Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd

Industrial Relations Commission (NSW)|2001-07-01|Before: Boland J, Mr J, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd [2001] NSWIRComm 92 FIRST APPLICANT Gough & Gilmour Holdings Pty Ltd

SECOND APPLICANT Harcourt David Gough PARTIES : THIRD APPLICANT Anthony Lansley Gilmour

RESPONDENT Caterpillar of Australia Limited FILE NUMBER: IRC 5227 of 2000 CORAM: Boland J CATCHWORDS : Unfair Contract - Preliminary issue - Joinder of a foreign corporation - Whether Court needed to satisfy itself that if it did order joinder it would grant leave to proceed under r 112(4) of the Industrial Relations Commission's Rules 1996 - Whether the necessary jurisdictional fact existed to provide the basis for ordering joinder of the foreign corporation - Whether the Court had power under s 106 of the Industrial Relations Act 1996 to add a party to a contract - Whether there was a sufficient connection in the Brown v Rezitis sense to order joinder - Whether an asset preservation order was the more appropriate remedy and therefore an application for joinder was an abuse of process - Whether r 112 of the Commission's Rules was a valid Rule - Whether a proceeding under s 106 is an action in personam - Joinder ordered - Question of leave to proceed adjourned - Costs reserved. Industrial Arbitration Act 1940 Industrial Arbitration (General) Regulations Industrial Relations Act 1991 Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Commission Rules 1996 Interpretation Act 1987 Service and Execution of Process Act 1901 (Cth) Supreme Court Act 1970 Supreme Court Rules 1970 Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420, [2000] NSWIRComm163 Attorney-General v Sillem (1864) 10 HLC 704 Agar v Hyde (2000) 74 ALJR 1219 Hyde v Agar (1998) 45 NSWLR 487 Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388 Bell v Macquarie Bank (No 4) (1999) 93 IR 191 BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 Brown v Rezitis (1970) 127 CLR 157 Carter v NSW Rugby League Ltd (1997) 78 IR 368 Cooper v Sithe Energies Australia Ltd [2000] NSWIRComm 176 Eslick v Exben Pty Ltd [2001] NSWIRComm 68 Fernance v Wreckair Pty Ltd (1991) 22 NSWLR 439, (1991) 39 IR 280 CASES CITED : Gosper v Sawyer (1985) 160 CLR 548 Harrington v Lowe (1986) 190 CLR 311 Laurie v Carroll (1958) 98 CLR 310 Legal & General Assurance Society Ltd v Stock (1993) 49 IR 464 McGee v Yeomans [1977] 1 NSWLR 273 Minister for Youth & Community Services v Health and Research Employees of Australia, New South Wales Branch (1987) 22 IR 59 at 74 Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 Smith v Clutha Pty Ltd (1989) 28 IR 306 Societe Generale de Paris v Dreyfus Brothers (1885) 29 Ch D 239 Visalli v Southwell (1988) 28 IR 234 at 241 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 539 Walker v Hussman Pty Ltd (1991) 24 NSWLR 451 Wong v Cheng (1999) 91 IR 376 Wreckair Pty Ltd v Fernance (1994) 58 IR 343 HEARING DATES: 03/27/2001; 03/29/2001 DATE OF JUDGMENT: 05/01/2001

APPLICANTS Mr M J Kimber SC with Mr I Taylor of counsel Solicitor: Mr J Robinson Harmers Workplace Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr P M Hall QC with Mr D T Kell of counsel Solicitor: Mr T Gooch Mallesons Stephen Jaques

JUDGMENT: - 62 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J 1 May, 2001 Matter No IRC 5227 of 2000 Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited

Application under s 106 of the Industrial Relations Act 1996 Interlocutory Judgment No. 4 - Joinder of a Foreign Corporation 1 On 27 October 2000 Gough & Gilmour Holdings Pty Limited ("first applicant"), Harcourt David Gough ("second applicant") and Anthony Lansley Gilmour ("third applicant") filed a summons for relief under ss 106 and 107 of the Industrial Relations Act 1996. The respondent named in the summons was Caterpillar of Australia Limited ("the respondent"). 2 Since that time, there have been various proceedings in relation to the summons which, for the moment, I need not dwell upon except to say that, subject to any outcome in conciliation proceedings before Marks J, the matter is set down for hearing for four weeks commencing on 21 May 2001. 3 On 16 March 2001 the applicants filed a notice of motion seeking to join Caterpillar Inc. as a respondent to the proceedings. Further, the applicants sought an order that the Further Amended Summons for Relief filed on 28 November 2000 be amended in the form of the proposed Second Further Amended Summons to reflect, amongst other things, the fact that Caterpillar Inc. had been joined as the second respondent. The applicants put forward a number of grounds and reasons in support of the motion. These may be summarised as follows: 1. Caterpillar Inc. is a corporation incorporated in Delaware USA with its head office in Peoria, Illinois, USA. Caterpillar of Australia Limited is ultimately owned by Caterpillar Inc. 2. The agreements which are the subject of the proceedings under s 106 of the Act were in a standard form used by Caterpillar companies throughout the world. 3. The decision to terminate the agreements which are the subject of the substantive proceedings was made or approved by Caterpillar Inc. 4. It is appropriate to grant the motion in order that all parties to the contracts/arrangements be before the Commission in Court Session and for all relevant matters and claims arising from the agreements and related and collateral arrangements to be considered and determined as part of the proceedings. 5. If the Commission in Court Session determines, as alleged, that the agreements are in some way unfair, then Caterpillar Inc., as the company that the applicants allege has fashioned the terms of those agreements, should bear some or all of the responsibility for any consequent orders. 6. If the Commission in Court Session does find, as alleged, that the process by which the decision to issue the purported notice of termination was unconscionable, then Caterpillar Inc., who as the applicants contend ultimately made the decision, should bear some or all of the responsibility for that decision. 7. As the ultimate beneficial owner of Caterpillar of Australia Limited, Caterpillar Inc. derives benefit from the making of the agreements and so should bear some or all of the responsibility for any orders made arising from findings of unfairness in relation to those agreements. 8. There have been changes announced by the respondent and Caterpillar Inc. in recent times that give rise to concern about the respondent's ability to meet any orders the Court may make in the substantive proceedings. Solicitors for the applicants wrote to the respondent seeking an undertaking that it would not dissipate its assets. Solicitors for the applicants wrote to Caterpillar Inc. seeking an undertaking that to the extent that the respondent would not pay any amount ordered by the Commission in Court Session in the substantive proceedings, Caterpillar Inc. would. No undertakings were given by the respondent or Caterpillar Inc. 4 An affidavit of Emma Graham Pritchard in support of the notice of motion was tendered in the proceedings before me on 27 March 2001. Ms Pritchard is a solicitor employed by Harmers Workplace Lawyers, the solicitors on the record for the applicants. The affidavit purported to show that service on Caterpillar Inc. was effected in accordance with the Commission's Rules. I will come back to the issue of service later in this judgment. 5 Mr M J Kimber SC with Mr I Taylor of counsel appeared for the applicants. Mr Kimber put extensive oral submissions on 27 March 2001 as to why Caterpillar Inc. should be joined. Mr P M Hall QC with Mr D T Kell of counsel, appeared for Caterpillar of Australia Limited. There was no appearance by Caterpillar Inc. In a letter from Caterpillar Inc.'s senior litigation lawyer, Mr James Rooney, the applicants' solicitors were notified that Caterpillar Inc. "does not consent to being joined to the Proceedings" and that "Caterpillar Inc. has not instructed solicitors within Australia to accept service of any Notice of Motion." Mr Hall also put extensive and detailed submissions, orally and in writing, as to why Caterpillar Inc. should not, and could not, be joined and why leave should not be granted to the applicants pursuant to r 112(4) of the Industrial Relations Commission Rules 1996 to proceed against the applicants if joinder were to be ordered. 6 In reply, Mr Kimber put a written submission on the issue of joinder that was received on 12 April 2001. The submission also went to the question of leave to proceed. A response by the respondent to a number of issues raised by Mr Kimber was received in my Chambers, in the form of a facsimile message, after hours on Friday, 20 April 2001. 7 In his oral and detailed written submissions, Mr Kimber went to the grounds and reasons in support of the motion and, in elaborating on them, drew my attention to certain affidavit material filed in relation to the substantive proceedings. In particular, the Court was referred to material concerning the alleged involvement of Caterpillar Inc. in the decision to terminate the agreements that are the subject of the substantive proceedings. In this respect, the summary of matters of fact and law in the Second Further Amended Summons, after referring to the decision by Caterpillar Inc. to approve the termination of the agreements, states: The termination decision was made or approved by the second respondent pursuant to an arrangement, collateral to the Agreements, between the first and second respondents, to the effect that the first respondent would not give notice of termination of the Agreements to the first applicant unless the second respondent had decided that such notice be issued or approved of such notice being issued ('Termination Arrangement'). 8 Mr Kimber also referred to a further affidavit of Ms Pritchard in support of the notice of motion and correspondence referring to the requests for undertakings by the applicants relating to their concern that assets might be moved offshore and the refusal by the respondent and Caterpillar Inc. to give those undertakings. The Issues 9 The applicants' notice of motion raised a number of issues that are relevant to the question of whether Caterpillar Inc. should be joined to the proceedings as the second respondent. I have distilled the issues into six questions, which I have formulated as follows: 1. In deciding whether to join Caterpillar Inc., does the Court need to satisfy itself, at least on a preliminary basis, that if it did order joinder, it would grant leave to proceed against Caterpillar Inc.? 2. Does the necessary jurisdictional fact exist that provides the basis for ordering joinder of Caterpillar Inc. to the proceedings? 3. Does the Court have the power under s 106 to make an order adding Caterpillar Inc. as a party to a contract between the first applicant and the respondent, and if not, whether it should nevertheless exercise its discretion in favour of ordering Caterpillar Inc. to be joined to the proceedings. 4. Does Brown v Rezitis (1970) 127 CLR 157 provide an alternative basis for joining Caterpillar Inc.? 5. If the real reason for the joinder application was a concern on the part of the applicants that the respondent would not have sufficient assets to meet any eventual judgment, is the proper remedy an asset preservation order and, if so, is an application for joinder an abuse of process? 6. Is r 112 of the Industrial Relations Commission Rules 1996 a valid Rule? In deciding whether to join Caterpillar Inc., does the Court need to satisfy itself, at least on a preliminary basis, that if it did order joinder, it would grant leave to proceed against Caterpillar Inc.? 10 Mr Kimber went first to the question of the Court's power to order joinder and in doing so referred to s 170 of the Act and r 83(c), r 84(1) and r 148 of the Industrial Relations Commission Rules . There can be no doubt, and the matter was not contested, that upon the application of an applicant in proceedings, an additional respondent or respondents may be joined. Mr Hall submitted, however, that the present proceedings were more than about joinder simpliciter and involved the question of joinder of a foreign corporation. Mr Hall also submitted that on an application for joinder of a person to proceedings the threshold question was whether the particular application involved a matter of procedure only or whether it involved a question of jurisdiction. The distinction, he said, was one that underpins the difference between an application which involved matters of administration or proceedings within jurisdiction and one that enlarges jurisdiction. In other words, as I understood Mr Hall 's submission, the Court needed to consider, as a threshold matter, whether there was any jurisdictional bar to dealing with Caterpillar Inc. in the manner proposed by the applicants in their amended summons. If such a bar existed, then there was no basis upon which Caterpillar Inc. could be joined. 11 Mr Kimber took a different view. His submission was that joinder was properly to be regarded as a question of practice and/or procedure and not jurisdiction. In other words, provided the Court was satisfied that an amendment to the proceedings, including joinder of a party, was necessary in the interests of justice pursuant to s 170 of the Industrial Relations Act 1996, there were no other prerequisites to joinder. As I understood the import of Mr Kimber 's submission, it was that consideration of any question of jurisdiction as a preliminary or threshold point would be inappropriate; that such a consideration could be given at an appropriate time after Caterpillar Inc. filed a notice of appearance or, if no notice of appearance was filed, any jurisdictional question could be determined in the course of deciding whether the applicants should be given leave to proceed against Caterpillar Inc. 12 It seems to me that both parties have comprehensively argued the six issues I have identified above and have, in their submissions, addressed the question of leave to proceed. The approach I, therefore, intend to take is a convenient and practical one, that is, in order to determine whether the Court would join Caterpillar Inc. it needs to consider, in a preliminary way, whether it would be disposed to grant leave to proceed against Caterpillar Inc. There is little point, in my view, in deciding that Caterpillar Inc. should be joined if the Court is also of the view that there is little prospect of the applicants succeeding in their claims against Caterpillar Inc. Whatever the outcome, it does not seem to me that any party will be disadvantaged by a preliminary consideration of the question of leave at this stage. Moreover, the trial in the proceedings is due to commence on 21 May 2001. This leaves little time to consider the issue of joinder, then if joinder were to be ordered, to consider the issue of leave for the applicants to proceed against Caterpillar Inc. in completely new and separate proceedings. 13 The leading authority in this jurisdiction on the proper approach to be taken in determining whether to grant leave to proceed against a foreign person pursuant to r 112(4) of the Commission's Rules, is the decision of the Full Bench in Bell v Macquarie Bank Limited (No 4) (1999) 93 IR 191. 14 In Bell v Macquarie Bank the Full Bench endorsed a two step test for determining whether leave should be granted: 1. Whether the applicant has established, to the standard of a "good arguable case", that the relevant jurisdictional nexus exists for the Court to deal with the claim; 2. Whether as a matter of discretion, leave should be given to the applicant to proceed, or, alternatively, to set service aside. 15 The approach adopted by the Full Bench was drawn to a large extent from the approach adopted by the Court of Appeal in Hyde v Agar (1998) 45 NSWLR 487. Hyde v Agar was the subject of an appeal to the High Court in Agar v Hyde (2000) 74 ALJR 1219 where a majority of the High Court ( Gaudron, McHugh, Gummow and Hayne JJ) held that under the Supreme Court Rules 1970 (Pt 10, r 1A), the requirement for the jurisdictional nexus (ie, that it be a claim that falls within one of the matters set out in r 1A) is one that is made out on the face of the claim and that there is no additional requirement that the Court be convinced that there is a "good arguable case" that the claim falls within one of the matters in r 1A. 16 The majority in Agar v Hyde said at pars 48-51: 48. Part 10 r 1A of the applicable Rules permits the service of originating process outside Australia only in certain specified cases. If a defendant served outside Australia has not entered an appearance, an applicant for leave to proceed must demonstrate that one or more of the cases set out in r 1A applies. Those cases are described either as "where the proceedings are founded on" a particular kind of claim, or as "where the subject matter of the proceedings" is of a particular kind.

To take the particular paragraphs which the respondents relied on in these matters, it was said that the originating process in each action might be served outside Australia because: "(a) ...the proceedings are founded on a cause of action arising in the State; ... (d) ... the proceedings are founded on a tort committed in the State; (e) ... the proceedings, wholly or partly, are founded on, or are for the recovery of damages in respect of, damage suffered in the State caused by a tortious act or omission wherever occurring; ... (i) ... the proceedings are properly brought against a person served or to be served in the State and the person to be served outside the State is properly joined as a party to the proceedings".

In deciding whether Pt 10 r 1A applied, and thus permitted service outside Australia of the originating process in these two actions, attention must be directed to the way in which the claims made by the respondents are framed. The paragraphs speak of "proceedings [which] are founded on" a specified matter such as a cause of action arising in the State or a tort committed in the State. That focuses attention upon the nature of the claim which is made. That is, is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations , is a cause of action arising in the State?

51.The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff's claim. The Court of Appeal was wrong to make such an assessment in deciding whether the Rules permitted service out. In so far as the contrary was held in Bank of America v Bank of New York it should be overruled. The application of these paragraphs of r 1A depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial. Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs of Pt 10 r 1A, service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.

17 At par 55, the majority laid down three bases for determining whether a Court would decline to exercise jurisdiction: On an application to set aside service, or to have the Court decline to exercise jurisdiction, attention might be directed to any of a number of features of the proceeding, the claims made in it, or the parties to it, in aid of the proposition that the Court should not exercise jurisdiction. Part 10 r 6A is cast in general terms and it would be wrong to attempt some exhaustive description of the grounds upon which the rule might be invoked. Nevertheless, it may be expected that three common bases for doing so are first, that the claims made are not claims of a kind which are described in Pt 10 r 1A, secondly, that the Court is an inappropriate forum for the trial of the proceeding and thirdly, that the claims made have insufficient prospects of success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims. Whether the Rules prescribe a different test for determining questions of inappropriate forum from that developed at common law is a question which we need not stay to consider. In these cases, it is necessary to deal only with the last of the bases we have mentioned. It was on this that the appellants chiefly relied. 18 The question is whether the High Court's tests in Agar v Hyde evident in the quoted passage above, replace the Full Bench's test in Bell v Macquarie Bank . The answer is far from straightforward and it is necessary to consider a number of competing considerations. The first and most obvious consideration is that the High Court was concerned with the Supreme Court Rules in Pt 10, which differ from the Industrial Relations Commission Rules in that Pt 10 r 1A(1) of the Supreme Court Rules sets out 24 particular circumstances in which process may be served outside Australia, whereas r 112 the Commission's Rules simply permits process or documents to be served outside Australia. This is subject, of course, to leave to proceed where the foreign party does not enter an appearance (which is the same as Pt 10 r 2(1) of the Supreme Court Rules) . 19 Notwithstanding the differences in the two sets of Rules, the Full Bench in Bell v Macquarie Bank , observed that Pt 10 of the Supreme Court Rules prescribes a similar procedure to r 112 of the Commission's Rules. At 201 the Full Bench said: Notwithstanding the difference which exists between the structure and terms of Pt 10 of the Supreme Court Rules and r 112 of the Industrial Relations Commission Rules, we consider that a similar approach [to that adopted in Hyde v Agar ] should be adopted in this case. 20 At 202 the Full Bench said: We also consider, for reasons of comity and uniformity, that in determining whether to grant leave to proceed we should have regard to the way in which the Supreme Court has approached similar questions under its rules and the jurisprudence which has developed concerning their application. 21 I note also the majority's observation in Agar v Hyde about how the Supreme Court Rules 1970 departed from the Chancery practice and do not require leave to serve out of jurisdiction and do not require that the party seeking to serve out demonstrate a prima facie entitlement to the relief sought in the originating process. The majority said at par 47: "The applicable [Supreme Court] Rules are silent about what matters can or should be taken into account in granting or refusing that leave [to proceed against a foreign person]." This observation applies with equal force to r 112. 22 It is, indeed, arguable that with the approach of the Court of Appeal in Hyde v Agar being overturned, the tests formulated by the majority in Agar v Hyde should now replace the two part test in Bell v Macquarie Bank in any consideration of whether there should be leave to proceed under r 112 of the Commission's Rules. That is, in the circumstances of the present case: 1. Whether the claims made are not of a kind that would attract the jurisdiction of the Commission in Court Session pursuant to ss 106 and 107 of the Industrial Relations Act 1996, namely, that there is a contract or arrangement whereby work is performed in any industry in and of New South Wales, or a related collateral arrangement, to which Caterpillar Inc. is a party; or 2. Whether the Commission in Court Session is the inappropriate forum for the trial of the proceeding; or 3. Whether the claims made have insufficient prospects of success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims. 23 The difficulty I have with adopting the High Court's approach in Agar v Hyde is that the majority's decision in that case depended almost exclusively on its view of the construction of Pt 10 of the Supreme Court Rules which, as I have already noted, is quite different to the counterpart provision in the Commission's Rules. Moreover, the Full Bench in Bell v Macquarie Bank decided, as a matter of discretion and for reasons that included comity and uniformity, to apply the two part test in Hyde v Agar . Although the decision in Hyde v Agar was overturned, that does not automatically mean that the majority's decision in Agar v Hyde applies to r 112 of the Commission's Rules. I consider that it is a matter for a Full Bench to determine whether the Commission in Court Session will continue to apply the two part test adopted in Bell v Macquarie Bank or adopt the approach in Agar v Hyde and, until that occurs, I am bound by the decision in Bell v Macquarie Bank . Does the necessary jurisdictional fact exist that provides the basis for joining Caterpillar Inc. to the proceedings? 24 Mr Hall's submission on this key jurisdictional issue may be summarised as follows: 1. The Commission's jurisdiction to make orders pursuant to s 106 is limited to contracts or arrangements (and any related conditions or collateral arrangements) "whereby a person performs work in an industry…." (s 106(1)). This requirement is the jurisdictional fact that must be satisfied before the Commission in Court Session is seized of jurisdiction and is separate from the subsequent subsections of s 106 which provide conditions for the grant of relief but are not jurisdictional in nature : Walker v Hussman Pty Ltd (1991) 24 NSWLR 451. 2. In respect of Caterpillar Inc. the proposed amended summons relevantly pleads no more than that Caterpillar Inc. was involved in an arrangement with the respondent whereby the respondent would not give the applicants notice of termination of the agreements unless Caterpillar Inc. had determined or approved the giving of such notice. This arrangement ("the termination arrangement") is said by the applicants to be collateral to the agreements between the applicants and the respondent. This is not so. 3. Bell v Macquarie Bank is distinguishable from the present case. In Bell the applicants were parties to both the contract with Macquarie Bank and the contract with its operational instrument, Macquarie International Capital Markets Ltd. In the present case the respondent has been operating in Australia, conducting substantial commercial operations in Australia and has been in contractual relations with the applicants. Caterpillar Inc. is a separate and distinct foreign corporation which could not be regarded as a mere instrument of the respondent. 4. Caterpillar Inc. was not and is not a party to the dealership agreements. Moreover, apart from the termination arrangement there is no relevant arrangement pleaded to which Caterpillar Inc. is said to be a party. Furthermore, the termination arrangement pleaded by the applicants does not and cannot constitute a "collateral arrangement" within the meaning of the Act (ss 105, 106(1)). The cases on collateral arrangements involve arrangements to which the claimant is a party, not between a respondent and its parent company or some other third person. See for example : Smith v Clutha Pty Ltd (1989) 28 IR 306; Fernance v Wreckair Pty Ltd (1991) 22 NSWLR 439; Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388; Carter v NSW Rugby League Ltd (1997) 78 IR 368. 5. Even more significantly, there is no relevant transactional relationship involving Caterpillar Inc. which is an essential element in an "arrangement" or "collateral arrangement". The existence of reporting lines of authority within corporate groups does not equate to the same. There is no authority that establishes that "links" between one entity and another is sufficient to bring both within jurisdiction. 25 There does not appear to be any issue about the fact that there is a contract(s) or arrangement(s) whereby a person performs work in an industry in New South Wales. Thereby the fundamental jurisdictional fact is established, at least insofar as the applicants and respondent are concerned, and the Court derives power to make the relevant orders, if it so decides they are appropriate, under ss 106 and 107 of the Act. The question of joinder, however, depends on whether Caterpillar Inc. has a sufficient connection with these contracts or arrangements or is a party to a collateral arrangement. 26 Mr Kimber submitted that it was not put into issue that Caterpillar Inc. had the right, which it exercised in this case, to make the ultimate decision to terminate the contracts and/or arrangements. He submitted that this uncontested fact would be enough in itself to form a proper basis for the applicants to seek orders from the Court to vary the contracts and/or arrangements in a way that affected Caterpillar Inc. (eg by affecting its right to terminate the dealership) and/or to make orders for compensation against Caterpillar Inc. 27 Mr Kimber further submitted that the arrangement between Caterpillar Inc. and the respondent, whereby the respondent had to obtain the approval of Caterpillar Inc. before terminating the dealership, was an arrangement within the meaning of s 105 of the Act, as it clearly related to the contracts between the respondent and the applicants, and had a necessary connection with or necessary relation to those contracts : Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388 at 398, and that it met the test for an arrangement set out in Legal & General Assurance Society Ltd v Stock (1993) 49 IR 464 at 480-81. 28 It was further submitted for the applicants that there was no basis for the contention that the only "arrangements" or "related conditions" or "collateral arrangements" contemplated by the definition of contract in s 105 of the Act were those that have the applicant/worker as "a party" or to those wherein there was what was asserted to be a "relevant transactional relationship" between a third party and an applicant for relief under s 106 of the Act. It was submitted by Mr Kimber that: this is not surprising as such a narrow view of the definition of "contract" would mean that an off-shore parent company could set up a wholly owned subsidiary in New South Wales with no substantial assets; have that fully controlled and controllable subsidiary enter into contracts for work in industry for New South Wales; direct and control the operation of that business and behave unconscionably in connection therewith; assist upon a variation or termination of the relevant contract on capricious or arbitrary or otherwise unsupportable grounds, and without providing the s 106 applicant with any procedural/substantive fairness; and then contend that it is not caught by s 106 because of the lack of any direct party/party relationship or transactional relationship between itself and the applicant. 29 In any event, Mr Kimber contended, it would be open to the Court to find that there was "an overall arrangement" whereby work was performed in industry in New South Wales that had the respondent, Caterpillar Inc. and the applicants as "parties", and that the dealership agreements between the respondent and the applicants were merely one component or feature of that overall arrangement. In this respect, it was contended for the applicants that Caterpillar Inc. was a "significant 'actor'" at all relevant times in the contracts and/or arrangements and their operation and that, indeed, there was evidence that Caterpillar Inc. had played a significant role in the commencement, in setting the terms of, and in the performance and termination of the relevant contracts. Mr Kimber referred to the evidence and verified allegations in the Second Further Amended Summons to support these contentions. 30 It is clear that Caterpillar Inc. was not a party to the dealership agreements between the respondent and the applicants. It is also clear that there was no contract between the applicants and Caterpillar Inc. The question is whether there was an arrangement involving the applicants and Caterpillar Inc. whereby a person performed work in any industry in New South Wales, or any related condition or collateral arrangement. 31 As I have already noted, the applicants submitted that the arrangement between Caterpillar Inc. and the respondent, whereby the respondent had to obtain the approval of Caterpillar Inc. before terminating the dealership, was an arrangement within the meaning of s 105 of the Act, as it clearly related to the contracts between the respondent and the applicants, and had a necessary connection with or necessary relation to those contracts. 32 The fact that a subsidiary company is required to obtain approval from its foreign owner to terminate a contract in New South Wales does not seem to me, without more, to provide the basis for establishing the existence of an arrangement or any related condition or collateral arrangement within the meaning of s 105 of the Act. That approval by a subsidiary's foreign owner might be required to terminate a contract is merely an incident of commercial life. It is not sufficient, in my view, to bring the foreign owner within the purview of s 106 of the Act. Whilst s 106 might be broad in its scope, there must be a limit to what is an arrangement or related condition or collateral arrangement. In Legal & General Assurance v Stock the Full Court of the NSW Industrial Court at 480 referred to arrangements as encompassing transactions or plans which are not legally enforceable agreements. The granting of approval by a parent company on the recommendation of its subsidiary to terminate a contract does not, in my opinion, fall within the meaning of a "transaction" or a "plan". 33 The respondent submitted that in order for there to exist an arrangement or related collateral arrangement under s 106 of the Act, there needed to be a "relevant transactional relationship" between a third party and an applicant. I do not think this is so. In Bell v Macquarie Bank the Full Bench said at 207: If it appears that there is either one contract or arrangement whereby work is performed to which both the intra-jurisdictional and extra-jurisdictional respondents are party, or that the extra-jurisdictional respondent is a party to a related collateral arrangement, then there may be a good arguable case that the extra-jurisdictional respondent is a party to an arrangement with the relevant territorial connection. 34 There is no additional requirement that there be a "transactional relationship" between the applicants and Caterpillar Inc. 35 I find, however, that in the present case, the fact that the respondent was required, as a matter of internal corporate reporting procedure, to gain approval to terminate the dealership agreements between the applicants and the respondent, did not, of itself, amount to a contract or arrangement between the respondent and Caterpillar Inc., nor did it amount to a collateral arrangement to the dealership agreements between the applicants and the respondent. 36 The alternative approach urged by the applicants in their reply was that it would be open to the Court to find that there was "an overall arrangement" whereby work was performed in an industry in New South Wales that had the respondent, Caterpillar Inc. and the applicants as "parties" and that the contract between the respondent and the applicants was merely one component or feature of that overall arrangement. 37 This alternative proposition was put by the applicants in their written reply to the respondent's substantive submissions. The proposed Second Further Amended Summons, as the respondent correctly pointed out, does not plead an overall arrangement involving Caterpillar Inc. The debate had focused on the "Termination Arrangement" between the respondent and Caterpillar Inc. and did not extend to an overall arrangement that involved Caterpillar Inc., the respondent and the applicants. 38 I consider that it is too late, in what is a reply to the respondent's submission, for the applicants to plead an overall arrangement. Such a fundamental proposition should have been pleaded in the proposed Amended Summons or, at the very least, raised directly in the applicants' substantive submissions on the motion. The respondent has not responded to this fundamentally new pleading, and properly so, given it was put in reply. The situation I am now faced with is a submission by the applicants on the alleged existence of an overall arrangement and no submission on the issue by the respondent. The trial is to commence on 21 May 2001. If I were inclined to consider the applicants' submission on "an overall arrangement" I would need to give the respondent an opportunity to respond. This would, in my opinion, inevitably require a re-scheduling of the trial. 39 The applicants may say to this that, if the trial needs to be postponed so be it, because justice demands that Caterpillar Inc. be made a respondent to the proceedings. This would be a surprising submission because the trial was expedited on the application of the applicants. 40 In any event, I have come to the view that the applicants had every opportunity to put their contention as to an overall arrangement from the outset. Having failed to do so I am not prepared to consider the submission at this late stage.

Does the Court have the power under s 106 to make an order adding Caterpillar Inc. as a party to a contract between the first applicant and the respondent, and if not, whether it should nevertheless exercise its discretion in favour of ordering Caterpillar Inc. to be joined to the proceedings Caterpillar Inc.? 41 The principal amendment foreshadowed in the Second Further Amended Summons involved the addition of Caterpillar Inc. as a party to the relevant agreements which are the subject of these proceedings. 42 Mr Hall submitted that there was no power under s 106 to conscript a person, against his or her will, to be made a party to a contract. His submissions in this respect may be summarised as follows: 1. It is beyond argument that Caterpillar Inc. is not a party to the agreements between the applicants and the respondent. A contract is, by its inherent nature, a consensual arrangement. Contract by compulsion is both a contradiction in terms and a fiction that the law does not recognise. The provisions of s 106 proceed upon the fundamental basis of the parties' consensual establishment of relations between them. 2. Whilst the last two decades have seen some inroads into the doctrine of privity of contract, none of those inroads are in any way analogous to the present facts and relief sought by the applicants. 3. Section 106 does not provide the Commission in Court Session with jurisdiction to make the principal orders that are sought in the proposed amended summons, namely to compel Caterpillar Inc. to become a party to a contract to which it has never been privy and then to vary the contract so as to impose additional obligations beyond those the agreement to which it is not a party provides. 43 I am unable to discern any jurisdictional basis on which I am able to compel Caterpillar Inc. to become a party to the agreements that are the subject of these proceedings. Section 106 provides for the making of orders declaring a contract wholly or partly void and orders varying a contract, as well as the making of money orders, but it does not provide for the making of orders adding a party to a contract. Nothing put by the applicants in their reply convinces me otherwise. 44 The applicants submitted that the question of whether the Court has power to add Caterpillar Inc. as a party is a question to be determined at the end of the proceedings and not at the outset. If what the applicants ultimately seek is for Caterpillar Inc. to be made a party to the agreements between them and the respondent, and it is obvious that there is no power in the Court to do that, it is pointless to ignore that fact at this stage of the proceedings, especially when what I am being asked to do is to join a foreign corporation. 45 The applicants submitted that even if the respondent was correct that the Court does not have power to add a party to a contract, it did not detract from the fact that the Court might make other orders that affect Caterpillar Inc., such as compensation orders or orders affecting its right to terminate the contracts or arrangements. See for example Fernance v Wreckair Pty Ltd (1991) 22 NSWLR 439; (1991) 39 IR 280 where Hungerford J determined to join the trustee of a Victorian superannuation trust fund because, even though no order could be made varying the Victorian superannuation trust deed, orders for compensation might nevertheless be made against the trustee. Such an approach was not the subject of criticism on appeal: Wreckair Pty Ltd v Fernance (1994) 58 IR 343. I acknowledge and accept the force of this submission. 46 The applicants also point to the fact that they seek an order under s 107 of the Act, the effect of which would be to prevent Caterpillar Inc. using the standard form contracts signed by the applicants when they won the dealership in 1989 and that, regardless of whether Caterpillar Inc. was to be ultimately named as a party to the dealership contracts, s 107(1)(b) would on its own provide the foundation for the joinder of Caterpillar Inc. to these proceedings. I am not sure whether this last proposition is correct because the making of an order under s 107 depends on an order being made under s 106 but, certainly, the fact that the applicants seek an order under s 107 of the Act is a matter that I should, in the overall scheme of things, properly take into account in considering whether to join Caterpillar Inc. to these proceedings. Does Brown v Rezitis (1970) 127 CLR 157 provide an alternative basis for joining Caterpillar Inc.? 47 Mr Hall for the respondent submitted that if I were to find in his favour to the effect that the necessary jurisdictional fact did not exist, Brown v Rezitis (1970) 127 CLR 157 does not provide an alternative basis for jurisdiction. His submissions in this respect may be summarised as follows: 1. there was no relevant pleading or evidence to establish that Caterpillar Inc. would fall within the class of persons contemplated in Brown v Rezitis ; there was no relevant evidence that Caterpillar Inc. derived benefits under the contract in issue. Even if it could be inferred that Caterpillar Inc. would have derived an indirect benefit from the contract, Mr Hall submitted that it was not relevantly the type of benefit that would properly attract the principles in Brown v Rezitis where the High Court grounded its reasoning on s 106(5) in restitutionary principles. Section 106(5) is a statutory code for the making of restitutionary orders for recoupment of losses suffered under or pursuant to a contract within jurisdiction be it loss of capital or premium or loss from the incurring of expenditure. Thus, a third party who has directly profited from the unfairness of the impugned contract, or otherwise holds the fruits of the contract (such as in the case of a superannuation fund), may be called to account for the benefit received or held. The present case does not involve a loss-making contract at all; there is no basis for restitutionary relief. 2. Brown v Rezitis required a close or real connection "with the making, variation or avoidance of the contract or arrangement which has been [or is sought to be] varied or avoided." The present case is not a case involving allegations of Caterpillar Inc. being relevantly associated with the making of the contract. Caterpillar Inc. is not relevantly involved in the variation of the contract since it is not a party to the contract. Caterpillar Inc. does not provide a relevant connection with the avoidance of the contract since the applicants in these proceedings are not seeking avoidance. Rather, the applicants seek for the contract to be perpetuated. 48 Mr Kimber referred to Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420; [2000] NSWIRComm163 where a Full Bench of the Commission in Court Session ( Wright J, President, Glynn and Hungerford JJ) quoted extensively from Brown v Rezitis (1970) 127 CLR 157. Mr Kimber referred to the following statements by Barwick CJ quoted at 429: …..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. But though there is a generality in the language employed in the sub-section the power to make an order for the payment of money is not, in my opinion, unlimited particularly as to the persons against whom such an order may be made. 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. The draftsmanship of the section is inadequate: but I think the expressed intention as to this limitation can be derived from the sub-section read as a whole. Whilst it can be said that the expression "in connection with" is of wide import, it does emphasise 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. 49 Mr Kimber said: The point of Brown v Rezitis in this context is that it implies that quite apart from anything else that the Commission is at liberty to join somebody who they think has sufficient connection to the contract if only for the purpose of ensuring that there could be an apportionment or proper monetary order made against the relevant party. You do not even need for the purpose of a joinder under s 106, that the person that you seek to join be a party to a relevant contract or arrangement. As long as the Commission is satisfied that the person sought to be joined has a sufficient connection to the relevant contract or arrangement. 50 Mr Kimber referred to the New South Wales Court of Appeal decision in Visalli v Southwell (1988) 28 IR 234 as authority for the proposition that "the Commission has power to join parties provided the Commission is satisfied that they have a sufficient connection with the contract or arrangement in question." Mr Kimber cited Priestley JA at 242 to the following effect: Section 88F authorises the Commission to make a variety of orders or awards in regard to contracts of a defined kind, if any one of the various grounds is found to exist. There is no restriction in the section limiting the persons who may be the subject of orders made under it. It is settled that the operation of the section is not limited to persons who are in law the parties to the contract all or part of which is in question in an application under the section. Persons having no conceivable connection with the contract are not: see Brown v Rezitis (1970) 127 CLR 157 at 164-165. 51 Brown v Rezitis stands for the proposition that orders can be made against persons who had a "close" or "real" connection with the making, variation or avoidance of the contract or arrangement which has been [or is sought to be] varied or avoided, even though the persons were not a party to the contract or arrangement. 52 The applicants alleged that Caterpillar Inc. did have a real connection to the making of the contracts that are the subject of the substantive proceedings in that the contracts were in a standard form as dictated by Caterpillar Inc. I note that the applicants seek an order under s 107 of the Act. Section 107(1)(b) provides that the Commission, when making an order under s 106 or at a later time, may make such further order as the Commission considers appropriate for the purpose of prohibiting any other person who is associated with any party to a contract from entering into any specified kind of contract whereby a person performs work in an industry or doing any act which may reasonably be construed as being intended to induce other persons to enter into any such contract. 53 The applicants further submitted that: 1. It may be inferred from the affidavit material and the verified allegations in the amended summons that Caterpillar Inc. either chose or approved of the applicants being granted the Caterpillar dealership in 1989 and therefore could be found to be connected to the formation of the dealership contracts and received benefits from those contracts: Wong v Cheng (1999) 91 IR 376; 2. Caterpillar Inc., as the ultimate decision maker, caused the contracts to operate unfairly (and exposed the unfairness of the contracts in the sense of Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 ) by authorising cancellation of the applicants' dealership without a proper foundation for so doing and without first extending to the applicants an opportunity to be heard about relevant complaints and to address those complaints as a pre-requisite to the making of a cancellation decision; 3. The applicants relied upon representations from both the respondent and Caterpillar Inc. to their detriment vis a vis the expenditure of significant sums of money after the publication of the article by Caterpillar Inc.'s Chairman and Chief Executive, Donald Fites, as to the 'good faith' approach of Caterpillar Inc. to its dealers. Thus, Caterpillar Inc. was culpably associated with the operation of the contracts between the applicants and the respondents: see Eslick v Exben Pty Ltd , [2001] NSWIRComm 68. 54 It seems to me that, taking all of these matters into account and not just the approval by Caterpillar Inc. of the termination of the dealership agreements, Brown v Rezitis does provide a basis upon which I might order joinder. This is because, even though Caterpillar Inc. was not a party to the dealership agreements or to any collateral arrangement, there is at least an arguable case that it had a sufficient connection with those agreements to the extent that money orders and an order under s 107 of the Act could be made against Caterpillar Inc. Such orders might be made in the event that the applicants were unsuccessful in obtaining the primary relief they seek. For example, if the applicants were able to show that they did, indeed, rely upon representations by the chairman of Caterpillar Inc. in expending significant sums of money on their business on the understanding that their contracts were not subject to termination on 90 days' notice, the question may arise as to whether a 'subterfuge' of the Brown v Rezitis type had been perpetrated against the applicants. 55 The respondent submitted that the applicants' reliance on Brown v Rezitis involved a misconception on the part of the applicants because the present case does not involve a loss-making contract. It followed, the respondent contended, that there was no basis for restitutionary relief of the type contemplated by Brown v Rezitis . It is true that the primary relief sought by the applicants is to have the relevant contracts remain on foot, subject to variations which the applicants seek. If the applicants were successful, there would be no basis to claim restitutionary relief against Caterpillar Inc. However, if the applicants were unsuccessful in obtaining their primary relief and the Court was to vary the contracts but not in the manner sought by the applicants, the applicants seek compensatory orders for losses incurred by the termination of the contracts. In that context there is a claim for restitutionary relief. If the real reason for the joinder application was a concern on the part of the applicants that the respondent would not have sufficient assets to meet any eventual judgment, is the proper remedy an asset preservation order and, if so, is an application for joinder an abuse of process? 56 Mr Hall 's submissions on this aspect may be summarised as follows:

There is no evidentiary basis to support a contention that the organisational restructuring involves anything other that the Caterpillar group of companies, including the respondent, carrying on their business in the ordinary sense. The organisational restructure essentially deals only with changes in personnel and lines of authority and some re-organisation of profit centre financial reporting. 2. The applicants' application for joinder based on organisational restructuring is fundamentally misconceived in terms of the appropriate court procedure. If the applicants' fear is that the respondent's assets will be moved offshore so as to make the respondent effectively an empty shell were the applicants to succeed at trial, the appropriate procedural response by the applicants would be to seek injunctive relief in the nature of an asset preservation order. It is an abuse of process to seek to employ an application for joinder as either a disguised form of asset preservation order or to seek to avoid having to establish what would be necessary to obtain a Mareva order. 57 The applicants contended that the fact that a party may have open to it more than one possible application cannot mean that choosing one of them rather than another amounts to an abuse of process. Further, the Court will consider whether to join a party on the basis of proper principles for joinder ie, by reference to whether the party has sufficient connection to the contract or arrangement, not by attempting to determine the true motivation for the application, and whether any concern underpinning it is justified. 58 The applicants further submitted that the fact that Caterpillar Inc. and the respondent both refused to give the undertakings sought, or to offer any alternative undertakings, provided a proper basis for the applicants to be concerned about the restructure taking place operative from 1 June 2001. Mr Kimber submitted that contrary to the respondent's submissions, there was evidence of a restructure that seemed to involve the demise of the respondent; the respondent elected not to attempt to dispel that conclusion by calling any sworn evidence but instead led evidence from the Bar table in the form of "instructions". 59 He further submitted that given that, if Caterpillar Inc. were to be joined, the Court would be unlikely to then grant any application for a Mareva order (following the approach in Cooper v Sithe Energies Australia Ltd [2000] NSWIRComm 176), the applicants cannot be criticised for asking the Court to consider joinder before asking it to consider any Mareva injunction. It may well be asked, the applicants submitted, how any joinder application could be characterised as a "disguised form of Mareva injunction" as joinder does not and could not affect a respondent's ability to deal with its assets. 60 Whilst it is undoubtedly correct to submit that in considering an application for joinder regard should be had to the principles applying to joinder, that does not mean that the Court, in exercising its discretion as to such an application, will not also consider the reasons underpinning the application. In this case it is apparent that the trigger for the joinder application was information that came to light in the discovery process that Caterpillar Inc. was intending a major restructuring of its Asia-Pacific operations and that on the face of certain documents the presence of Caterpillar in Australia was to be significantly downgraded. This no doubt gave rise to a concern on the part of the applicants that the respondent's assets might be moved off-shore so as to make the respondent an empty shell. 61 In the ordinary course, the appropriate procedural response by the applicants would be to seek injunctive relief in the form of an asset preservation order. Mr Hall submitted that the applicants did not pursue this course, however, because it "would be doomed to failure" and that the joinder application "is a mere device effectively to avoid that result." 62 I do not consider that the joinder application was an abuse of process. It was open to the applicants to choose which form of relief they considered appropriate in the circumstances and it could not be said that a joinder application is an asset preservation order in disguise. I do consider, however, that a significant reason for the applicants seeking joinder of Caterpillar Inc. was a concern on their part that there was to be a dismantling of the Caterpillar operation in Australia and that there was a risk that if orders were ultimately made in the applicants' favour, they would be of no effect because Caterpillar Australia would have been rendered an empty shell. In other words, in the absence of information about Caterpillar's restructuring plans it is probable that the applicants would have been content to pursue their remedy against the respondent notwithstanding that there may have been concern on the applicants' part about what they perceived to be Caterpillar Inc.'s culpable involvement in the decision to terminate the dealership. The applicants' fear about the consequences of Caterpillar's restructuring plans appears to have caused the applicants to focus more closely on Caterpillar Inc.'s involvement and thereby triggered the joinder application. It is open to the Court to take these considerations into account in exercising its discretion as to whether or not to order joinder. 63 There is one further matter upon which I wish to comment in relation to the Mareva order option. I have noted very carefully what Mr Hall said about the intentions of the Caterpillar organisation, particularly what he said in the nature of an assurance that there is no intention arising out of the restructuring of Caterpillar's Asia-Pacific operations, to move assets off-shore leaving the respondent an empty shell. I accept these assurances. I, therefore, consider it reasonable to presume that if any order is made against the respondent it would be in a position to comply. Is r 112 of the Industrial Relations Commission Rules 1996 a valid Rule? 64 Mr Hall submitted that r 112 of the Industrial Relations Commission Rules 1996 was invalid and, therefore, service of process outside of Australia was not authorised under the Industrial Relations Act 1996. Mr Hall's submissions in this respect may be summarised as follows: 1. In an action in personam , the rules as to the legal service of a writ of summons define the limits of the jurisdiction of the court: Gosper v Sawyer (1985) 160 CLR 548 at 558. 2. The question whether service can be effected outside the jurisdiction does not involve a matter of procedure but an extension of jurisdiction: Laurie v Carroll (1958) 98 CLR 310 at 322-324, 332. 3. A power to regulate the practice of a court does not involve any power to extend the nature of its jurisdiction: Attorney-General v Sillem (1864) 10 HLC 704 at 721. 4. Gosper v Sawyer demonstrates that a court must have legislative warrant for service of originating process outside the State including a particular service of such process outside Australia: BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 504. Otherwise, service of such process involves an excess of jurisdiction. 5. Rule 112 of the Commission's Rules purport to authorise the service of process outside of Australia. Rule 112, not being concerned with a procedural matter, must have a clear and express legislative warrant. 6. The validity of r 112 depends on the rule-making power of the Rule Committee conferred by s 185 of the Act as there is no provision of the Act itself that permits service outside Australia. Section 185 does not provide any authority for r 112 and no other provision of either the Act or the Rules confers jurisdiction to commence proceedings against persons outside Australia. 7. There is a distinction to be observed in the Commission's powers to require service of a document outside the State by virtue of s 162(2)(f) and power in a person having legislatively conferred entitlement to validly institute proceedings against a person outside Australia. Section 162(2)(f) empowers the Commission to authorise service of a document "outside the State", but it is silent as to extending its jurisdiction outside the State or outside Australia. It does not confer jurisdiction for the commencement of proceedings against a person outside Australia as does Part 10 of the Supreme Court Rules . 8. The Commission has both arbitral and judicial powers. Some of the powers conferred on the Commission are procedural powers (eg, s 132) to assist its arbitral and dispute-resolution functions but are powers that are inapposite for its judicial functions. 9. Section 162(2)(f) finds its place in a catalogue or list of powers dealing with the procedural rather than with substantive matters. Moreover, s 162(2)(f) uses the expression "document" rather than "originating process" as is found in Part 10 of the Supreme Court Rules and in r 112. 10. The language of s 162(2)(f) ("may require a document to be served") is not the language of conferral of jurisdiction by authorising service outside Australia - in contrast to the language of Part 10 of the Supreme Court Rules ("originating process may be served outside Australia in the following cases….."), which is a legislative enlargement of jurisdiction. 11. The Rule Committee cannot make a rule in terms of r 112 which has the effect of conferring a substantive extension of jurisdiction. That is a matter for the legislature. In this respect, the absence of any head of power in the Act and the circumscribed authority arising under s 185 establish that: (a) there is no authority or power in any of the provisions of the Industrial Relations Act 1996 to so extend jurisdiction; (b) there is no power or authority by means of scheduling Rules scheduled to the Act (as is the case in the Rules set out in the fourth Schedule to the Supreme Court Act 1970 - the means adopted for the legislative conferral of extra-territorial jurisdiction on that Court). 12. There is an important distinction between regulation or rule-making function conferred in relation to procedural matters not upon the Executive but upon judges of a court and the distinctive legislative function of changing conditions by making a new substantive rule to be applied thereafter to those subject to its operation: Harrington v Lowe (1996) 190 CLR 311 at 324. The provisions of s 185(1) and s 185(2) of the Industrial Relations Act 1996 do not provide or confer authority upon the Rules Committee to make a rule in the terms of r 112. 13. The decision of the High Court in Gosper v Sawyer was concerned with regulation 157 of the Industrial Arbitration (General) Regulations . There are two points to be noted in respect of that decision: Regulation 157 was a direct legislative conferral of power and made by the Governor pursuant to s 130 of the Industrial Arbitration Act 1940; Regulation 157 therefore had the statutory warrant of the Legislature in a similar fashion to the Supreme Court Rules , which r 112 does not have. 14. An enlargement of jurisdiction cannot by the rule-making power be validated by any provision in s 185 of the Act. 65 Mr Kimber , for the applicants, disputed the respondent's contentions relating to the invalidity of r 112. His submissions may be summarised as follows: 1. The common law position is that a writ issued out of a relevant court of a State will not run outside that State and, in actions in personam this must determine the jurisdiction of the court over the defendant: Laurie v Carroll at 322-323; 2. Proceedings under s 106 of the Industrial Relations Act 1996 are not actions in personam : Minister for Youth and Community Services v Health and Research Employees Association of Australia, New South Wales Branch (1987) 10 NSWLR 543; Visalli v Southwell (1988) 12 NSWLR 502 at 510. See also Reich v Client Server Professionals of Australia Pty Limited (2000) 99 IR 69 at 80 and Bell v Macquarie Bank (No. 4) (1999) 93 IR 191 at 202. 3. In Gosper v Sawyer , the important distinction between s 106 actions and actions in personam was not argued. Gosper v Sawyer is not authority for the proposition that a s 106 proceeding is an action in personam and is not, in turn, authority for the proposition that the Court's jurisdiction depends upon notification to any particular party or even service of process upon them. 4. Accordingly, in the context of s 106 proceedings, there is no foundation for the respondent's assertions that: (a) the question of whether service can be effected outside the jurisdiction involves 'an extension of jurisdiction' rather than being properly categorised as a matter of 'procedure'; and (b) Rule 112 purports to enlarge the jurisdiction of the Court to persons outside Australia. 5. In other words, as Kirby P and McHugh JA said in Visalli, given the foundation for s 106 jurisdiction, the joinder of Caterpillar Inc. as a party to the present proceedings is no more than a procedure designed to avoid arguments relating to the requirements of natural justice or the facilitation of ultimate recovery. Such matters are quite readily categorised as questions of practice and, if this be correct, then the question of service of such parties for such purposes must also be regarded as a proper matter of practice and/or procedure. The Court has power to make Rules in relation to practice and procedure: see section 185 (1) and (2)(a) of the Act and hence r 112 is properly to be seen as authorised and supported (as to its validity) by that section of the Act. 6. The effect of the decision in Gosper v Sawyer insofar as it held that a provision framed in terms of regulation 157 did not confer a power to enlarge jurisdiction by permitting service out of the jurisdiction was overcome in September 1989 by the introduction of new regulations: as to the new regulations, see Fernance v Wreckair Pty Limited (1991) 39 IR 280 at 295 and 297-298. Those new regulations were thereafter reflected in s 356(3) of the Industrial Relations Act 1991 and then again in s 162(2)(f) of the Act and in r 112 (as authorised both by s 185 of the Act and s 78 of the Interpretation Act 1987). The applicants' submit that the necessary "legislative warrant" now exists in s 162(2)(f) and in s 185 to support valid service of s 106 summons outside Australia. 7. Contrary to the submissions of the respondents there is no proper basis for reading down the clear and substantive power bestowed on the Court by s 162(2)(f). This is not because of any lack of any proper foundation for, in effect, adding the words "but only within Australia" after the words "outside the State." The words of the section are properly to be interpreted as meaning "outside the territorial jurisdiction" (as contrasted with inside that jurisdiction). 8. It is not correct to assert that s 162(2)(f) only deals with procedural matters. Apart from s 162(2)(f), note sub-sections (h) - (j) which are substantive rather than procedural powers. 9. Rule 112 is properly characterised as a provision of practice and procedure, and so made validly pursuant to s 185(1) or s 185(2)(b). Rule 112 accordingly regulates, as a matter of practice and procedure, that which the Court has express power to do under s 162(2)(f). 10. In any event, even if r 112 is not characterised as a matter of practice and procedure, it is nevertheless a Rule made within power. Section 185(2), without limiting the generality of s 185(1) allows for Rules to be made for or with respect to "(a) the initiation of proceedings in the Commission". It is noteworthy that subparagraph (a), unlike subparagraphs (b) to (d), does not limit the subject matter of Rules regarding the initiation of proceedings to 'practice and procedure'. Rule 112 is authorised by s 185(2)(a), even if r 112 could be characterised as dealing with matters beyond mere practice and procedure. 11. In any event, r 112 would be authorised and valid as a Rule made pursuant to s 185(2)(e), being a "matter that may be the subject of Rules under the Supreme Court Act 1970". 66 As I understand the core of the respondent's submissions on the invalidity of r 112 of the Industrial Relations Commission Rules it is that: 1. A proceeding under s 106 of the Industrial Relations Act 1996 is an action in personam . That is, wherever a defendant can be legally served with a writ or its equivalent, then the court, on service being effected, has jurisdiction to entertain an action against the defendant. Consequently, except for statutory extensions a writ issued out of a State court will not run outside that State and in actions in personam this must determine the jurisdiction of the court over the defendant: Laurie v Carroll (1958) 98 CLR 310 at 322-323. 2. The question whether service can be effected out of the jurisdiction "does not involve a matter of procedure but an extension of jurisdiction": Gosper v Sawyer (1985) 160 CLR 548 at 558. 3. A court must have a legislative warrant for service of originating process outside the State including, in particular, service of such process outside Australia: BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at 504. 4. Rule 112 purports to authorise the service of process outside Australia. Rule 112, not being concerned with a procedural matter, must have a clear and express legislative warrant. 5. There is no legislative warrant for r 112, therefore, any service on Caterpillar Inc. purported to have been carried out pursuant to r 112 is invalid. 67 The first question to be determined is whether a proceeding under s 106 is an action in personam. In Minister for Youth & Community Services v Health and Research Employees of Australia, New South Wales Branch ( 1987) 22 IR 59 at 74 McHugh JA said: The jurisdiction of the Commission under s 88F depends upon the existence of a contract, arrangement or condition answering the relevant description and nothing else. Unlike an action or suit at law or in equity jurisdiction does not depend on the service of process on any particular respondent. 68 In Visalli v Southwell (1988) 28 IR 234 at 241, Kirby P said: The jurisdiction of the Commission [in a section 106 case] is posited upon the existence of a contract. It does not by the terms of the Act follow the normal common law principle which relies upon the presence before the court or tribunal of parties to ground the jurisdiction to make orders against them. It is the contract not the presence of particular parties to the contract which is the source of the Commission's jurisdiction under section 88F of the Act. Provided there is proved to be a contract to which the Act applies, the Commission has undoubted jurisdiction to make an order or award. Indeed, the Commission is empowered at any to make an award of its own initiative so long as it otherwise has jurisdiction to do so: see the Act, section 31(b)(i). Such an award is in the nature of a legislative act. It is addressed not simply to the parties to the litigation but to the state at large. Leaving aside the requirements of the rules of natural justice and the preconditions to enforceability of such an award against particular parties, the jurisdiction of the Commission to make an award in the first place does not depend upon notification to such parties or even service of process upon them. 69 In Bell v Macquarie Bank (No.4 ) (1999) 93 IR 191 at 202, the Full Bench said: We consider that it is also relevant to observe that jurisdiction under s 106, and its predecessors, has been long held to depend not upon the service of a writ or summons, but rather upon the existence of a contract, arrangement, related condition or collateral arrangement answering the relevant statutory description. See, for example, the judgment of McHugh JA in Minister for Youth & Community Services v Health and Research Employees Association of Australia NSW Branch (1987) 10 NSWLR 543 at 558-559 and the judgment of Kirby P in Visalli v Southwell (1988) 12 NSWLR 502 at 510. 70 On their face, these cases strongly suggest that a proceeding under s 106 is not an action in personam and that jurisdiction depends on the existence of a contract that answers the relevant statutory description. 71 The respondent, however, relies on the decision of the High Court in Gosper v Sawyer as authority for the proposition that a proceeding under s 106 is an action in personam and, therefore, authority for the proposition that the Court's jurisdiction depends upon proper service of process under legislative warrant. 72 As the applicants contend, however, the distinction between s 106 and actions in personam was not argued in Gosper v Sawyer, possibly because, as Kirby P suggested in Visalli v Southwell at 241, " in the circumstances of that case, the parties considered that they needed to join trustees in Victoria in order to be able to enforce against them any award recovered under s 88F of the Act in New South Wales." The High Court in Gosper v Sawyer merely proceeded on the basis that a proceeding under s 88F of the Industrial Arbitration Act 1940 was an action in personam but it made no positive determination in that respect. Their Honours Mason and Deane JJ said at 562: To hold that Mr. Sawyer's proceedings against the appellants are an action in rem would, however, serve only to make more difficult his task of establishing jurisdiction in the Commission since it has not been suggested that any relevant res is situate in New South Wales. That being so, it will not be to Mr. Sawyer's prejudice if the matter is approached on the basis on which it was dealt with by the Commission and has been argued in this Court, namely, that his proceedings against the appellants were an action in personam . 73 The respondent submitted that the decision in Gosper v Sawyer: involved the High Court in specifically addressing the question of extra-territorial jurisdiction as it applied in the context of s 88F of the Industrial Arbitration Act and is the closest and most authoritative decision underlining the marked distinction between, on the one hand, the extra-territorial jurisdiction of a court and, on the other hand, mere matters of practice and procedure so far as s 88F/s 106 proceedings are concerned. 74 The respondent also submitted that the decision in Visalli v Southwell (and presumably the decision in Minister for Youth and Community Services v Health and Research Employees' Association ) was made in a different context to that of Gosper v Sawyer . The proposed respondent in Visalli v Southwell was within New South Wales and, therefore, within the Court's "territorial jurisdiction", whereas the High Court was concerned with respondents in Victoria and, therefore, outside territorial jurisdiction. The respondent submitted that the contextual setting for the discussion on jurisdiction in Visalli v Southwell was "subject matter jurisdiction" and not "territorial jurisdiction". In other words, in determining that "It is the contract not the presence of particular parties to the contract which is the source of the Commission's jurisdiction under section 88F of the Act", Kirby P was doing so in the context of the proposed respondent being within the territorial jurisdiction of the Court. The respondent pointed to the following observation by Kirby P in Visalli v Southwell at 240 : There is no doubt that joinder has, from time to time, been described as a matter of practice: see eg Glass JA in McGee v Yeomans [1977] 1 NSWLR 273 at 280. However, that cannot be conclusive of the present controversy. It is equally clear that Gosper can satisfactorily be distinguished. Service beyond the jurisdiction to ensure enforceability of an award against a party not in the jurisdiction may quite readily be seen as a matter not of mere practice but jurisdiction. To some extent the question is one of degree. But a provision in the Supreme Court Rules , Pt 10, r 2, extending the facility of the service of process outside New South Wales may be considered to be different in quality from the provision here in question. Part 8 r 8 [ SCR ], if incorporated, simply permits the joinder into proceedings as a party of a person who is undoubtedly within the jurisdiction, who could be brought separately or differently before the Commission as a party and who has no jurisdictional basis, in the normal sense of that term, to object to such joinder. 75 Further, in the same case Priestley JA said at 243: The second submission was that in some way Gosper v Sawyer (1985) 160 CLR 548; 9 IR 452 supported the Commission's asserted lack of power. Amongst the many differences between that case and the present one is that the relevant party was not physically within New South Wales. This was one of the facts on which the decision in Gosper was based: see Gibbs CJ, Wilson and Dawson JJ (at 559) and per Mason and Deane JJ (at 564-566). What was said in Gosper does not in my opinion bear on the propositions I have stated in dealing with the first submission. The possible difficulties I there mentioned can apply only in regard to persons outside, and not persons within, New South Wales. 76 I think the respondent is correct in its analysis of Visalli v Southwell and Gosper v Sawyer. Notwithstanding that "subject matter jurisdiction" might be established under s 106 of the Industrial Relations Act by the existence of a contract or arrangement that answers the relevant statutory description, there remains the question of the Commission in Court Session's power to join an extra-jurisdictional respondent which, on the authority of Laurie v Carroll and Gosper v Sawyer, is a matter of jurisdiction and not practice and procedure. I note the observation by the Full Bench in Bell v Macquarie Bank about the Commission's in Court Session's jurisdiction, which I quoted above. However, the Full Bench in that case was not asked to turn its mind to the issue before me and the validity of r 112 was not in issue. 77 It follows, in my opinion, that the joinder of Caterpillar Inc. is more than a question of "procedure designed to avoid arguments relating to the requirements of natural justice or the facilitation of ultimate recovery"; it is a question of jurisdiction and in that context - the context of extra-territorial jurisdiction - a proceeding under s 106 is an action in personam . Accordingly, it is necessary to determine which of the provisions of the Industrial Relations Act validate r 112 of the Commission's Rules. 78 The applicants contend that even if a proceeding under s 106 of the Act is to be properly categorised as an action in personam , the High Court in Gosper v Sawyer accepted that the common law limits on jurisdiction that usually apply to such actions can be extended by appropriate legislative provisions. In that case, however, the High Court held that the statutory provisions sought to be relied upon to extend jurisdiction, namely reg 157 of the Industrial Arbitration (General) Regulations (NSW) and s 11 of the Service and Execution of Process Act 1901 (Cth), did not provide the extension as asserted by the respondent in that case. 79 Regulation 157 was in the following terms: Where there is no established practice and usage of the Commission, and where none of the rules now made is applicable, then the practice for the time being of the Supreme Court, in its Equitable Jurisdiction, shall, as far as is practicable, regulate the practice of the Commission. 80 Regulation 157 was repealed on 22 September 1989 and regs 125T, 126D and 126N were inserted: see Government Gazette No 97 of 22 September 1989. Regulation 126N provided that: (1) Service outside the State is to be as nearly as practicable in accordance with Part 10 of the Supreme Court Rules. (2) Leave to serve or confirmation of service may be given by the tribunal before which the proceedings are brought. 81 This Regulation was then reflected in part in s 356(3) of the Industrial Relations Act 1991 as follows: ……….. (3). The Commission may require a document to be served outside the State. 82 Section 162(2)(f) of the Industrial Relations Act 1996 provides that: The Commission: ………… (f) may require a document to be served outside the State. 83 It can be seen, therefore, that s 162(2)(f) does have a statutory pedigree whose origins appear to be in regulations designed to overcome the absence of an independent underlying power to order service outside the State. 84 It is convenient at this point to set out the other provisions of the Industrial Relations Act 1996 and the Interpretation Act 1978 that are relevant before proceeding to analyse the respective parties' submissions on the validity of r 112. 85 Sections 185 and 186 of that Act provide: 185. Rules of Commission (1) Rules of the Commission may be made for or with respect to any matter that by this or any other Act is required or permitted to be prescribed by rules of the Commission or that is necessary or convenient to be prescribed in relation to the practice and procedure of the Commission under this or any other Act. (2) Without affecting the generality of subsection (1), rules of the Commission may be made for or with respect to: (a) the initiation of proceedings in the Commission, or (b) the practice and procedure to be followed in, or for the purposes of, proceedings before the Commission, or (c) the means for, and the practice and procedure to be followed in, the enforcement and execution of decisions of the Commission, or (d) the functions of the Industrial Registrar or other officers under this Act, including functions in relation to proceedings instituted before the Commission, or (e) any matter that may be the subject of rules under the Supreme Court Act 1970. (3) This section extends to the making of rules relating to the practice and procedure of (and other matters relating to) an Industrial Committee. 186. Establishment and procedure of the Rule Committee of the Commission (1) The rules of the Commission are to be made by a Rule Committee of the Commission comprising: (a) the President of the Commission, and (b) 2 other Presidential Members appointed by the President. (2) The President of the Commission may co-opt other persons to be members of the Committee, either generally or for limited purposes. (3) The procedure at a meeting of the Committee is to be as determined by the President of the Commission. (4) At a meeting of the Rule Committee of the Commission: (a) the President of the Commission is to preside, or (b) if the President is absent, a member nominated by the President is to preside. 86 Section 78 of the Interpretation Act 1987 provides: 78. Rules of court (1) The power of a person or body to make rules of court includes power to make rules of court for the purposes of any Act or statutory rule that permits or requires any thing to be done by or in accordance with rules of court. (2) If an Act or statutory rule: (a) confers any jurisdiction on a court or tribunal, or (b) extends or varies the jurisdiction of a court or tribunal, the person or body having power to make rules or orders regulating the practice and procedure of the court or tribunal may make rules or orders (including rules or orders with respect to costs) regulating the practice and procedure of the court or tribunal in the exercise of the jurisdiction so conferred, extended or varied. 87 Rule 112 of the Industrial Relations Commission Rules 1996 provides: 112. Service out of Australia (1) This Rule applies where, pursuant to section 162(2)(f) or otherwise, any process or document is to be served outside the State and outside Australia. (2) Process or documents may be served outside Australia, but must bear a note in the appropriate form. (3) Where process served under this Rule requires or permits the filing of a notice of appearance, the period for entry of such an appearance will be 21 days after service, unless the tribunal, on application allows a shorter period. (4) Where there is no appearance by the defendant or respondent to any process served under this Rule, the applicant must not proceed except by leave of the tribunal before which the proceedings are brought. 88 The applicants submitted that s 162(2)(f) of the Industrial Relations Act 1996 supported valid service of a s 106 summons outside Australia. The respondents, on the other hand, contended essentially three things about s 162(2)(f): firstly, that it only empowers the Commission to require service of a document "outside the State" but it is silent as to extending its jurisdiction outside the State or outside Australia; secondly, the language of s 162(2)(f) is not the language of conferral of jurisdiction by authorising service outside Australia in contrast to the language of Pt 10 of the Supreme Court Rules 1970, and; thirdly, s 162(2)(f) should be understood as facilitating the arbitral and dispute resolution functions of the Commission - it is inapposite to the Commission in Court Session's judicial functions. 89 If I could deal firstly, with the proposition that s 162(2)(f) should be understood as facilitating the arbitral and dispute resolution functions of the Commission. I can find no reasonable basis for arriving at such a conclusion. It would mean that the Commission in Court Session, in the exercise of a judicial function, could not require a document to be served outside the State but the Commission exercising arbitral functions could. If the Legislature intended to separate the functions of the Commission in this way, surely more explicit language would have been required. 90 As to the respondent's other two contentions regarding s 162(2)(f), that is, it only empowers the Commission to require service of a document "outside the State" but it is silent as to extending its jurisdiction outside the State or outside Australia, and that the language of s 162(2)(f) is not the language of conferral of jurisdiction by authorising service outside Australia in contrast to the language of Pt 10 of the Supreme Court Rules 1970, I refer to what Mason and Deane JJ said in Gosper v Sawyer at 564-565: In the context of the matters mentioned in the preceding paragraph, a statutory conferral of power upon a court to order service of its process outside its territory will ordinarily be construed as carrying with it an implied grant of jurisdiction to entertain an action, of which it is otherwise cognizant, against the person served: "whenever a defendant can be legally served with a writ, then the court, on service being effected, has jurisdiction to entertain an action against him" (Dicey and Morris on The Conflict of Laws, 10th ed. (1980), vol.1, p.182). That general proposition is, of course, subject to any express or implied contrary intention or qualification to be discerned in the legislative provisions authorizing service outside the limits of territorial jurisdiction. Subject to any such contrary intention or qualification, the conferral upon a court of a power to order service outside its territory will provide the basis of "an extension of jurisdiction" (cf. Laurie v. Carroll, at p 332). 91 Section 162(2)(f) appears to be based on antecedents derived from the Supreme Court Rules 1970 as originally enacted in the Fourth Schedule to the Supreme Court Act 1970. These Rules provided that unless service outside the State was in accordance with the prior leave of the Court, or the Court confirmed the service, or the person served waived objection by entering an appearance, service outside the State was not valid under Pt 10 (r 2(1)). Part 10, r 2(2) of those Rules provided that leave might be granted "[w]here the Court is satisfied on the following matters …(b) that the applicant has a prima facie case for the relief which he seeks". With a party required to seek leave to serve out of jurisdiction, it would explain the use of the word "require" in s 162(2)(f). The current Supreme Court Rules, as a consequence of amendments in 1988, do not require leave to serve out of jurisdiction and do not require that the party seeking to serve out demonstrate a prima facie entitlement to the relief sought in the originating process. Rule 112 of the Commission's Rules would appear to be based partly on the current Supreme Court Rules relating to service outside Australia. 92 Despite the language of s 162(2)(f), I do not think this detracts from it being a statutory conferral of power that provides the basis of an extension of the Commission's jurisdiction outside the State and outside Australia. If one reads s 162(2)(f) with s 78 of the Interpretation Act 1987 and with s 185(1) of the Industrial Relations Act 1996, which allows for the making of rules of the Commission for or with respect to any matter that by the Act is required or permitted to be prescribed by rules of the Commission, in my opinion, r 112 is properly authorised and is, therefore, a valid rule. 93 If I am wrong about s 162(2)(f), I have considered the alternative proposition contended by the applicants, namely, that r 112 would be authorised and valid as a Rule made pursuant to s 185(2)(e) of the Act, being a "matter that may be the subject of Rules under the Supreme Court Act 1970" or s 185(2)(a), which allows for rules to be made with respect to the initiation of proceedings, even in the absence of s 162(2)(f) of the Act. It may be noted that r 112(1) states that "This Rule applies where, pursuant to section 162(2)(f) or otherwise , any process or document is to be served outside the State and outside Australia." 94 The respondent submitted that s 185(2)(e) of the Act did not authorise r 112. It was contended by the respondent that the Supreme Court Rules were enacted as a Schedule to the Supreme Court Act 1970 so that those Rules have statutory warrant. On the other hand, the Industrial Relations Commission Rules are not Rules made by Parliament nor are they scheduled as Rules under the Industrial Relations Act 1996. Therefore, unless the Act contains a provision that extends the jurisdiction of the Court, the Rule Committee under s 186 cannot confer upon itself the power to extend jurisdiction by the making of a rule such as r 112. 95 The respondent relied on the decision in Gosper v Sawyer where the High Court held that reg 157 of the Industrial Arbitration (General) Regulations did not render Pt 10 of the Supreme Court Rules applicable to proceedings in the Commission. It is convenient to repeat what Regulation 157 prescribed: Where there is no established practice and usage of the Commission, and where none of the rules now made is applicable, then the practice for the time being of the Supreme Court, in its Equitable Jurisdiction, shall, as far as is practicable, regulate the practice of the Commission. 96 In Gosper v Sawyer, Mason and Deane JJ, while issuing a separate judgment from the majority, agreed with the majority that reg 157 was inadequate to confer jurisdiction on the Commission to order service outside jurisdiction. Their Honours said at 565-566: It is possible to point to some statements in reported cases which lend at least superficial support for the view that a question of service outside territorial limits is a matter of the "practice" or "procedure" of the particular court (see, e.g., Black v Dawson (1895) 1 QB 848, at p 849). There is much to be said for that view in a case where a court plainly has power to order service of the particular process outside its territory and what is involved is the manner of exercise of the power in the circumstances of the particular case. On the other hand, the question whether a court possesses the actual power to make an order for service outside its territory is not a mere matter of the practice or procedure observed by the particular court in the exercise of its jurisdiction. The existence of an actual power to order service outside territorial jurisdiction is a component and a measure of jurisdiction itself (see, e.g., Laurie v Carroll , at pp 322-324; In re Anglo-African Steamship Co. (1886) 32 Ch D 348, at pp 350,351). Accordingly, if the Commission had been possessed of some independent substantive power to order service of its originating process outside New South Wales, there would be force in the argument that a provision that the Rules of the Supreme Court in its Equitable Jurisdiction should, mutatis mutandis, govern the manner in which that power should be invoked and exercised would relate merely to the "practice" or to the "practice or usage" of the Commission. It is not, however, suggested that, apart from the provisions of the Service and Execution of Process Act to which reference will subsequently be made, the Commission possesses any such independent underlying power. To the contrary, it is sought to derive the power itself from the provision in reg.157 that "the practice for the time being of the Supreme Court, in its Equitable Jurisdiction, shall, as far as is practicable, regulate the practice of the Commission". That involves attributing to the regulation an operation which would effect an expansion of the Commission's jurisdiction. As has been seen however, such an operation is something which the provisions of reg.157, properly understood, are simply inadequate and inappropriate to encompass.

97 It is readily apparent that the provisions of s 185 of the Industrial Relations Act 1996 are quite different to reg 157 considered by the High Court in Gosper v Sawyer . 98 It would also seem that s 185(2) of the Act has to be read subject to s 185(1). So that any rules of the Commission may be made: (i) for or with respect to any matter that by the Act (or any other Act) is required or permitted to be prescribed by the Commission's Rules, or; (ii) where it is necessary or convenient for rules to be prescribed in relation to the "practice and procedure" of the Commission under the Act (or any other Act). 99 Thus, s 185(1) enables a rule to be made for or with respect to any matter that by the Act (or any other Act) is required or permitted to be prescribed by the Rules of the Commission. Section 185(2) provides that a rule may be made for or with respect to: (a) the initiation of proceedings in the Commission; ……. (e) any matter that may be the subject of rules under the Supreme Court Act 1970. 100 On this construction, the limits associated with "practice and procedure" as discussed in Gosper v Sawyer do not arise. Section 185(2)(a) permits a rule to be made for or with respect to the initiation of proceedings. Section 185(2)(a) is not limited by any reference to "practice and procedure" as is the case with s 185(2)(b) and (c). However, I have to say that in the absence of a specific reference to extra-jurisdictional power I think s 185(2)(a) falls short of providing the basis of an extension of jurisdiction outside the State. 101 As to s 185(2)(e), in the absence of any suggestion to the contrary, Pt 10 of the Supreme Court Rules , which provides for service on persons outside Australia, is valid. It follows that if Pt 10 contains rules validly made, then the subject matter of Pt 10 is, pursuant to s 185(2)(e), a "matter that may be the subject of rules under the Supreme Court Act 1970." 102 It was submitted by the respondent, however, that the Supreme Court Rule Committee may, pursuant to s 124(o) of the Supreme Court Act 1970, make rules regulating or prescribing any matter to which provision was made in Schedule Four to that Act but that such power only extends to rules governing procedure and, accordingly, there is no power to make rules extending jurisdiction, such as rules concerning service outside the jurisdiction. In other words, it was contended that there was a distinction to be drawn between the Rules in the Fourth Schedule, which was made by Parliament, and any subsequent Rules made by the Supreme Court Rule Committee; the Committee could not make rules extending the jurisdiction of the Supreme Court. 103 It was further submitted by the respondent that the reference in s 185(2)(e) to a "matter that may be the subject of rules under the Supreme Court Act 1970" was not a reference to the Rules in the Fourth Schedule but only to those rules referred to in s 124(o) of the Supreme Court Act , namely, rules made by the Rule Committee for regulating and prescribing any matter concerning or in relation to which provision is made by the rules in the Fourth Schedule of that Act. Accordingly, it was submitted, because the Supreme Court Rule Committee cannot make rules extending that Court's jurisdiction, s 185(2)(e) cannot be used to extend the Commission's jurisdiction by relying on rules made by the Supreme Court's Rule Committee. 104 I do not think this submission is tenable in the face of the opening words of s 124(1), which states "Any Rules may be altered or added to or rescinded, and any further or additional Rules may be made, by the Rule Committee for the purpose of carrying this Act into effect….". Further, s 122 of the Supreme Court Act , provides: 122. Rules taken to have effect as rules made by the Rule Committee (1) The rules in the Fourth Schedule shall come into operation on the commencement of this Act, but subject to and together with rules made by the Rule Committee. (2) Upon the expiry of six months after the commencement of this Act, or on such earlier date as may be appointed by the Governor and notified by proclamation published in the Gazette, the Fourth Schedule to this Act shall, by force of this subsection, be repealed. (3) On and after the repeal to be effected by subsection (2) the rules in the Fourth Schedule shall have effect as rules made by the Rule Committee, but subject to and together with rules made by the Rule Committee. Note. A proclamation was not published under subsection (2). Therefore, the Fourth Schedule was repealed on 1 January 1973 (six months after the commencement of this Act). 105 If the rules in the Fourth Schedule, which is now repealed, are to have the effect as rules made by the Rule Committee of the Supreme Court but subject to and together with the rules made by the Rule Committee, I cannot see how a distinction can be made, for the purpose of interpreting s 185(2)(e) of the Industrial Relations Act 1996, between rules under the repealed Fourth Schedule and rules made by the Rule Committee. 106 Section 185(2)(e) also appears to have its origins in provisions designed to overcome the shortcomings identified in Gosper v Sawyer (See reg 126N(1) of the Industrial Arbitration (General) Regulations ). Those shortcomings were about a deficiency in a regulation that sought to adopt the relevant Supreme Court Rules in its Equitable Jurisdiction to regulate the "practice" of the Commission. The High Court held that a court's power to order extra-territorial service was a question of jurisdiction and not practice. Section 185 of the Act enables rules to be made for or with respect to any matter that by the Act or any other Act is required or permitted to be prescribed by rules of the Commission. Rules under the Supreme Court Act may be, and have been, made with respect to service outside Australia. Rule 112 of the Commission's Rules is a rule with respect to service outside Australia. 107 In my opinion, r 112 is authorised and valid as a rule made pursuant to s 185(2)(e) of the Industrial Relations Act 1996. Conclusion 108 If I may summarise the position thus far: 1. The applicants seek joinder of Caterpillar Inc. as a respondent to the proceedings. The applicants submitted that in deciding whether to join Caterpillar Inc. all that the Court needs do at this stage is to consider the appropriateness of joinder having regard to the relevant authorities governing joinder. If Caterpillar Inc. is joined and appears in the proceedings then that is the end of the issue and the applicants may proceed against both respondents. If Caterpillar Inc. were not to appear, the next step would be to consider whether the applicants should be granted leave to proceed against Caterpillar Inc. I have taken the view, however, given all that has been put before me, that I should at least in a preliminary way, consider the question of leave to proceed if Caterpillar Inc. was joined as a respondent. This involves a two part test as laid down in Bell v Macquarie Bank . 2. The principal amendments foreshadowed in the proposed Second Further Amended Summons involved the addition of Caterpillar Inc. as a party to the contracts that are the subject to these proceedings. I have found that there is no power under s 106 to order that Caterpillar Inc. be made a party to a contract or arrangement. 3. In their Second Further Amended Summons and in their substantive submissions, the applicants pleaded that there was a "termination arrangement" involving the respondent and Caterpillar Inc. It was submitted that this was an arrangement or collateral arrangement. I have found that the "termination arrangement" is not an arrangement or collateral arrangement within the meaning of s 105 of the Act. In their reply to the respondent's substantive submission the applicants raised an alternative pleading that Caterpillar Inc., the respondent and the applicants were parties to an "overall arrangement". I have found that it is too late for the applicants to plead an "overall arrangement" in a reply. 4. I consider, based on the principles established in Brown v Rezitis, that even if Caterpillar Inc. were not a party to a relevant contract or arrangement, it is arguable that there is a sufficient connection with the relevant contract or arrangement to the extent that money orders and an order under s 107 could be made against Caterpillar Inc. 5. It would have been open to the applicants, given their concern that the restructuring of Caterpillar operations in Australia might lead to assets being moved off-shore, to seek an asset preservation order rather than a joinder of Caterpillar Inc. to these proceedings. In this respect, the respondent has submitted, in effect, that there was no intention of Caterpillar moving its assets off-shore. Despite it being open to the applicants to pursue an asset preservation order as the alternative to joinder I do not consider the joinder application to be an abuse of process. 6. Rule 112 of the Industrial Relations Commission Rules 1996 is a valid rule. 109 I turn to consider the question of leave to proceed. Given that I have found that the "termination arrangement" was not a relevant arrangement or collateral arrangement within the meaning of s 105 of the Act, the applicants have failed, in this respect, to make out a good arguable case that Caterpillar Inc. was a party to an arrangement or collateral arrangement with the relevant territorial connection. 110 Moreover, the primary relief sought by the applicants was continuation of the dealership agreements, albeit on different terms. In pursuing this relief the applicants seek to have Caterpillar Inc. made a party to the relevant contracts or arrangements between the applicants and the respondent. The Court does not have the power under s 106 to make Caterpillar Inc. a party to the dealership agreements. Consequently, there would be no point in joining Caterpillar Inc. to the proceedings, even if Caterpillar Inc. was a party to an arrangement or collateral arrangement. 111 However, in the event that the applicants were unsuccessful in obtaining the primary relief they seek, namely, continuation of the contracts in amended terms, the alternative relief sought, if unfairness were found, is compensation for loss by virtue of the termination of the contract. In this respect, I have found that it is arguable that there was a connection, in the Brown v Rezitis sense, between Caterpillar Inc. and the contracts or arrangements that are the subject of these proceedings to the extent that money orders could be made against Caterpillar Inc. in the event that it was found that Caterpillar Inc. had acted unfairly. Accordingly, I consider that the applicants have made out a good arguable case for this connection. 112 The next question is whether I should exercise my discretion to grant leave to the applicants to proceed against Caterpillar Inc. In doing so, the matters I may take into account include whether there is insufficient prospect of success, inappropriate forum and 'inconvenience and annoyance' in the international law sense. 113 I think it is clear on the authorities that the Commission in Court Session is not an inappropriate forum: Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 539. The contracts that are the subject of the proceedings involved the performance of work in New South Wales and were formed in New South Wales. There is no suggestion that another forum would be more convenient. 114 As to inconvenience and hardship, the majority in Agar v Hyde noted with approval (at par 42) what the Court of Appeal said below in relation to such matters that contemporary developments in communications and transport make the degree of "inconvenience and annoyance" to which a foreign defendant would be put, if brought before the Court, "of a qualitatively different order to that which existed in 1885." The reference to 1885 was a reference to the decision in Societe Generale de Paris v Dreyfus Brothers (1885) 29 Ch D 239. As the applicants submitted, there was no suggestion that Caterpillar Inc., as a large company with global operations, would suffer any inconvenience or hardship of any degree in being joined to the proceedings in New South Wales. 115 An important consideration in the exercise of discretion is whether the applicants' claims have insufficient prospects of success to warrant putting Caterpillar Inc. to the time, expense and trouble of defending the claims. The first thing to note about this question is that, in my opinion, any claims against Caterpillar Inc. could only arise if the applicants were unsuccessful in obtaining their primary relief, that is, continuation of the contracts on different terms. Only then might the question arise as to whether the applicants have any claim against Caterpillar Inc. for loss caused by any unfairness on the part of Caterpillar Inc. 116 Whilst the role of Caterpillar Inc., as the respondent's parent, may have had an indirect impact on the applicants, overwhelmingly the major relationship and the main transactions appear to have occurred between the applicants and the respondent. Perhaps it may be inferred that Caterpillar Inc. ultimately approved the dealership being awarded to the applicants in 1989, but most probably this was made on a recommendation of the respondent. Similarly, the termination of the dealership may have been approved by Caterpillar Inc. but again, it appears, on the recommendation of the respondent. In respect of the article by the chairman of Caterpillar Inc. Mr Fites, and the 'good faith' approach he espoused in the Harvard Business Review towards Caterpillar dealerships around the world, I note that it was brought to the attention of the applicants by the respondent. 117 Clearly, Caterpillar Inc. had a business in New South Wales but it seems that it was operated at arms length through a substantial corporation, namely, the respondent. There is little, if any, material to suggest that Caterpillar Inc. made any decisions about the applicants' dealership, or conducted itself, independently of advice from its Australian subsidiary. Indeed, it would be surprising if this were the case. One exception to this, which is presently apparent, is the standard form contract issued by Caterpillar Inc. and upon which the dealership appears to be based. This is, I think, Caterpillar Inc.'s Achilles Heel. 118 However, even if the applicants were not successful in achieving their primary relief but the Court was, nevertheless, inclined to make orders pursuant to s 106(5), it is arguable that these could be made exclusively against the respondent without giving rise to any injustice. In this connection, having argued vigorously for the exclusion of Caterpillar Inc. from the proceedings, and assuming the respondent was successful in this argument, the respondent would be in no position, if unfairness were found, to seek to transfer any part of the blame to Caterpillar Inc., based on an argument related to the standard form contracts having emanated from Caterpillar Inc., in order to offset any liability for compensation. 119 Another factor to be weighed up is that if it were not for the applicants' concern that assets of the respondent may be moved off-shore, the applicants would, most probably, not have turned their minds to the involvement of Caterpillar Inc. and would have been content to proceed solely against the respondent. 120 It may be discerned from what I have said that I do not consider the applicants' prospects of success against Caterpillar Inc. to be particularly strong. However, for the present, I refrain from finding that there is an insufficient prospect of success and, therefore, at this stage I am not prepared to refuse leave to proceed. In this respect, I am reminded of what McHugh JA said in Minister for Youth and Community Services v Health and Research Employees at 74, albeit in respect of an intra-jurisdictional respondent: Who can properly be a respondent to the proceedings? In my opinion any person whose rights or legitimate expectations will or may be affected by the exercise of the power conferred by s 88F is a necessary respondent. 121 This raises the question that if, for example, I were to make an order pursuant to s 107 prohibiting the use by Caterpillar Inc.'s Australian subsidiary of its standard form contract in New South Wales, I could be affecting Caterpillar Inc.'s rights and so, before finally deciding the issue of leave to proceed, not only should I give the applicants and the respondent the opportunity to make further submissions in the light of this judgment but Caterpillar Inc. should be given the opportunity to consider its own position. That is, Caterpillar Inc. will have to decide, in the light of this judgment, whether it will file a Notice of Appearance and defend the claims made against it or, take its chances on leave to proceed being refused. Even if leave is refused, there is the risk for Caterpillar Inc. that if unfairness is found any orders may, nevertheless, impact on its rights or legitimate expectations and I cite the example of the standard form contracts. 122 I intend, therefore, to grant the application for joinder. In the event that Caterpillar Inc. does not appear the applicants are required to seek leave to proceed against the second respondent. 123 I accept that on the basis of the evidence of Ms Pritchard in the form of an affidavit sworn on 27 March 2001 that service has been properly effected on Caterpillar Inc. pursuant to r 112. 124 I order that Caterpillar Inc. be joined as the second respondent in these proceedings. Caterpillar Inc. may file a Notice of Appearance by 4.00 pm Monday 7 May 2001. This matter is listed for further directions at 4.00 pm on Tuesday 8 May 2001. 125 Costs are reserved.

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