Crowe v UCS Developments Pty Ltd

Industrial Relations Commission of New South Wales in Court Session

CITATION : Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234 APPLICANT: Damon Anthony Crowe

PARTIES : RESPONDENTS: UCS Developments Pty Ltd Unified Communication Systems Limited Mr Geoffrey Gribble Quantum Securities Pty Ltd FILE NUMBER: IRC 6856 of 2001 CORAM: Wright J President; Walton J Vice-President; Marks J Unfair contract - Reference to Full Bench - Questions of law - Whether application to join additional respondents precluded by s108B of Industrial Relations Act 1996 - Nature of power under s106 - Statutory interpretation - Need to construe s108B in light of structure and effect of s106 - Held, addition of respondents not precluded, in this case, by s108B - Questions answered - Orders made. CATCHWORDS : Statutory interpretation - Unfair contract - Reference to Full Bench - Questions of law - Whether application to join additional respondents precluded by s108B of Industrial Relations Act 1996 - Nature of power under s106 - Need to construe s108B in light of structure and effect of s106 - Held, addition of respondents not precluded, in this case, by s108B - Questions answered - Orders made. Industrial Arbitration Act 1940 s 88F Industrial Relations Act 1996 s 106 s 105 s 107 s 108A s 108B s 109 s 170 Industrial Relations Amendment (Unfair Contracts) Act 2002 LEGISLATION CITED : Industrial Relations Commission Rules 1996 r 83 r 89 Interpretation Act 1987 s 5 s 30 Limitation Act 1969 s 78 Supreme Court Rules 1970 Part 8 rule 11 Attorney-General (Qld) v Australian Industrial Relations Commission, Minister for Employment and Workplace Relations v Australian Industrial Relations Commission (2002) 76 ALJR 1502 Bell v Macquarie Bank Limited (No.4) (1999) 93 IR 191 Bowker v Software Engineers Australia (NSW) Pty Limited [2003] NSWIRComm 213 Brown v DML Resources (No 3) [2001] NSWSC 719 Brown v Rezitis (1970) 127 CLR 157 Bull v Attorney General of New South Wales (1913) 17 CLR 370 Chang Jeeng v Nuffield (Australia) Proprietary Limited (1959) 101 CLR 629 Chu Kheng Lim v The Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 Commonwealth of Australia v Mewett (1997) 191 CLR 471 Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98 Davies and Jones v Western Australia (1904) 2 CLR 29 Director of Public Works v Ho Po Sang [1961] AC 901 Esber v The Commonwealth of Australia (1992) 174 CLR 430 Drinan v Hickey (1982) 11 NSWLR 744 Fernance v Nominal Defendant (1989) 17 NSWLR 710 Fisher v Hebburn Limited (1960) 105 CLR 188 Georgiadis v Australian Overseas Telecommunications Corporation (1994) 179 CLR 297 Hollingsworth v Commissioner of Police (1998) 81 IR 276 CASES CITED : Holmes v Permanent Trustee Company of New South Wales Ltd (1932) 47 CLR 113 Horsell v Chegwyn Insurance Brokers [2002] NSWIRComm 293 Kennedy v Contract Transport Solutions [2003] NSWIRComm 158 King v State Bank of New South Wales [2002] NSWIRComm 353 Kurnow v O'Sullivan (No.2) (1976) 11 ALR 465 L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Company Limited (1994) 1 AC 486 Madden v Fisher (2002) 54 NSWLR 179 Maxwell v Murphy (1957) 96 CLR 261 Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 Ogden Industry Pty Limited v Lucas (1967) 116 CLR 537 Ratcliffe v V S & B Border Homes Ltd (1987) 9 NSWLR 390 Reich v Client Server Professionals of Australia Pty Limited (2000) 99 IR 69 Repatriation Commission v Hayes (1982) 43 ALR 216 Rice v Henley (1914) 19 CLR 19 Starevich v Repatriation Commission (1987) 76 ALR 449 Stonham v Speaker of the Legislative Assembly of New South Wales (No.4) (2001) 110 IR 417 Stout v R A Wenham Builders Pty Ltd [1980] 1 NSWLR 426 Westfield Holdings v Adams (2002) 114 IR 241 Wong v Cheng t/as Artist Production (1999) 91 IR 369 HEARING DATES: DATE OF JUDGMENT: 07/31/2003

APPLICANT: Mr A R Moses of counsel Colin Biggers & Paisley, Solicitors (Ms Victoria Hiley) LEGAL REPRESENTATIVES: RESPONDENTS: Mr A T Britt of counsel Heidtmann & Co., Lawyers (Ms Penny Cable)

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: WRIGHT J, President WALTON J, Vice-President MARKS J

Matter No IRC 6856 of 2001 DAMON ANTHONY CROWE v UCS DEVELOPMENTS PTY LTD AND ANOTHER Application under section 106 of the Industrial Relations Act 1996

JUDGMENT OF THE COURT [2003] NSWIRComm 234

1 The genesis of these proceedings was the summons filed on 19 October 2001 by the applicant, Damon Anthony Crowe, pursuant to s 106 of the Industrial Relations Act 1996, in which he sought relief from contracts of employment which were alleged to be unfair, harsh, unconscionable and against the public interest. The summons initially filed identified two respondents, UCS Developments Pty Limited and Unified Communications Systems Limited. The detail of the grounds upon which the summons for relief is brought will require consideration later in this judgment. However, for present purposes, it is sufficient to observe that the proceedings arose out of the termination of the applicant's employment with the second respondent on 22 August 2001.

2 In the course of the usual interlocutory proceedings before the Registrar it became apparent that the first and second respondents had been placed into liquidation. Perhaps because of that situation, the applicant filed a notice of motion seeking to join a third respondent, Mr Geoffrey Gribble, to the proceedings. The notice of motion was subsequently amended to seek to join both Mr Gribble and a fourth respondent, Quantum Securities Pty Ltd.

3 As a result of the joinder being opposed, and having regard to the basis of the opposition, it was determined, with the consent of the parties, that the relevant issues be referred to the Full Bench. The questions referred, as formulated by the parties with the assistance of Marks J, were:

1. Does the New South Wales Industrial Relations Commission in Court Session have the jurisdiction to make an order naming a person as a respondent to an application under s 106 of the Industrial Relations Act 1996 in circumstances where: (a) The summons for relief seeks an order declaring a contract of employment whereby the applicant performed work in an industry to be unfair, harsh and unconscionable and contrary to the public interest; (b) The summons for relief seeks an order declaring void in whole or in part or varying in whole or in part the contract of employment either from its commencement or from some other time; (c) The summons for relief was originally commenced prior to the commencement of s 108B of the Act which limits the time periods in which applications for orders under Division 2 of Part 9 of Chapter 2 of the Industrial Relations Act 1996 can be commenced; (d) The Notice of Motion to join the additional respondents was filed prior to the commencement of s 108B of the Industrial Relations Act 1996; (e) The hearing of the Notice of Motion to join the additional respondent was [listed] prior to the commencement of s 108B of the Industrial Relations Act 1996; (f) The hearing of the Notice of Motion was subsequent to the commencement of s 108B; (g) At the time of the hearing of the Notice of Motion more than 12 months had elapsed since the termination of the contract of employment; (h) The effect of the amended summons for relief under s 106 of the Industrial Relations Act 1996 is to seek orders under Division 2 of Part 9 of Chapter 2 of the Industrial Relations Act 1996 against the proposed respondents in relation to a contract that has been terminated? 2. When a summons for relief is amended to join additional respondents, does the limitation period in s 108B in relation to the proposed respondents run from the date of termination of the contract to: (a) The date of the filing of the notice of motion to amend the summons to join additional respondents; (b) The date the summons is amended to "join" the additional respondents? 3. Whether the Court has the jurisdiction to amend a summons for relief to allow an applicant to seek orders under Division 2 of Part 9 of Chapter 2 of the Industrial Relations Act 1996 against a proposed respondent in relation to a contract that has been terminated and more than 12 months has elapsed since the termination of the contract and the hearing of the Notice of Motion to join the proposed respondent. 4. Does the reference to an application for an order under this Division in s 108B include an order to make a person a respondent to a Summons for Relief under s 106?

4 During further programming of the reference proceedings the parties agreed that the reference would be determined on written submissions filed by the parties, subject to any decision by the Court to list the matter for a short oral hearing to deal with any outstanding issues. The submissions have been received and in the result we consider that judgment may be given by reference to the written submissions of the parties.

5 As is clear from the questions referred to the Full Bench, the issue in these proceedings arises from recent amendments to the unfair contracts provisions in Division 2 of Part 9 of Chapter 2 of the Industrial Relations Act. These amendments were made by the Industrial Relations Amendment (Unfair Contracts) Act 2002, which is Act No. 32 of 2002.

6 The Industrial Relations Amendment (Unfair Contracts) Act 2002 relevantly inserted two new sections into the relevant Division. The provisions are s 108A and s 108B, which provide: 108A Employment contracts in respect of which applications cannot be made (1) An application cannot be made for an order under this Division if the application relates to a contract of employment under which: (a) a remuneration package that exceeds the remuneration cap is paid or received (or is payable or receivable) during the period of 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination), or (b) a remuneration package is paid or received (or is payable or receivable) during a period of less than 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination) that would, if the remuneration package had been paid or received (or been payable or receivable) for a period of 12 months, have exceeded the remuneration cap. (2) An application cannot be made for an order under this Division by a person who is a partner carrying on a business if: (a) the application relates to a contract between that partner and the other persons carrying on that business in partnership, and (b) the share of the net profits, or payments contingent on the net profits, of the business that are paid to or received by (or payable to or receivable by) the applicant during the period of 12 months immediately before the application is made (or, if the application relates to a contract that has been terminated, immediately before the termination) exceed: (i) $200,000, or (ii) if an amount is prescribed for the purposes of paragraph (b) of the definition of "remuneration cap" in subsection (3)---that amount. (3) In this section: "contract of employment" means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract. "employment benefit" means a benefit provided to an employee at the cost of his or her employer (being a benefit of a private nature) and, without limitation, includes: (a) contributions payable to a superannuation scheme by an employer in respect of the employee, including any liability of that employer to make any such contributions or to pay costs associated with that scheme, or (b) the provision by an employer of a motor vehicle for private use by the employee, or (c) any other benefit prescribed by the regulations for the purposes of this definition. "monetary remuneration" includes any performance-related bonus or incentive payment. "remuneration cap" means: (a) $200,000, except as provided by paragraph (b), or (b) any greater amount prescribed by the regulations (being a regulation that increases the amount by reference to increases in the amount referred to in section 83 (1) (b)). "remuneration package" means the total value of monetary remuneration and employment benefits payable or receivable under a contract of employment. 108B Time for making application (1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. (2) The Commission does not have jurisdiction to extend the time for making any such application or to accept an application made after the time prescribed by subsection (1). These amendments came into effect on 24 June 2002.

7 The applicant contended that the four questions became in substance the following issue: Does the limitation period in s 108B apply in respect of an application to join a respondent to proceedings and, if so, when does time commence running?

8 The relevant power of amendment is to be found in s 170 of the Industrial Relations Act and the basis for the exercise of the power is that "the Commission considers [the amendment] to be necessary in the interests of justice". As to the substantive question of joinder, the issue is whether the proposed respondents have a sufficient connection with or involvement in the contract or arrangement that is the subject of the proceedings: for example, Bell v Macquarie Bank Limited (No.4) (1999) 93 IR 191, 207, Wong v Cheng t/as Artist Production (1999) 91 IR 369 and Stonham v Speaker of the Legislative Assembly of New South Wales (No.4) (2001) 110 IR 417.

9 In the applicant's submission, "section 106 rights are extant rights": Madden v Fisher (2002) 54 NSWLR 179 and Georgiadis v Australian Overseas Telecommunications Corporation (1994) 179 CLR 297. For the legislative amendments to operate so as to remove "the rights of the applicant to join the proposed respondents" would require express words to that effect: see s 30(1)(c) of the Interpretation Act 1987 and Hollingsworth v Commissioner of Police (1998) 81 IR 276. There is nothing in s 108B that expressly abrogates "the applicant's accrued right to join the respondents pursuant to s 170 of the 1996 Act".

10 Section 108B ought not, the applicant contends, unless the intention appears with reasonable certainty, be construed to operate retrospectively so as to confer, impose or otherwise effect rights or liabilities defined by reference to past facts or events: Ogden Industry Pty Limited v Lucas (1967) 116 CLR 537, 564 (Kitto J); also Maxwell v Murphy (1957) 96 CLR 261, 267; Chang Jeeng v Nuffield (Australia) Proprietary Limited (1959) 101 CLR 629, 637 - 638; Fisher v Hebburn Limited (1960) 105 CLR 188, 194 (Fullagher J); L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Company Limited (1994) 1 AC 486, 524 - 525 (Lord Mustall) and Pearce and Geddes, Statutory Interpretation in Australia, 5th Edition 2001 at pp 250 - 251. The applicant contends that there is nothing in the amending Act that would expressly or by necessary implication eliminate the right of joinder available under s 170 of the Act.

11 Moreover, the provisions of s 106 and s 170 of the Act are remedial and beneficial legislation, which should be construed "so as to give the fullest relief which the fair meaning of its language will allow": per Isaacs J in Bull v Attorney General of New South Wales (1913) 17 CLR 370. Reliance was also placed on Holmes v Permanent Trustee Company of New South Wales Ltd (1932) 47 CLR 113; Rice v Henley (1914) 19 CLR 19; Kurnow v O'Sullivan (No.2) (1976) 11 ALR 465; Repatriation Commission v Hayes (1982) 43 ALR 216 and Starevich v Repatriation Commission (1987) 76 ALR 449. This approach was said to be particularly germane here, having regard to the fact that both the applicant's summons for relief and the notice of motion seeking joinder were filed prior to 24 June 2002 and under the substantive law of the 1996 Act prior to the 2002 amendment coming into effect.

12 The applicant submitted that where more than one interpretation of a statute is available, the courts will endeavour to adopt an interpretation that will ensure the validity of the statutes: Davies and Jones v Western Australia (1904) 2 CLR 29 at 43; Chu Kheng Lim v The Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1. Further, this approach will usually result in the court declining to interpret a statute in a manner whereby its operation will be negated, if there is an alternative construction available: Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014, 1022. The amending Act should not be construed so as to invalidate s 170 of the 1996 Act in relation to applications that were yet to be determined by the Commission. The applicant submitted that the questions should be answered as follows:

1. Yes 2. Neither situation is applicable to the applicant in these proceedings. Both the summons for relief and the joinder application were filed prior to the commencement of the 2002 amending Act. As such, the limitation period does not apply. 3. Yes 4. No. The relevant source of power to join additional parties is to be found in s 170 of the statute.

13 The applicant sought that the orders set out in the amended notice of motion be made and that orders for costs of both the amended notice of motion and the Full Bench proceedings be made in his favour.

14 The respondents accepted the applicant's refinement or specification of the questions referred. On their submissions, the initial issue is whether the limitation period in s 108B was intended to apply to proceedings and/or contracts which were in place prior to 24 June 2002. If that question were answered in the affirmative, it would be necessary to determine when the proceedings can be said to be commenced against the additional respondents if they were joined to proceedings by an order under s 170 of the Industrial Relations Act.

15 The respondents accepted that s 108B on its face "directly interferes with contingent rights" of a person to utilise the long standing unfair contracts jurisdiction, and as such should be strictly construed so as to remove from s 106 only those contracts which unambiguously fall within the exclusion provided in s 108B. However, having made that concession, the respondents contended that the issue of the effect of a statutory amendment on existing rights and liabilities is a matter of statutory construction. On the respondents' contention, s 108B, in terms, operates from 24 June 2002 and applies to all applications for an order of the relevant kind commenced after that date, irrespective of when the contract was terminated.

16 The correct starting point for analysis, in terms of the respondents approach, is the meaning and effect of s 108B, derived from its language, understood in context and with a view to giving effect to apparent legislative purpose: Attorney-General (Qld) v Australian Industrial Relations Commission; Minister for Employment and Workplace Relations v Australian Industrial Relations Commission (2002) 76 ALJR 1502 at [112] per Kirby J. The presumptions provided for in the Interpretation Act and the common law analogies, are conditioned upon a "contrary intention" appearing in the relevant amending Act: Maxwell v Murphy (1957) 96 CLR 261, 267, 270 (Dixon CJ) and Attorney-General (Qld) v Australian Industrial Relations Commission. It is the amending Act which must first be considered.

17 The language of s 108B(1) is contended by the respondents to be emphatic, unequivocal and such that the Commission must not make orders under Division 2 of Part 9 of Chapter 2 of the Act where an application for such orders has been made more than 12 months after the termination of the contract. If the orders are sought more than 12 months after the relevant contract was terminated, it does not matter when the contract was terminated. The prohibition in the section will apply. The strict nature of the section is reinforced by the provisions of s 108B(2). There is no temporal limitation as contended by the applicant. The language of the section precludes any presumption, external to the section itself, protective of established rights.

18 The other provisions of the amending Act, which also restrict the operation of the section, are reflective of the legislative intent: Attorney-General (Qld) v Australian Industrial Relations Commission at [115]. Relevant extrinsic materials, including the Minister's second reading speech, equally demonstrate the intention to restrict the operation of the section. Construing s 108B so as to operate prospectively from 24 June 2002, would defeat the purpose of the legislation, in that it would not prevent the "negative and serious consequences" of the unfair contracts jurisdiction being "regularly invoked by persons who are neither being exploited nor treated ungenerously". The Court should give effect to the policy changes directed by the Parliament: Attorney-General (Qld) v Australian Industrial Relations Commission at [125].

19 The respondents also pointed to the practical difficulties that would arise in relation to the operation of s 108A, if the provisions of the amending Act were given a prospective construction: see Attorney-General (Qld) v Australian Industrial Relations Commission at [66] (Gaudron, McHugh, Gummow and Hayne JJ), [122] (Kirby J) and [159] (Callinan J).

20 Further, it was contended that the absence of transitional provisions does not imply that s 108B was to have a prospective effect only. These considerations were relevant in construing the amending legislation: Attorney-General (Qld) v Australian Industrial Relations Commission at [66] and [123]. Moreover, the absence of any transitional provisions does not, of itself, warrant that conclusion: Attorney-General (Qld) v Australian Industrial Relations Commission at [122]

21 Section 108B is to apply, in terms, to all contracts terminated both before and after 24 June 2002. It applies to contracts of the relevant kind, whenever they were terminated. Clearly, on its face, the section expresses a "contrary intention", for the purposes of s 5(2) of the Interpretation Act, displacing the presumption referred to in s 30 of that Act and the common law presumptions against an amending Act not affecting any right, privilege, obligation or liability acquired, accrued or incurred prior to the commencement of the amending Act. Moreover, on the respondents' submission, the construction for which they contend does not afford a "retrospective" operation to s 108B.

22 In the alternative, the respondents' contended that the "rights" sought to be protected by the applicant were not "rights" as that term is understood in s 30 of the Interpretation Act or its common law counterparts.

23 Courts traditionally have drawn a distinction between "an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given": Director of Public Works v Ho Po Sang [1961] AC 901, 922; Esber v The Commonwealth of Australia (1992) 174 CLR 430, 447; Attorney-General (Qld) v Australian Industrial Relations Commission at [44] - [46], [137] and [156] - [157]. On the respondents' submissions, the "right" to commence proceedings under s 106 is not a right that may be fairly called "inchoate or contingent". It provides a means by which a person may establish a right which, at the commencement of the proceedings, they did not have. On the respondents' submission the power under s 106 is "more like the making of an award and/or an investigation which is to decide whether some right should or should not be given to an applicant". The section of itself does not create or enforce "rights" as that term is envisaged in s 30 of the Interpretation Act.

24 As to issues arising from the joinder application, the respondents contend that the motion seeks to amend the current proceedings, so as to seek orders under s 106(5) against the respondents. It is that application for such orders, as opposed to the notice of motion itself, which is caught by s 108B.

25 The Commission has power to amend proceedings as provided in s 170 of the Act and that power is supported by the relevant rules as to joinder: see r 83(c) of the Industrial Relations Commission Rules 1996. That statutory power to amend does not, however, override the restriction on commencing proceedings found in s 108B. Moreover, outside r 83(c), there is no rule which determines the time from which a party is deemed to have been joined to the proceedings, when a summons is amended so as to add a new party. Rule 89(5) is applicable and picks up the practice, procedure or usage of the Supreme Court on this question.

26 The practice, procedure or usage of the Supreme Court as to the joinder of parties is provided by Pt 8 of the Supreme Court Rules. These rules do not allow a party to be joined to proceedings where the statutory time limit in relation to the cause of action against the party has expired: see Stout v R A Wenham Builders Pty Ltd [1980] 1 NSWLR 426 and Drinan v Hickey (1982) 11 NSWLR 744. The court, the respondents submitted, should adopt a similar approach in relation to the joinder of parties following the time limit imposed in s 108B of the Act.

27 Further, it was contended that, as the rules of the Commission are silent as to when proceedings are deemed to have been commenced against a party joined to proceedings, r 89(5) would again pick up the practice and procedure of the Supreme Court. In this regard, Pt 8 r 11 of the Supreme Court Rules would apply and deem the proceedings against the joined party to have been commenced at the time the amendment is made to the originating process: see Fernance v Nominal Defendant (1989) 17 NSWLR 710, Ratcliffe v V S & B Border Homes Ltd (1987) 9 NSWLR 390 and Brown v DML Resources (No 3) [2001] NSWSC 719. The Commission should adopt a similar practice in proceedings following the insertion of s 108B of the Act. In so far as the proposed third and fourth respondents are concerned, the relevant date of commencement would be the date on which the amended summons for relief was filed, not the date of the notice of motion seeking joinder or that of the original summons for relief. The amendment would be prohibited by s 108B, having regard to the inability to extend time. As such, the summons cannot be amended.

28 It was contended, in the alternative, that s 170 of the Act provides that an amendment may be made where, "in the interests of justice", the Commission forms a view that the amendment is warranted. The respondents' contend that permitting the applicant to amend in circumstances where he would not otherwise be able to bring proceedings against the proposed respondents was not a just outcome. The insertion of s 108B into the Act should have the effect of reversing the presumption that a summons can be readily amended to join additional respondents.

29 The respondents submitted that the referred questions should be answered:

1. No 2. The date the summons is amended to "join" the additional respondents 3. No

4. No the order made under s 170 is not an order for the purposes of s 108B. However, the amended summons to seek orders against the respondents would be an application for orders caught by s 108B and subject to the limitation contained therein

30 In reply, the applicant contended that an application to join a party is made pursuant to the amendment power in s 170 and is therefore, not an "order" within the contemplation of s 108B.

31 Moreover, on the applicant's submission, the rights enlivened by the commencement of proceedings and by the filing of the amended notice of motion on 4 July 2002, are rights contemplated by s 30 of the Interpretation Act. The Commission in Court Session is a superior court and in the conduct of an application under s 106 of the statute, exercises judicial power. Once enlivened, an applicant has an accrued right to have the proceedings determined according to law.

32 The applicant contends that the respondents' reliance upon Pt 8 r 11 of the Supreme Court Rules is misplaced. Rule 83(c) of the Industrial Relations Commission Rules expressly deals with joinder of parties to proceedings, displacing the operation of r 89(5): Horsell v Chegwyn Insurance Brokers [2002] NSWIRComm 293. In any event, on the applicant's submission, even were the Supreme Court Rules to apply, the date by which the respondents were required to enter an appearance was 11 June 2002, well prior to the commencement of the provisions of s 108B.

33 Subsequent to the parties' submissions being filed, counsel for the applicant informed the Court of two matters of which he had recently become aware. The matters were: (a) The judgment of Peterson J delivered on 19 May 2003 in Kennedy v Contract Transport Solutions [2003] NSWIRComm 158; and (b) Section 78 of the Limitation Act 1969. The Court was also advised that, if it required any further submissions to be made consequent upon either the Kennedy case or s 78 of the Limitation Act , both counsel would be prepared to do so.

34 Section 108B was enacted as a part of the amendments made to the Industrial Relations Act by the Industrial Relations Amendment (Unfair Contracts) Act 2002 which took effect on 24 June 2002. The intention of the amending Act in relevant respects is reasonably plain on its face. It was intended that applications seeking orders directed towards contracts of certain identified types and satisfying certain conditions, should be removed from the scope of the unfair contracts provisions of the Act; namely, those applications which seek to vary or avoid contracts (as defined) providing a remuneration package that exceeds an identified "remuneration cap", or those which seek an order to vary or avoid the terms of certain kinds of partnership agreements. The amending Act also required that any application for an order under s 106(1) be brought within 12 months of the termination of the relevant contract or arrangement. Those observations seem to be confirmed by the objects of the amending Act, identified in this way in the Explanatory Memorandum to the Bill: (a) to prevent an application being made to set aside or vary a contract of employment by the making of an unfair contract order if the remuneration package paid or receivable under the contract during the 12 months preceding the application (or, if paid or receivable for a shorter period, that would have been paid or receivable if converted to an annual basis) exceeds $200,000 (or a greater indexed amount), and

(b) to prevent an application being made to set aside or vary a contract between partners in a partnership by the making of an unfair contract order, and

(c) to require the Commission to take into account whether or not an applicant (or person on behalf of whom an application is made) took any action to mitigate loss in assessing the amount of money payable in connection with a contract that is set aside or varied by an unfair contract order, and

(d) to require an application for an unfair contract order in relation to a contract that has been terminated to be made within a period of 12 months after termination. Further confirmation is to be found in the Minister's Second Reading speech in the Legislative Council on 11 April 2002 (Hansard, Legislative Council, at pp 1399 - 1400):

35 While it is clear that the amendments were intended to, and will, have significant effects on any application for an order made after 24 June 2002, the present case cannot be described as simply or merely as "an application for an order" made after 24 June 2002. In substance, the questions referred require consideration of the effect of s 108B on proceedings commenced prior to 24 June 2002 and, in particular, the effect of s 108B on an application seeking to amend proceedings presently on foot so as to add additional respondents, in circumstances where more than 12 months have elapsed following the termination of the contract to which the proceedings relate.

36 The High Court has recently considered many of the issues which arise from the enactment of amending legislation in Attorney-General (Qld) v Australian Industrial Relations Commission; Minister for Employment and Workplace Relations v Australian Industrial Relations Commission (2002) 76 ALJR 1502. As was emphasised by Gleeson CJ at [6]: When a statute changes the law, the effect of the change upon existing rights, liabilities, claims or proceedings is determined by the meaning of the statute.

37 Regard should also be said to the important observations of Kirby J in that case (at [74] - [77], footnotes omitted): [74] Amendment and repeal of legislation are inherent features of the representative democracy established by the Constitution. Such changes have an impact upon rights and obligations expressed in the law as it previously stood. A question commonly arises as to how pre-existing rights and duties are to be accommodated to the new law. This is the question raised by the five appeals before the Court in these proceedings. [75] The primary rule for resolving such questions is that, if the new legislative requirements are valid, the decision-maker must obey and give effect to them according to their terms. When the new law is clear there is no problem. Thus, provisions in the new law may deal with transitional cases explicitly. However, it is often suggested that the new law has failed to address transitional cases, or at least to do so clearly. In such circumstances, subject to any contrary indication, both the common law and statute have established principles to help decision-makers reconcile any continuing effect of the repealed law with the duty of obedience to the law that has taken its place.

[76] The reconciliation of the applicable rules, and the derivation of the consequences they mandate in a particular case, are often matters of doubt and uncertainty. They have resulted in divisions of opinion within this Court and differences in judicial views in federal and State appellate courts. Such differences of approach have arisen between successive members and Full Benches of the Australian Industrial Relations Commission ("the Commission"), concerning the requirements of a supervening law as it affects the powers and duties of the Commission. It now falls to this Court, in the context of the present appeals, to resolve some of the points of difference.

[77] Two important but potentially conflicting principles of statutory construction are involved. The first concerns the extent to which legislation will be construed in accordance with a presumption that, in the absence of very clear language, amendments and repeals do not alter legal entitlements that accrued before the amendment or repeal in question took effect. The second concerns the duty of a court to uphold the stated command of the Parliament, expressed in valid legislation, clearly designed to achieve important legislative objectives.

38 It is elementary that it is the provisions of the amending Act to which consideration must be first given. The parties were ad idem in the view that s 108B interfered with the right to seek relief under s 106 of the statute, and as a consequence should be strictly construed. However, on the respondents' contentions, there was to be found in s 108B a "clearly expressed" intention that the Commission must not make orders under Division 2 of Part 9 of Chapter 2 of the Act where an application for such an order has been made later than 12 months after the termination of the contract. This, on the respondents' contention, would comprehend the amended summons for relief that would issue in these proceedings if the amendment sought in the notice of motion were granted.

39 On its face, s 108B has the effect of imposing a time limitation on the filing of a summons seeking relief in respect of a particular or identifiable contract. That is, on and after 24 June 2002, a summons cannot be filed in the Court seeking relief under s 106 "in relation to a contract" terminated more than 12 months prior to the filing of the summons and there is no jurisdiction to extend the time so limited.

40 Although there are well known principles of construction which would point against giving any retrospective effect to the amendment made by s 108B, to apply that principle broadly would result in s 108B applying only to contracts terminated on and after 24 June 2002. Whilst we consider that there may be some difficulties with such a construction, it is unnecessary to deal with this matter on that precise basis as it was not in issue that both the substantive proceedings and the notice of motion seeking to join additional respondents were filed prior to the commencement of s 108B.

41 It is nevertheless necessary to consider the effect of the amending Act and especially the enactment of s 108B to identify their effect on the application to amend the summons in these proceedings. Having made that observation, consideration of the Court's powers to amend process and the rules relevant to such amendment, deflects attention from the real issue: that is, the characterisation of the application to amend the summons for relief filed in these proceedings.

42 Section 106(1) provides that "the Commission may make an order declaring wholly or partly void, or varying, any contract …if the Commission finds that the contract is an unfair contract". Subsections (2) and (3) of s 106 respectively provide some of the matters which the Court may consider in forming the view that the relevant contract was an "unfair contract", and the scope of the power to vary or avoid as provided in s 106(1). Subsection (4) provides for matters which must be considered in forming the view that the contract was an unfair contract on the basis that it was against the public interest. Subsection (5) provides for consequential monetary orders "in connection with any contract declared wholly or partly void, or varied" as is considered just in the circumstances. Subsection (6) (another amendment brought about by the Industrial Relations Amendment (Unfair Contracts) Act 2002) merely identifies a particular matter (mitigation or failure to mitigate) to which the Court must have regard in exercising the power under the section.

43 Section 107 provides for "such further order as the Commission considers appropriate" for a specific purpose. Section 108 provides that an order may be made under this Division on the application of "any party to the contract", "any person who, but for the making of such an order, would be a party to the contract", or a relevant industrial organisation.

44 The power to make orders under the legislative scheme is clearly dependent upon the power to make an order pursuant to s 106(1). That is, an order "declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract." The focus or target of the order is clearly "the contract" as defined. The term "contract" is defined in very wide terms in s 105 as meaning "any contract or arrangement, or any related condition or collateral arrangement". There is no reason to conclude that in enacting s 108B the legislature intended to cut across the scope of the expression "contract" beyond that explicitly achieved by the enactment of s 108A. The width of the expression has been consistently emphasised in the authorities: for example, Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98. It is significant that s 108B imposes a limitation by reference to "an application for an order under [the relevant] Division in relation to a contract" rather than by reference to, for example, the parties to the contract.

45 That it was by reference to the application for an order and thus to the contract or arrangement that the legislature directed attention, rather than the specific parties to any set of proceedings, is not surprising when regard is had to the long line of authority examining the persons against whom, following a declaration that the contract is an "unfair contract", consequential relief and orders may be made. An early leading authority in this area is the judgment of Barwick CJ (with whom McTiernan, Windeyer and Owen JJ agreed) in Brown v Rezitis (1970) 127 CLR 157 (at 163 - 165), examining s 88F of the Industrial Arbitration Act 1940 (the origin of s 106). His Honour, having observed that - "even if the proceedings for the variation or avoidance of the contract or arrangement must be initiated by one of the parties to the contract or arrangement, the parties to the proceedings are not necessarily limited to those parties", emphasised that "one of the purposes of the section is to deal with subterfuges" and that "the nature of the orders which may be made under sub-section (2) will of necessity cover a wide field", before concluding:

But underlying sub-s. (2) is I think a broad concept of a restitution of the parties to a situation which existed before the making of the contractual arrangement as well as in an appropriate case to make remedial provision for what has taken place or been done under the contract in the meantime. This, it seems to me, cannot of necessity and in all cases and with relation to an arrangement varied or avoided on each of the grounds in sub-s. (1) be confined to an order for payment of money by one of the parties. In some cases, as I have said, there will be persons who are not the parties to the contract but who have in fact participated in its making and there may be persons who have received money indirectly from one of the parties to the contract or who may be holding money derived therefrom for one of the parties. Consequently, I am of opinion that the power to order the payment of money is not limited to the making of an order for the payment of money by one of the parties to the contract or arrangement varied or avoided. His Honour concluded this part of the judgment by observing that the power to make orders for the payment of money were not "unlimited particularly as to the persons against whom such an order may be made."

46 The judgment of the Chief Justice continued: The problem is to ascertain the limitation by construction of the section. It seems to me that the expression "in connection with" the contract or arrangement varied or avoided provides the necessary limitation as to the nature of the orders for payment of money which can be made and as to the person against whom they may be made. … Whilst it can be said that the expression "in connection with" is of wide import, it does emphasize the need for a close connexion between the order made and the contract or arrangement varied or avoided. In my opinion, the power to make an order for the payment of money is at best no more than a power to make such an order as can reasonably be thought to have a real connexion with the making, variation or avoidance of the contract or arrangement which has been varied or avoided. It may in truth be limited to a power to make an order for payment of money which has in fact a real connexion with the making, variation or avoidance of the contract or arrangement. However, in either case it will, of course, include power to make an order for payment of money which has been paid or which was payable under the contract arrangements themselves. But, in my opinion, the power will not be limited to the making of such orders. It will extend to ordering the payment of money where the order on the larger view of the jurisdiction given by the sub-section could be considered to be appropriate to effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement.

47 In a separate but concurring judgment, Menzies J (at 167 - 168) emphasised "the section is clearly intended to confer a comprehensive power upon the Commission to go to the substance of an arrangement made for a person to perform work in an industry" and that "the central power conferred is to avoid or vary the contract or arrangement for work actually made, upon proof of one of the grounds stated". Having referred to the "ancillary power" to make monetary orders, his Honour observed:

It is to be noticed that the limitation upon this ancillary power is that the payment ordered must be "of money in connection with" the contract or arrangement avoided or varied. This requirement is readily enough applicable if the contract or arrangement be but varied, for, in such a case, there remains a contract or arrangement which can, as varied, be enforced. It is, however, more difficult to apply the words used in a case where the contract or arrangement has been altogether avoided. In such a case, what is a payment of money "in connection with" the avoided contract or arrangement? It seems to me, without exhausting the meaning of the phrase, that a payment of money in respect of (1) work done, or (2) money spent, or (3) obligations incurred, under the avoided contract or arrangement, is properly to be regarded as a payment in connexion therewith so long as the person who is ordered to make the payment is a person who was connected in some way with the making of the contract, or the work done, or the expenditure made, or the obligation incurred thereunder.

48 Menzies J concluded (at 170) that "I do not doubt that the Commission has a wide discretion in determining not only what money should be paid but by whom it should be paid".

49 It is to be observed that the Court's powers in s 106(3) and s 106(5) are consequential upon an order being made declaring the contract or arrangement wholly or partly void or varied. Moreover, the relief granted must relate to remedying the unfairness found in the contract: see Westfield Holdings v Adams (2002) 114 IR 241 and King v State Bank of New South Wales [2002] NSWIRComm 353 at [105] - [109].

50 Similarly, s 108A(1) prohibits "an application [being] made for an order under this Division if the application relates to a contract of employment" with certain specified features. Section 108A(2) again refers to a prohibition against "an application [being] made for an order under this Division by a person who is a partner carrying on a business", if "the application relates to a contract between that partner and the other persons carrying on that business in partnership" (emphasis added) where certain specified conditions are met. Section 108B(1) similarly identifies an application by reference to the relevant impugned contract as: "an application for an order under this Division in relation to a contract that has been terminated".

51 The "application" referred to in these provisions is, we consider, an application to exercise the substantive power of the Division; that is, an application for an order under s 106(1) directed to, or made in respect of, the particular contract or arrangement sought to be declared "wholly or partly void" etc pursuant to the terms of s 106(1).

52 Clearly, the original summons filed constitutes an application for an order under s 106(1) in respect of a particular contract or arrangement. It was filed well before the commencement of s 108B and the original summons and the orders sought therein are therefore not affected by the limitation period created by that section. What then, is the effect of the amendment sought to the summons? Does it constitute a separate application for an order under the Division or should it be characterised as being an amendment to an application for an order already made and with respect to which s 108B has no effect? Or, to put the matter in a slightly different way, does the amendment, in substance rather than in mere form, give rise to an application for an order declaring wholly or party void or to vary the same contract or arrangement as that identified in the original application, or does it amount to an application for an order in respect of a different contract or arrangement? 53 The summons currently names UCS Developments Pty Ltd as first respondent and Unified Communications Systems Pty Ltd as second respondent. The summons claims relief with respect to contracts of employment between the applicant and the second respondent. The first respondent is said to be specified as the applicant's employer on the applicant's 2001 group certificate. The summons alleges employment with the second respondent commencing in July 1999, the acquisition by a third party of the second respondent and a process by which the applicant came to be employed by another entity. 54 The proposed amended summons alleges that the first and second respondents "were spun out of" the fourth respondent and that the third respondent was employed by the fourth respondent. It is alleged that the fourth respondent purchased the assets of an entity within which the applicant worked and which commenced paying the applicant's salary. It is further alleged that the applicant reported to the third respondent whilst employed by the second respondent. However it is not alleged in the summons that the applicant became employed by the fourth respondent. The summons proceeds on the basis that the applicant's employment continued with the second respondent and that the fourth respondent brought about the termination of his employment with the second respondent which occurred through the actions of the third respondent as a director of the fourth respondent. The proposed amended summons still has as a substantial focus the contract of employment between the applicant and the second respondent and his employment by the first and second respondents. 55 While the proposed amended summons seeks to join additional respondents, the joinder is based upon their alleged participation in the circumstances which gave rise to the initial application for an order under s 106 constituted by the original summons. In these circumstances, the conclusion is available that the application to amend the summons and the proposed amended summons do not constitute a fresh application for an order, but are in substance an amendment to an application for an order made under s 106(1) prior to s 108B coming into effect. The amendment sought and, if granted, the resulting amended summons are therefore not precluded by s 108B.

56 There may be circumstances in which an amendment to an original application may be so substantial or its nature such as to warrant the conclusion that it could be characterised as an application for an order caught by s 108B. That is not the situation here.

57 Finally, we deal with the additional submissions received from the applicant (see paragraph [33] above). Section 78 of the Limitation Act is in the following terms: 78 Characterisation of limitation laws (1) In this section: "limitation law" means a law (including but not limited to this Act) that provides for the limitation or exclusion of any liability or the barring of a right of action in respect of a claim by reference to the time when a proceeding on, or the arbitration of, the claim is commenced. (2) A limitation law of the State is to be regarded as part of the substantive law of the State.

(3) This section extends to a cause of action that arose before the commencement of this section, but does not apply to proceedings instituted before the commencement of this section. That provision was considered by Dawson J in Commonwealth of Australia v Mewett (1997) 191 CLR 471, 507 where his Honour said: It is also necessary to refer to s 78 of the New South Wales Act which was inserted by s 3 of the Limitation (Amendment) Act 1993 (NSW). Section 78 provides that a limitation law, which is defined to include a law barring a right of action as well as a law excluding liability, is to be regarded as part of the substantive law of the State. That section cannot, however, change the effect of a limitation law. That is to say, if the law merely bars the remedy and does not extinguish the right, a statute-barred cause of action continues to exist even though the law is regarded as part of the substantive law. It does not seem to be necessary to determine which of the two categories referred to by his Honour is relevant to s 108B although it seems the former category is applicable. However, once the intention of the provision is identified as it is in the next part of his Honour's judgment (set out below) it is tolerably plain that s 78 is not relevant to the present issues: The intention behind s 78 appears to be that a limitation law of New South Wales which under the rules of private international law might otherwise not be applied in another place because it is procedural, should now be regarded as part of the substantive law and be applied in that other place.

58 Turning then to the judgment of Peterson J in Kennedy v Contract Transport Solutions Pty Ltd, his Honour there dealt with a number of issues which required consideration of the effect of s 108B of the Industrial Relations Act. His Honour's statement of the issues and his determination of them is sufficiently set out in the following extracts from the judgment: [17] It will be obvious from the foregoing that on 6 February 2002 and perhaps 7 February 2002 the contract remained on foot. On another view of the facts, it remained on foot until it was terminated on 15 February 2002. However, the parties provided in the termination agreement effected on that latter date that the termination date would be 3 February 2002. If that be the date which must be accepted, for the purposes of s 108B(1), as the date of termination then the application was filed more than 12 months thereafter and falls foul of s 108B and must be struck out.

[18] On that aspect of the argument I am not persuaded that 3 February 2002 is the relevant date. Section 108B(1) requires that an application must be made "not later than 12 months after the termination of the contract". Where the contract is demonstrated, as it was here, to have been in operation at a time within 12 months of the date of filing of the summons for relief, I consider the application was filed within time. The view I would take of s 108B(1) is that the section is not concerned with a legal fiction or, as it was termed by Mr Warren of counsel for Mr Kennedy, "a commercial effect". He submitted that the parties are perfectly free to change the commercial effect of their relationship but they cannot change the fact that the contract actually operated after that date. In my view, that proposition must be correct. Were it otherwise, parties could by an agreement in writing obviate completely the 12 month limitation period provided by s108B. On that basis the time bar argument advanced for the respondent must fail.

59 It is plain that his Honour concluded the "contract" there under consideration was still on foot less than 12 months prior to the commencement of the initiating proceedings in that matter. As such, the limitation provision in s 108B did not strictly arise. His Honour, however, dealt with the further submission of the applicant to the effect that: "[T]here [had] accrued to the applicant in February 2002 a right to commence these proceedings without any relevant time restriction and that, on the basis of the ordinary rule of construction (see for example Maxwell v Murphy (1957) 96 CLR 261) the right remained unaffected by the later amendment of the Act, given the absence of any express intention demonstrated therein that the amendment have retrospective effect."

60 Having referred to the judgment of Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261, his Honour concluded: [25] In my view that authority demonstrates that any substantive right obtained by the applicant in February 2002 to commence this action will not be affected by the retrospective operation, as here the argument by CTS must involve, of a statutory provision such as s108B in the absence of an express intention in the statute.

61 His Honour, having referred to Reich v Client Server Professionals of Australia Pty Limited (2000) 99 IR 69 and Brown v Rezitis (1972) 127 CLR 157, concluded that the term "contract" where used in the relevant initiating process should be construed by reference to the definition of that term in s 105 of the Act and that as such, the applicant in those proceedings had standing to bring the claims advanced.

62 Peterson J was not required to consider in detail the provisions of s 108B. His Honour did, however, refer to Maxwell v Murphy, which anchors the presumption against retrospective effect. That is a matter which does not fall for determination in these proceedings and as such it is unnecessary to deal with it and, particularly so, in the absence of specific submissions.

63 We should also note that the operation of s 108B and the judgment of Peterson J in Kennedy have recently been considered by Schmidt J in Bowker v Software Engineers Australia (NSW) Pty Limited [2003] NSWIRComm 213. Again, it is unnecessary to consider her Honour's judgment to resolve the issues in these proceedings. We would emphasise, as we have done, that the operation of s 108B is a question of statutory construction which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context.

64 We therefore determine that the questions referred should be answered as follows:

1. In these proceedings, yes. 2. Unnecessary to answer. 3. Yes. 4. Unnecessary to answer.

65 The respondents should pay the applicant's costs of the motion and reference. The proceedings should be remitted to a judge for the making of the formal orders for the amendment of the proceedings and for conciliation pursuant to s 109 of the Industrial Relations Act. We so order. ______________________

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