John Holland Group Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union & Ors [2011] VSCA 11

2 The appellant seeks orders that it be given leave to amend its notice of appeal and that certain grounds of appeal be heard separately and in advance of other grounds of appeal.

3 The appeal arises from a decision by a judge in the trial division of the Supreme Court refusing the appellant's claim to enforce an industrial agreement between the appellant employer and the respondent trade unions.

4 The agreement was the product of an industrial compromise, which was governed by the Workplace Relations Act 1996 (Cth). The appellant acquired the engineering business that serviced Ansett and the other aircraft of other airlines. The agreement related to the employment of the workforce of the business and was described as a union greenfields agreement. The agreement was for a term of three years with an option to extend the expiry date by a period of either one or two further years. The appellant sought to exercise the election to extend the expiry date.

5 After the agreement was made, the Workplace Relations Act 1996 (Cth) was replaced by the Fair Work Act 2009 (Cth). The appellant accepted that this development rendered the agreement unenforceable against the employees. It contended, however, that the agreement was enforceable as against the unions as a common law agreement.

6 The trial judge held that the mechanism by which the nominal expiry date of the agreement was to be extended depended upon the existence of the regime created by the Workplace Relations Act. The agreement did not contemplate the terms of the Fair Work Act, which only subsequently came into existence after a general election and a change of government.

7 The agreement between the appellant and the respondents did not confer upon a appellant the contractual right devoid of legislative effected under the Workplace Relations Act. His Honour said:

What was contemplated in the deed of settlement in terms and in substance was that the greenfields agreement would have effect as an instrument through the Workplace Relations Act and that on that basis, among other things, John Holland could elect to extend the date of the greenfields agreement with the character and quality as a greenfields agreement under the Workplace Relations Act for a period of a further one or two years. In my view clause 6 has become inoperative and unenforceable by the repeal of the Workplace Relations Act and the introduction of the Fair Work Act.

8 The appellant maintained an alternative claim that its inability to extend the nominal expiry date by reason of the repeal of the Workplace Relations Act constituted an impermissible acquisition of property contrary to s 51 (xxxi) of the Constitution. The appellant contended that it had a chose in action under the agreement which permitted it to extend the nominal expiry date in the greenfields agreement. The trial judge rejected this argument, holding that the Fair Work Act was not a law with respect to the acquisition of property within the meaning of s 51 (xxxi). Any effect which the Act had upon the contractual entitlement of the appellant against the respondents was incidental and subservient to the principle purpose and effect sought to be achieved by the legislation.

9 I agree with the appellant's contention that the amendment sought to be made to the notice of appeal are not intended to raise substantially new grounds but rather to articulate existing grounds more clearly and state properly the orders which would ensue if the appellant were to succeed.

10 As the respondents do not oppose the application I would grant the leave which is sought.

11 As to the application to split the hearing of the appeal, grounds 1, 1(a) and 2 raise questions of contract law, that is the construction of the agreement and frustration. The appellant seeks an order that those grounds be dealt with separately from grounds 5 and 6, which raise the issue of constitutional law, namely whether the Commonwealth Act constituted an acquisition of property otherwise than on unjust terms. If the appellant were to succeed on the contract questions it would be unnecessary for the Court to embark on the constitutional law question.

12 The appellant contends that the contract questions, can be dealt with shortly, whereas the relevant constitutional law principles are complex, their application is not straightforward and there is likely to be additional argument from the Attorney-General for the Commonwealth. It is said that the first question would occupy this Court for perhaps half a day whereas a hearing of all questions together could take between one and one and a half days and two days.

13 On the other hand, if the contract issues are decided adversely to the appellant, there will be delay and I think it likely there will be duplication of costs and the performance of extra work by the parties and by the Court. If the parties or party losing the contract issues were to seek leave to appeal to the High Court, there would be further delay. Further, I have some doubt as to the accuracy of the predictions by the appellant as to the relative complexity of the issues and the time required for their merits to be debated.

14 If the contract and constitutional issues were entirely distinct, there might well be merit in the applicant's application. But they are not. Each issue requires consideration of the terms and effect of the agreement between the parties as well as an examination of the work place relations regime before and after the enactment of the Fair Work Act. The potential and, I think, likely disadvantages of the course proposed by the appellant are hardly outweighed by the advantages of saving what, in my view, would be a relatively short time spent in argument in court.

15 As I think there is a reasonable risk of delay and duplication and waste of the parties' and the court's resources if the hearing of the appeal were to be split, I would refuse the application.

16 I agree and would make the orders proposed by his Honour, for the reasons which he gives. In relation to the application to split the hearing of the appeal I would add the following.

17 As illustrated by the approach adopted by this Court, at its own instigation, in Sopov v Kane Constructions Pty Ltd,[1] the court will, in an appropriate case, split the hearing of issues on an appeal. But that will be a rare case. First, it would ordinarily be a condition of such a split that nothing dealt with in the first part of such a split hearing would require to be dealt with in the second part, should that be necessary.

18 Secondly, there would also need to be some really significant prospect of the second part of the hearing becoming unnecessary. In Sopov, the parties to the appeal accepted the Court's proposal to defer the second set of issues because there was a readiness on both sides to go to mediation on those issues, and because the parties:

evidently [shared] the court's view that lengthy and expensive argument over multiple quantum issues should be avoided if possible.[2]

19 In the present case, by contrast, there is no way of telling how the first issue will be resolved, and hence no real indication that time is likely to be saved. Moreover, there is a real prospect of overlap of issues. As his Honour has said, the case does not come near to satisfying what will always be stringent requirements for splitting.

20 As to the time required for the hearing of the appeal, the matter should be fixed for hearing on an estimate of a day. The experience of the Court in cases like Port of Portland Pty Ltd v State of Victoria[3] is that a variety of complex questions of contract and constitutional law can be quite adequately dealt with in the course of a day's hearing. We are fortunate to have the assistance of highly capable counsel and

1. The appellant have leave to amend the notice of appeal in the form of Exhibit CFH1 to the affidavit of Christopher Francis Hartigan dated 19 November 2010.

2. The appellant file and serve the amended notice of appeal on or before 4 pm on 7 February.

4. The appellant is to pay the respondent's costs of the application.

[1] (2007) 20 VR 127, 129 [2]-[5] ('Sopov').

[3] [2009] VSCA 282.