void or vary: see Batterham v QSR Limited (2006) 225 CLR 237; Fish v Solution 6 Holdings Limited (2006) 225 CLR 180; Old UGC v Industrial Relations Commission of New South Wales (2006) 225 CLR 274; Sin Yong Yim and Tai Sik Kim v Industrial Relations Commission of New South Wales and Anor (2007) 162 IR 62 and Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83; 255 ALR 131 ("Caterpillar") (at [114] to [124]); (2) The appellant contested jurisdiction upon the basis that the respondent could not satisfy the requirements of s 106 when proper consideration was given to the second test; (3) The only contract placed in issue in these proceedings by the respondent is the Supermarket Delivery Contract. It was a contract between the appellant and the respondent. It was a contract in writing. There was no other contract or arrangement which was the subject of the application for relief. Mr Reilly asserted that these were his businesses, he runs them and Dairy Farmers has no involvement. It was never suggested that the Reilly businesses were not independent entities or the contract was in some way a pretence; (4) There can be no doubt that the standard form contract is written so as to apply to a range of possible contracting parties. But the subject contract is one between two corporate entities and needs to be construed as such; (5) The appellant submitted that the mere performance of the functions of a director does not satisfy the jurisdictional requirements of s 106: for example, see Azzi & Ors v Volvo Car Australia Pty Ltd [2007] NSWSC 319 at [121] and Caterpillar at [50(4)]; (6) It was necessary to bear in mind, when considering the question of whether the Supermarket Delivery Contract fell within s 106, that Mr Reilly was both an operator and a director of the respondent. The respondent was a bare trustee of a trust with a number of beneficiaries (including Mr Reilly). However, the performance of work by Mr Reilly and the other operators (like that of Messrs Gough and Gilmour in Caterpillar) was pursuant to their contracts or arrangements with the respondent on behalf of the trust; (7) The analysis of the Supermarket Delivery Contract indicates no analogy with an employer/employee relationship. The contract identifies no particular individual. It does not attempt to prescribe industrial terms and conditions. The arrangement of the respondent's business, including structures and the range of businesses in which it operates (save for conflicts of interest), is a matter for the respondent. The arrangements for the performance of work, in fulfilment of the respondent's obligations under the Supermarket Delivery Contract, whether by Mr Reilly, employed operators or by lease are also a matter for it; (8) It was contended that, had the primary judge properly considered the jurisdictional test and applied it to the relevant Supermarket Delivery Contract, he would have and should have found that the Supermarket Delivery Contract did not fall within s 106. Rather, the identified work was performed pursuant to a contract or arrangement between the person actually performing the work and the respondent.

38 Mr A Britt, of counsel, made, in summary, the following oral and written submissions: (1) There is a need to identify the contract pursuant to which the actual work was performed with a characterisation of the contract as a whole by specific reference to what was envisaged would be the contractual vehicle by which work was performed. It is then necessary to have regard to the performance of work in connection with the contract: McDonald's Australia Holdings Limited and Anor v Industrial Relations Commission of New South Wales and 2 ors [2005] NSWCA 286 at [99]; (2) The onus was on the appellant to prove that the Supermarket Delivery Contract could not be a contract amenable to s 106; (3) The mere fact that the contract was not with Mr Reilly did not prevent the Supermarket Delivery Contract from being a contract that is caught by s 106 (see Wirraway (NSW) Pty Ltd and Anor v Ultratune Australia Pty Ltd [2006] NSWIRComm 300; McDonald's Australia Holdings Limited and Anor v Industrial Relations Commission of New South Wales and 2 ors [2005] NSWCA 286 (at [99]) and Caterpillar of Australia Pty Ltd v Industrial Court of NSW [2009] NSWCA 83 (at [137])); (4) The facts and circumstances of this case are distinct from Caterpillar and Fish. The fact that there was a corporate entity is itself not determinative. The Supermarket Delivery Contract does not need to be analogous to an employee/employer relationship: Caterpillar at [124]. The Court needs to consider all the surrounding circumstances to assess whether the relationship has any analogy with an employer/employee relationship and is capable of falling within the industrial context in which the statutory formulation must be understood. This includes the work performed and the expectations of the appellant; (5) In addition, if the work had been done directly by Mr Reilly as an employee of the respondent he would be an employee and covered by the Milk Treatment, &c., and Distribution (State) Award and post March 2006 a Notional Agreement Preserving a State Award (NAPSA) based upon that award; (6) Unlike the facts in both Caterpillar and McDonald's, there is a historical nexus between s 106 and the work performed by milk vendors which also gives rise to a sufficient industrial context to bring the Supermarket Delivery Contract with those classes of contracts caught by s 106. Both McDonald's and Caterpillar recognise that contracts involving working proprietors and franchisees, or for that matter independent contractors, can be caught by s 106; (7) It is too simplistic a reading to not interpret the manual in conjunction with the contract. When read together a wholly different impression and understanding about how the contract works was established. In substance, the contract required that someone performed work in a way that was contemplated by s 106; (8) The Court should consider matters of substance and not the form of any contractual arrangement: Caterpillar at [137]. The work performed was clearly industrial, the industry is the delivery of milk. The business involves picking up the milk, transporting the milk, selling the milk, picking it up from places which are designated by the appellant, wearing uniforms required by the appellant, having trucks decorated in a particular form required by the appellant. All of those circumstances, notwithstanding the judgments in McDonald's and Caterpillar, fall on the other side of the line. This contract is, thus, caught by s 106. 39 During the hearing of the appeal, the Court asked the parties to provide a submission as to the following question: What is the relevant factual substratum that would apply to the determination of jurisdiction if the Court considers that the surrounding circumstances are relevant to the determination of the question of jurisdiction? 40 It was common ground between the parties (correctly, in our view) that if the Court was to consider the surrounding circumstances (noting that was not the primary position of the appellant) the factual substratum which was applicable was that operating at the time of the filing of the original summons pursuant to s 106 in 2002. 41 The majority judgment in Fish (at [18] to [20]) establishes that consideration of the preliminary issue whether a contract or arrangement is one "whereby a person performs work in any industry" involves a two-step or two-stage inquiry. The first step in the inquiry is to ascertain whether a person performs work in any industry. The second step, assuming the answer leads to further inquiry, is to identify the contract or arrangement according to which a person performs the work. Was work performed in any industry?

42 The business activities of the respondent prior to deregulation have been earlier set out in this judgment. The respondent is a bare trustee for the Reilly Family Settlement Trust ("the Trust"). One beneficiary of the Trust is Reilly Family Investment Pty Ltd of which Mr Reilly and his wife, June Reilly, are directors. According to Mr Reilly, the respondent bought a small milk wholesale and home run at Bilgola Plateau in 1977. At this time it was licensed under the NSW Dairy Corporation Regulations. During 1985 to 1989, the respondent had agreements with the appellant for the supply of dairy products, including white milk, via wholesale ("route trade"), home runs and supermarket deliveries. The respondent sold the home runs in about 1986 and purchased wholesale and supermarket runs in adjoining areas during the late 1980s. It held the geographic area from Narrabeen to Palm Beach for wholesale and supermarket runs, with the exception of minor retail and wholesale runs bordering the major shopping centres. According to Mr Reilly, the respondent was one of the biggest distributors for the appellant in New South Wales prior to deregulation. 43 Mr Reilly said that after the respondent commenced working in the milk industry he performed the majority of the delivery work. This work involved attending local depots in order to collect the appellant's products in his refrigerated truck, and delivery of the products. The respondent employed workers part-time to assist on weekdays and on weekends. He employed one driver on Saturday to do the weekend deliveries to the supermarkets. June Reilly attended to administrative tasks which included payment of the accounts and keeping the records of the business. 44 In October 1997, the Trust, through the respondent, purchased five additional supermarket runs. According to Mr Reilly, the purchase price for these additional runs was $314,940, secured by way of bank loan. The contracts for the purchase were signed by Mr Reilly on 29 October 1997. After the purchase, the respondent operated a total of 12 supermarket runs. 45 At the time the SDC was executed (on 9 June 1998), the respondent was a member of a corporate group under the direction and control of Mr Reilly and his wife. Mr and Mrs Reilly were directors of the corporate beneficiary of the Trust. A related corporate entity, Sydney Northern Beaches Co Ltd ("SNBC"), owned the business name Reilly & Sons Foods Services. Mr and Mrs Reilly were also directors of SNBC. Jack Boy Services Pty Ltd was incorporated in 2005, with Mr Reilly as its sole director. That corporation provided labour hire services to SNBC. 46 Mr Reilly explained that the respondent never traded in its own right. Up until 30 June 2006, the Trust, through the respondent, employed workers in connection with the business of the Reilly corporate entities. 47 The dairy industry was deregulated on 1 June 1998. Mr Reilly described the impact of deregulation on the respondent's business as instant and substantial. The appellant lost its contract to Woolworths supermarkets for the delivery of its dairy products immediately following deregulation. As a consequence, the respondent was unable to deliver white milk to four supermarkets in the Woolworths chain. At the same time, the respondent lost its supermarket delivery run to Flemings stores. This left it with only six active stores. From 1 July 1998, the respondent also lost its income earned from the modified milk sales. The income from those sales prior to deregulation had accounted for up to 60 per cent of the respondent's business. 48 In September 1999, the respondent sold its route trade business, however, some months later Mr Reilly commenced route trade deliveries for another milk producer, National Foods, for the delivery of dairy products, including white milk. In late 2001 to early 2002 the appellant lost the right to supply white milk to Franklins, with the result that the respondent stopped servicing Franklins supermarkets. With the loss of the Franklins stores, the respondent was left with one supermarket run at Coles in Warriewood. Following the opening of a new Coles supermarket in Forestville, the respondent commenced to deliver dairy products to that supermarket on behalf of the appellant in late October 2002. 49 The foregoing material provides a brief background to the respondent's sphere of operations at or around 2002. It may be readily inferred from the background that Mr Reilly and the workers employed by the Trust through the respondent during this period performed work, namely, delivery to supermarkets of the dairy products supplied by the appellant. The industry in which this work performed may be described as 'the milk vending industry'. What was the Contract or Arrangement whereby a person performed the work? 50 We turn now to the second stage of the inquiry, that is, the identification of the contract, or set of arrangements, according to which, or whereby, a person, or persons, performed the work. 51 The only contract which arises for consideration is the SDC. It is the only contract which is the subject of the application for relief. The present inquiry must, therefore, focus on that contract which, it will be recalled, also incorporates the terms of the Manual. 52 In the SDC the respondent is referred to as "the Contractor". The Manual, which employs the term "Supermarket Contractor" (which we take to mean the same thing as "Contractor") contains an expanded definition in cl 1.3: 1.3 Definition of the Supermarket Contractor A Supermarket Contractor is contracted to distribute Dairy Farmers products to designated supermarket customers. Supermarket Trade includes major Supermarket chains as defined by Dairy Farmers. 1.3.1 The Role of the Supermarket Contractor Supermarket Contractors have an ongoing business relationship with Dairy Farmers to effectively deliver a portfolio of milk and dairy foods in the Supermarket Trade to a list of designated customers. The aim is to increase penetration in the Supermarket Trade by developing relationships with existing accounts by offering superior customer service. The core function of the Supermarket Contractor is to support the Dairy Farmers customer relationship. The role of the Supermarket Contractor is a critical element of Dairy Farmers Direct to Store strategy. Compliance with customer requirements as outlined in Definition of the Supermarket Contractor and legal obligations such as HACCP and road regulations is also mandatory. In essence, your business is designed to give the customer the secure feeling of dealing with a large supplier, supported by personalised service to a customer. One of the major benefits of being part of a network is the proven brand value and more efficient business practices developed from the broad experience within the network. This manual is a major way to share that experience. Other avenues include training sessions, Council meetings, and annual business conferences. 53 The Manual at cl 1.4 also sets out the duties and responsibilities of Supermarket Contractors. These include detailed instructions for picking up orders from the Distribution Centre, instructions for delivery, including signing off for delivery and processing, and handing in paper work. 54 A number of recitals set out the basic structure of the relationship between the contracting parties. Under recital A the appellant supplies a range of dairy products to customers. Recital E recites that the appellant has developed a market distribution format to assist the parties to deal with the challenges and opportunities of the market place. Recital F sets out the nature of the agreement between the parties: F. Dairy Farmers has agreed to appoint the Contractor to distribute the Dairy Farmers Products to designated supermarkets for the Term and on the terms and conditions set out in this Agreement. The Contractor will act as a reseller of the Dairy Farmers Products up to Deregulation, and thereafter except where otherwise agreed between the parties will be paid a commission for delivery of the Dairy Farmers Products in accordance with each customer's requirements. 55 Clause 1 of the SDC contains a number of definitions of which the following are relevant: "the Business" means the activities of the Contractor delivering the Dairy Farmers Products to the Designated Customers in accordance with and by virtue of the rights granted by this Agreement, but specifically excludes any other activities. "the Designated Customers" means those supermarket outlets to which the Contractor has the exclusive right to deliver Dairy Farmers Products pursuant to clause 2.1 of this Agreement. "the Manual" means the manual specifying the standards and procedures which Dairy Farmers requires of Contractors, as amended from time to time. "the Operator" is an individual approved and accredited by Dairy Farmers who has completed the training prescribed by Dairy Farmers for Operators and who is employed by the Contractor to drive the Vehicle or otherwise assist in servicing the Designated Customers of the Business. "the Standards" means the prescribed standards of health, safety, refrigeration, delivery, storage, customer service and performance as specified by Dairy Farmers in this Agreement and the Manual. "the System" means the processes, systems and operational procedures developed from time to time by Dairy Farmers for the sale or delivery of the Dairy Farmers Products to the Designated Customers in accordance with the Standards. 56 A provision of the Manual, which appears to bear some connection to the definition of "Operator" in the SDC, contains : 2.4 Employment of Drivers The Supermarket Contractor must notify Dairy Farmers of the appointment of drivers. 57 Clause 2 of the SDC grants the respondent the exclusive right to deliver the appellant's products. Sub-clauses 2.1 and 2.2 provide: 2.1 Dairy Farmers and the Contractor agree that the Contractor shall have the right to deliver Dairy Farmers Products to the Designated Customers for the Term and on the terms and conditions contained in this Agreement. 2,2 Subject to clauses 4.3, 4.5 and 4.7 of this Agreement, the Contractor shall have the exclusive right to deliver the Dairy Farmers Products to the Designated Customers. As Dairy Farmers will be granting similar exclusive rights to other Contractors, the Contractor agrees not to distribute the Dairy Farmers Products to anyone who is not a Designated Customer without the prior written consent of Dairy Farmers. 58 Sub-clauses 4.3, 4.5 and 4.7 deal with, respectively, the appellant's rights to withdraw or cease to service a designated customer, or its products (sub-cls 4.3 and 4.4); and the right to withdraw a designated customer where the respondent declines to service that customer (sub-cl 4.7). 59 Clause 3 sets out some features of the SDC. Sub-clauses 3.2 and 3.5 relevantly provide: 3.2 Dairy Farmers has developed a supermarket distribution format linked into Designated Customers which it believes will assist the parties to deal with the challenges and opportunities of the marketplace, and provide to the Contractor reasonable security and protection. The Contractor will act as a reseller of the Dairy Farmers Products up to Deregulation, and thereafter will be paid a commission for delivery of the Dairy Farmers Products in accordance with each customer's requirements. 3.5 Where the contractor ceases to be a reseller and is instead paid a commission for delivering the Dairy Farmers Products, Dairy Farmers will handle all dealings with customers, and any action taken by the Contractor with those customers shall on (sic) behalf of Dairy Farmers. Dairy Farmers shall be responsible for all supply, pricing, discounts, rebates, invoicing, collection and account management issues, and will handle the negotiation of the delivery format and delivery arrangements. Where appropriate Dairy Farmers will consult with the Contractor or the Contractor's elected representatives.

60 In combination with items 4 and 5 of the Schedule and cl 5 of the SDC, the term of the SDC is two years with options for renewal provided to the respondent. 61 The manner in which the SDC was intended to operate is provided by cl 6: 6. REQUIREMENTS ON COMMENCEMENT OF THE DELIVERY CONTRACT 6.1 On the signing of this Agreement a list of the Contractor's Designated Customers will be attached to this Agreement. 6,2 Prior to the Commencement Date the Contractor and all Operators shall satisfactorily complete any initial training program and obtain all necessary permits or licences required by Dairy Farmers or any law, regulation or industry code of conduct including a current certificate of registration as a Dairy Produce Merchant under the Dairy Industry Act 1979. 6.3 The Contractor shall ensure that the Vehicle is suitable for use in the Business, meets the specifications of Dairy Farmers as set out in the Manual, complies with any relevant laws or regulations, and is correctly outfitted and sign written in accordance with the Dairy Farmers Image. 6.4 Prior to the Commencement Date the Contractor shall appoint the Operator, and notify Dairy Farmers of the appointment. All Operators must have an appropriate driver's licence and will otherwise be able to lawfully and competently drive the Vehicle. 62 Clause 7 of the SDC deals with payments to the respondent by the appellant by way of Commission. After deregulation, sub-cls 7.2 (a) and (b) provide: 7.2 After Deregulation: (a) Except where the parties agree that the Contractor will be a reseller of the Dairy Farmers Products, Dairy Farmers shall pay to the Contractor the Commission in consideration for the Contractor delivering the Dairy Farmers Products to the Designated Customers.

(b) Dairy Farmers will set the Commission in consultation with the Contractor or the elected representatives of the Contractors. When setting the Commission Dairy Farmers will: (i) have regard to the costs incurred by the Contractor to service the Designated Customers; and (ii) provide the Contractors with the reasons for the proposed change in Commission. 63 Under the definitions provided in cl 1 of the SDC, the actual amounts of commission were to be determined by the appellant "in view of the requirements of the designated customers and by market forces in the manner discussed in cl 7.2". 64 Clause 9 of the SDC lists some of the obligations of the respondent under the SDC: 9. ADHERENCE TO SYSTEM, IMAGE AND STANDARDS 9.1 Both parties shall throughout the Term adhere to the System, the Image and the Standards as prescribed by this Agreement and the Manual. 9.2 The Contractor shall not act in a manner detrimental to the Image or which prejudices the goodwill or reputation of Dairy Farmers or any of the Dairy Farmers Products. 9.3 The Contractor and all Operators involved in the Business shall wear the Dairy Farmers uniforms set out in the Manual in the conduct of the Business. 9.4 All parties shall adhere to the customer service standards described in this Agreement and the Manual. In particular the Contractor shall build and maintain positive personal relations with those representatives of the Designated Customers with whom the Contractor comes into contact when performing the delivery functions and cooperate in the resolution of any customer service issues or complaints. 9.5 The Contractor shall ensure all staff in the Business are aware of the contents of this Agreement and all obligations imposed upon the Contractor hereunder, and are appropriately trained and supervised at all times. 9.6 The Contractor must be able to deliver to Customers seven days a week, and at times of the day and night which meet the reasonable requirements of the Designated Customers of the Contractor.

65 Clause 10 sets out the responsibilities of the appellant. They include an obligation to train the respondent in "the System", to assume all supply, pricing, discount, rebate, invoicing, collection and account management functions in respect of "designated customers" and to handle the negotiation of deregulated customer delivery format and arrangements. Clause 10.11 obliges the appellant to provide uniforms to the Operators at the appellant's expense, with expenses associated with replacement uniforms to be borne equally by the appellant and the respondent. Clause 2.6 of the Manual repeats in large measure the requirements of cl 10.11. 66 By cl 11 of the SDC the respondent has obligations to ensure the vehicle used in the Business is maintained and adequately equipped. 67 The respondent's responsibilities as "Contractor" are set out in cl 13 which provides: 13. RESPONSIBILITIES OF THE CONTRACTOR 13.1 The Contractor agrees that the Contractor's prime responsibility shall be to deliver Dairy Farmers Products to the Designated Customers in accordance with the requirements of the Designated Customers. The Contractor shall avoid all activities which shall give rise to any conflict of interest or prejudice the ability of the Contractor to perform such prime responsibility. 13.2 The Contractor will not sell or deliver any other products without the prior written consent of Dairy Farmers, which consent will not be unreasonably withheld where the time and nature of such activities do not prejudice the ability of the Contractor to properly service the Designated Customers. 13.3 The Contractor and Dairy Farmers will work together to deliver the Dairy Farmers Products in the manner and time requested by the Designated Customers. 13.4 The Contractor shall take out all group tax, income tax, worker's compensation, payroll tax, superannuation and other registrations and remit all payments to the relevant authorities in accordance with their requirements. 68 Under cl 15 the respondent is required to: Maintain on a daily basis a record of all deliveries and dealings with Customers including all Customer details and any other information relevant to the Dairy Farmers as and when required by reporting or direct computer access. 69 Sub-clause 16.1 imposes requirements on the respondent to comprehensively insure the Vehicle, all drivers of the Vehicle, and all other assets used in the business. Item 7(a) of the Schedule lists those insurances which the respondent is required to take out: * public liability cover in relation to the Business to $10,000,000. * all compulsory insurance cover and comprehensive motor vehicle and third party personal injury insurance to cover the Vehicle and all Operators. * workers compensation insurance in respect of all Operators and other employees involved in the Business. 70 Clause 18 of the SDC deals with transfers and assignment. It provides: 18. TRANSFER/ASSIGNMENT 18.1 Dairy Farmers may at any time transfer, assign, delegate or otherwise deal with some or all of its rights and responsibilities under this Agreement. The Contractor shall on request execute any assignment documentation requested by Dairy Farmers. 18.2 If the Contractor desired to sell all or part of the Business: (a) the Contractor must notify Dairy Farmers in writing of the proposed sale price and terms of sale; (b) Dairy Farmers shall have the option to buy the Business or part at the Contractors requested sale price within 14 days of the notice of sale; (c) the Contractor shall not sell the Business or part to any person at a price or on terms more favourable than those which have been offered to Dairy Farmers without giving Dairy Farmers a further option in accordance with sub-paragraph (b) above. 18.3 The Contractor may not transfer subcontract or otherwise deal with the Business without the consent of Dairy Farmers in writing. The Contractor must also obtain the consent of Dairy Farmers in writing prior to any change in the underlying beneficial ownership or control of the Business. 18.4 The Contractor may sell all or part of the Business if, and only if: (a) Dairy Farmers had declined or failed to exercise it's option in clause 18.2 above; (b) Dairy Farmers has given its written consent to the sale, which consent will not be unreasonably withheld; (c) the proposed transferee is responsible, solvent, has sufficient financial and business capacity to properly operate the Business in accordance with this Agreement, has the necessary qualifications and licences to operate the Business, satisfactorily completes all training programs required by Dairy Farmers and otherwise conforms with the Dairy Farmers Entry Criteria and procedures for incoming Contractors; (d) the Contractor pays the reasonable legal and other costs of the assignment; (e) the proposed assignee executes Dairy Farmers's standard Supermarket Delivery Contract, and complies with all pre-conditions contained in the Supermarket Delivery Contract; 18.5 The parties acknowledge that clause 18 covers the situation where the Contractor desires to sell individual Designated Customers. 71 On 1 October 2007, the respondent leased its supermarket runs to another contractor of the appellant, Taringha House. The supermarket runs included Coles stores at Forestville, Warriewood and Mona Vale and a Franklins store at Frenchs Forest. According to Mr Reilly, the respondent took this action because a change of venue of the collection point for delivery of the appellant's products in the Sydney metropolitan area proved to be an unprofitable location for the respondent. Following the lease of the runs to Taringha House, the appellant continued to make commission payments to the respondent which were forwarded by the respondent to Taringha House. 72 Clause 19 of the SDC, headed "Death and Permanent Disability", contains provisions dealing with death and permanent disability of "Contractors" (presumably natural persons) as well as Operators. With regard to Operators, sub-cl 19.3 provides that the respondent must ensure a replacement Operator is appointed in the event an Operator dies or is permanently disabled. 73 Clause 20 deals with the circumstances under which the SDC may be terminated. 74 Clause 23 deals with the parties' joint responsibilities. It emphasises that the parties are "independent proprietors" and denies any relationship of partnership, agency, joint venture, and employment. Under sub-cl 23.2 the respondent is required to "clearly indicate on the Vehicle all stationery and other materials given to Customers that the Contractor is an independent business proprietor". 75 This factual background, which includes a summary of the more pertinent terms and conditions of the SDC as complemented by the Manual, reveals the following key matters:

1. The SDC is between two corporate entities;
2. The SDC grants to the respondent an exclusive right to deliver the appellant's products;
3. Delivery of the appellant's products under the SDC is to be effected through individuals, called "Operators", who are approved by the appellant and who must undergo a training programme prescribed by the appellant;
4. Under the SDC, "Operators" are individuals employed by the respondent as drivers or as assistants in the servicing of Designated Customers of the Business;
5. The Trust, through the respondent, employed persons as "Operators" to deliver the appellant's products under the terms of the SDC;
6. After deregulation, the respondent was paid commission by the appellant for the delivery of the products;
7. Mr Reilly and the other employees of the Trust who performed the role of "Operators" under the SDC, also performed work in connection with the businesses of the Reilly Corporate group. Mr Reilly, from late 1999 to early 2000, undertook route trade deliveries of dairy products for another milk producer, National Foods;
8. At the time the SDC was executed, the respondent, as Trustee for the Trust, had purchased and operated 12 supermarket runs;
9. The impact of deregulation on the respondent's business was immediate and substantial. By about 2002, the respondent had lost all its supermarket runs acquired prior to deregulation, except one, although Mr Reilly acquired, in 2000, the truck delivery work with National Foods, and in 2002 the respondent acquired a new supermarket delivery run to Coles at Forestville. In 2007, the respondent leased its supermarket runs, pursuant to the terms of the SDC, to another Contractor, Taringha House;
10. The respondent, at the time it executed the SDC, was a member of the Reilly Corporate group which was under the direction and control of Mr Reilly and his wife, June Reilly. The Trust, of which the respondent was Trustee, had one known beneficiary, namely, Reilly Family Investments Pty Ltd, of which Mr Reilly was a director. The members of the Reilly Corporate group were SNBC which owned the business name, Reilly & Sons Food Services, and, in 2005, Jack Boy Services which provided labour hire services to SNBC. Mr Reilly and Mrs Reilly were directors of SNBC. Mr Reilly was the sole director of Jack Boy Services;
11. The respondent never traded in its own right. The Trust, through the respondent, employed workers in connection with the businesses of the Reilly Corporate entities. 76 Similar provisions to the SDC were analysed in two earlier authorities, Caltex Oil (Australia) Pty Ltd v Feenan and Others (1980) 1 NSWLR 724 and Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and Others (1991) 28 NSWLR 443. 77 In Caltex Oil v Feenan, the owner of a service station (Caltex) granted a non-exclusive and personal licence (the Solus Contract) to Mr and Mrs Feenan to sell its petroleum products. Features of the licence included a requirement upon the Feenans to buy the products exclusively from Caltex. The Feenans, as licensees, were also required to carry on the business "for any period during lawful trading hours on any day". The Feenans were also required to apply for, and use their best endeavours to obtain from any relevant authority, permission to ensure that the business was conducted for the maximum permissible trading hours. They were also prohibited from making "any additions, alterations, re-arrangements and improvements on the said land and licensed holdings". 78 The New South Wales Court of Appeal found that the licence agreement to which the Feenans were parties was an agreement which led to the Feenans working in an industry. The finding was upheld by the Privy Council in Caltex Oil (Australia) Pty Ltd v Feenan and Others (1981) 1 NSWLR 169 (at 173). Lord Diplock stated: Performing work in industry, in their Lordships view, covers anything which a person employed in the same occupation for hire or reward might be expected to be required to do under a contract for employment. So the Feenans when running the service station by their own labours were performing work in industry. The remaining question of construction is whether the solus contract was a contract "whereby" they did so. In their Lordships' view this provision in the context of contract or arrangement bears its ordinary meaning of "in consequence of which" or "in fulfilment of which". Either meaning is sufficient to bring the Solus Contract within the description of contracts to which s 88F applies. the Feenans were required to carry on the task of supplying petroleum products to motorists throughout all lawful working hours. In doing so they were fulfilling their contractual obligations to Caltex. The total remuneration which they received (to use the expression used in s 88F(1)(d)) was the difference between the prices at which they were able to sell those products and the prices which Caltex chose to sell the products to them, together with licence fee and the so-called rental of goodwill. The benefit obtained by Caltex from the Solus Contract in addition to the licence fee and rental of goodwill, was an assured and profitable outlet for employees for doing what, under the Solus Contract, the Feenans had bound themselves to do instead.

79 Majik Markets concerned a franchise agreement and a lease of premises. Majik Markets was a company within the Caltex group of companies. It entered into franchise agreements with independent contractors who were either corporate entities or individuals for the operation of convenience stores on land owned by the franchisor and for the sale of motor fuel purchased from the franchisor. The agreement was expressed as a "licence and authority to operate a Majik Market convenience retail store and petrol service facility at the premises and to use in connection therewith the Trademarks and the Majik Market System and other property provided by the company". A condition precedent to the operation of the agreements was that persons nominated in the agreements should have completed a relevant training programme, details of which were set out in a schedule to the agreements. Those nominated persons were, under the terms of the agreements, required to: Devote ... their full time personal attention and effort to the conduct, operation and management of the Business and at all times whilst the premises are open for business, ..maintain adequate personnel to facilitate the checking out and handling of orders, including the dispensing of motor fuel and other needs of customers so as to avoid any unnecessary delay to and on the part of customers. 80 Other provisions of the agreement provided that the franchisees staff the premises with: Uniformed, competent and adequately trained personnel who shall maintain a high standard of sanitation cleanliness and demeanour. 81 Mahoney JA held that the "purpose" of the agreements was that the nominated persons should perform work in the activities referred to in the agreements. His Honour added (at 459): I am conscious that the franchise agreements contemplate and intend that the franchisees will become the proprietors of businesses, that they may acquire assets, and that they will, as proprietors or otherwise, be involved with the operation of those businesses. But the work to be done in the industry in which the business is to operate was, in my opinion, to be done not merely as a means of carrying out another purpose, viz, the setting up and conduct of a business by the franchisees but was, in the relevant sense, the purpose which the agreement sought to achieve: it was, in my opinion, the purpose of Majik that that work should be done and accordingly the petroleum and other products should be sold and it was the purpose of the franchisee that they would do or cause to be done such things. Mr Conti QC did not, I think, contest that it had been held that the section applied in cases where the work to be done was to be done by independent business persons or contractors. The arrangement referred to in, for example, Caltex Oil (Australia) Pty Ltd v Feenan [1981] 1 NSWLR 169, involved or contemplated such things. In Stevenson v Barham , the share farmer in question would or might well have been, in this sense, an independent businessman or contractor. 82 A submission made on behalf of Majik Markets before the Court of Appeal was that a contract for the outright sale of a business to a proprietor who intends to be a working proprietor is not within s 88F (a predecessor provision to s 106). It was also submitted that the franchise agreements did not have an "industrial colour or flavour" and were not entered into as stratagems to avoid employment relationships. It was further submitted that they were akin to agreements for the outright sale of a business. The Court of Appeal found otherwise. Handley JA said on the issue (at 464-465): The franchisees are independent contractors conducting retail businesses on land of the franchisor and selling motor fuel purchased from the franchisor. The franchisees, or in some cases their employees, work in the businesses both in consequence of the agreements and in fulfilment of them. The form of agreement requires the franchisee to perform work in the retail industry either personally or through employees and therefore it leads directly to the performance of work in that industry. The franchisor has a real interest in the performance of that work. It results in the sale of motor fuel purchased from the franchisor and tends to maintain and improve both the value of its general goodwill, and the value of the local goodwill attached to its premises. While the franchisees, if natural persons, are working for themselves, they are also in a very real sense working for the franchisor. If the business was not operated by some franchisee, the franchisor would either have to employ staff of its own or sell or lease the site to an independent purchaser or lessee. In my opinion the decision of this Court in Production Spray Painting and Panel Beating Pty Ltd v Newnham establishes that the franchise agreements are contracts whereby work is performed in an industry either by, or on behalf of, the franchisees. Indeed so far as jurisdiction is concerned the present agreement, in my opinion, is indistinguishable from that in Caltex Oil (Australia) Pty Ltd v Feenan , where this Court and the Privy Council upheld the jurisdiction of the Commission. The matters relied upon by Mr Conti may establish that the agreements are not unfair or within any of the other grounds for relief under s 88F, but they do not establish that these are not agreements whereby work is performed in an industry. 83 The terms of the licence, which required the Feenans to carry on business "for any period during lawful trading hours on any day", substantially mirrors cl 9.6 of the SDC under which the respondent must be able to deliver to customers seven days a week and at times of the day and night which meet the reasonable requirements of the designated customers of the contractor. Like the Feenans, the respondent also carried on business for itself as an independent contractor. Through the Trust it employed operators, including Mr Reilly, to perform the work. Like the licence under which the Feenans operated their business, persons were employed in the respondent's business to deliver the appellant's products. 84 On the other hand, there are distinguishing features. The respondent, under the SDC, is not required to exclusively deliver the appellant's products. As the appellant had sought to emphasise in its submissions, no individual person is required under the SDC to devote their full time and attention to the performance of its terms. The respondent is not prohibited from operating other businesses concurrently with the delivery of the appellant's products, although, under cl 13.2, the appellant's prior written consent (which could not be "unreasonably withheld") is necessary before the respondent can sell or deliver any other products. The SDC is also one step removed from the licence agreement the subject of the judgments in Caltex. The Feenans, as parties to the agreement, performed work as independent proprietors. Mr Reilly's role, as a director of the respondent working as an operator, may be characterised as that of independent proprietor but he was not, like the Feenans, a party to the contract. 85 Majik Markets also exhibits a number of features in common with the SDC. It is an authority for a proposition that s 106 contemplates that persons performing work under a contract may be business proprietors or independent contractors. The respondent here is a corporation, however, this feature did not assume any particular significance for the Court of Appeal (or the Privy Council) in Majik Markets, as some of the franchisees were clearly corporate entities as well as natural persons. Moreover, the franchises, in some cases, employed persons to work in the business. This fact was not considered to be capable of impacting on a positive finding of jurisdiction in McDonald's Australia Holdings Ltd v Industrial Relations Commission of New South Wales (2005) 144 IR 219 at [99]; see also Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales (2009) 255 ALR 131 (at [137], [139]). 86 McDonald's concerned a grant of licences to use the McDonald's system. McDonald's granted licences and lease agreements to McLaughlin's Family Business (MFB) and Max William McLaughlin (Mr McLaughlin). Mr McLaughlin was the sole director of MFB, and was identified as the Principal in each licence and lease agreement. Under the licences, the McDonald's system included proprietary rights in trademarks, design and colour schemes for restaurant buildings, signs, equipment layouts, formulae and specifications for certain food products and bookkeeping and manuals covering business practices and policies. The licensee was required to adhere strictly to the system. One condition of entry into the agreements was that the licensee must work full-time at the McDonald's restaurant business. The licences contained provisions for the payment of the licences and service fees. The service fee was computed in accordance with undertakings set out in the licences which the licensee was obliged to give including operating the restaurant in a clean, wholesome manner, making necessary repairs and replacements to ensure the restaurant building and parking areas were in good condition, operating the restaurant seven days a week throughout the year, and causing all employees to wear uniforms of a type and design specified by the licensor. 87 Clause 6.05 of the licence agreements required the licensee, "or where the licensee is a company, Principal", to personally devote "his full time and attention to and devote his best efforts in the operation of the restaurant". Under cl 10 of the licence agreement, the licensee could assign his interest in the agreement but not without the prior written consent of the licensor. Clause 19 dealt specifically with corporate licensees requiring it (and the Principal) not to amend its constitution without the prior written consent of the licensor. 88 Under the leases, the lessee was obliged to use and occupy the lessor's premises only for a McDonald's System restaurant. The leases also contained provisions for the payment of rent which included adjustment with respect to gross sales. 89 Spigelman CJ, in the minority, found himself bound by earlier High Court authorities which had examined the issue of jurisdiction. His Honour referred to Stevenson v Barham (1977) 136 CLR 190 and Brown v Rezitis (1970) 127 CLR 157 which his Honour said "were decided at a time when courts were prone to apply a more narrowly literalist approach to the task of statutory interpretation than is the case today". The correct approach, his Honour said, was purposive. The failure to adopt a purposive approach, his Honour said (at [6]), was made plain by Barwick CJ in Stevenson v Barham. In that judgment, Barwick CJ said: Notwithstanding the wide language of s 88F, I have found difficulty in becoming convinced that it was within the contemplation of the legislature that agreements for business ventures, of which the present may be a specimen, freely entered into by parties in equal bargaining positions, should be so far placed within the discretion of the Industrial Commission as to be liable to be declared void. However, I have come to the conclusion that the language of s 88F of the Act is intractable and must be given effect according to its width and generality. The legislature has apparently left it to the good sense of the Industrial Commission not to use its extensive discretion to interfere with bargains freely made by a person who was under no constraint or inequality, or whose labour was not being oppressively exploited. 90 Spigelman CJ emphasised the modern approach to the importance of context (to be taken into account in the first instance and not merely after ambiguity has been identified) when construing a statute. His Honour acknowledged that he remained bound by the earlier High Court authorities, but considered that the industrial context of s 106 remained pertinent when applying "the Stevenson v Barham test" (a determination as to when the requisite connection between an impugned contract and the performance of work is sufficiently "direct"). His Honour concluded (at [50] and [51]): Unconstrained by the authority of Stevenson v Barham , I would have concluded that a contract with a person in his or her capacity as a proprietor of a business was not a contract "whereby a person performs work in any industry" within s 106 of the Act. That is not to say that the Court would not pay careful attention to the substance rather than the form of any contractual arrangement. It would not avail parties to seek to avoid s 106 by evasions and subterfuges. (See Brown v Rezitis at 164; Solution 6 at [76].) Simply because a person was in form an independent contractor, and could be said to be running his or her own business, would not be determinative. However, the literalist test adopted in Stevenson v Barham , which this Court must apply, prevents the Court from concluding that the role performed by a proprietor of a business as such is not encompassed by the statutory formulation of "performance of work in an industry". 91 Spigelman CJ also saw no differences of any significance between the McDonald's agreements and those agreements considered in Caltex v Feenan and Majik Markets (at [65]). In particular, his Honour found that cl 6.05, which required Mr McLaughlin to devote his full-time and personal attention and to exercise his best efforts in the operation of the restaurant, was "closely analogous to a similar clause in Majik Markets". His Honour also found persuasive the "considerable emphasis" in the McDonald's licences given to the personal involvement on a full-time basis of the individuals who own the equity in the business. 92 Handley JA, with whom Mason P agreed, came to a different conclusion with regard to the McDonald's set of agreements. His Honour, in particular, focused on an aspect of the evidence which revealed that MFR, "currently employs in excess of 350 employees of which about 20 to 25 employees are full-time". In that regard, his Honour said (at [93]-[96]): However, I am unable to agree that these four transactions, comprising leases and licence agreements, collectively or separately are contracts, agreements or arrangements (contract) whereby Mr McLaughlin performs work in an industry within the meaning of s 106(1). In his affidavit of 4 April 2005 filed in this Court Mr McLaughlin said (para 98) that his company "currently employs in excess of 350 employees of which about 20 to 25 employees are full-time". Franchise agreements with a working proprietor or proprietors were held to be within the jurisdiction of the Commission under the predecessor of s 106 in Caltex Oil (Aust) Pty Ltd v Feenan [1981] 1 NSWLR 169 (PC) and Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443; 39 IR 169. The Chief Justice holds that these cases cannot be distinguished and since the subject contracts require Mr McLaughlin to work fulltime in the business they are contracts whereby he performs work in an industry. It seems to me, with respect, that this view involves an over literal construction and application of the section. The earlier franchise cases in the superior courts did not involve contracts with a working proprietor who employed a workforce of this magnitude. 93 Handley JA nevertheless agreed (at [99] and [100]) with Spigelman CJ that the franchise agreements in Caltex v Feenan and Majik Markets fell within s 106. His Honour's view was expressed as follows: I have no difficulty in characterising the franchise agreements in Feenan and Majik Markets as contracts within the section although they contemplated the employment of additional staff by the franchisees. The Court could also find, without difficulty, that the terms of the contract had a recognisable and direct impact on the working conditions and remuneration of the proprietors. No such conclusion is open on the facts of the present case. The impact of particular clauses in the leases and licenses on Mr McLaughlin's remuneration and profits would be anything but recognisable and direct. 94 The importance of industrial context within which s 106 is said to operate was also raised by Handley JA. After extracting a passage from Barwick CJ's judgment in Brown v Rezitis (which dealt with the avoidance of subterfuges as a purpose of s 88F), Handley JA said (at [101] and [102]): Barwick CJ recognised that the section is not confined to contracts of that character but nevertheless it seems to me that its basic purpose was to provide a safety net for workers or persons in the position of workers. In my judgment the present application to the Commission attempts to turn the section on its head. Characterisation of a contract to determine whether it is within the jurisdiction of the Commission under s 106 will raise questions of fact and degree in franchise cases near the borderline and the decision may not be an easy one. However there is no difficulty in the present case where the working proprietor's company employs some 350 staff. The distinction is one of substance, not form, and the Commission, in the words of Barwick CJ in Brown v Rezitis at 164, can uncover the real transaction between the parties. The real transaction here does not have to be uncovered, and it is not a contract whereby Mr McLaughlin works in an industry. 95 The central question posed by the High Court for consideration in Fish is contained in the following extract of the judgment of the majority (Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ) (at [17]): The central question in this appeal, and in the two other appeals heard at the same time, is whether the contract which the applicants in the Commission sought to have declared wholly or partly void, or sought to have varied, was a "contract whereby a person performs work in any industry". In this and in the other appeals, other questions arise but before identifying those other questions, it is as well to begin by identifying what, uninstructed by any of the decisions on the construction of s 106 or its legislative predecessors, is the proper approach to determining its application to particular facts and circumstances. 96 The same question arises for consideration in this appeal. We have already referred to the proper approach to the construction of s 106, identified by the majority judgment in Fish. 97 Fish was an appeal from the Court of Appeal judgment in Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558; 137 IR 123. The agreement under consideration in Fish was a share purchase agreement under which Nisha Nominees Pty Ltd had agreed to sell its shares in Fish Tech and Partners Pty Ltd to Solution 6 Holdings Ltd. Nicholas Terence Fish, who was a party to the share purchase agreement, made a separate agreement with a subsidiary of Solution 6 Holdings by which it was agreed that he would be employed by Solution 6 Holdings. The share purchase agreement provided that completion of the share purchase would not proceed unless Mr Fish had entered into an employment contract with Solution 6 Holdings. It was a term of the share purchase agreement that Nisha could sell its shares if Mr Fish's employment was terminated otherwise than for cause or by him. In November 2001, following the completion of the share purchase agreement, and after a substantial fall in the share price, Mr Fish was made redundant and his employment was terminated. 98 In the Court of Appeal judgment, a number of provisions of the share purchase agreement were identified. These included cl 2.1(a) which provided that a pre-condition for completion of the share purchase agreement was that Mr Fish enter into an employment contract with Solution 6 Holdings. Other provisions which dealt with pre-conditions to completion of the share purchase agreement were that key employees not resign or express an intention to do so (cl 2.1(c)) and that Nisha use its best endeavours to ensure that the conditions in cl 2.1(a) and (c) were satisfied. Under cl 14.1, Mr Fish and Nisha were obliged to use their best endeavours to ensure that contractors and employees remained contracted to or in the employ of Fish Tech (see Solution 6 Holdings at [37]). Spigelman CJ (with whom Mason P and Handley JA agreed) held that the share purchase agreement was not a contract within the meaning of s 106 "whereby work is performed in any industry". The relationship between the share purchase agreement and the performance of work was, his Honour said, "indirect or consequential, rather than direct" (at [53]). 99 The majority judgment of the High Court in Fish came to the same conclusion (at [42]and [43]): The share purchase agreement made by Nisha and Mr Fish stipulated that Mr Fish's entering an employment contract with Solution 6 Holdings was a condition precedent to completion of the share purchase. (Nothing was said to turn on the fact that the employment agreement that was made was an agreement with a subsidiary of Solution 6 Holdings.) The employment agreement that was made and the share purchase agreement were therefore related and one may well be described as collateral to the other. After the two agreements were made and the share purchase agreement was completed, Mr Fish performed work in an industry. But when one asks what was the "contract" whereby he performed that work, the answer does not include the share purchase agreement. Neither the share purchase agreement as a whole, nor the particular provisions of it which are now said to be or to have become unfair or against the public interest, constituted a contract, an arrangement, a related condition or a collateral arrangement whereby Mr Fish performed work in an industry. That being so, the Commission has no jurisdiction to declare the share purchase agreement or any of its particular provisions void, or to vary that agreement or any of those provisions. 100 The majority judgment in Fish also emphasised the importance of industrial context in which s 106 is intended to operate (see, for example [11]; [13]; [15]; [21]; [34]; [36]-[41]). The theme was again taken up in Caterpillar.

101 In Caterpillar, Spigelman CJ (with whom Allsop P and Tobias JA agreed), after referring to the prevailing purposive approach to statutory construction, said (formal references omitted): [89] This approach formed the commencement of the analysis in the joint judgment in Fish which I will set out in full below and which was picked up by reference in Batterham and Old UGC . The narrow literalism which characterised earlier High Court authority, by which I regarded myself as bound in my dissenting judgment in McDonald's , , has been superseded. 102 His Honour then embarked on an analysis of the majority judgment in Fish. In particular, his Honour (at [90]) referred to the statement made in Fish "This Act is concerned with matters industrial", a reference to the Industrial Relations Act 1996. His Honour also referred to the emphasis placed by the High Court in Fish on the statutory framework in which s 106 operates, namely Pt 9 of Ch 2, being a chapter entitled "Employment" (see at [92]). The reference in Fish to the objects of the 1996 Act set out in s 3, his Honour said, suggested that the High Court regarded the unfair contract provisions of Pt 9 of Ch 2 as "serving the object of providing a framework for the conduct of industrial relations that is fair and just" (at [96]). Reference was also made by his Honour to the characterisation of the definition of "industry" in s 7(a) of the 1996 Act, which his Honour said was "very wide" (at [97]). According to his Honour, the approach in Fish to the interpretation of Pt 9 of Ch 2 suggested that "Part 9 should be seen as 'supplementing' the other parts of Chapter 2 and 'operating in the same fashion'". His Honour added that s 106 had to be read and understood in a similar context to s 16(4) of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) which was to be read and understood "in an employer/employee context" (at [103]). Adopting the phraseology used in Fish, Spigelman CJ said (at [104]): For present purposes it is of significance that the legislative scheme is concerned with matters "industrial". It is this context which gives content to the generality of the words found in the "hinge" phrase - "whereby a person performs work in any industry". 103 According to Spigelman CJ, the respondents had reversed this approach in their submissions by contending that a contract or arrangement will be regarded as "industrial" if it can be characterised as one whereby work is performed in an industry. His Honour formed the view that this submission was wrong because "The reasoning in Fish, Batterham and Old UGC, requires the Court to read the critical phrase - "whereby a person performs work in any industry" - as not extending beyond a context which can reasonably be characterised as industrial" (at [105]). 104 In Caterpillar, the relationship between the parties was regulated by three dealership agreements. Also of relevance was an overall arrangement which included the three dealership agreements, a fourth assurance and the Last Resort Policy. At first instance, in this court, it was held that the dealership agreements and the overall arrangement were contracts which satisfied the test in s 106(1). The finding was upheld by a Full Bench of the court. The Court of Appeal found otherwise, declaring that this court did not have jurisdiction, quashing the orders and findings made in the Industrial Court and prohibiting the Industrial Court from exercising its power. 105 The brief facts in Caterpillar were that Gough and Gilmour Holdings Pty Ltd ("Holdings") was a dealer for Caterpillar Inc., selling and servicing Caterpillar equipment. Mr Gough was the managing director of Holdings and Mr Gilmour was a director. Both men worked full-time as senior executives of Holdings. Caterpillar Inc. is one of the world's largest manufacturers of construction and mining equipment. The contractual relationship between the parties was contained in the three dealership agreements. Those agreements consisted of a sales and service agreement of 1 July 1991, a distribution agreement for engines, parts and services of 1 July 1991, and a product support agreement of 12 November 1997. The work said to be performed in an industry was the work performed by Messrs Gough and Gilmour under the dealership agreements, supplemented by other aspects set out in the overall arrangement. The dealership agreements contained a number of parallel provisions. Spigelman CJ selected the sales and service agreement as representative of the other dealership agreements all of which contained a number of parallel provisions (at [126]). All of the obligations imposed under the clauses in the agreement, his Honour noted, were imposed upon Holdings as the Dealer. Messrs Gough and Gilmour were not parties to the agreements but were identified under cl 2 as "principals" in order to achieve the "primary purpose", identified in cl 2(a) as the development and promotion of the sale of products; the provision of a high standard of parts availability and mechanical services, and the assurance of satisfaction by the users of the products. With regard to the "principals", cl 2(c) contained a promise by Holdings that "Dealer agrees that such individuals will continue in the active arrangement of the Dealer or will continue to own a substantial financial interest in the Dealer". 106 Under cl 3, Caterpillar agreed to sell to Holdings various products for resale. Under cl 4, Holdings agreed to maintain places of business at some 19 locations within New South Wales and the ACT. Under cl 5, Holdings agreed to "employ an adequate number of qualified salesman to solicit orders for products". By cl 6, Holdings agreed to provide diagnostic and mechanical services, as well as delivery and inspection services, to all users of the equipment and to employ "an adequate number of experienced and competent service men - to perform all required services". Holdings, under cl 7, agreed to inform itself about the performance of products, promptly report all incidents involving the products and perform all product improvement programmes announced by Caterpillar. Under cl 9, Holdings agreed to develop and execute promotion and market development programmes to support sales for the products. Other clauses made provision for the maintenance of sales records and reports. By cl 27, the parties agreed that the relationship between them was that of independent contractor and vendor and vendee and that nothing in the agreement should constitute Holdings the agent of Caterpillar Australia. 107 Spigelman CJ saw similarities between the respective agreements in Caterpillar and Fish. In Fish, the majority judgment found that after the share purchase agreement was completed and the employment agreement was made, Mr Fish performed work in an industry, but the contract whereby he performed the work was not the share purchase agreement, it was the employment contract. It was Spigelman CJ's opinion that the same conclusion applied with regard to Messrs Gough and Gilmour (at [134]): Messrs Gough and Gilmour can be said to perform work in an industry "in accordance with", "in fulfilment of" or "in consequence of" their contract or arrangement with Holdings, in the same way as Mr Fish was found to perform work pursuant to the employment contract. Similarly, when one has regard to the range of obligations expressly imposed upon Holdings under the dealership agreements, which, on the findings, were to be carried into effect by Messrs Gough and Gilmour, there is an analogy with the role envisaged for Mr Fish as a senior executive "responsible for developing strategy" in Australia. 108 Spigelman CJ also found that in numerous respects the expectations and obligations arising from the commercial interdependence and closeness of the relationship between Caterpillar and Holdings "required or envisaged conduct by Messrs Gough and Gilmour which goes beyond that encompassed in a managerial employment contract of the kind considered in Fish" (at [135]). Despite this, his Honour found that those considerations "make it less, rather than more, likely that the dealership agreements answer the statutory description, by reason of the industrial context in which that description must be read and understood". 109 The size and extent of Holding's operations, as well as Messrs Gough and Gilmour's position as working proprietors of a large corporate enterprise, appear to have been significant factors for the view taken by his Honour that the dealership agreements were not contracts falling within s 106. On these issues his Honour said: [136] No doubt in a colloquial sense working as an entrepreneur/manager/controller of a large corporate enterprise can be said to constitute "work in an industry" and, accordingly, satisfy a dictionary definition of that term. However, there is no "industrial" element in such "work" by a person who occupies a position such as that which Messrs Gough and Gilmour occupied in Holdings. (I note that there was no suggestion that there was any occasion to differentiate Mr Gough's more dominant position from that of Mr Gilmour.) [137] The characterisation of a person as a "working proprietor", or an equivalent characterisation, is not determinative. The legislative scheme was clearly directed to regulating persons in situations where the formal contractual relations had changed from that of an employer/employee to that of an independent contractor. Contractual relations or arrangements which take the form of a dealership or franchise relationship are capable of answering the description of a contract "whereby work is performed in an industry" within s 106. The section is concerned with matters of substance not form. The surrounding circumstances must be reviewed to assess whether the relationship has any analogy with an employer/employee relationship and is capable of falling within the industrial context in which the statutory formulation must be understood. [138] The "industrial" context of the legislative scheme must be taken into account. The High Court's characterisation of the scheme as such was not a matter to which the Full Bench gave express regard in its reasons for judgment on the jurisdictional question. [139] There will be cases in which it is correct, or at least open, to conclude that the working proprietor of a franchise or dealership does perform "work in an industry" in accordance with the dealership or franchise agreement. When exercising its supervisory jurisdiction, this court would not substitute its own views on such a matter for those of the Industrial Court where the issue turns on matters of fact and degree. However, the fact that there may be cases in which drawing the line is difficult, does not mean, when a particular fact situation clearly falls on one side of the line, that the court must refrain from exercising its supervisory jurisdiction. That, in my opinion, is the case in the present proceedings. [140] Messrs Gough and Gilmour conducted an enterprise in which they were the only investors and occupied the senior managerial positions. They were entrepreneurs who conducted a business of significant scale, involving tens of millions of dollars of capital investment, with 700 employees, over a score of business locations. No doubt they worked. They did not, however, "perform work in an industry" "according to" the dealership agreements or the overall arrangement, within the meaning of s 106 of the Act. ... [142] In the context of a business of this scale, the range of activities to be undertaken by Messrs Gough and Gilmore, as envisaged by or required by the dealership agreements or the overall arrangement, was devoid of any "industrial content. In so far as their activities could be said to constitute "work" within s 106(1), neither those arrangements nor the Arrangement can be said to be, or to be included in, the contract or arrangement "whereby" that work was done. 110 In the present proceedings, the SDC, like the agreements in Caterpillar, is made between two corporate entities. All the obligations imposed under the SDC are imposed upon the respondent. No individual is designated as a "Principal" of the respondent and no individual is required to devote his full time and attention to the business. Nevertheless, the fact that contractual parties may be corporate entities assumed no significance in Majik Markets, for example, where the issue might otherwise have arisen. In Caterpillar, it was expressly recognised that contractual relationships which take the form of a dealership or franchise arrangement, or where the arrangements include a working proprietor of a franchise or dealership, are capable of meeting the description of contracts "whereby work is performed in any industry" (at [137] and [139]. 111 In both Fish and Caterpillar, the relevant contract according to which, or "whereby", the work was performed was found to be the employment contract entered into between the applicant-parties at first instance and the workers who performed the work. The evidence in the present proceedings indicates that the Operators, as defined in the SDC, were employed by the Trust through the respondent. No details emerged in the evidence, however, as to the terms and conditions of any employment contracts. Neither party placed any great reliance on the existence of such contracts or their relevance to the jurisdictional issue. The contracts may have been entered into orally. The Court simply does not know. 112 Neither Fish nor Caterpillar are authorities for a proposition that a contract of employment which employs workers who perform the relevant work and which exists alongside and separately from the impugned contract, automatically warrants the exclusion of the latter contract from the jurisdictional reach of s 106. Spigelman CJ, in Caterpillar, sought to emphasise that s 106 is concerned with matters of substance, not form. The relevant relationship which falls for assessment, according to his Honour, was one which bears an analogy to an employer/employee relationship and is capable of falling within the industrial context in which s 106 operates and is to be understood. The fact that the Operators were employed under another contract to perform the delivery work cannot be determinative of the issue of jurisdiction otherwise a great many franchise agreements, for example, would fall outside s 106. Each case must be decided according to its own facts and circumstances. 113 The SDC, by its terms, exhibits, in our view, an ongoing business relationship between the parties with regard to the delivery of the appellant's products. It is not a contract where, after its execution, the appellant had no further interest in the respondent's activities: cf Production Spray Painting & Panel Beating Pty Ltd and Others v Newnham and Others (1991) 27 NSWLR 644 at 657F. The appellants had a "real interest" in the work being performed by the Operators (Majik Markets at 465A). It resulted in the sale of its products to the supermarkets for profit. The appellant also stood to benefit from the obligations imposed upon the respondent under the SDC to build and maintain positive relations with representatives of the Designated Customers. Under the SDC the respondent is required to deliver the appellant's products seven days per week. In addition, the respondent is obliged to ensure that its staff are aware of its obligations as "Contractor" imposed under the SDC. The respondent is obliged to ensure its staff are appropriately trained and supervised "at all times" with regard to the required adherence by it to the appellant's "System, Image and Standards". The Operators involved in "the Business" must wear the appellant's uniforms, details of which are set out in the Manual. The respondent's "prime responsibility" under the SDC is identified as the delivery of the appellant's products. 114 This is not a case, such as Euphoric Pty Ltd v Ryledar Pty Limited (2002) 117 IR 1, where the Full Bench found that the delivery obligation imposed upon a reseller of petroleum products (as part of a contract for the sale of that product) was merely a "consequential result of a sale contract" (at [40]). Unlike the appellant in this matter, in Euphoric it was found that the contracting party had "no interest in how this (the delivery) was done, on what terms, or by whom" (at [40]). Here, as we have found, the contract was intimately concerned with such matters. Hence, the obligation to perform deliveries and take other steps relating thereto under the SDC was a substantial purpose of that contract in a manner dissimilar to that which resulted in a finding against jurisdiction in Production Spray Painting. 115 These obligations and responsibilities, in the context of an ongoing business relationship between the parties, indicate, in our view, that the SDC is a contract according to which, or "whereby", the respondent, through the Operators, performed the work, namely, the delivery of the appellant's products. 116 The performance of work under the terms of the SDC also sits comfortably, in our view, with the requirement identified in Fish, McDonald's and Caterpillar that there be an "industrial element in the work performed" (see Caterpillar at [136]). There is no meaningful comparison, in our view, between the respondent's business operation under the SDC and the businesses, or commercial enterprises, which were the subject of consideration in Fish, McDonald's and Caterpillar. The respondent's operation, in particular from the period commencing in 2002, may be best described as "modest". In real terms, Mr Reilly conducted the bulk of the delivery work to the supermarkets. Other Operators, of which there appear to be only a few, perhaps two or three, worked in the business in a part-time capacity. 117 The SDC, therefore, falls within the ambit of s 106 as a contract according to which or "whereby" Mr Reilly and the other operators performed delivery work in the milk vending industry.

WHETHER THE PRIMARY JUDGE SHOULD HAVE DECIDED THAT, ON ITS PROPER CONSTRUCTION, CL 1(a) OF SCHEDULE 1 OF THE ACT WAS OF NO RELEVANCE TO THE QUESTION OF WHETHER THE SDC WAS A CONTRACT WITHIN THE MEANING OF S 106 OF THE ACT 118 Given our findings, with regard to the first two grounds of appeal, it is unnecessary to consider the appellant's third ground of appeal, and, accordingly, we decline to do so.

119 We have determined that the appeal from the judgment of Marks J should be upheld with respect to the "appropriate time" question. At the invitation of the parties, that judgment did not result, however, in a remitter of the jurisdictional question. We resolved that question adversely to the appellant. Leave to appeal having been granted, those conclusions give rise to the question as to what orders should be made in the disposition of the appeal. 120 We note that Marks J made orders dismissing the appellant's notice of motion at first instance (which was filed on 26 June 2009 and essentially consisted of a strike out motion). Marks J resolved the question of costs of that notice of motion in an extempore judgment delivered on 11 March 2010, in which his Honour reserved the costs of the motion itself but made costs orders against the respondent with respect to an interlocutory application of 4 August 2009 to the costs proceedings themselves. 121 No appeal has been brought from his Honour's judgment on costs. In those circumstances, and given our findings as to jurisdiction, there does not seem to be an appropriate basis to disturb the orders made at first instance as to the appellant's notice of motion, and we shall thereby confirm them by dismissing the appeal other than as to the "appropriate time" question. The proceedings in Matter No IRC 2463 of 2002 will hereafter be heard in accordance with this judgment. The allocation of those proceedings will be a matter for the President. 122 That gives rise to the question of costs of the appeal. This is a difficult issue. In essence, Marks J found at first instance that it was not the appropriate time to determine the jurisdictional question, contrary to the submissions of the respondent. However, the respondent unsuccessfully resisted the appeal from that judgment and, yet, succeeded in sustaining its contentions in favour of jurisdiction in those proceedings. This tends to point towards a conclusion that each party should pay its own costs of the appeal. However, we are prepared to provide an opportunity for either party to contend for a contrary view, if they are so advised, and will make an allowance in our orders to permit that course. We intend that any such costs issue raised will be determined on the papers unless a party expressly seeks to make oral submissions.

2. The appeal is upheld to the extent provided by this judgment;

4. Order 1 of the orders made by Marks J on 29 October 2009 is confirmed;

5. Costs of the appeal are reserved in accordance with this judgment. Any party wishing to contend for a conclusion as to costs, other than each party paying its own costs, shall do so in a written submission filed and served within 14 days of this judgment. In the event that any such submission is filed and served, then the opposing party may make a submission in reply within a further 14 days. In the absence of a submission being filed within the time specified, the Court shall make orders in accordance with this judgment in Chambers. Otherwise, any contested issue as to costs shall be determined on the papers unless a party making written submissions within these orders seeks to make oral submissions.

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