Kennedy v Contract Transport Solutions Pty Ltd

SOLICITOR Astley Thompson Cox PENRITH. LEGAL REPRESENTATIVES: RESPONDENT/APPLICANT ON THE MOTION Mr P P Elias

SOLICITOR Slater & Elias SYDNEY.

JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

MICHAEL KENNEDY v CONTRACT TRANSPORT SOLUTIONS PTY LIMITED

Application under s106 of the Industrial Relations Act 1996. INTERLOCUTORY JUDGMENT

1 The respondent, Contract Transport Solutions Pty Limited ('CTS'), to an application brought by Michael Kennedy under s106 of the Industrial Relations Act 1996 ('the Act') has, by motion, sought the striking out of the matter upon two bases. The first is that the application is time barred by s108B of the Act. The second is that Mr Kennedy lacks standing to bring the application.

2 The background is that Mr Kennedy was a driver employed by CTS between October 2000 until September 2001, the date from which a Cartage Contract was effected between CTS and a company formed for the purpose by Mr Kennedy and his wife, Kathryn Hanley, called Kennedy Transport Pty Limited.

3 It is irrelevant for present purposes how that Cartage Contract came into effect. Mr Kennedy, as a director of Kennedy Transport, received independent legal advice in relation to the matter.

4 The Cartage Contract provided that Kennedy Transport (as "the contractor") would provide cartage services on behalf of CTS, in relation to the supply of cartage services to Aldi retail stores.

5 Clause 3.2 of the contract provided that: The Contractor will ensure that:

(a) it has sufficient suitable drivers and employees to perform its obligations under this Cartage Contract;

(b) its drivers and employees perform in a manner that ensures the Contractor complies with this Cartage Contract;

(c) all vehicles owned by the customer and sub-leased by CTS to the Contractor are operated in accordance with the terms and conditions of the vehicle sub-lease, a copy of which is set out in Schedule 2 of this Cartage Contract.

(d) all other vehicles used to perform the obligations under this Cartage Contract meet the specifications set out in Schedule 3 and are maintained in good working order, are clean and tidy and carry comprehensive and third party insurance.

6 There was no other requirement in the Cartage Contract in relation to the identity of the persons to be supplied as drivers.

7 On 15 February 2002 the parties to the Cartage Contract executed what was called a "Cartage Contract Termination Agreement". It recited, in part, that "Kennedy (referring to Kennedy Transport Pty Limited) has requested that the Contract and the Sub-Lease be terminated with effect from 3 February 2002 ("the termination date")". It also recited that CTS has agreed to that termination on the terms and conditions of the agreement.

8 By cl.2 it provided "CTS hereby agrees to waive the three months' notice of termination period provided that all terms and conditions of this agreement are met by Kennedy".

9 One of the duties and obligations provided by the termination agreement were that Kennedy Transport warranted that all wages, overtime, allowance and any other agreed payments had been fully paid to any driver employed by it up to 3 February 2002.

10 The summons for relief, which was filed on 6 February 2003, claims the following orders:

1. An order declaring that the Cartage Contract between the Applicant and the Respondent dated 1 September 2001, (a copy of which is annexed hereto and marked with the letter "A"), whereby the Applicant performed work for the Respondent in the transport industry was unfair, harsh or unconscionable or contrary to the public interest.

2. An order that the contract between the Applicant and the Respondent became unfair, harsh or unreasonable or contrary to the public interest due to the conduct of the respondent.

3. An order declaring void in whole or in part or varying in whole or in part and either from its commencement or from some other time the said contract of employment between the Applicant and the Respondent.

4. Further, an order that the Respondent pay to the Applicant such amount of money in connection with the contract so avoided or varied as may appear to be just in the circumstances.

11 The respondent's motion, on the matter of the time bar, depends upon the termination date identified by the termination agreement as 3 February 2002 and the date of filing, 6 February 2003. This is said to be outside the time limit provided by s108B which is in the following terms. 108B Time for making application

(1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract.

(2) The Commission does not have jurisdiction to extend the time for making any such application or to accept an application made after the time prescribed by subsection (1).

12 Both parties have tendered affidavit evidence on the motion, the critical aspects of which seem to me to be as follows.

13 Mark Ross-Smith, the Managing Director of CTS and the signatory on behalf of CTS to both the Cartage Contract and the Termination Agreement, deposed that on or about 6 February 2002 Mr Kennedy approached him, asking in part whether he could put another driver on under the contract in his place because of a back injury he was then suffering, it seems for some months. Mr Ross-Smith said to him: "Well you know Michael, I really do require you to be one of the drivers for at least 50% of the time because it's you I have the relationship with."

14 Matthew Clinch, the Transport Manager of CTS, also deposed that he heard a conversation between Mr Ross-Smith and Mr Kennedy at the dock of the warehouse on 6 February 2002 concerning Mr Kennedy's back condition.

15 Jason Gibson, a truck driver who had been employed by Kennedy Transport Pty Limited from 2 October 2001 and was later employed by CTS after the termination of the Cartage Contract, deposed that he had two conversations with Mr Kennedy on 6 February 2002. The first occurred at his home when Mr Kennedy attended and said words to the following effect: "Things are not going too good. I don't know if it's going to work out or not or keep the contract going. I am going to ask Mark to employ you if the contract doesn't work out."

16 He also deposed: Later that night, about three hours after the first meeting, Mr Kennedy telephoned me and said: "Everything's going to be all right. I've worked it out with Mark." The next morning on 7 February 2002, Mr Kennedy telephoned me again and said: "My contract's been cancelled. Mark's going to employ you from today's day shift."

17 It will be obvious from the foregoing that on 6 February 2002 and perhaps 7 February 2002 the contract remained on foot. On another view of the facts, it remained on foot until it was terminated on 15 February 2002. However, the parties provided in the termination agreement effected on that latter date that the termination date would be 3 February 2002. If that be the date which must be accepted, for the purposes of s108B(1), as the date of termination then the application was filed more than 12 months thereafter and falls foul of s108B and must be struck out.

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

19 However, there is an additional argument advanced in the applicant's favour to which I must advert. Section 108B was included in the Act by the Industrial Relations Amendment (Unfair Contracts) Act 2002, the commencement date of which was the date of assent, 24 June 2002. It follows that as at February 2002 there was no time bar, save the effect of any argument based upon the doctrine of laches, against an application brought under s106. Mr Warren argues that in these circumstances there accrued to the applicant in February 2002 a right to commence these proceedings without any relevant time restriction and that, on the basis of the ordinary rule of construction (see for example Maxwell v Murhpy (1957) 96 CLR 261) that right remained unaffected by the later amendment of the Act, given the absence of any express intention demonstrated therein that the amendment have retrospective effect.

20 Mr Elias, solicitor, for CTS argues that s30 of the Interpretation Act 1987 would protect any s106 claim filed on or before 24 June 2002 but not yet determined. The common law rule against retrospectivity would apply.

21 He also submitted that the amendments brought in by s108B are procedural and the common law rule against retrospectivity would not apply.

22 He cited two judgments of the Commission which refer to the point. The first was that delivered by Glynn J on 8 November 2002 in Horsell v Chegwyn Insurance Broking Services Pty Limited [2002] NSWIRComm 293. In that matter Mr Horsell had commenced s106 proceedings in January 1999 against the company identified in the title of the case. In April 2002 he sought by motion to add Mr Chegwyn as a second respondent. On 8 November 2002 Glynn J referred to the President pursuant to s193(1) of the Act for decision by a Full Bench "the question as to whether, as the result of the enactment of s108B, applications for joinder of persons as additional respondents to proceedings which were instituted prior to 24 June 2002 and which related to employment contracts terminated more than twelve months before the date joinder is sought, were statute barred". On 4 February 2003 the matter was concluded on the basis of terms of settlement filed on 24 December 2002. Accordingly, the referred question was not resolved by any judgment of the Full Bench.

23 Mr Elias also referred to a judgment of Boland J in Vision Publishing Pty Limited v Commonwealth Bank of Australia [2003] NSWIRComm 83. Again, that matter involved an attempt by the applicant to join a further respondent out of time. The matter went off on the basis, here not relevant, that there was no evidence that the relevant agreement had been terminated and accordingly the qualification in s108B(1) that the application for an order be "in relation to a contract that has been terminated" was not satisfied and s108B(1) did not operate to prevent the joinder of the further respondent out of time.

24 In Maxwell v Murphy Dixon CJ said: The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed. The basis of the distinction was stated by Mellish L.J. in Republic of Costa Rica v Erlanger (1876) 3 Ch D 62. "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done" (1876) 3 CH D at p.69.

25 In my view that authority demonstrates that any substantive right obtained by the applicant in February 2002 to commence this action will not be affected by the retrospective operation, as here the argument by CTS must involve, of a statutory provision such as s108B in the absence of an express intention in the statute.

26 Maxwell v Murphy was a case which concerned an attempt to invoke the provisions of the Compensation to Relatives Act which had been amended to extend a time limit for the bringing of an application from 12 months to six years. The particular case was one in which the 12-month time bar had actually operated, because the application had not been filed within 12 months. The subsequent amendment of the Act to provide six years time limitation was held not to have retrospective effect such that it could revive the right which had expired with the effluxion of the earlier time bar. In a sense that case is the mirror image of the present matter where an extended "time limit" is sought to be cut back by a later amendment. Therefore, I conclude that upon this approach to the construction of s108B(1) the Act does not provide a 12 months limitation which could exclude the summons for relief in this matter.

27 The other argument advanced by CTS is that Mr Kennedy, being a personal applicant, has no standing since his summons relates to a contract to which he was not a party, the Cartage Contract between CTS and Kennedy Transport Pty Limited.

28 On the face of the claims as identified in the summons for relief and quoted above in par.10 there would appear to be, at least superficially, some support for this argument. Claim 1 refers to the Cartage Contract whereby the applicant performed work for the respondent. It does seem clear that the Cartage Contract was not a contract whereby Mr Kennedy performed work for CTS but rather Kennedy Transport undertook the contractual obligations.

29 Claim 2 refers to "the contract between the Applicant and the Respondent". Again, superficially, there was no such contract. The same might be said for claim 3 which refers to "the said contract of employment between the Applicant and the Respondent".

30 However, Mr Warren submits, particularly in the context of the second claim sought which refers to "the contract between the Applicant and the Respondent" the reference to "the contract" must be taken to refer to a contract as defined by s105 of the Act where contract is said to mean relevantly "any contract or arrangement, or any related condition or collateral arrangement".

31 The submission relied on the judgment of the majority in Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69. That case concerned a summons for relief which sought orders varying "the contract between the Applicant and the Respondent, whereby the applicant was employed as . . . .". The trial judge had held that the claim was limited to the contract of employment in the strict contractual sense and so as not to comprehend aspects of the employment relationship. The majority said, in that context (at 75): That approach, we may immediately say, was an error in the construction of the statutory provisions and, we would add, contrary to settled authority. Indeed, having in mind the definition of "contract" in s105, it is only proper to view the use of that word in the appellant's originating summons as comprehending the full meaning of the word as defined in the statute. The result is that it must be seen to refer not only to the contract of employment but also to employment arrangements or any related conditions or collateral arrangements thereto, that is, as we would understand it, the overall employment relationship.

32 There is no warrant to take any different view of the claim here. On the facts as elicited for the purposes only of the motion, if the term "the contract" in claim (2) is accepted to mean the contract as defined, it may embrace an arrangement between Mr Kennedy and CTS whereby Mr Kennedy's corporate vehicle, Kennedy Transport Pty Limited, would contract to provide cartage services which, on the evidence of Mr Ross Smith, included an obligation to provide his own personal services as a driver. If that be so, then Mr Kennedy, as a party to that arrangement, if not the Cartage Contract, must have standing to commence proceedings under s106. This view is supported by the judgment of Barwick J in Brown v Rezitis (1972) 127 CLR 157 (with whom McTiernan, Windeyer and Owen JJ agreed) where his Honour said: "In my opinion, even if the proceedings for the variation or avoidance of the contract or arrangement must be initiated by one of the parties to the contract or arrangement, the parties to the proceedings are not necessarily limited to those parties."

33 Here, as I have said, on that approach to the case Mr Kennedy would be a party to the arrangement as identified by Barwick CJ.

34 In these circumstances, the respondent has failed to satisfy the strict burden in a strike-out motion that the absence of jurisdiction be patent on the face of the material in evidence taken at its highest in the applicant's case. In these circumstances, the court orders: 1. That the motion be dismissed.

2. That the applicant on the motion pay the costs of the respondent to the motion in an amount as agreed or, if not agreed, as assessed. - 10 -

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