Darc Rasmussen v Eltrax Systems Pty Ltd

FOURTH RESPONDENT John Picardi

FIFTH RESPONDENT Verso Technologies Inc. (Formerly Eltrax Systems Inc.) FILE NUMBER: IRC 4276 of 2001 CORAM: Boland J Unfair contract - Interlocutory proceedings - Notice of motion - Applicant seeking leave to file amended summons for relief under s 106 of Industrial Relations Act 1996 and leave to serve summons for relief and amended summons for relief on Fifth respondent - No appearance by Fifth respondent and no notice of motion filed by Fifth respondent pursuant to r82(1) of Industrial Relations Commission Rules 1996 - Submissions opposing leave to serve Fifth respondent put by first to fourth respondents - Minor amendments only to summons - No prejudice to respondents - Leave granted to file amended summons - Lengthy delay in serving Fifth respondent - Whether applicant estopped from seeking leave to now serve Fifth respondent - Whether adequate reason for lengthy delay - Fifth respondent a foreign corporation - Whether contract in and of New South Wales - Whether contract is one whereby work is performed in any industry - Whether any judgment entered against Fifth respondent would be enforceable - Leave granted to serve summonses on Fifth respondent CATCHWORDS : Practice and procedure - Unfair contract - Interlocutory proceedings - Notice of motion - Applicant seeking leave to file amended summons for relief under s 106 of Industrial Relations Act 1996 and leave to serve summons for relief and amended summons for relief on Fifth respondent - No appearance by Fifth respondent and no notice of motion filed by Fifth respondent pursuant to r82(1) of Industrial Relations Commission Rules 1996 - Submissions opposing leave to serve Fifth respondent put by first to fourth respondents - Minor amendments only to summons - No prejudice to respondents - Leave granted to file amended summons - Lengthy delay in serving Fifth respondent - Whether applicant estopped from seeking leave to now serve Fifth respondent - Whether adequate reason for lengthy delay - Fifth respondent a foreign corporation - Whether contract in and of New South Wales - Whether contract is one whereby work is performed in any industry - Whether any judgment entered against Fifth respondent would be enforceable - Leave granted to serve summonses on Fifth respondent Foreign Judgments Act 1973 (Cth) Foreign Judgments Regulations 1992 (Cth) LEGISLATION CITED : Industrial Relations Act 1996 Industrial Relations Commission Rules 1996 r 82 r 88 r 108 Supreme Court Rules 1970 r 7(1) Bell v Macquarie Bank (No 4) (1999) 93 IR 191 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Chrysler Jeep v Canberra Star Motors (1997) 79 IR 452 Clough & Rogers v Frog (1974) 4 ALR 615 Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 Darc Rasmussen v Eltrax Systems Pty Ltd (Formerly Sulcus (Australia) Pty Ltd) and others [2003] NSWIRComm 157 Delaney v Fujian Pacific Pty Ltd [1999] NSWIRComm 56 Franklin House v ANI Corporation (unreported, SCNSW, Windeyer J, 7 November 1994) Gough & Gilmour v Caterpillar Australia (No 5) [2001] NSWIRComm 112 CASES CITED : Harding v Bourke (2000) 48 NSWLR 598 Mayne Nickless Ltd v Industrial Relations Commission of NSW & Ors [2004] NSWCA 359 McRann v UnitedGlobalcom Inc and ors [2003] NSWIRComm 131 Mitchforce v Industrial Relations Commission of NSW (2003) 57 NSWLR 212 Reich v Client Server Professionals of Australia Pty Limited (2000) 49 NSWLR 551 Solution 6 Holdings Limited & Ors v Industrial Relations Commission of NSW & Ors [2004] NSWCA 200 Solution 6 Holdings v IRC of NSW [2004] NSWCA 200 Sydney Water Corporation Ltd & Anor v Industrial Relations Commission of NSW & Ors (CA 40666/04) Verso Technologies Inc (formerly Eltrax Systems Inc) v Rasmussen and Ors (No 2) [2004] NSWIRComm 234 Verso Technologies Inc. (formerly Eltrax Systems Inc) v Rasmussen [2004 NSWIRComm 90 Western Sydney Area Health Service v Gibson (2001) 109 IR 359 HEARING DATES: 09/22/2004 DATE OF JUDGMENT: 10/15/2004

APPLICANT Ms K Nomchong of counsel Solicitor: Ms H MacAlister Carroll & O'Dea LEGAL REPRESENTATIVES: RESPONDENT Mr P Newall of counsel Solicitor: Ms K Dent Gadens Lawyers

JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J Friday 15 October 2004

DARC RASMUSSEN v ELTRAX SYSTEMS PTY LTD (FORMERLY SULCUS (AUSTRALIA) PTY LTD AND ORS

Application under section 106 of the Industrial Relations Act 1996 JUDGMENT [2004] NSWIRComm 307

1 Before the Court is a notice of motion by Darc Rasmussen, the applicant in the substantive proceedings. The motion seeks leave to file an amended summons for relief under s 106 of the Industrial Relations Act 1996 and leave to serve the summons for relief and the amended summons for relief on the fifth respondent by a date to be fixed.

2 It is to be noted that there was no appearance entered for the fifth respondent on the motion and no notice of motion filed pursuant to r 82 of the Industrial Relations Commission Rules 1996 seeking an order under r 82(1). The opposition to the orders sought in the motion was advanced by the first to fourth respondents notwithstanding the fact that one of the orders sought related exclusively to the fifth respondent. That a submission that, in the circumstances, would normally have been made by the fifth respondent pursuant to a motion under r 82, but which in this case was put vicariously by the first to fourth respondents, is quite unsatisfactory. I accept that the first to fourth respondents have an interest in the outcome of the motion relating to the fifth respondent and would be entitled to state their case in that respect. But it does not seem to me that interest extends to placing themselves in the position of the fifth respondent.

3 There was some objection by the applicant to the submissions being made by the first to fourth respondents on behalf of the fifth respondent but the objection did not extend to a contention that the Court should not countenance those submissions, no doubt because of the possible delay in a matter that, it seems to me, has been delayed long enough.

4 In the interests of expedition, therefore, I have had regard to all of the submissions by the first to fourth respondents in respect of the motion seeking leave to serve the summons for relief and the amended summons for relief on the fifth respondent. The failure, however, of the fifth respondent to take advantage of r 82 and make its own submissions without having to enter an appearance eliminates, in my view, any basis for later complaint on its part if the opposition to the motion is unsuccessful, which is the case here.

5 The applicant filed his original summons for relief on 25 June 2001. The summons was served upon Gadens Lawyers ("Gadens") on 26 June 2001 who advised on 2 July 2001 that they accepted service on behalf of Eltrax Systems Pty Ltd (formerly Sulcus (Australia) Pty Ltd), Christopher Ian Gribble and Jo-Ann Schlein, the first, second and third respondents respectively. It was common ground that the first respondent is the Australian subsidiary of the fifth respondent, Verso Technologies Inc. (formerly Eltrax Systems Inc.), a foreign corporation. It was also common ground that the second, third and fourth respondents were directors of the first respondent.

6 Gadens filed Notices of Appearance for the first, second and third respondents on 3 July 2001. The fourth and fifth respondents have, at all relevant times, been located in the United States of America. The fourth respondent was served on 18 March 2002 and a Notice of Appearance was filed on 9 April 2002.

7 The fifth respondent was served with the summons by the Sheriff's Office at its corporate offices at 400 Galleria Parkway, Atlanta, Georgia, USA on 10 July 2002. A sworn and sealed Sheriff's Entry of Service was provided. The solicitors for the applicant filed the Entry of Service in the Registry on 18 July 2002. The fifth respondent did not file a Notice of Appearance. On 3 October 2002 the applicant filed a notice of motion seeking orders in accordance with Rule 112 (4) of the Industrial Relations Commission Rules. On 19 December 2002 the fifth respondent filed a notice of motion pursuant to r 82 seeking, amongst other things, to have the proceedings as against it, set aside.

8 The two competing notices of motion were heard before Staunton J on 4 April and 2 May 2003. Her Honour handed down a decision on 21 May 2003 granting leave to proceed against the fifth respondent and ordering that the late service of the fifth respondent was effective service for the purpose of the proceedings (Darc Rasmussen v Eltrax Systems Pty Ltd (Formerly Sulcus (Australia) Pty Ltd]: (ACN 053 993 025) and others [2003] NSWIRComm 157). On 11 June 2003 the fifth respondent filed an application for leave to appeal and appeal against her Honour's decision and orders.

9 Up until the application for leave to appeal and appeal Gadens had been retained to act for each and all of the respondents. On 11 June 2003, a Notice of Change of Solicitor was filed to the effect that the fifth respondent (the appellant) was thereafter being represented by Cowley Hearne. On 23 October 2003, the fifth respondent filed a Reply to the summons for relief, the other four respondents having already filed their Replies sometime earlier. On 24 October 2003, a conciliation took place pursuant to s 109 of the Act before Staunton J but no agreement was reached and a Certificate of Failed Conciliation was issued on the same day.

10 On 14 April 2004 the Full Bench handed down its decision allowing leave to appeal and upholding the appeal that, amongst other things, service on the fifth respondent had not been effected by reason of the procedural irregularities associated with the service and the lack of evidence before the Commission as to the law relating to service of originating process in the State of Georgia, USA (Verso Technologies Inc. (formerly Eltrax Systems Inc) v Rasmussen [2004 NSWIRComm 90).

11 The applicant now seeks leave to file an amended summons and serve the summons and amended summons out of time.

12 The first to fourth respondents opposed the application for leave to file an amended summons. Apart from minor amendments, the substantive changes to the orders sought in Part A of the summons were as follows: (a) A further order varying the terms of the contract so that any monies payable under an order made pursuant to paragraph A3(a) of the Summons is converted to US dollars using the exchange rate as at the date of termination of the contract: paragraph 3(a1); (b) That the Fifth Respondent together with the other respondents be held jointly and severally liable for any money orders made: paragraph 3(c) and for any other orders made: paragraph 4A; (c) A declaration that the individual respondents (Second, Third and Fourth) are closely and culpably associated with the unfairness arising out of the contract: Paragraph 3A. 13 In terms of the Matters of Fact and Law in Part B of the summons, the changes were as follows: (a) that the Fifth Respondent, as ultimate holding company of the First Respondent, directed and controlled the majority of actions of the First Respondent; (b) that the contract or arrangement or collateral arrangement was unfair because it failed to require the First Respondent to pay the Applicant the monies which ought to have been paid to him in fairness.

14 The approach of the Commission in Court Session to matters of procedure such as applications to amend pleadings is to avoid excessive rigidity and, upon a consideration of all of the circumstances, to ensure fairness to all parties. As the Full Bench observed in Western Sydney Area Health Service v Gibson (2001) 109 IR 359 at [16], after citing Harding v Bourke (2000) 48 NSWLR 598 at 603, the Rules of the Commission should not act so as to frustrate or otherwise limit the requirements of justice.

15 In Delaney v Fujian Pacific Pty Ltd [1999] NSWIRComm 56 Glynn J considered that the relevant principles to be applied to an application to amend pleadings were those in an established line of cases commencing with Clough & Rogers v Frog (1974) 4 ALR 615 at 618 and in Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 106-7. They are as follows: (a) the proposed amendment must not be so obviously futile that it would be liable to be struck out if it had appeared in the original pleading) (i.e., it must disclose an arguable cause of action); (b) the application for leave must be made for a proper purpose; (c) the amendment must not cause prejudice to the other party that cannot be compensated by appropriate consequential orders, including an order for costs; (d) the amendment must not be contrary to the interests of the administration of justice.

16 The applicant contended that in this case all four tests were satisfied: 1 The amendments disclose an arguable cause of action in that they seek to have reviewed a contract which is unfair because, amongst other things, it deprived the Applicant of moneys which should in fairness have been paid to him for work performed. 2 The application is made for a proper purpose. It is to clarify the claim so that it quantifies the remuneration level and the exchange rate which should apply. It alleges each of the individual Respondents as being jointly and severally culpable and liable for money orders made. 3 There can be no prejudice to the Respondents. The claim has always been that the Applicant was not fairly compensated for the work he performed when the contract was terminated. The case that the Respondents have to meet in that regard is not materially different than in the original Summons. 4 The amendment is not contrary to the interests of justice.

17 The amendments sought are some three years after the filing of the original summons and are indicative of an unsatisfactory degree of tardiness on the part of the applicant. I note, however, that the amendments do not seek to introduce significant new facts and merely reformulate elements of the claims. Moreover, the respondents are yet to file and serve any evidence upon which they intend to rely and, of course, no hearing date has been set and is not likely to be set until a date well into 2005.

18 In the circumstances, I propose to grant leave to the applicant to file the amended summons for relief within seven days.

LEAVE TO SERVE SUMMONS AND AMENDED SUMMONS ON FIFTH RESPONDENT

19 The application seeking leave to serve the summons and the amended summons on the fifth respondent arises out of the fact that the summonses are out of time. The applicant, therefore, seeks orders granting an extension of time to serve the summonses on the fifth respondent. The applicant submitted the re-issuing of proceedings against the fifth respondent could not cure the prejudice to the applicant if an extension of time is granted. This is because pursuant to amendments to the Industrial Relations Act, which commenced on 24 June 2002, an application pursuant to s 106 cannot be made later than 12 months after the termination of the contract and no extension can be granted by the Commission in respect of same: s108B of the Act. If leave were not granted, the applicant could not re-issue proceedings against the fifth respondent.

20 Rule 108 of the Industrial Relations Commission Rules does not specify a particular time for service of an originating process. However, it does state that service must be "prompt". It could not be said that service three years after the originating process was filed was 'prompt'.

21 The Commission's Rules are silent on the continuing validity of an originating process and accordingly, the provisions of r 89(5) apply, such that the relevant practice and procedure of the Supreme Court of New South Wales applies. Part 7 Rule 7(1) of the Supreme Court Rules 1970 specifies that an originating process shall only be valid for one year after the date on which it is filed, unless the Court otherwise orders. The summons for relief in this matter was filed on 25 June 2001 and pursuant to the provisions of Pt 7 r 7(1), it became stale on 24 June 2002.

22 The applicant submitted that given the provisions of Pt 7 r 7(1) of the Supreme Court Rules and the general procedure contained in the Industrial Relations Commission Rules (r 88), the Commission in Court Session is empowered to grant an extension of time.

23 The applicant submitted an extension of time is a discretionary order of the Court. However, it was submitted that the Court should take into account the following factors: (a) length of the delay; (b) the reason for the delay; (c) any evidence of prejudice occasioned to the Fifth Respondent by reason of the delay; (d) whether there was any conduct of the Fifth Respondent which induced the Plaintiff to delay; (e) the prejudice to the Plaintiff if an extension is not granted.

24 Whilst it was conceded the delay was significant it was submitted the fifth respondent has been fully informed of the nature of the proceedings and the claim being made against it (and the other respondents) since the inception of the proceedings. In this respect, it was submitted: (a) When the Summons was served by the Sheriff's Office on the Fifth Respondent's offices on 10 July 2002, only 16 days had elapsed since the Summons became "invalid" under the Rules. (b) Up until 10 July 2002, the reasons for the delay include the difficulty in locating the offices of the Fifth Respondent in the United States of America and the fact that the Fifth Respondent had changed its name and the location of its registered office. The reasons also encapsulate the fact that the Applicant who is resident in the United States had undertaken to effect service of the Fifth Respondent but his work, health and other time commitments prevented him from doing so in a timely manner. (c) Since 10 July 2002, the reasons for the delay have been encapsulated in the interlocutory proceedings in this Court concerning service of the Summons upon the Fifth Respondent (where the Fifth Respondent has appeared pursuant only to Rule 82 of the Rules). (d) It is conceded that the Applicant did not pursue service of the Fifth Respondent with as much vigour as it could have. However, the interests of justice would require the Commission in Court Session to balance the prejudice to the Fifth Respondent on the day as against the prejudice to the Applicant should an extension of time not be granted. (e) There is no doubt that the Fifth Respondent was aware of the proceedings and had been informed by either the First, Second, Third and/or Fourth Respondents or by Gadens as to the fact of and the nature of the Summons prior to formal service upon it on 10 July 2002. (f) The First Respondent is the Australian subsidiary of the Fifth Respondent and given that the proceedings involved its parent company it is highly unlikely and, indeed, improbable that the First Respondent would not have taken steps to inform its parent company of the proceedings and the possible claims which may be made against the parent company. (g) Moreover, the Second and Third Respondents were directors of the Fifth Respondent and continue to be so. Accordingly, on the principle that a corporation is governed by its directors and senior management, it is open to the Court to infer that the Fifth Respondent had, for all intents and purposes, knowledge of the proceedings at an early stage.

25 In relation to prejudice, the relevant principle is that it must be significant prejudice such that it would make the chances of a fair trial unlikely: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Ms K Nomchong of counsel for the applicant submitted there was no evidence of any prejudice to the fifth respondent in relation to the extension of time by reason of the unavailability of witnesses or the destruction of any relevant documentation. However, there would be significant prejudice to the applicant if the extension was not granted because the applicant would be precluded from re-issuing proceedings by virtue of s 108B of the Act.

26 Mr P Newall of counsel for the first to fourth respondents opposed the motion on a number of grounds. The first was that the applicant was estopped from seeking the orders in the motion.

27 On 13 November 2002 the applicant filed a notice of motion in the Commission moving the Commission, inter alia, for: Further, or in the alternative, an order that the Applicant be granted leave to serve the Summons for Relief on the Fifth Respondent out of time.

28 No new or fresh evidence was advanced in the present notice of motion, it was submitted, save for an affidavit sworn by a Ms H McAlister, which added no probative evidence to the matter beyond that already brought before the Commission on the applicant's earlier notice of motion. Staunton J heard the applicant's notice of motion; not only heard it, but heard it on precisely the evidence which is now once again advanced to the Commission.

29 Mr Newall submitted the Commission expressly determined the question of leave to serve out of time, and granted the applicant leave to serve the Summons out of time. The Commission made orders including, inter alia: That the Applicant is granted leave to serve the Summons for Relief on the Fifth Respondent out of time.

30 An appeal against the decision of Staunton J brought by the fifth respondent, was heard and determined. The Full Bench upheld the appeal and set aside the judgment and, specifically, the orders: Verso Technologies v Rasmussen.

31 The respondents submitted the applicant has already once brought this application to the Commission and argued it. The applicant has already moved the Commission to grant it the leave it here seeks, to serve the summons for relief on the fifth respondent out of time, and had that application heard and determined by the Commission. The applicant was granted the leave it again seeks, indeed had the order it now seeks made, at first instance. Then that decision was reversed on appeal and the order granting leave to serve out of time quashed.

32 Counsel for the respondents submitted the Full Bench quoted the fifth respondent's submissions in its costs decision Verso Technologies Inc (formerly Eltrax Systems Inc) v Rasmussen and Ors (No 2) [2004] NSWIRComm 234 that, "There is no prospect of any of the issues finally decided by the Full Bench arising again in these proceedings on the same set of facts", without demur. That is the position. A final decision has been made on the question of serving the fifth respondent out of time and it simply cannot be agitated again. The cause of action - that is, the cause that the applicant seeks to serve the fifth respondent out of time - has been finally determined. That is the more so as the same facts, the same evidence, is here relied on.

33 It was submitted, however, that even if the Commission did not regard the applicant as being estopped in a formal sense, the Commission would not regard it as a proper exercise of the discretion to grant an indulgence which had already been sought from the Commission before on grounds which were found wanting. That is the more so when the applicant comes before the Commission unabashedly on the same evidence it brought before; there is no doubt that the applicant is simply asking that the same question be tried again. The discretion should not be exercised so as to encourage parties to, when given a decision they do not like, simply approach another member of the Commission with the same evidence, seeking a different decision, which is what has happened here.

34 The second proposition put by counsel for the respondents was that not only was the summons out of time but it was also stale: Part 7 r 7 of the Supreme Court Rules. Whilst the Commission in Court Session may order otherwise, the onus was on the applicant to show that there is 'adequate reason' for the Court to exercise its discretion in the applicant's favour: Franklin House v ANI Corporation (unreported, SCNSW, Windeyer J, 7 November 1994).

35 It was submitted that in considering any exercise of its discretion regarding an extension of time the Court would take into account there was no proper effort to serve in time and the reasons advanced here by the applicant for an exercise of discretion are not sufficient. Mr Newall submitted that it appeared the solicitors acting for the applicant preferred to allow the applicant to seek to effect service. The applicant had not been diligent in doing so; for example, nothing was done - and no reason for that is given - for a period of over three months between March and June 2002; that unaccounted delay was identified in the decision of Staunton J. It can be taken, it was submitted, that solicitors, in entrusting the service of the document to the applicant personally, would necessarily have advised him that it retained its validity for only a year. Armed with that knowledge, the applicant, nevertheless, permitted the initiating process to become invalid by passage of time.

36 In these circumstances, it was submitted, the position is similar to that in Franklin House and, as in that matter, the Court ought not indulge the applicant. The initiating process, therefore remains invalid as against any respondent not served to date. An invalid originating process cannot be validly served.

37 The respondents' third proposition was that in order to consider exercising a discretion to extend time, the Commission would have to be satisfied - the onus again falling on the applicant - that it was a proper exercise of discretion to permit the applicant to proceed against the fifth respondent, which is a foreign corporation. That is because the grant of leave to serve would be inappropriate where it is, prima facie, unlikely that leave to proceed, which is a further exercise of discretion, would be granted. In this matter, it was submitted, such leave to proceed would, prima facie, not be granted: Bell v Macquarie Bank (No 4) (1999) 93 IR 191 at 201-2; Gough & Gilmour v Caterpillar Australia (No 5) [2001] NSWIRComm 112.

38 Mr Newall submitted the alleged contract with the fifth respondent was not a contract under which work was performed in an industry 'in and of' New South Wales. Neither was the alleged contract negotiated in New South Wales; nor was it in furtherance of work done in a NSW industry (Bell at 204); nor does it have a territorial connection with NSW (Bell No 4) at 205.

39 Counsel submitted the case against the fifth respondent was said to arise, first, from a stock option agreement said to be in place between the applicant and the fifth respondent and said to be collateral to a contract under which work was performed. That stock option scheme is pleaded to be a contract. If that is so then, as a contract collateral to or related to the contract whereby work was performed, it is not within jurisdiction: Solution 6 Holdings v IRC of NSW [2004] NSWCA 200 at [66]. In any event, it was submitted, the stock option scheme is not a contract whereby work was performed in an industry, and, accordingly, the allegedly related or collateral contract is outside the jurisdiction: Solution 6.

40 Next, it was submitted, it appeared to be pleaded that the fifth respondent had some sort of complicity in alleged conduct of the first respondent, being that the applicant was not paid certain entitlements. That proposition is pleaded to proceed on the basis of unfairness characterised in Reich v Client Server Professionals of Australia Pty Limited (2000) 49 NSWLR 551. That the fifth respondent is pleaded to be liable on such a basis weighs very much against, not for, the exercise of any discretion in the applicant's favour, given the views expressed by the Court of Appeal in relation to Reich.

41 Finally, it was submitted for the respondents that it further stands against any exercise of the discretion in favour of the applicant to extend time that the United States of America is not a country which affords reciprocity of treatment to Australian judgments, and is not, therefore, a country to which Part 2 of the Foreign Judgments Act 1973 applies. In other words, even if any judgment were entered against the fifth respondent it would not be enforceable. The Commission's time and resources and the costs - which would be substantially increased for reason of adding a new respondent at all, let alone a foreign corporation - accruing to the parties would be wasted. It was submitted the discretion to extend time should not be exercised when that is the position even if a judgment were entered against the party now sought to be served.

42 I do not consider the applicant is estopped from seeking leave to serve the fifth respondent. The proceedings before Staunton J were interlocutory proceedings and the subsequent appeal dealt with an interlocutory judgment and orders. That the Full Bench on appeal considered her Honour erred in making the orders she did, is no bar to the applicant either commencing fresh proceedings against the fifth respondent or, alternatively, seeking leave to extend time so that he might correct the earlier errors relating to service and at the same time amend the summons.

43 Staunton J originally granted leave to extend time to the applicant to serve the fifth respondent. The Full Bench set aside all of the orders made by Staunton J, including that relating to the extension of time. But there is no basis for considering that in doing so the Full Bench was precluding the applicant from re-issuing proceedings. The only reason, it seems to me, that the Full Bench set aside the extension of time order was that it was the tidiest option given the other procedural irregularities, and thereby avoided pre-empting what the applicant might later choose to do.

44 The respondents contended that the applicant had to provide an adequate reason as to why the Court should regard the summons as valid (i.e., not stale given that more than one year has elapsed) and why an adequate extension of time should be granted. I consider the respondents are correct in this submission. The Court, however, accepts the applicant's reasons in these respects. Whilst the Court has some concern about the delay and why it occurred, there is ultimately no prejudice to the fifth respondent if the Court were to regard the summons as valid and extend time for service. In this respect I note what Staunton J had to say at [78] regarding the application to extend time: [H]aving regard to the history of these proceedings particularly the conduct of the parties, and most notably the conduct of the Fifth Respondent that I have already referred to, I am satisfied that the Applicant should be granted an extension of time until 10 July 2002 in which to serve the Fifth Respondent. Further, there is no doubt that there would be an injustice visited upon the Applicant should such a discretion not be exercised in favour of him. Further, the extension of time that is being considered is some sixteen days, which in all the circumstances is not excessive in my view. Finally, and most persuasively, it has not been submitted at any time in the proceedings before me that the Fifth Respondent would suffer any prejudice if this application for leave to proceed and serve out of time was granted, nor has it been suggested that the substantive issue in the originating Summons involving the Fifth Respondent is a futility.

45 I take no different view to Staunton J, and whilst her Honour at the time was considering an extension of only 16 days, it must be borne in mind that since the time Staunton J considered the matter, the issue of service was not something over which the applicant had any control until the judgment on appeal and the Full Bench's costs orders were made. The applicant then moved with reasonable haste to file the motion before me seeking leave to extend time to serve the fifth respondent.

46 As I have already stated, the respondents contended that given it was unlikely the Court would grant leave to the applicant to proceed against the fifth respondent, in the exercise of its discretion the Commission should refuse leave to extend time. It was submitted for the respondents the question is whether it is proper to put an overseas party 'to the time, expense and trouble of defending the claims'. The test for joinder of a foreign party is whether there is 'a good arguable case' against that party: Gough and Gilmour (No 5); Bell (No 4).

47 The respondents contended: 1 The alleged contract with the fifth respondent is not a contract under which work was performed in an industry 'in and of' New South Wales. 2 The stock option scheme alleged to have been in place between the applicant and the fifth respondent was not a contract whereby work is performed in any industry and is, therefore, not within jurisdiction: Solution 6 . 3 The proposition that the fifth respondent had some sort of complicity in alleged conduct of the first respondent, being that the applicant was not paid certain entitlements, is a proposition based on one of unfairness as characterised in Reich v Client Server Professionals. That the Fifth Respondent is pleaded to be liable on such a basis weighs very much against, not for, the exercise of any discretion in the applicant's favour, given the views expressed by the Court of Appeal in relation to Reich .

48 Relying on the judgment of the Full Bench in Chrysler Jeep v Canberra Star Motors (1997) 79 IR 452, Peterson J observed in McRann v UnitedGlobalcom Inc and ors [2003] NSWIRComm 131 at [58]: It is not necessary for a contract to be one exclusively "in and of New South Wales", that is, having no connection with some or any other place. To come within the court's jurisdiction it is sufficient that it have "a relevant and sufficient connection" with New South Wales.

49 The issue here, then, is whether the contract or arrangement between the applicant and the fifth respondent has a relevant and sufficient connection with New South Wales. It is asserted in the summons for relief and the amended summons that the applicant was an employee and/or performed work pursuant to contracts with the first respondent, a corporation with its registered office in New South Wales. Further, that the first respondent is the Australian subsidiary of the fifth respondent and that the second, third and fourth respondents are directors of the first respondent.

50 The summonses also allege that: On or about 31 March 1998 the Fifth Respondent and the Applicant entered into a contract or arrangement or collateral arrangement, being a share option scheme, referred to as Eltrax Systems, Inc., 1998 Stock Incentive Plan ("the Plan") whereby the Applicant was granted certain share options in the Fifth Respondent which would vest over time and be exercisable by the Applicant at those later times.

51 In the context of whether the Stock Incentive Plan is a contract or arrangement or collateral arrangement in and of New South Wales, I have no other information before me other than what I have summarised above. Consequently, I am in no position, at this stage of the proceedings, to determine this issue and it is, therefore, a matter to be dealt with in the wider proceedings if those proceedings take place.

52 Similarly, whilst it was contended that the stock option scheme was not a contract whereby work was performed in any industry, in the absence of any relevant evidence I am in no position, in these interlocutory proceedings, to determine that issue.

53 As to the Reich point, the observations by Spigelman CJ at [93] in Mitchforce v Industrial Relations Commission of NSW (2003) 57 NSWLR 212 and Handley JA in Solution 6 Holdings Limited & Ors v Industrial Relations Commission of NSW & Ors [2004] NSWCA 200 at [162] to [164] could not, with respect, even be regarded as obiter dicta because in neither case was it necessary to consider whether a contract can be found to be unfair because of conduct which is in breach of contract. As Mason P indicated in Mayne Nickless Ltd v Industrial Relations Commission of NSW & Ors [2004] NSWCA 359 at [67], the scope and correctness of Reich will be addressed by the Court of Appeal in Sydney Water Corporation Ltd & Anor v Industrial Relations Commission of NSW & Ors (CA 40666/04). Accordingly, I do not propose to refuse leave to extend time to serve the fifth respondent on the basis of views thus far expressed by the Court of Appeal in relation to Reich.

54 The final proposition put by the respondents for refusing leave was that the United States of America is not a country which affords reciprocity of treatment to Australian judgments, and is not, therefore, a country to which Part 2 of the Foreign Judgments Act 1973 (Cth) applies. In other words, it was submitted, even if any judgment were entered against the fifth respondent it would not be enforceable.

55 The superior courts of the US are not listed in the Schedule to the Foreign Judgments Regulations 1992 (Cth) and so there is no provision for Australian judgments to be automatically registered with a US court and treated as a judgment of that court. That is not to say, however, any judgment of the Industrial Relations Commission of New South Wales in Court Session, as a superior court of record, would not be recognised and enforced under the law of the relevant US state, which in this case would appear to be Georgia. Whether that would be so I do not know at this stage and it may be a relevant issue for evidence in any proceedings relating to leave to proceed against the fifth respondent if no appearance is entered, or in the substantive proceedings.

56 The Court makes the following orders: 1 For the purpose of Part 7 Rule 7(1) of the Supreme Court Rules 1970 the Summons for Relief filed by the applicant in these proceedings on 25 June 2001 is valid. 2 Leave is granted to the applicant to file the Amended Summons for Relief within seven days of the date of this judgment; 3 Leave is granted to the applicant to serve the Summons for Relief and the Amended Summons for Relief on the fifth respondent by 4.00 pm on 8 November 2004; 4 Costs are reserved. _______________________

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