Caterpillar of Australia Limited & Ors v Gough & Gilmour Holdings Limited & Ors [2008] NSWIRComm 3 | Case summary

Caterpillar of Australia Limited & Ors v Gough & Gilmour Holdings Limited & Ors [2008] NSWIRComm 3 | Case summary | Zoe

[25]

794 In the result, and having regard to the terms and operation of the overall arrangement and the conduct of all of the parties, I find that the overall arrangement referred to in par [780(1)] of this judgment between the applicants and the respondents was unfair within the meaning of ss 105 and 106 of the Industrial Relations Act . 11 This conclusion was substantially based upon a finding that the appellants' conduct was inconsistent with particular assurances and understandings now known as the Fourth Assurance and the Last Resort Policy, which were found to constitute part of the "Overall Arrangement". In Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd and anor (No 15) [2003] NSWIRComm 173 at [278] his Honour found: 278 There were two substantive episodes of failure by the respondents to observe their last resort policy. The first was in March 1999 when the first respondent decided to recommend to the second respondent that the relationship with the applicants should be brought to an end and did so without taking steps to allow the applicants every reasonable opportunity to retain the dealership. The second was in September 2000 when the respondents decided to terminate the dealership agreements, again without satisfying themselves there were no options open other than cancellation and that proper grounds existed to support cancellation. 12 This was further explained in the first instance judgment at [77]: ... That is to say, the Court found in Judgment No. 11 that the respondents' conduct in relation to the sale process was completely at odds with the assurances given to the applicants that the respondents would assist the applicants in the sale process in achieving a fair price for the business and that the process would be amicable (Fourth Assurance) and that the respondents failed to adhere to their Last Resort Policy in that in March 1999 the first respondent decided to recommend to the second respondent that the relationship with the applicants should be brought to an end and did so without taking steps to allow the applicants every reasonable opportunity to retain the dealership. Further, in September 2000 the respondents decided to terminate the dealership agreements, again without satisfying themselves there were no options open other than cancellation and that proper grounds existed to support cancellation. 13 As the Court refused to grant the primary relief sought (that is, continuation of the Dealership Agreement in varied form), the respondents thereafter sought different relief in the form of alternative variations to the "Overall Arrangement". 14 In Gough & Gilmour (No 15) the respondents' claims for alternate, rather than primary, relief were addressed. As the alternative relief concerned variations to contracts and arrangements rather than compensation, the proceedings were effectively broken into three parts, being hearings into primary relief, alternate relief, and compensation. On the basis of the two findings of unfairness in Gough & Gilmour (No 11) the Court varied the "Overall Arrangement" in Gough & Gilmour (No 15) to include an "Additional Sale Period", "Final Termination Date" and an "Improvement Plan". His Honour stated at [284] to [286] 284 ... As I have already explained, there were two substantive episodes where the respondents failed to comply with their last resort policy. The first was the decision in March 1999 where the first respondent decided to recommend a change in the dealer for New South Wales and the ACT. The second was in September 2000 when the respondents decided to cancel the dealership agreement because of what they, unfairly, considered to be a failed sales process.

[44]

2C. Further, or in the alternative, to Orders 2, 2A and/or 2B, an order that the collateral arrangements or related conditions referred to in claim 1B above be set aside or varied ab initio as follows: 1. If prior to 25 October 2000, Caterpillar holds a serious concern that relationship difficulties it has with Gough & Gilmour may require consideration to be given to terminating the dealership, then prior to 25 October 2000: (a) Caterpillar will implement an improvement plan as set out in paragraph (b) below; (b) The improvement plan will include the following components: (A) The relationship problems in which improvement is sought will be notified, identified and described by Caterpillar; (B) reasonable methods of bringing about improvement and evaluation of improvement will be suggested by Caterpillar, and Caterpillar and Gough & Gilmour will, within 30 days of the notification referred to in sub clause (A), each use their best endeavours to seek to reach agreement regarding the methods for bringing about improvement and evaluating improvement that are to be adopted; (c) the improvement plan as agreed, or in the absence of agreement, as reasonably suggested by Caterpillar ("the improvement plan"), is to be pursued by Caterpillar and Gough & Gilmour over a period of six months, or for such other period as may be agreed between the parties; and (d) prior to 25 October 2000, Caterpillar will not make a recommendation within Caterpillar for the termination of the dealership or any exercise of its right to terminate the Dealership Agreements before giving Gough & Gilmour a reasonable opportunity to complete the improvement plan. 2. In the event that Caterpillar has complied with the sub-clause (1) hereof but reasonably holds the view that the relationship issues that continue to exist warrant terminating the dealership, Caterpillar shall be entitled to give 26 weeks notice of termination to Gough & Gilmour. Should Caterpillar decide to give such notice it will, prior to giving such notice, use best endeavours to: (a) provide Messrs Gough & Gilmour with a reasonable opportunity to sell their shares in the dealership business to Caterpillar's preferred dealer candidate; and

[79]

41 We pause here to make the following preliminary observations: cl 2(c) of the Agreement when read with cl 2(a) and cl 2(b) makes plain that the Agreement both contemplated and required the second and third respondents to work: the work being the active management of the "Dealer". This requirement must of course be read in light of terms of the earlier clauses which, inter alia, specify that both parties' "primary purpose" in entering the Agreement "is to develop and promote the sale of products..." This in turn required the Dealer to be primarily responsible for the full and adequate development and promotion of the sale to customers and prospective customers within the relevant territory. It was also specified that the contract was a personal contract entered into in reliance upon the Dealer's capability to provide relevant sales and service to customers. 42 The proscription in cl 2(b) against the Dealer having any financial or management affiliation in a similar field specifically proscribed common management or common ownership, and thus precluded the second and third respondents from working as managers in other organisations in the industry. The Agreement thus not only required the relevant respondents to work but also prevented them from undertaking certain other work. 43 Returning to the Agreement, cl 4 specified that the Dealer would maintain a suitable place or places of business: Dealer will maintain a suitable place or places of business at the points shown in Exhibit A to provide adequate sources of products and mechanical service for the benefit of users of past, present and future products of the types specified in Exhibit A in the service territory described in Exhibit A. In the event that additional places of business or changes in the location of any Dealer's places or business may become needed to properly service users in said territory, Dealer agrees to establish and maintain such additional places of business or change the location of existing places of business. The location of any additional places of business and the relocation of abandonment of any existing places of business may only be made with the consent of Company given in writing and signed as required by section 38 for a supplement or amendment of this agreement. All places of business will be maintained by Dealer in a neat and attractive manner with adequate quantities of products specified in Exhibit A - all to the satisfaction of Company. 44 Clause 5 required that the Dealer employ an adequate number of qualified salesmen. The Dealer would demonstrate and exhibit products. It was also required that the Dealer employ an adequate number of parts and service personnel to serve the needs of the territory:

[114]

(d) Gough & Gilmour will be given the opportunity to complete the plan before a recommendation is made within Caterpillar for the termination of the dealership or any exercise of its right to terminate the dealership agreements. 3. In the event that Caterpillar has complied with clause 2 hereof but this has proved to be unsuccessful, Caterpillar will take steps to provide Messrs Gough and Gilmour with a proper opportunity to sell their shares in the dealership business and will assist Messrs Gough and Gilmour receive fair value for those shares in that business by ensuring that the sale process is conducted on a reasonable basis without duress. Such steps are to be taken prior to the issue of any notice of termination. Furthermore, Caterpillar shall not use the act or timing of the issue of a termination notice for the purpose of weakening Gough & Gilmour's bargaining position in any sale process. 4. To avoid doubt, Caterpillar will comply with its obligations under clauses 2 and 3 hereof by 25 October 2000. Monetary Orders - Sixth Further Amended Summons 61 Monetary orders were sought in the Sixth Further Amended Summons on the basis that the appellants failed to follow the Fourth Assurance and Last Resort Policy and the Improvement Plan. Apart from adjustments to the specific monetary amounts claimed, the relevant particulars were set out above, at para [33] of these reasons. Findings at first instance regarding Jurisdiction Jurisdiction s 106(1) 62 In the first instance judgment the trial judge determined that the Dealership Agreements and Overall Arrangement fell within the jurisdiction of s 106 of the Industrial Relations Act. His Honour also (at [45]) summarised the findings and determinations made in relation to jurisdiction in Gough & Gilmour (No 11) as follows: 45 It may be seen that the Court found that: (1) The Dealership Agreements were agreements creating an "unusually close relationship" as distinct from "arms length, one-off commercial transactions" ([57], [58]); (2) The dealer principals were required to use their qualifications and personal abilities to achieve the primary purpose of the Dealership Agreements (i.e., develop and promote the sale of products and to provide a high standard of parts availability and mechanical service) and to continue in the active management of the dealership ([60]-[61]);

[120]

(b) the performance of work was a purpose of the Overall Arrangement: 59 But even if one does ask whether work was a purpose of the Overall Arrangement, the answer is in the affirmative. There was no suggestion that work must be "the" purpose but only "a" purpose. In that respect, the second and third applicants, as dealer principals under the Dealership Agreements, were, inter alia , required to actively participate in the management of the business of the first applicant (see, for example, clause 2(c) of the Sales and Service Agreement; clause 2(c) of the Product Support Agreement; clause 2(c) of the Distribution Agreement). Moreover, as the applicants submitted, the second respondent's decision to terminate the agreements was based on its dissatisfaction with the work relationship between the first respondent and the second applicant in particular (because he was, amongst other things, too independent and not prepared to perform as a dealer in a manner that was to the first respondent's "satisfaction"). (c) in the decision in Wirraway (NSW) Pty Limited v Ultra Tune Australia Pty Limited (2006) 156 IR 367 (" Wirraway ") it was held that the decision in McDonald's fell into a unique or special category and was limited to its own peculiar facts and on that basis it should not be followed: 61 Implicit in the Full Bench decision in Wirraway is a cautionary note about following McDonald's because it was "strongly" suggested that decision "falls into a unique or special category and is a case that is limited to its own peculiar facts." The respondents contended, nonetheless, that the circumstances in McDonald's were relevantly indistinguishable from those in the present case. If that were so, despite what I regard as some difficulties with the majority judgment in McDonald's I would, nevertheless, be bound to follow it. However, I do not regard the facts in this case as being on all fours with McDonald's . (d) the Overall Arrangement was akin to an employment relationship between the first appellant and the second and third respondents given the closeness of the relationship: 62 The Overall Arrangement as found by the Court was, in my opinion, on reflection, akin to an employment relationship between the first respondent and the second and third applicants given the closeness of the relationship. (e) the decision in Wirraway supported the determinations in Gough & Gilmour (No 11) as to jurisdiction under s 106 of the Industrial Relations Act : 63 Wirraway also serves to support the correctness of the decision in Judgment No. 11 that jurisdiction existed. In Wirraway, the Full Bench dismissed a motion by Ultra Tune Australia Pty Ltd in which Ultra Tune sought a finding that the Court lacked jurisdiction because a Franchise Agreement with the applicant, Wirraway (NSW) Pty Ltd, did not lead directly to the performance of work in an industry ... (f) the decision in Mayne Nickless v Industrial Relations Commission of NSW (2004) 141 IR 1 (" Mayne Nickless ") also supported the proposition that jurisdiction existed under s 106. Mayne Nickless presented an analogous situation which supported the finding that the second and third respondents were "typical workers" with a "hands on role" and an integral part of their business: 65 Further support for the correctness of Judgment No. 11 may be found in Mayne Nickless v Industrial Relations Commission of NSW (2004) 141 IR 1. The Court of Appeal held it has not been established that there was no contract whereby a person performed work in an industry and that the directness test required by Stevenson v Barham was open to be satisfied as the Deed in that case directly recognised, contemplated and provided for the work that was to be done by the fourth opponent in the provision of pathology services.

[121]

Jurisdiction s 106(2A) 66 The trial judge considered the provisions of s 106(2A) of the Industrial Relations Act. The respondents had relied on those amendments and sought to establish alternate bases for jurisdiction for components of the Overall Arrangement, namely the Fourth Assurance and the Last Resort Policy. 67 His Honour considered that the purpose of the amendments was to counter the appellants' contentions that the case law had developed in such a way that it might be found that those components did not meet the jurisdictional requirements of s 106(1). He noted that the effect of the amendments would be to ensure that the components would still fall within jurisdiction by virtue of being collateral contracts under s 106(2A). 68 The trial judge determined that the Fourth Assurance and the Last Resort Policy could be considered collateral contracts for the purposes of s 106(2A) because they met the requirements of that provision outlined in ss 106(2A)(a) and (b). They were related to a contract where work was performed in an industry (the Dealership Agreements) and the performance of work was a significant purpose of the contractual arrangements. His Honour concluded: 78 The Overall Arrangement was varied in Judgment No. 15 to provide relief for the unfairness found in relation to the Fourth Assurance and the Last Resort Policy. Even if it were the case that the variations to the Overall Arrangement bore no relationship to the performance of work (and that is not conceded), it is arguable that the Fourth Assurance and the Last Resort Policy may be characterised as related conditions or collateral arrangements for the purposes of s 106(2A); they were, together with the Dealership Agreements, part of an overall, interrelated, arrangement. Further, as the earlier discussion in this judgment reveals, the performance of work was a significant purpose of the contractual arrangements, that is, the Overall Arrangement as found to exist by the Court. 69 The appellants had argued that the decisions in McDonald's and Solution 6 supported the proposition that the power to declare void or vary a contract or arrangement extended only to those parts of the contract or arrangement that were closely related to the performance of work in an industry. 70 His Honour resolved that above proposition in the negative and in so doing noted two important points. One was that the proposition in Solution 6 had been overcome by the introduction of s 106(2A) and the second point was where Solution 6 had applied it had only applied to s 106(1). See, [73], [75] as follows: 73 In Solution 6, and in McDonald's, the Chief Justice was, in my opinion, directing his attention to the power to vary or declare void in s 106(1) of the Act, not the provisions of 106(5), when he held that relief should relate in some reasonably direct manner to the performance of work. Assuming that be right, it raises for consideration s 106(2A) of the Act.

[126]

In this respect he referred to, and relied upon the remarks of Barwick CJ in Brown v Rezitis at 164. However, in my opinion those remarks by the Chief Justice while indicating a substantial purpose underlying subs (2) were not intended by his Honour, and were not expressed by his Honour, to be an exhaustive statement of the effect of that subsection. I therefore consider that the further limitation, which Mr Campbell has urged upon us, which would involve limiting the powers of the Industrial Commission under subs (2) so as to leave the present orders beyond jurisdiction should not be accepted either (my emphasis). 73 In relation to the Fourth Assurance and the Last Resort Policy, which might be regarded as collateral arrangements or related conditions under s 106(2A), the trial judge considered that there was no impediment to the making of monetary orders under s 106(5) in connection with the variation of these arrangements or conditions. At [82] to [83] his Honour stated: 82 Having varied the Overall Arrangement to provide relief for the unfairness, it is open to the Court to consider the amount of compensation that should be paid to the applicants in connection with the arrangement as so varied and there is no requirement that the compensatory orders sought must bear a direct relationship with the performance of work under the Overall Arrangement. (Even if there was a requirement for such a relationship, the Last Resort Policy was designed to protect the applicants in their ability to continue to operate the dealership and to continue to earn remuneration from the business. It is at least arguable, on the evidence that is already in, that the non-compliance with the Last Resort Policy affected the second and third applicants' ability to work in the dealership and also affected their remuneration. Similarly, with the Fourth Assurance; arguably the failure by the respondents to assist the applicants in the sale process had an effect on their ability to perform work in the dealership and also affected their remuneration).

[129]

What kind of monetary orders? 75 The trial judge noted that the respondents sought in their Sixth Further Amended Summons compensation for a range of matters, including loss of opportunity by reason of the first respondent's alleged non-compliance with the Last Resort Policy and the Fourth Assurance; damages in respect of alleged losses flowing from post-Gough & Gilmour (No 15) events (which have not been particularised in part B of the Sixth Further Amended Summons); and an amount for compensation for losses arising out of the management distraction and disruption caused by these proceedings. 76 The trial judge addressed the appellants' contention that s 106(5) only authorised an order for the payment of money in the nature of restitution. It had been submitted that none of the above matters were restitutionary in nature and that s 106(5) did not speak in terms of damages or compensation, let alone damages in the nature of expectation loss. 77 The trial judge cited Westfield Holdings v Adams (2001) 114 IR 241 ("Westfield Holdings") at [102] where the Full Bench had specifically addressed the basis upon which monetary relief might be granted under s 106(5): 102 We do not think that Brown v Rezitis mandates an approach to the assessment of compensation under s 106(5) on the basis that restitution in the sense referred to, is to be the fundamental guiding principle. Restitution so understood may be appropriate in particular cases, but the fundamental guiding principle is that which is stated in the statute itself, namely, what is just in the circumstances of the case. 78 The trial judge also noted (at [88]) that the decision in Westfield Ltd v Helprin (1998) 82 IR 411 ("Westfield") had seen compensation awarded under s 106(5) for lost opportunity: 88 It is not unusual in the cases to find compensation having been awarded under s 106(5) for the loss of opportunity. In Westfield Ltd v Helprin (1998) 82 IR 411, for example, the Full Bench agreed with Marks J's conclusion at first instance that Mr Helprin's contract was unfair in that it did not require a counselling and warning process, including an opportunity for Mr Helprin to improve his performance, prior to the exercise of the right of termination. Both Marks J and the Full Bench considered it appropriate to vary the contract to incorporate a requirement that the respondent provide the applicant with a period in which to improve his performance. Thus, the variation to remedy the unfairness in Mr Helprin's case enabled the Court to make a consequential order awarding monetary compensation to reflect the respondent's failure to provide the opportunity to the applicant to improve his performance. 79 David Jones Ltd v Cukeric (1997) 78 IR 430 ("David Jones")was cited by the trial judge as a decision where, notwithstanding that Mr Cukeric's employment had been terminated, the Full Bench varied the contract ab initio to provide that the employment was not to be terminated as a result of any restructuring without fair consideration first being given to Mr Cukeric's future position in any new structure. His Honour referred to what the Full Bench had concluded at page 462, namely: [I]t would be just in the circumstances to make a monetary order in favour of Mr Cukeric in connection with the arrangement as varied by us. The Company is to pay to Mr Cukeric an amount of money (additional to that already paid) to reflect entitlements in respect of a further period of six months' notice of termination. 80 The trial judge considered whether a monetary order could follow the failure of the respondents to follow the Improvement Plan. The Plan had been a notional variation to the Overall Arrangement in Gough & Gilmour (No 15). The trial judge did not consider it an appropriate time to conclude whether a monetary order could follow the failure to follow the Improvement Plan. 81 The appellants also contended that a claim in regard to lost goodwill could not give rise to a monetary order and the trial judge determined it could, consistent with the same reasoning as for lost opportunity.

[156]

The bill amends section 106 to clarify that if the commission finds that there is a contract or arrangement whereby a person performs work in an industry, then it can vary or declare void any related condition or collateral arrangement found to be unfair, even though that related condition or collateral arrangement does not in itself relate to a person's performance of work. For example, the commission will be able to vary a superannuation arrangement, share option agreement or franchise agreement that is related or collateral to a contract whereby a person performs work in an industry. The amendment requires however that the performance of work is a significant purpose of the overall contractual arrangements between the parties. By adopting the requirement that there be a significant connection between the arrangements and the performance of work, the bill ensures that the Court of Appeal will be able to continue to set the parameters of what are industrial matters, as opposed to those which are essentially commercial in nature. 99 The effect of s 106(2A) was significant because, in permitting collateral contracts which did not relate to the performance of work in an industry to fall within the Court's jurisdiction, it overcame the limitations of s 106(1) in which the power to declare void or vary a contract or arrangement was held to be limited only to those parts of the contract or arrangement that were closely related to the performance of work in an industry, see Solution 6 at [95], McDonald's at [66], [81] to [84]. 100 We propose to briefly discuss the construction of s 106(2A). The first condition is that the instrument must be a contract. There is no basis, in our view, to treat the meaning of "contract" in s 106(2A) as different to the same expression in s 106(1) given the use of the expression in both contexts is to specify the jurisdiction of the Court and further given the definition in s 105 is to apply to "this part"; that is the part of the statute which incorporates s 106. The expression "contract" must attract the wide meaning given in s 105, that is, wider than the common law meaning and including arrangements or collateral arrangements. The term "arrangement" was discussed in this way in the predecessor section to s 105, s 88F of the Industrial Arbitration Act 1940 in Custom Credit Corporation Ltd v Goldsmith and Ors [1976] AR (NSW) 98 where the Full Bench said at 131: We are of the opinion that in one of its meaning "arrangement" embraces transactions which do not give rise to contracts or obligations, that is to say obligations enforceable at law ... 101 The second element is that the contract must be a "related condition" or "collateral arrangement". It is the latter condition that is relevant in this case. We consider that the plain meaning of a "collateral arrangement" to be a contract (as defined in s 105) which is related, auxiliary or subsidiary to a primary contract.

[162]

(b) Characterisation of a contract to determine whether it is within jurisdiction of the Court under s 106 will raise questions of fact and degree in cases. The distinction is one of substance, not form. A relevant factor will be to examine whether the company of the alleged "working proprietor" engages a work force of significant magnitude. The critical question is whether the real transaction needs to be uncovered and whether it is a contract whereby a person works in an industry: see McDonald's at [95] and [102]; (c) It is not sufficient that a contract involves the provision of goods and services with a consequential performance of work in an industry. The impugned contract must directly, under or pursuant to its terms provide for the performance of work in an industry: see Solution 6 ; (d) The minimum conditions for the conclusion of directness to be drawn may be that the impugned agreement or arrangement itself must directly envisage the employment of a person or persons in industry and have a recognizable impact upon the conditions of that employment: see Solution 6 at 576; (e) Whether a contract leads directly to the performance of work has been posed in terms of whether the relevant contract requires a person to perform work and whether the performance of work is a purpose of the contract: see Solution 6 at 576[59]; (f) If there is an Overall Arrangement, it must still lead directly to the performance of work but need not be performance of work pursuant to a legal obligation, provided work was in fact performed: see QSR Ltd v Industrial Relations Commission of NSW (2004) 141 IR 238 (" QSR ") at [46] to [47]; (g) Some element of subordination by the person said to be performing the work to the other party to the contract or arrangement is required to satisfy the concept of work in an industry: see QSR ; (h) There must be a nexus between the relevant jurisdictional fact establishing jurisdiction (i.e., whether there is a contract whereby a person performs work in an industry) and the relief claimed by the applicants. The power to declare void or vary a contract or arrangement extends only to those parts of the contract or arrangement that are closely related to the performance of work in an industry: see Solution 6 at [95] and McDonald's at [66], [81] and [82]. 112 For reasons which were advanced before the trial judge, the appellants maintained that the Dealership Agreements between the first respondent and the first appellant were not contracts whereby the respondents performed work in an industry for the following reasons: (a) The Dealership Agreements do not require or provide for the licensing or operation of premises for the conduct of a business thereon on behalf of or for the benefit of the Appellants;

[174]

(m) Further, the employment of over 700 employees by the First Respondent (in comparison to the 350 staff employed by the Proprietor in the McDonald's case) does not make it difficult to characterise this case as being outside the jurisdiction of the Court. The real transaction here does not have to be uncovered, it is clearly not a contract whereby the Respondents performed work in an industry. This case is indistinguishable from the decision in McDonald's . 113 It followed that if the Dealership Agreements were not contracts within the jurisdiction of s 106, there was no basis on which the Overall Arrangement could be within jurisdiction, as it included the Dealership Agreements. 114 The appellants contended that the majority reasoning in McDonald's amounted essentially to the proposition that, where a working proprietor employs a significant number of staff, that fact is of itself sufficient to distinguish the case from Majik Markets Pty Limited v Brake & Service Centre (1991) 28 NSWLR 443; 39 IR 169 ("Majik Markets") and to thereby remove the contract from the ambit of s 106. Although, it was acknowledged by the majority in McDonald's that this may involve difficult questions of fact and degree, the employment of 350 staff was held to fall clearly on the non-jurisdictional side of the line. In McDonald's the Court of Appeal considered whether franchise agreements (comprising certain Licence and Lease agreements) entered into by the parties, collectively constituted a contract whereby work was performed in an industry. The Court found by majority that they were not. Handley JA (with whom Mason P agreed) took a different view to Spigelman CJ in relation to whether the contracts were ones whereby "Mr. McLaughlin" performed work in an industry. They found that they were not. Handley JA considered that the earlier franchise cases involved agreements with a "working proprietor" but not a working proprietor who employed "a workforce of this magnitude" (see [95]). His Honour observed (at [102]) that: 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.

[176]

118 It was contended that it was in the interests of comity that the Full Bench should overrule its decision in Wirraway to avoid an unnecessary conflict between the reasoning of the Full Bench of the Industrial Court and the Court of Appeal. 119 It followed that neither the Dealership Agreements nor the Overall Arrangement were contracts which fell within the jurisdiction of s 106 of the Industrial Relations Act. 120 The appellants maintained that if it could be established that neither the Dealership Agreements nor the Overall Arrangement fell within the jurisdiction of s 106, it would follow that s 106(2A) could not be used to establish jurisdiction for collateral contracts. On this basis, it was contended that s 106(2A) of the Act did not provide the Court with any additional jurisdiction in relation to the Fourth Assurance and Last Resort Policy. There would be no basis for establishing collateral arrangements because there was no identifiable contract where a person performed work in an industry and the performance of work was not a significant purpose of the contractual arrangements. 121 The appellants submitted that the trial judge had ignored the observations made by Schmidt J in Kennett at [95] that whether or not the performance of work was a significant purpose of the particular arrangements is a question of fact to be determined in each case. In this case, the performance of work was not a significant purpose of the contractual arrangements. 122 It followed that jurisdiction in relation to the Dealership Agreements and the Last Resort Policy at the threshold of s 106 of the Industrial Relations Act could not be established. The respondents' submissions 123 The respondents' contentions regarding jurisdiction under s 106 reflected the findings of the trial judge. It was submitted that there were no errors in the appealed decision and that the trial judge was correct to find that the Dealership Agreements and Overall Arrangements were within the jurisdiction of s 106 of the Industrial Relations Act. 124 The Dealership Agreements (the Sales and Service Agreement, the Distribution Agreement for Engines, Parts and Service and the Product Support Agreement for Engines, Parts and Service) were the contracts whereby the relevant work was performed. 125 That the Dealership Agreements had the performance of work as their primary purpose and the requirement that the respondents work for another, were not considered to be determinative considerations as to whether the agreements were within jurisdiction under s 106.

[179]

(c) Thirdly, to ascertain the transaction (the " contract " or " arrangement ") whereby (or " according to which ", " in consequence of which " or " in fulfilment of which ") that work was performed by that person or those persons. 127 The respondents addressed the Sales and Service Agreement, particularly provisions cl 2(a), 2(c), 4, 5, 6(a), 6(b), 6(c) and 8(b) and contended that the "development" and "promotion" of sales was the relevant work, the "active management of Dealer" by the second and third respondents was the relevant work, the "demonstration" and "exhibition" of products was the relevant work, the "service of the needs of the territory" was the relevant work, the "rendering" of "prompt, competent, diagnostic and mechanical services" was the relevant work, the "rendering" or "provision" of "delivery or inspection service" and "warranty service" was the relevant work, the "development" and "execution" of market development programs was the relevant work and the Sales and Service Agreement in accordance with the provisions above was the transaction according to which, in consequence of which, or in fulfilment of which all that work was performed. 128 Whilst the result took into account developments in the case law subsequent to Boland J's Judgments Nos (11) and (15), the result was effectively no different to the approach that had been applied in the test created in Stevenson v Barham (1977) 136 CLR 190, which was used to establish jurisdiction in Gough & Gilmour (No 11). That test had asked whether the performance of work was required by the Agreement and had led to the same determination that jurisdiction existed in relation to the Dealership Agreements. 129 The respondents concluded that against that background it was plain that the Dealership Agreements were still contracts whereby a person performed work in an industry and that the Court possessed, and continued to possess, jurisdiction to hear and determine the application under s 106 of the Act. 130 It was contended that it could be established that the Overall Arrangement (comprising the Dealership Agreements, various plans and understandings, the Fourth Assurance and the Last Resort Policy) was an arrangement whereby the relevant work was performed in an industry for the purposes of the Act and was also within jurisdiction.

[181]

134 The respondents' contention that the Fourth Assurance and the Last Resort Policy could be classed as collateral arrangements for the purposes of s 106(2A) of the Industrial Relations Act was an alternate jurisdictional view to the one which had considered that those contractual components were already part of an Overall Arrangement, which was within jurisdiction of s 106. 135 The proposed amendments relying on s 106(2A) in the Sixth Further Amended Summons sought to establish alternate bases of jurisdiction for the Fourth Assurance and the Last Resort Policy as collateral arrangements or related conditions to the Dealership Agreements so that the decisions and variations from the prior proceedings could be further confirmed and also sought to establish a jurisdictional bridge to enable the making of monetary orders. Furthermore, given that the Court had determined that the Dealership Agreements themselves were unfair vis-a-vis termination and decided to correct any unfairness by varying the Overall Arrangement, inter alia, so as to override the unfair operation of clause 29 of the Dealership Agreements, these proposed amendments would simply advance alternative characterisations and other remedial options on the evidentiary case already heard and determined. 136 It was contended that the Court should not deny the respondents the opportunity to further amend the Third Summons based on established facts. It was apparent that the amendments were necessary because of the challenges posed to the jurisdiction and power of the Court to make the decisions and orders that it already made. The s 106(2A) amendments arose out of an abundance of caution on the part of the respondents. The intention of availing the jurisdiction from s 106(2A) was to insulate the existing variations to the agreements and to protect the respondents against the appellants' assertions that the recent High Court and Court of Appeal authorities had undermined the correctness of the judgments in Gough & Gilmour (No 11) and (No 15) and the jurisdictional basis of s 106(1) under which those decisions were made. 137 The respondents submitted that the trial judge was correct to determine that the plans and understandings which constituted the Fourth Assurance and the Last Resort Policy could be considered arrangements collateral to the Dealership Agreements. The trial judge was correct to determine that the Dealership Agreements were Agreements where work was performed in an industry and the performance of work was a significant purpose of the overall contractual arrangements between the parties (see ss 106(2A)(a) and (b) of the Act) or "arguably so". It followed that those collateral arrangements were consistent with the requirements of ss 106(2A)(a) and (b) and that the variations in the Sixth Further Amended Summons could be made.

[182]

138 A great deal of attention in Gough & Gilmour (No 11) and the first instance judgment was focused on establishing and affirming that the "Overall Arrangement" was within the jurisdiction of s 106(1). In light of the conclusion that we ultimately reach in this judgment that (1) the Dealership Agreements fall within the jurisdiction of the Court pursuant to s 106(1); (2) the Fourth Assurance and Last Resort Policy fall within the Court's jurisdiction under s 106(2A); and (3) Boland J's reliance on the Fourth Assurance and Last Resort Policy, to making his findings of unfairness was correct, it is unnecessary for us to consider that broader question. In this respect, we have adopted the alternate jurisdictional formulation submitted by the respondents where they contended that the Fourth Assurance and Last Resort Policy are collateral arrangements to the Dealership Agreements within the meaning of s 106(2A) of the Industrial Relations Act thereby enabling those arrangements to be within jurisdiction without themselves being contracts whereby a person performs work in an industry. It also follows that we agree with that part of Boland J's findings at first instance in which he considered that the Dealership Agreements were within jurisdiction of the Court pursuant to s 106(1) of the Industrial Relations Act and that the Fourth Assurance and the Last Resort Policy were arrangements that fell within the Court's jurisdiction under s 106(2A). 139 In the light of this approach, and as earlier noted, the issues we have resolved are: i) whether the Dealership Agreements are contracts whereby work is performed in an industry and contracts within the jurisdiction of s 106(1) and s 106(2A)(a); and ii) whether the Fourth Assurance and Last Resort Policy are collateral contracts to the Dealership Agreements and are within the jurisdiction of s 106(2A). Dealership Agreements Principles in Fish, Batterham and Old UGC 140 The current test for determining whether a contract is one whereby a person performs work in an industry for the purposes of s 106(1), is to be found in the decisions in Fish, Batterham and Old UGC. 141 In his judgment in Yim, Spigelman CJ, with whom Mason P and Handley JA agreed, concluded that all prior authority on the interpretation of s 106(1) had been superseded by those decisions. We respectfully agree with that conclusion although we note that the decision in Yim was confined to an interpretation of s 106(1) and did not consider s 106(2A)). 142 The decisions in Fish, Batterham and Old UGC were delivered concurrently by the High Court and may therefore be taken as a composite expression of the view of the majority of the High Court in those judgments as to the law concerning s 106(1) and we shall approach the judgment in that light. Those judgments mention the Industrial Relations Amendment Act but do not consider the provisions in any detail. 143 In Fish, the majority of the Court (Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ) expressed the following views as to proper approach to the interpretation of the critical words in s 106(1) in order to determine the Court's jurisdiction. Their Honours' discussion as to whether a contract is one whereby a person performs work in an industry may be found at [18] to [20] and [41] in these terms: 18 The Act is concerned with matters industrial. The power given to the Commission by s106(1) to declare wholly or partly void or to vary certain contracts should be understood as hinged about the reference to performance of work in any industry. The first inquiry required by s106(1) is whether a person "performs work in any industry". What may be declared wholly or partly void or varied is any "contract" whereby a person performs that work. 19 Because 'contract' is given the extended definition that has been noted earlier, it must be understood as extending to any arrangement or related condition or collateral arrangement of the requisite kind, namely, a contract or arrangement whereby a person performs work in any industry. But what must be identified is the set of arrangements (leaving aside, for the moment, whether those arrangements are or may be contractual or otherwise) according to which (that is, 'whereby') a person performs the relevant work. What may be declared void or varied is any part of those arrangements: the arrangements in accordance with which a person performs work. 20 It is to invite error to begin by identifying what contracts or arrangements are related one to another. It invites error because it suggests that it is appropriate then to ask whether any of that interlocking set of arrangements made provision for the performance of work in an industry, and to treat any and every aspect of the interlocking arrangements that have been identified as amenable to the powers given to the Commission under s106. And that is the way in which much of the argument advanced on behalf of those parties who were applicants in the Commission proceeded. ...

[185]

145 We also refer to the majority judgment of Gummow, Hayne, Callinan and Crennan JJ in Old UGC at [25], where their Honours said: As noted earlier, the answer which the Court of Appeal made to that question depended upon the conclusion that the C & R Agreement formed a part of "a single contract of employment constituted by reading together the Employment Agreement and the [C & R] Agreement". But to answer the question in that way was to begin the investigation of whether s 106 could be engaged by first identifying what contractual stipulations or other arrangements were to be regarded as related one to the other. For the reasons given in Fish v Solution 6 Holdings Ltd , that begins the inquiry at the wrong point. And while it may be accepted that the C & R Agreement varied the terms governing the relationship between Mr McRann and the Old UGC parties in connection with his employment in an industry in New South Wales it by no means follows that all the resulting stipulations and arrangements fall within the expression a "contract whereby a person performs work in any industry". 146 Having regard to the aforementioned principles in Fish, Batterham and Old UGC it is necessary in order to determine the jurisdiction of the Court as to whether the Dealership Agreements are contracts whereby a person performs work in an industry to consider sequentially the following questions. i) whether the second and third respondents performed work in an industry; and ii) if there was a contract or arrangement whereby that work was performed. Further Issues of Principle: McDonald's 147 The fundamental point which the appellants contend emerges from the High Court decisions above is that a purposive rather than an overly literal construction is to be given to s 106 consistent with the industrial context and purpose of the Act. The "reformulation" of the jurisdictional test recognises that there is a limit to the scope of the jurisdiction of the Industrial Court to review contracts under s 106 and that it is not appropriate for the Industrial Court to purport to exercise its jurisdiction to review contracts which can more accurately be described as commercial contracts rather than contracts whereby work is performed. 148 The appellants submitted that the number of employees is a relevant factor to have regard to when considering whether a contract can properly be said to be a contract whereby work is performed as required by s 106. The appellants also submitted that this is a relevant factor to distinguish the present case from the decision in Majik Markets. 149 Although there is a line to be drawn between contracts which are within the jurisdiction and those that are not, the appellants maintained that the commercial nature of a contract and the number of employees involved in the relevant business connected with a contract are relevant to the question of jurisdiction. A working proprietor or franchise type arrangement may therefore not be within jurisdiction. The appellants contended that the Dealership Agreements and the "Overall Arrangement" were on all fours with the agreement considered in McDonald's which had been determined to be beyond jurisdiction. 150 The principles the appellants adduced from that decision were that working proprietor contracts of the type seen in McDonald's, that is, one with many staff and operating locations, were appropriately seen as commercial contracts because the proprietor was not a party to a contract whereby a person performs work in an industry. The relevant passages of the reasoning of Handley JA relied upon are set out below (at [95], [97], [98] and [102]): 95 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.

[190]

152 The decision in Wirraway was a decision of a specially convened Full Bench of the Industrial Court of four members constituted after the handing down of the judgments in Fish, Batterham and Old UGC, after the introduction of s 106(2A) and after the amendments to s 179. That decision applied the approach to determining jurisdiction set out in Fish, Batterham and Old UGC. At [42] the Full Bench held: 42 It is abundantly clear from the decision of the High Court in Solution 6 that in applying s106 the Court is to first establish whether any work has been performed in an industry and then to identify the contract or arrangements whereby that work is performed. 153 The Full Bench in Wirraway (at [35]) considered that the decision in McDonald's fell into a unique or special category and was a case limited to its own peculiar facts: 35 Having regard to the number of outlets and the number of employees, either as a test or a relevant consideration, has additional difficulties. Firstly, the High Court in its recent decisions about s106 has cautioned against an approach that does not focus upon a search for the provision within the contract whereby a person performs work in an industry. Secondly, in applying the McDonald's approach, a question arises as to where the line is to be drawn. When does a contract involving work by a proprietor and a number of employees become so numerous in the number of franchise outlets and employees that it can no longer be regarded as a contract whereby work is performed in an industry? These difficulties strongly suggest that the decision in McDonald's falls into a unique or special category and is a case that is limited to its own peculiar facts. 154 Wirraway elaborated (at, for example, [45]) the established parameters of s 106 in light of relevant case law (Majik Markets) and described the provision as not limited to subterfuge of awards but as a provision which covered franchise and working proprietor arrangements: 45 While s106 requires a contract whereby a person performs work in an industry, there is no requirement that such work be full-time, substantially full-time or that it be "hands-on" work as opposed to managerial or supervisory work . 155 Wirraway discussed the decision in Majik Markets as follows, at [46]: 46 Having regard to the other provisions of the Franchise Agreement identified by counsel for Wirraway, the picture formed is one of a contract entered into by the parties for their mutual financial benefit and it is one whereby the parties clearly intended that as a direct consequence of the contract Wirraway, through its nominee, would operate, manage, conduct and control the outlet and would employ sufficient persons to supply the service. There is a recognisable and direct impact of the terms of the Franchise Agreement upon the working remuneration of the Franchisee's nominee. As the evidence presently stands, it is not possible to characterise the contract as simply one whereby intellectual property is conveyed between the Franchisor and the Franchisee such that it is the only or primary purpose of the contract. On the evidence available, that is not an accurate characterisation of the substance of the Franchise Agreement, nor is it analogous to a construction contract as referred to in McDonald's . The similarity of the terms with those scrutinised in Majik Markets supports a finding that the application under s 106 is within jurisdiction and that Ultra Tune's Notice of Motion challenging the Court's jurisdiction to deal with the application must therefore fail.

[208]

129 I consider that Mr Gilmour was heavily influenced by Mr Gough, understandably so because Mr Gough held 90 per cent of the shares compared to Mr Gilmour's 10 per cent, but also because of Mr Gough's dominating personality. 164 Various findings in Gough & Gilmour (No 11) and the first instance judgment relate directly to the jurisdictional question as to whether work was performed in an industry by the second and third respondents. Although Boland J did not approach the analysis in the form of two sequential questions as this Court intends to, those decisions, nonetheless, addressed and resolved elements of those aspects of the jurisdictional question. See Gough & Gilmour (No 11) at [65], [66] and [71], as follows: 65 ... The agreements require the applicants to set up a business in a certain way; they require the principals of the dealership to use their qualifications and abilities to achieve the primary purpose of the Agreements, for example, the development and promotion of the sale of products; they directly require the applicants to employ personnel to perform work in the business - the business could not operate unless relatively large numbers of personnel were employed to perform work for the business. Whilst the dealership does not operate under the business name of Caterpillar, the dealership is synonymous with that name. The dealership, through its employees, is required to develop and execute promotion and market development programs to support the sale of Caterpillar products and to solicit orders for Caterpillar products. 66 ... Moreover, the performance of work is not merely a remote consequence of the agreements but a necessary requirement that, in the absence of the performance of such work, would render the agreements meaningless. 71 ... The applicants are natural persons and a corporate entity conducting a sales and service business on land at a location determined by Caterpillar and required by Caterpillar to be suitable for the purpose, and selling Caterpillar equipment purchased from Caterpillar. The applicants, or their employees, work in the business both in consequence of the agreements and in fulfilment of them. The form of the agreement requires the applicants to perform work in the sales and service industry either personally or through employees and therefore it leads directly to the performance of work in that industry. Caterpillar has a real interest in the performance of that work. It results in the sale of Caterpillar products purchased from Caterpillar and tends to maintain and improve the value of its general goodwill. 165 See also the first instance judgment at [59]: [T]he second and third applicants, as dealer principals under the Dealership Agreements, were, inter alia , required to actively participate in the management of the business of the first applicant (see, for example, clause 2(c) of the Sales and Service Agreement; clause 2(c) of the Product Support Agreement; clause 2(c) of the Distribution Agreement). Moreover, as the applicants submitted, the second respondent's decision to terminate the agreements was based on its dissatisfaction with the work relationship between the first respondent and the second applicant in particular (because he was, amongst other things, too independent and not prepared to perform as a dealer in a manner that was to the first respondent's "satisfaction"). 166 We set out earlier at para [62] the findings of the trial judge in Gough & Gilmour (No 11) as summarised in the first instance judgment, at [45]. It is appropriate in summary form to now isolate the findings from Gough & Gilmour (No 11) and the first instance judgment which bear specifically on whether the second and third respondents performed work in an industry. They are: a) the second and third respondents performed work in the sales and service industry either personally or through employees; b) that the second and third respondents actively participated in the management of the business of the first respondent; c) the nature of the breakdown of the relationship between the parties indicated that the second and third respondents had been performing work in the management of the first respondent.

[218]

176 The 1988 Dealership prospectus which was sent to the second and third respondents contained information consistent with the expectation that work would be performed by the second and third respondents as Dealer Principals. Significantly it suggested that work was to be performed because the relationship between the parties was to be more involved than that of a mere commercial investor relationship. The Prospectus had said: In entering into a Dealership Agreement with Caterpillar, it is agreed that the principal signers will continue in the active management of the Dealership, and will continue to own a controlling financial interest in the Dealership 177 A facsimile dated 18 November 1988 from Matt Tong, the finance director of Caterpillar Australia Ltd, to Bob Frantz of Caterpillar Inc in America regarding the change of Dealer described the second and third respondents in the following terms. It said: [W]e believe the management skill and marketing effectiveness of this team is superior to the other candidates. 178 An interoffice memo from T N Thorstenson to D F Coonan dated 18 November 1988, recommended that the second and third respondents take on the Dealership and described them in terms which reflected an expectation that the managerial skills exhibited were required to be used when the second and third respondents became Dealer Principals. Their experience and operational skills were considered essential by Caterpillar because they would be applied when they took on the Dealership, the memo included the following: [E]ach are private, user oriented, experienced in our business and in the territories in question. In each we saw and talked with the people who will own and operate the dealership. Stability and tenure is spoken in terms of "forever". 179 The respective skills and accomplishments of the second and third respondents were also described in the memo which contained the following recommendation which showed that the respondents clearly envisaged those skills being prospectively applied in the Dealership situation: We recommend the team of Harcourt Gough and Tony Gilmour as the new Dealer for the service territory now covered by Waugh & Josephson.

[226]

188 While the Court can determine that by their bare terms the agreements require the performance of work, earlier decisions in this matter have indicated that the Dealership Agreements do not provide a complete picture of the actual work relationship between the appellants and respondents. To the extent that the Court can in determining the jurisdictional question go beyond the requirements of the bare terms of the Dealership Agreements, it is important to note that the conclusions of Boland J were that the work relationship between the first appellant and second and third respondents was close and interrelated and that the Company structure was a conduit by which the second and third respondents performed work for the first appellant. The direct requirement to manage in clause 2(c) in bare terms reflected the broader reality of the Dealership Agreements, was open on the facts. It was an inherent understanding of both parties in engaging in the Dealership Agreements that the second and third respondents would perform work as Managers of the Dealer (their own company), and apply their qualifications and abilities to the task. This was the expected state of affairs on which the agreements were based and proceeded. Failure to exercise that managerial capacity would render the work of the Dealer meaningless or ineffective. That work was required. It was not an after-thought or extraneous. That was the context in which the contracts were made and the basis for the characterisation of interdependence and closeness. It follows that the Dealership Agreements were contracts whereby the second and third respondents performed work in an industry. As an overview, that analysis is expressed below by application of the question to the provisions of the Sales and Service Agreement: (a) The second and third respondents were involved in the development and promotion of sales. They were involved in the development and promotion of sales in their capacity as Dealer Principals of the Dealer.

[262]

The Appellants' contentions 218 The appellants contended that the Court did not have jurisdiction or power to make the orders claimed by the respondents in Stage 2 of the proceedings, for monetary orders under s 106(5) of the Industrial Relations Act. They argued essentially that: (a) A proper application of the recent decisions of the High Court and the Court of Appeal in McDonald's necessitated the conclusion that the Court had no jurisdiction to grant any relief to the respondents in Stage 2 of the proceedings, as the contracts or arrangement did not meet the requirements of s 106. There was a reiteration of the arguments by the appellants that the contracts or arrangements were not within jurisdiction of s 106 either by s 106(1) or s 106(2A). (b) The monetary orders sought pursuant to contracts or arrangements established to be within jurisdiction under ss 106(1) and 106(2A) were required to bear the necessary close relationship with the performance of work in an industry and the monetary orders sought in the Sixth Further Amended Summons did not. The monetary relief sought by the respondents in Part D of the Sixth Further Amended Summons could not on any view be characterised as closely related to the performance of work in any industry for reasons which included: Parts D1 and D2 claim compensatory orders for the alleged failure of the Appellants to comply with retrospective obligations imposed by the Court; Part D3 is a claim for compensation for the lost opportunity of retaining the dealership which has no close relationship to the performance of any work pursuant to the Dealership Agreements; and Part D4 is a claim for compensation for the lost opportunity to sell shares in the First Respondent. It is contended that the Second and Third Respondents lost, inter alia, the opportunity to receive substantial financial rewards by way of the premium/goodwill component in any agreed business sale price. (c) Monetary Orders under s 106(5) of the Industrial Relations Act only provided for payments in the nature of restitution. Section 106(5) of the Act did not speak in terms of damages or compensation, let alone damages in the nature of expectation loss. Section 106(5) only authorised an order for the payment of money in the nature of restitution within the scope considered by the High Court in Brown v Rezitis (1970) 127 CLR 157 (" Brown ") at 165, 170 per Barwick CJ. The claims for damages set out in Part D3 and D4 in the Sixth Further Amended Summons fell well beyond the limitations set out in Brown. The Respondents' contentions

[270]

117 In any event, as I have said, I am satisfied that there is no ambiguity and that nothing in the language of the section, as amended by the insertion of s 106(2A), would permit a proper reading of its terms to confine s 106(5), by excluding the making of money orders in respect of 'any contract declared wholly or partly void, or varied', pursuant to the express provision made for such orders in s 106(2A). 227 Section 106(5) therefore allows the respondents to claim the monetary orders as set out in D3, D4 and D5 of the Sixth Further Amended Summons because they concern monetary orders in relation to varied collateral contracts, being the Fourth Assurance and Last Resort Policy. We note that there is no requirement that the monetary orders relate to the performance of work in an industry. 228 It also follows that the monetary orders sought in D2 with respect to the appellants' failure to follow the improvement plan are within jurisdiction. That aspect of the monetary claims is permissible because the improvement plan is a variation of the Last Resort Policy and Fourth Assurance and monetary orders can be made in connection with any variation. 229 The second issue relates to the possible form the monetary orders may take. The primary contention of the appellants in this respect was that monetary orders needed to be restitutionary in nature. We reject this aspect of the appellants' challenge. 230 The trial judge was correct to find that the nature of monetary orders that may be made under s 106(5) are not so limited. In the first instance judgment the trial judge had (correctly in our view) relied on the decision in Westfield Holdings, where the Full Bench specifically addressed the basis upon which monetary relief might be granted under s 106(5) and in doing so had regard to Brown. After addressing at some length the decision of Barwick CJ the Full Bench stated at [98] to [102]: 98 So, the formulation by Barwick CJ as to the nature of the power to make money orders under s 88F(2) of the 1940 Act may be said to be, strictly speaking, obiter . However, the main point we wish to make about Brown v Rezitis is that in arriving at his formulation, the Chief Justice did so against the background of the facts of the case. He was required to focus on the question of restitution because of the order of Richards J that the appellants repay the $2,000 paid by the respondents for the contract, thus restoring "the aggrieved party to a situation which existed before the making of the contractual arrangement". Understandably then, the concept of restitution figured prominently in the Chief Justice's judgment. Given the other orders by Richards J requiring the appellants to pay the respondents for work done and expenses incurred, Barwick CJ was also required to address the question of making remedial provision for what had taken place or been done under the contract. 99 In these circumstances, given the particular facts of the case with which Barwick CJ was dealing, it could not be said that the formulation by the Chief Justice regarding the nature of the power to make money orders under s 106 is to be taken as the exclusive, or even the primary, test to be applied universally to all of the diverse circumstances that arise under s 106. Restitution has been said to be concerned with restoring or giving back something to its proper owner or making reparation for loss or injury previously inflicted. As the Full Industrial Court ( Fisher CJ, Bauer and Hill JJ) observed in State of New South Wales v Health and Research Employees Association of New South Wales (unreported, 31 March 1993) (at 82): "... 'restitution' seems to involve a reversion to a position as if the contract had never been entered into."

Caterpillar of Australia Limited & Ors v Gough & Gilmour Holdings Limited & Ors

At a glance

Court

Decision date

Before

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Judgment (278 paragraphs)

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Cases Cited (28)

Cited By (3)