Field v Jenolan Caves Reserve Trust

Industrial Relations Commission (NSW)|2007-08-22|Before: Walton J, Boland J, Staunton J, Mr J, Schmidt J

CITATION: Field v Jenolan Caves Reserve Trust [2007] NSWIRComm 242

FIRST APPELLANT Archer Field

SECOND APPELLANT Celia Field

THIRD RESPONDENT Director-General, Department of Environment and Conservation

FOURTH RESPONDENT The Crown in the Right of the State of New South Wales

CORAM: Walton J Vice-President; Boland J; Staunton J

Appeal - Leave to appeal - Unfair contract - Working director excluded by receiver from performing work in relation to management and operation of a company - Whether application for relief made within prescribed time - Whether time for making application for relief to be calculated from the time working director excluded from performing work or from a later time when relevant contract terminated - Application of s 108B of Industrial Relations Act 1996 - Appeal upheld CATCHWORDS: Unfair contract - Appeal - Leave to appeal - Working director excluded by receiver from performing work in relation to management and operation of a company - Whether application for relief made within prescribed time - Whether time for making application for relief to be calculated from the time working director excluded from performing work or from a later time when relevant contract terminated - Application of s 108B of Industrial Relations Act 1996 - Appeal upheld

LEGISLATION CITED: Corporations Act 2001 Industrial Relations Act 1996 s 105, s 106, s 108B, s 108B(1), s 108B(3), s 154, s 187, s 188

Ex parte V. G. Haulage Services Pty. Ltd. and another; Re The Industrial Commission of New South Wales and another [1972] 2 NSWLR 81 Field & Anor v Jenolan Caves Reserve Trust and Ors [2007] NSWIRComm 131 CASES CITED: Hawkesbury Development Co. Ltd. v Landmark Finance Pty. Ltd. and Others [1969] 2 NSWLR 782 Legal & General Assurance Society Limited v Stock (1993) 49 IR 464 Mitchforce Pty Ltd v Industrial Relations Commission of New South Wales and others (2003) 57 NSWLR 212 Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378

APPELLANT Mr J W Shaw QC Solicitors: The Peoples Solicitors

LEGAL REPRESENTATIVES: RESPONDENT Ms E Brus of counsel Solicitor: I V Knight Crown Solicitors

CORAM: WALTON J, Vice-President BOLAND J STAUNTON J

Application by Archer Field and Another for leave to appeal and appeal from a decision of Justice Schmidt given on 4 June 2007 in Matter No IRC 190 of 2007

1 In February 2007, Archer Field ('first appellant') and Celia Field ('second appellant') commenced proceedings under s 106 of the Industrial Relations Act 1996. The respondents named in the summons for relief were Jenolan Caves Reserve Trust, Tourism New South Wales, Director General of the Department of Environment and Conservation and the Crown in the Right of the State of New South Wales. 2 In an amended summons filed on 1 March 2007, the appellants sought an order declaring the overall arrangement between the first appellant and/or the second appellant and the respondents whereby the first appellant performed work in an industry, by administering and operating Jenolan Caves House and related businesses, was unfair, harsh or unconscionable or contrary to the public interest. Other orders were sought in relation to 'collateral arrangements or related conditions' constituted by the Jenolan Caves Reserve Plan of Management, a lease of Jenolan Caves House and a services agreement. Orders of variation of the overall arrangement were sought, as well as a number of declarations pursuant to s 154 of the Act, and money orders. 3 On 23 April 2007, the appellants filed a notice of motion, seeking various orders, including an order under s 108B of the Act, for extension of the time for filing the summonses for relief. In Field & Anor v Jenolan Caves Reserve Trust and Ors [2007] NSWIRComm 131, a judgment given on 4 June 2007, Schmidt J declined the application to extend time. Pursuant to ss 187 and 188 of the Act the appellants have applied for leave to appeal and, if leave is granted, to appeal her Honour's decision. Background facts

4 Schmidt J described the parties' respective cases at [4] and [5] of her Honour's reasons for decision: [4] Mr Field's case was that he was a working director of Jenolan Caves House Resort Pty Ltd ('JCHR'), the lessee, operator and manager of Jenolan Caves House. It was claimed that these proceedings had been brought within time, the arrangement under which he worked having come to an end in June 2006, when JCHR's lease of Jenolan Caves came to an end. These proceedings, brought in February 2007, were therefore commenced within the statutory 12 month limitation period. In the alternative, it was argued that if the arrangement had come to an end in December 2005, the Court should exercise its discretion to grant an extension of time. [5] The respondents' case was that the asserted arrangement came to an end when Mr Field was excluded from involvement with the operation of Jenolan Caves House, with the appointment of a receiver to JCHR in December 2005. Accordingly, the proceedings were brought out of time. It was also argued that the necessary 'exceptional circumstances' for an extension of time under s 108B(3) had not been established on the evidence. It followed that there was no basis upon which any discretion could be exercised in Mr Field's favour. 5 At [7] her Honour noted the respondents accepted that for the purpose of determining the extension of time application, the existence of the arrangement, the subject of the proceedings, had to be accepted. 6 Her Honour found at [14] that Mr Field's involvement as a working director of JCHR, 'administering and operating' the hotel at Jenolan Caves House and the associated businesses conducted there by JCHR, came to an end on 10 December 2005, when Mr Billington, one of the receivers, gave him a letter dated 9 December 2005. The letter advised Mr Field that as a consequence of the appointment, the receivers and managers took full responsibility for the management and operations of the company and the control of its assets. The letter indicated to Mr Field that without the permission of the receivers and managers he was not permitted to undertake any of the following: 1. Place any orders for goods or services, unless they have been duly authorised by the Joint & Several Receivers & Managers. 2. Accept delivery of any goods or services, unless they are the subject of a duly authorised order.

Supply any services to customers or dispatch any goods to customers.

Enter into any commitments with suppliers or customers.

Make any compromise or arrangement with any debtor or creditor of the company, including the allowance of any setoffs.

Incur any debts or liabilities in the name of the company or pledge its assets.

Remove any assets of the company from the company's custody or control.

You are required to secure all assets against theft under lock and key, and to ensure that no assets of the company are removed from the company's custody.

The Joint & Several Receivers & Managers will not be responsible for payment for goods and services supplied or other debts incurred after the appointment unless the orders have been duly authorised by the Joint & Several Receivers & Managers in writing.

Every invoice, order for goods, business letter or similar document shall have the words "(Joint & Several Receivers & Managers Appointed)" immediately following the name of the company.

All monies received are to be forwarded to Grant Thornton or, if so instructed, paid to the credit of a bank account styled Jenolan Caves Resort Pty Limited (Joint & Several Receivers & Managers Appointed). 7 The letter also stated: 14. Whilst the directors' power of control over the operations of the company is suspended, the appointment does not remove the statutory responsibilities of the directors i.e. the holding of annual general meetings, the preparation and lodging of accounts, the filing of annual returns and the maintenance of registers. The Joint & Several Receivers & Managers will make available such information as is necessary to enable the directors to perform the above functions.

All known breaches of the law or regulations (eg occupational health and safety, environmental, hygiene, fire, etc.) are to be notified to the Joint & Several Receivers & Managers in writing immediately.

These responsibilities should be communicated to all staff members. 8 On 12 December, in a further letter, Mr Field was told by Mr Billington that:

You are no longer an employee of the Company but your role as a director of the company continues. To that end I provided you at our meeting with a copy of the Standard Notification of Appointment and the Request for the Provision of a Statement of Affairs. I also confirmed that your letter of termination as an employee had been faxed to you the previous evening. 9 Thereafter, as her Honour noted at [14], JCHR's business, including the administration and operation of the hotel and other businesses, continued under the direction of the receivers, but without Mr Field's involvement, until July 2006, when the lease came to an end. 10 At [15] Schmidt J noted: Mr Field's statutory obligations as a director of JCHR continued. As was submitted for Mr Field, this was because the appointment of a receiver does not displace the company officers' internal administrative structure and duties (see Hawkesbury Developments Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWLR 782), so that directors retain their statutory responsibilities for the company placed into receivership. On the evidence, Mr Field attended to those obligations. That is not, however, what arises for consideration in these proceedings, at this point. First instance decision

11 Schmidt J described the question to be resolved as being the time at which the arrangement with the respondents, under which Mr Field claimed he worked and which he sought to attack in the proceedings as having been unfair, came to an end. In this respect her Honour found that on 10 December 2005, Mr Field was entirely removed from the work he had performed in JCHR's business to that point, at Jenolan Caves; that JCHR's employees thereafter reported to the receivers, who continued to conduct the business. Her Honour also found that Mr Field had ongoing responsibilities as a director of the company and noted his claim to have had other responsibilities under a guarantee he had earlier provided, to which he also endeavoured to attend. Her Honour held, however, that the work that the arrangement required him to perform in administering and operating Jenolan Caves House and the associated businesses conducted there, came to an end with the appointment of the receivers, when they excluded him from performing that work ([16]). 12 At [18]-[19] of her reasons for decision Schmidt J found that as a result of the appointment of the receivers and the actions they took, Mr Field was precluded from performing any further work in connection with the business JCHR conducted at Jenolan Caves: [18] The result of the appointment of the receivers and the actions they took, was to preclude Mr Field from performing any further work in connection with the business JCHR conducted at Jenolan Caves. While JCHR's lease and the business it conducted thereunder continued until June 2006, Mr Field no longer had any involvement. [19] It appears from the amended summons that the arrangement Mr Field seeks to vary flowed from the lease between JCHR and the second respondent, the Tourism Commission of New South Wales; a service agreement between JCHR and the Jenolan Caves Reserve Trust; and the Jenolan Caves Reserve Plan of Management. Mr Field was not himself a party to any of these. His involvement in the arrangement flowed from the work he performed in the business JCHR conducted at Jenolan Caves House, as a director of JCHR. It was JCHR which was a party to the lease and the service agreement. While Mr Field remained a director of JCHR, his control of JCHR ceased with the appointment of the receivers, as did his involvement in JCHR's operations. 13 At [20] her Honour found that the arrangement came to an end when Mr Field's involvement with JCHR's operation of Jenolan Caves House was brought to an end; the work Mr Field had performed under the arrangement ceased, even though the lease and the business conducted by JCHR under it continued. 14 At [21] Schmidt J held that the arrangement Mr Field claimed existed was not one which itself had any legally enforceable basis, so far as Mr Field was concerned, flowing as it did from various transactions or contracts to which he was not himself a party. Her Honour said it was rather the company of which he was a director that had enforceable legal rights in relation to those transactions or conditions. It was further held that although the lease to which JCHR was a party continued until June 2006 that did not alter her Honour's conclusion because Mr Field was not a party to the lease and did not claim to have any rights or obligations under the lease. At [22] her Honour stated: [22] Given the claims advanced and the material relied on, I am satisfied that it could not properly be concluded that the arrangement whereby Mr Field worked at Jenolan Caves House in JCHR's business continued, despite the steps taken by the receivers in December 2005, to exclude Mr Field from JCHR's business operations. 15 Her Honour proceeded then to deal with the question of the extension of time and in that respect stated that the issue was whether the circumstances were such as to warrant the conclusion that they were 'exceptional', that being the prerequisite to the exercise of the discretion granted by s 108B. Schmidt J stated that the issue fell to be resolved by considering the reasons why the proceedings came to be brought out of time and whether they might properly be considered to be 'exceptional', justifying the late application. The section, her Honour said, was not concerned with whether or not the claims sought to be advanced in the proceedings, might properly be characterised as 'exceptional' ([30]). 16 Her Honour concluded that the onus that fell on Mr Field had not been met. Schmidt J noted that an extension was permitted only 'if the applicant satisfies the Commission that there are exceptional circumstances justifying the making of the late application'. Her Honour noted that Mr Field sought to discharge the onus upon him by the explanation that whilst he might have received advice about s 106 of the Act in 2004, the advice he received after the termination of the arrangement in December 2005, did not alert him to the fact that he had rights under the section, which could be exercised. Further, that Mr Field was then concerned with commercial considerations and it was not until June 2006 when the lease was terminated, that he had time to further pursue his legal rights. It appeared to her Honour that Mr Field did nothing further to pursue such advice until the following January, with the result that he then took steps to initiate these proceedings, which were brought in February 2007. 17 At [33] Schmidt J indicated that she could find nothing 'exceptional' about the circumstances that would justify the late application. Her Honour continued: [33] An extension of time has frequently been granted in cases where there has been a failure to bring an appeal within time, because of a mistake made by a legal advisor. That there has been such a mistake made here, is not clear, of course. The existence of the alleged arrangement is denied; the Court's jurisdiction has been challenged by the respondents and it must be accepted that the claim which has been brought, has features which takes it out of the ordinary. Nevertheless, had there been a general discretion to extend time available to be exercised here, on balance I would have been inclined to exercise it in Mr Field's favour, in the circumstances in which he comes before the Court. (See the discussion in Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 at 5-6).

[34] I cannot, however, find anything 'exceptional' about these circumstances, as Haylen J was able to find in Burden . It was not suggested that his Honour erred in the approach he adopted to the construction of s 108B. I respectfully agree with it. Section 108B does not involve merely a consideration of the type of factors discussed in Skelly and the cases which have applied it. Mr Field had to show that the circumstances in which the application came to be made late were exceptional - that is unusual or extraordinary, so as to justify the late application. Given Mr Field's explanation of those circumstances, I am unable to conclude that he has satisfied the onus which fell upon him under the section and accordingly, the application must be declined.

18 The grounds of appeal were as follows: (1) Her Honour should have held that the contract or arrangement (including the lease and other relevant ancillary or collateral documents) whereby work was performed in an industry endured beyond the period of alleged termination, so that unfairness subsisted during the 12 months limitation period and beyond. It follows that no question of discretionary extension of time arose.

(2) In the alternative, there were valid and appropriate grounds to warrant, in the interests of justice, the extension of time and hence to allow the application to proceed in accordance with law.

(3) The purported exercise of discretion to decline any extension of time was vitiated by the trial judge:

(d) ignoring the principles applicable to the question of extension of time - including a liberal and beneficial approach and the absence of any prejudice to the respondents if time were extended. (4) Mr. Field (the first applicant) was never excluded from the arrangement until the termination of the (allegedly) unfair harsh and unconscionable lease and other associated arrangements. He continued as lessee, company director and guarantor until any arguable limitation period. He was a party to an ongoing arrangement.

(5) The Billingham "exclusion" did not displace Field from the ongoing arrangement. Certainly the lease remained binding as did the other associated documents. And he remained a guarantor of relevant leases (judgment paragraph 9)

(6) Field's obligations of a director of the company remained in place (judgment, paragraph 8)

(7) The on-going responsibilities on Field were clear: see paragraph 10 (14) of the judgment.

(8) The termination of employment was presumptively invalid (see paragraphs 12 and 13 of the judgment) but the ongoing status as a director of the company is indisputable: (paragraph 12 of the judgment).

(9) Her Honour is in error in referring to Mr. Field's non-involvement post receivership (paragraph 14 of the judgment) whilst it is clear, relevantly that statutory obligations continued (paragraph 15 of the judgment). See also paragraph 16 thereof. He had demonstrable albeit altered, involvement.

(10) The appointment of a receiver or administrator does not sever pre-existing contracts or arrangements.

(11) Her Honour's conclusion (paragraph 19 pf the judgment) that Mr. Field was not "a party" to various related and or collateral documents and arrangements: (a) defies reality

(d) overlooks and fails to mention the case law and academic commentary in relation thereto. (12) It was a fundamental error to conclude that Mr. Field's involvement with Jenolan Caves House came to an end when the receiver was appointed. On the contrary he had ongoing work relationships post-receivership.

(13) It was an error of law to conclude that Mr. Field was not a party to the arrangement impugned (including the lease.)

(14) Whilst Haylen J may have been correct in finding, as we understand it, that the test as to claims beyond the 12 month limitation must be "out of the ordinary", we submit that the instant case meets that test on the basis that as Mr. Field has testified: "After the receiver was appointed:

b) I continued to act in a responsible way and carry out any relevant or necessary duties as a director of JCR after the appointment of the receiver and up until 27 June 2006;

c) I continued to act in a responsible way and carry out my duties as a guarantor of JCR as required by the trust as a guarantor from 30 December 1994, until 27 June 2006;

d) I acted in a responsible way from 2003 until 2006 while the amended Jenolan Plan of Management was being considered, attending meetings when the amended Plan of Management was being drafted and sought to obtain access to the drafts and completed documents;

e) I was responsible for the St George Bank loans provided to JCR established in 1997 to restore Caves House that were secured against the Jenolan lease until 27 June 2006 as one of the guarantors required by the bank;

f) All funds paid to set up the business by me (and my wife) were exposed and at risk until the date of termination of the Jenolan lease, namely 27 June 2006. Accordingly I was a party to the 99 year Jenolan lease and the contract or arrangement which was in place during the period of the Trust Administrator and receivership of Caves House, including the provision of accommodation and hospitality, until 27 June 2006." (15) Her Honour erred in holding that the court lacked a general discretion in the extension of time in these cases.

(16) Her Honour was right to hold that this case has feature which "takes it out of the ordinary". And this was a sufficient and appropriate basis to extend time for filing.

(17) The judgment below is a triumph of procedural form over substance and industrial justice.

19 We propose to grant leave to appeal. Our consideration of the judgment at first instance has led us to conclude Schmidt J erred in finding the appellants' summons for relief was out of time pursuant to s 108B(1) of the Act. It is appropriate that we grant leave to appeal to rectify that error. Moreover, given the issues raised by the appeal are relatively novel we consider the appeal has wider implications for the jurisprudence of the Commission than simply the settlement of the issues between the parties.

20 The motion by the appellants to extend time was expressed to be "to the extent necessary". In other words, the appellants' primary position was that they were within time in making their application for relief under s 106 of the Act, but if they were wrong in that regard then the Court should grant an extension of time pursuant to s 108B(3). The onus fell on the appellants to make out their position. 21 It is important to understand the timeline. Her Honour found that the arrangement contended for in the summons for relief came to an end when Mr Field's involvement with JCHR's operation of Jenolan Caves House was brought to an end. That is, 10 December 2005. The proceedings were commenced under s 106 on 15 February 2007. Section 108B(1) requires that an application for an order under s 106 in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. Contract, of course, is defined in s 105 to include an arrangement. In her Honour's view the appellants' application was out of time. However, the appellants contended that the arrangement did not come to an end until 27 June 2006 when JCHR's lease of Jenolan Caves came to an end. Further, it was contended by the appellants that even if they were out of time under s 108B(1), the Court should grant an extension of time under s 108B(3) because there were exceptional circumstances justifying the making of the late application. 22 Section 108B is in the following terms: 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, subject to subsection (3), to accept an application made after the time prescribed by subsection (1). (3) The Commission may accept an application made within 3 months after the time prescribed by subsection (1) if the applicant satisfies the Commission that there are exceptional circumstances justifying the making of the late application. 23 It would appear that the arrangement at the centre of the controversy consisted, at least in part, of: a lease between JCHR and the second respondent, the Tourism Commission of New South Wales; a service agreement between JCHR and the Jenolan Caves Reserve Trust; and the Jenolan Caves Reserve Plan of Management. At [7] of Schmidt J's reasons for decision her Honour noted that the respondents accepted that for the purpose of determining the extension of time application, the existence of the arrangement was to be accepted. 24 Her Honour noted that Mr Field was not himself a party to any of the pleaded contracts or arrangements and that it was JCHR that was a party to the lease. Her Honour found that the first appellant's involvement in the arrangement flowed from the work he performed in the business JCHR conducted at Jenolan Caves House, as a director of JCHR and that whilst Mr Field remained a director of JCHR, his control of JCHR ceased with the appointment of the receivers, as did his involvement in JCHR's operations. 25 As we earlier stated, her Honour held that it could not properly be concluded that the arrangement whereby Mr Field worked at Jenolan Caves House in JCHR's business continued after December 2005 and, consequently, it became necessary for her Honour to consider whether it was appropriate to grant an extension of time pursuant to s 108B(3) of the Act. 26 It is apparent that her Honour took the view that on the evidence available to her, as a consequence of the receiver's instructions in the letter dated 9 December 2005, Mr Field performed no further work in connection with the administration and operation of Jenolan Caves House or the associated businesses from 10 December 2005. That is to say, her Honour's findings must be understood to mean that Mr Field did not perform any further work under the pleaded arrangement, which included the lease, the service agreement and the Plan of Management, from 10 December 2005 onwards. The work specified in the summons for relief was "administering and operating Jenolan Caves House and related businesses". 27 In the summons' summary of facts and law it was stated: On 9 December 2005, the St George Bank appointed Grant Thornton accountants as receivers and managers of Jenolan Caves Resort Pty Limited and the first applicant was subsequently excluded from the performance of further work with respect to Jenolan Caves House and associated businesses. 28 In cross-examination in the interlocutory proceedings before her Honour, Mr Field conceded that he had no "day-to-day" or "hands on" role in the management of Jenolan Caves House after 10 December 2005. 29 It is quite clear that on and from 10 December 2005, Mr Field performed no further work as a "working director" in relation to the day-to-day management of Jenolan Caves House either under the lease, the service agreement or the Plan of Management. He was, as he stated in his summons for relief, "excluded from the performance of further work with respect to Jenolan Caves House and associated businesses". 30 Mr Field claimed, however, that as a director of the corporate lessee and the guarantor of its debts, he continued to "work" up until at least 27 June 2006 when the lease came to an end in order to fulfil his obligations as a company officer under the Corporations Act 2001 and in his role as guarantor. As her Honour noted at [15], the appointment of a receiver does not displace the company officers' internal administrative structure and duties (see Hawkesbury Development Co. Ltd. v Landmark Finance Pty. Ltd. and Others [1969] 2 NSWLR 782), so that directors retain their statutory responsibilities for the company placed into receivership. These obligations include maintenance of the company's registers, the holding of meetings, the lodgement of returns and the payment of or provision for taxation liabilities. Moreover, directors are entitled to commence proceedings in the name of the corporation challenging the validity of the receiver's appointment. Schmidt J found that Mr Field attended to those obligations and did challenge the validity of the appointment of receivers. 31 In relation to Mr Field's continued performance of his statutory and guarantor obligations as a director of the corporate lessee, Schmidt J took the view that although Mr Field attended to those obligations, that issue did not arise for consideration. The reason, it seems, her Honour may have taken this view was that the arrangement pleaded in the summons was one whereby the appellant performed work in an industry, "specifically by administering and operating Jenolan Caves House and related businesses" and that fulfilment of a director's statutory obligations under the corporations law and as a guarantor did not fall within this pleading. That is to say, fulfilment of statutory obligations and the role of guarantor were not to be regarded as "administering and operating Jenolan Caves House and related businesses". 32 Alternatively, her Honour may have simply taken the view that given the receiver's instruction to Mr Field excluding him from performing further work with respect to Jenolan Caves House and associated businesses, and Mr Field's observance of that instruction, that after 10 December 2005 there was no longer any arrangement between the first appellant and/or the second appellant and the respondents in the sense that there was no "transaction", "plan", "understanding" or "dealing" whereby Mr Field performed work in an industry, specifically by administering and operating Jenolan Caves House and related businesses: see Legal & General Assurance Society Limited v Stock (1993) 49 IR 464 (at 480 - 481). In other words, the view may have been taken by her Honour that whilst Mr Field may have continued to meet his statutory obligations under the corporations law, fulfilment of those obligations was no part of any arrangement with the respondents for him to perform work in relation to Jenolan Caves House and related businesses.

33 Whichever view her Honour took, they raise two issues. The first scenario raises the question of whether Mr Field's role in the contract or arrangement, limited as it was to the performance of his statutory and guarantor obligations as a director of the corporate lessee, may be regarded as "administering and operating Jenolan Caves House and related businesses". The second scenario raises this question: if there is a contract or arrangement on foot whereby work is performed in an industry (assuming in this case it is the lease), does a direction by a receiver, who has taken full responsibility for the management and operations of the company and the control of its assets, the effect of which is to exclude a director from the performance of any further work in relation to the management and operations of the company (except in relation to statutory responsibilities), negative the existence of that contract or arrangement to the extent that the necessary jurisdictional requirement cannot be met? 34 As to the first scenario, it does not seem to us that mere performance of statutory obligations under the corporations law and the role of guarantor may properly be regarded as "administering and operating Jenolan Caves House and related businesses". However, we make no finding in this respect because we consider the second scenario subsumes it to the extent it becomes an irrelevant consideration 35 As we earlier noted, 108B(1) provides that: (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. 36 Schmidt J held that the arrangement came to an end when the receiver brought Mr Field's involvement with JCHR's operation of Jenolan Caves House to an end on 10 December 2005. That determination must be taken to mean, in the context of her Honour's decision, that the "contract", as it is referred to in s 108B(1), between the first appellant and/or the second appellant and the respondents was, according to her Honour, terminated on 10 December 2005. 37 It is quite clear from the case put by the appellants at first instance, and on appeal, that they were claiming the lease was part of the overall arrangement or, alternatively, was a collateral arrangement or related condition and that the lease, on the evidence, did not come to an end until 27 June 2006. Further, despite her Honour's finding that Mr Field did not claim to have any rights or obligations under the lease, it is tolerably clear from the record of proceedings at first instance that he did. Mr J W Shaw QC, for the appellants, submitted: This is a lease which clearly expressly and if necessary, by implication contemplates work in an industry. It contemplates the management, the administration, the running and the improvement of Jenolan Caves House.

38 That Mr Field was not a party to the lease does not mean that it precluded him from claiming that the lease was part of a broader arrangement under which he performed work (in any event, as we understand Mr Field's claim it was that the lease, by its terms, required the performance of work). All that is required is a contract whereby work is performed in any industry; there is no requirement for there to be an identity between the person working and the contracting party: Ex parte V. G. Haulage Services Pty. Ltd. and another; Re The Industrial Commission of New South Wales and another [1972] 2 NSWLR 81 at 87 per Jacobs JA. 39 Given that the lease between Mr Field's company (Jenolan Caves Resort Pty Limited, formerly Silkbard Pty Limited) and the second respondent did not come to an end until 27 June 2006, and the lease is claimed to a "contract" for the purposes of s 108B(1) of the Act, we fail to see how it could be concluded that the contract was terminated on 10 December 2005. That the receiver excluded Mr Field from performing any work under the arrangement, including the lease, is not tantamount to a termination of the contract. 40 It was the case, as her Honour found, that Mr Field performed no further work under the arrangement (including the lease) after 10 December 2005. But that is a different issue to whether the contract was terminated on that date. Assume that a contract of employment had continued for ten years and the employee in December 2005 took 12 months' leave without pay. In June 2006, the employer terminated the contract of employment. In February 2007 the employee made application for relief under s 106 of the Act. It could not be seriously contended that in those circumstances the employee was out of time because he performed no further work under the contract from December 2005. The contract was not terminated until June 2006 and whether or not the application for relief was made within time depended on when the contract was terminated, not when work under the contract ceased. 41 So it is the case here that although Mr Field performed no work from 10 December 2005, the lease did not come to an end until 27 June 2006. Whether or not the lease was a contract whereby work was performed in an industry was not considered by her Honour because she had taken the view Mr Field did not claim to have any rights or obligations under the lease. In this regard, her Honour erred. 42 We consider that her Honour confused the requirements of s 108B(1) and the jurisdictional prerequisite, namely, whether there was a contract whereby work was performed in any industry. That is to say, in deciding the question of whether the appellants were out of time, her Honour focused on when it was that the receiver directed Mr Field to cease work in connection with Jenolan Caves House and related businesses and on that basis decided there was no longer in existence an arrangement whereby work was performed. The inquiry required by s 108B(1) is whether the appellant's application for an order under s 106 in relation to the pleaded arrangement was made not later than 12 months after the termination of that arrangement. Given that the lease, which was pleaded as part of the overall arrangement or alternatively as a collateral arrangement or related condition, did not come to an end until 27 June 2006 and the appellants' summons for relief was filed in February 2007, a conclusion that the appellants' application for an order was made later than 12 months after the termination of the arrangement, was not open. 43 Whether the lease, on its own or as part of a broader arrangement, was a contract whereby work was performed in an industry was not a matter that was the subject of substantive submissions, either at first instance or on appeal. In light of decisions such as Mitchforce Pty Ltd v Industrial Relations Commission of New South Wales and others (2003) 57 NSWLR 212 and Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 that may be the next hurdle the appellants will be required to face. But in so far as the issue on appeal is concerned, that is, whether the appellants' application was within time, we find that it was. That finding makes it unnecessary for us to consider the appellant's alternative position of whether there were exceptional circumstances justifying the making of a late application under s 108B(3).

(2) The decisions and orders of Schmidt J made on 4 June and 2 August 2007 in Matter No IRC 190 of 2007 are set aside.

(3) The matter is remitted to a Member of the Court for hearing and determination.

(4) The respondents shall pay the costs of the appellants both at first instance and on appeal. ___________________________________________________

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At a glance

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Judgment (60 paragraphs)

Parties

Cases Cited (5)

Cited By (1)