106 Moreover, by 11 September 2001, the listing was already not "on track" according to the timeline. Mr Leung also said that despite the decision not to proceed further on 11 September 2001, that decision could be reversed and the matter reinstated if TAA settled its dispute with Volvo and Volvo was willing to continue the agreement for a further five years. The prospect of reinstating it was lost a month later, when TAA terminated its relationship with Volvo. Even if Oriental Patron had not withdrawn its support for the float when it did, similar circumstances would have caused it to do so, and the float would have been derailed in any event, by that termination, regardless of the "Volvo letters". Accordingly, even if there had been misleading conduct on the part of Volvo in the respects alleged, I would not accept that TAA has suffered damage as a result, because the float would have been derailed, and the expenditure wasted, as a result of the termination of the relationship in early October, in any event.
Harissa's tort claim
107 Harissa contends that by repudiating its contract with TAA, Volvo breached a duty of care allegedly owed to Harissa to perform its obligations under the contract with TAA, and that as a result of that breach of duty, Harissa suffered damage - including loss of rental that would have been earned during the currency of the dealership agreement, expenditure incurred by Harissa in establishing the temporary Volvo showroom and service facilities and the permanent showroom and service facilities, and loss of the ability to recoup over the full term of the contract the expenditure and start up costs and losses incurred by Harissa in redeveloping the premises for the purpose of use as a Volvo dealership.
108 The short answer to this contention is that, as I have concluded, Volvo did not repudiate its contract with TAA, even if Volvo owed Harissa any such duty as is alleged.
109 The longer answer is that Volvo owed Harissa no such duty in any event. Mr Trew submitted that a duty should be imposed because TAA were closely related companies operating for the benefit of the Azzi family, that Harissa owned the land and buildings from which TAA conducted its business, that Volvo knew or had the means of knowledge of the relationship between Harissa and TAA and that Harissa was part of an ascertainable group at risk if Volvo's conduct caused damage to TAA, and in those circumstances the likelihood of financial loss to Harissa in the event that Volvo repudiated its contract with TAA was reasonably foreseeable. Against that background, the judgment of the Queensland Court of Appeal in Fortuna Seafoods Pty Ltd v The Ship "Eternal Wind" [2005] QCA 405 was invoked. In that case, the ship Eternal Wind collided with the ship Melina T, which was owed and operated by Fortuna Fishing Pty Ltd; a related company, Fortuna Seafoods Pty Ltd, as agent for Fortuna Fishing processed and sold the fish caught by Fortuna Fishing. Fortuna Seafoods sued the Eternal Wind for damages for the loss resulting from its inability to process and market the catch, which but for the damage to Melina T, Fortuna Fishing might otherwise have made. In the Court of Appeal, the issue was whether Eternal Wind, because of its negligent conduct resulting in property loss to Fortuna Fishing and pure economic loss to Fortuna Seafoods, was liable to compensate Fortuna Seafoods in the tort of negligence. The two Fortuna businesses, though closely related, were conducted by different companies because of the operation of quotas in the industry, which created a commercial necessity for separation; but for that they could have been conducted within the one corporate framework. They were treated by their directors and shareholders as one company although with two bank accounts and separate books of accounts, so that in some respects transactions between them were at arm's length.
110 McMurdo P concluded, from Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529 and Perre v Apand Pty Ltd (1999) 198 CLR 180, that determination of whether a defendant owed a claimant a duty of care not to cause mere economic loss would depend on a combination of factors including: the reasonable foreseeability of the likelihood of harm; the defendant's knowledge or means of knowledge of an ascertainable determinate class of persons at risk of foreseeable harm; the claimant's vulnerability or whether they are unable to protect themselves from the foreseeable harm; whether the imposition of a duty would impair the defendant's legitimate pursuit of its autonomous commercial interests including the existence of any contracts between the claimant and the defendant; whether the damage flowed from the occurrence of activities within the defendant's control; the closeness of the relationship between the parties; and the existence of any other special circumstances justifying compensation (at [6]).
111 Critical to the existence of a duty of care in Fortuna was satisfaction that the Eternal Wind had the means of knowledge that Fortuna Seafoods was a member of a determinate ascertainable class of persons or entities who were at risk of foreseeable economic harm if Eternal Wind acted negligently in colliding with and sinking Melina T. That means of knowledge was found, despite the absence of direct evidence of knowledge of the commercial arrangements of the Fortuna companies, or even of the arrangements likely to apply to the ownership and operation of fishing vessels in Australia, from evidence that such arrangements were by 1997 common within the Australian fishing industry - from which it could reasonably be inferred that such information was within the means of knowledge of the Eternal Wind, which inference was the more readily to be drawn in the absence of any contradictory evidence from the Eternal Wind. Dutney J pointed out that the distinguishing feature of the case was that the catching and selling of the fish were necessarily related activities for a commercial fishing operation, and a relevant duty would less likely have been found if Seafoods had purchased the fish at arm's length from Fishing, which was not the case, because the fish were not sold, and Seafoods acted as Fishing's agent.
112 A significant distinction between Fortuna and the present case is that the relationship between Volvo and TAA was, on relevant assumptions and findings, regulated by a contract, whereas the Eternal Wind's liability to Fortuna Fishing arose in tort. It was also significant to the imposition of a duty of care on Eternal Wind not negligently to cause economic loss to Fortuna Seafoods by colliding with and sinking the Melina T, that imposition of such a duty did not impair the Eternal Wind's pursuit of its autonomous commercial interests, and that there was no contractual relationship between the Eternal Wind and Fortuna Seafoods (at [22]).
113 I would be content to accept that the relationship between Harissa and TAA, both in terms of shareholdings, and their business relationship, made them a closely integrated group, with Harissa providing the land on which the business operated for a return in rent, and also employing the staff who worked in TAA's business. I would also be content to accept that the relationship between Harissa and TAA - at least to the extent that Harissa owned the land and buildings from which TAA operated - was within the means of knowledge of Volvo: there was evidence that Volvo had been provided with information by Mr Azzi that the main facility of the business (obviously, Zetland) was "owned", and that Harissa was the "property company" within the group.
114 However, two significant distinctions deny the imposition of a duty of care to Harissa in this case. The first is that Harissa was remunerated by TAA for TAA's use of its premises by a rental calculated and valued at arm's length. As Dutney J observed (at [105]), in circumstances of arm's length dealings of that type, neither company has a direct interest in the results of the other. Harissa remained entitled to its rent, regardless of the profitability of TAA (and, in particular, regardless of whether or not the Volvo dealership continued). The second, and more significant, distinction is that whereas in Fortuna the primary liability (in that case to Fortuna Fishing) was in tort; in this case the primary liability (to TAA) was in contract. To impose on a party to a contract liability arising from breach of that contract to a third party, in circumstances where none of the recognised exceptions to the doctrine of privity apply, would impinge considerably on the ability of the first party to pursue its autonomous commercial interests, and would have the practical effect of extending the scope of liability for breach of contract far beyond its established limits.
115 Accordingly, Harissa's tort claim must be dismissed.
The Industrial Relations Act, s 106, claim
116 TAA contends that the arrangements between it and Volvo were a contract (or arrangement or related condition or collateral arrangement) whereby work was performed in an industry within the meaning of (NSW) Industrial Relations Act, s 105, and that the contract was "unfair" within s 106.
117 The contract was said to be one "whereby a person performs work" in an industry by reason that it obliged TAA to develop "an appropriate management structure and general staffing" and provided that it was "essential that TAA manages and staff proactively participate in the relevant training and develop programs scheduled by Volvo", and that Mr Azzi himself was a working director. Mr Trew submitted that the word "whereby" did not require that the contract impose a legal obligation to work, and that it was sufficient that the contract anticipated that persons would work in the industry, no matter by whom they might be employed.
118 There has been extensive recent judicial consideration, in the Industrial Relations Commission, in the Court of Appeal, and in the High Court, of the limits of jurisdiction under s 106. As it seems to me, the position may now be summarised as follows.
119 The critical jurisdictional fact in relation to s 106 is the identification of a contract, as defined in s 105, whereby a person performs work in any industry. In Fish v Solution 6 Holdings Ltd (2006) 227 ALR 241, [2006] HCA 22 [see also Batterham v QSR Limited (2006) 227 ALR 212; [2006] HCA 23; Old UGC Inc v Industrial Relations Commission of New South Wales in Court Session [2006] HCA 24; (2006) 227 ALR 190], the central question was whether the relevant contract was one whereby a person performed work in any industry. In a joint judgment Gleeson CJ, Gummow, Hayne, Callinan, and Crennan JJ, after emphasising (at [19]) that the Act was concerned with matters industrial and that what may be avoided or varied was any part of the arrangements "in accordance with" which a person performs work, the court reviewed its earlier decisions on the predecessor sections and said (at [28]):
The description of a contract as "one which leads directly to a person working in any industry" is not without its difficulty. What is meant, in this context, by "directly"? As Lord Diplock, giving the advice of the Privy Council in Caltex Oil (Aust) Pty Ltd v Feenan [[1981] 1 NSWLR 169], pointed out, this, and other glosses on the section, must not be permitted to divert argument away from the words of the statute in an attempt to "construe" the words in which judges express their reasons for reaching a conclusion in a particular case. To divert attention in that way is wrong. And even the gloss on the word "whereby" offered in Caltex Oil [at NSWLR 173], (in consequence of which or in fulfilment of which), like the gloss offered earlier in these reasons (according to which), must not be misunderstood as necessarily solving every difficulty that may be presented in seeking to apply the statutory language.
120 Thus although they are not to be substituted for the words of the statute, as a general indication a contract will be one "whereby" a person performs work in an industry if the work is performed in consequence or in fulfilment of or according to the contract. A contract will satisfy this test if it leads directly to a person working directly in the industry, but it is not enough that a contract lead only indirectly to the performance of work, or merely contemplates that work will be done: the contract must "directly, that is, under or pursuant to its terms, provide for the performance of work in an industry [Production Spray Painting & Panel Beating Pty Ltd v Newnham (1991) NSWLR 644, 657 (Priestley and Handley JJA); Mitchforce Pty Ltd v Industrial Relations Commission (2003) 57 NSWLR 212, 226 [49]]. That issue has been expressed in terms of whether the relevant contract "requires" a person to perform work [Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443, 465A; Production Spray Painting, 657; Solution 6 (35)]. At least it is necessary that the impugned agreement or arrangement itself directly envisaged the employment of a person or persons in industry and have a recognisable impact upon the conditions of that employment [VG Haulage Services Pty Ltd Ex parte; Re Industrial Commission of NSW [1972] 2 NSWLR 81, 88; Solution 6, 217 [12]-[14]; Solution 6 Holdings Pty Ltd v Industrial Relations Commission of NSW (2004) 60 NSWLR 558, 576].
121 It is not a jurisdictional requirement that a person performing the work be the contracting party [Mayne Nickless Limited v Industrial Relations Commission of New South Wales [2004] NSWCA 359; 141 IR 1, [46], [54]]. However, it is doubtful that the performance of functions as a director satisfies the jurisdictional requirements of s 106 as "performance of work in any industry" [Brandster v Tryak Pty Ltd (1989) 28 IR 329, 333 (Glynn J); QSR Limited v Industrial Relations Commission of New South Wales [2004] NSWCA 199 [42], [43]].