King v Industrial Relations Commission of NSW

CATCHWORDS: ADMINISTRATIVE LAW- Privative clause- Whether court's jurisdiction ousted. INDUSTRIAL LAW- Franchise agreement- Unfair contracts- Applicant sought avoidance of agreement in Industrial Relations Commission- Unsuccessful- Application for certiorari, mandamus and prohibition- Contract held to be induced by misrepresentation at first instance- Commission in its discretion refused relief- No basis on which an appeal or prerogative orders could be granted, even if court had jurisdiction to grant them. (ND)

Commonwealth Constitution 1900, covering clause 5 Industrial Relations Act 1996, ss 106, 179 LEGISLATION CITED: Judiciary Act 1903 (Cth) s 78B Trade Practices Act 1974 (Cth)

Finch v Copperart Pty Ltd (1995) 62 IR 162 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 CASES CITED: Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 Mitchforce Pty Ltd v Industrial Relations Commission of NSW (2003) 57 NSWLR 212 Westfield Holdings v Adams (2001) 114 IR 241

Gregory John King (Claimant) Industrial Relations Commission of New South Wales (1st Opponent) Cake It Away Pty Ltd (2nd Opponent) Cake It Away (Franchising) Pty Ltd (3rd Opponent) Paul Tartak (4th Opponent) PARTIES: Michael Tartak (5th Opponent) Tony Tartak (6th Opponent) Mary Tartak (7th Opponent) Pauline Tartak (8th Opponent) St George Bank Ltd (9th Opponent) Advance Leasing Ltd (10th Opponent)

Gregory John King (Claimant) (In Person) Industrial Relations Commission of NSW (1st Opponent) (Submitted) COUNSEL: F A Cassis (S) (2nd to 8th Opponents) J J E Fernon SC (9th & 10th Opponents)

Claimant in person SOLICITORS: Levitt Robinson (2nd to 8th Opponents) Watson & Watson (9th & 10th Opponents)

LOWER COURT JURISDICTION: Industrial Relations Commission of NSW in Court Session

LOWER COURT JUDICIAL OFFICER: Walton J Vice-President, Boland and Staunton JJ

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41168/04 IRC 4374/02

GILES JA YOUNG CJ in EQ HUNT AJA

Thursday 8 September 2005 GREGORY JOHN KING v INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES & 9 OTHERS Judgment 1 YOUNG CJ IN EQ: This is an application for leave to appeal from the Full Bench of the New South Wales Industrial Relations Commission or, alternatively, for an order that certiorari, prohibition and/or mandamus issue to that Commission. The opponents are (a) the Industrial Relations Commission of NSW, which has submitted; (b) a series of companies and people opponents two to eight, who can conveniently be described as the "Tartak Opponents" (after the name of the sixth opponent, Tony Tartak, the prime figure in the operation on the opponents' side); and (c) two banks who are the ninth and tenth opponents. I will refer to these as the "Bank Opponents". 2 The basal facts relate to a franchise agreement entered into between the applicant and the third opponent whereby the applicant became the owner and operator of a franchise business styled "Cake It Away" at Canley Heights. That business failed after only being in operation for about six months and the applicant lost his whole investment, including moneys he had borrowed from the ninth opponent. 3 The applicant applied to the Industrial Relations Commission under s 106 of the Industrial Relations Act 1996 to declare the franchise agreement void or, in the alternative, for an order varying it as an unfair contract. Section 106(1) of that Act provides that: "The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract." 4 On 7 December 2002, Marks J dismissed the applicant's application in a judgment that is coded [2002] NSWIRComm 140. 5 The applicant sought leave to appeal to the Full Bench. On 20 November 2003, the Full Bench of the Industrial Relations Commission (Walton J Vice-President, Boland and Staunton JJ) gave leave to appeal against the Tartak Opponents but refused leave to appeal against the Bank Opponents. However, in respect of the Tartak Opponents, even though it found that there had been material misrepresentation, the appeal was dismissed. It is coded [2003] NSWIRComm 242. 6 The applicant sought to reopen the matter before the Full Bench. On this application, the applicant sought to raise an argument for the first time, that there was a conflict between s 106 of the Industrial Relations Act and the Trade Practices Act 1974 of the Commonwealth. On 9 December 2004, the Full Bench dismissed that application with costs. It is coded [2004] NSWIRComm 377. 7 The applicant, who at all times appeared in person before the Commission and before us, filed a summons for leave to appeal to this Court on 20 December 2004. On 26 April 2005, the applicant filed an amended summons stating that the earlier version "apparently was in the wrong form", this time claiming certiorari, prohibition, mandamus and declaratory relief. 8 The opposition to the orders the applicant seeks can be summarised under three heads, namely: (a) s 179 of the Industrial Relations Act 1996 rules out any appeal or grant of prerogative relief; (b) in any event there was no error below which warrants relief being given in this Court; and (c) that the applicant has at no time ever relied on the Trade Practices Act before the Industrial Relations Commission prior to his attempt to have the Full Bench reopen the case at the end of 2004. 9 Section 179(1) of the Industrial Relations Act says: "Subject to the exercise of a right of appeal to a Full Bench of the Commission conferred by this or any other Act or law, a decision or purported decision of the Commission (however constituted):

(b) may not be appealed against, reviewed, quashed or called in question by any court or tribunal (whether on an issue of fact, law, jurisdiction or otherwise)." 10 As Handley JA said in Mitchforce Pty Limited v Industrial Relations Commission of New South Wales (2003) 57 NSWLR 212 at 252 para 204, this is the widest privative clause his Honour had seen. In that case this Court generally reviewed the operation of the section, a matter to which I will return in due course. 11 The basis of the applicant's complaints can most easily be seen from his statement of grounds for relief filed in this Court, particularly the first fifteen paragraphs. If I can summarise them, they are in four groups as follows:

(1) The Industrial Commission violated the principles of natural justice in that it failed to provide a fair hearing because, in particular, although it found there was a material misrepresentation which brought about the franchise agreement, it held that it had a discretion to dismiss the proceedings and did so.

(2) The Commission was biased against the applicant. In particular, it discriminated against him as a self-represented litigant, and over and over again it tried to put the blame on him for minor faults for the failure of the business, and ignored the many faults and problems caused by the franchisor.

(3) The Commonwealth Trade Practices Act mandates that if there is a misrepresentation, and the court below found that there was a material misrepresentation by the franchisor or its associates, the whole contract should be set aside. The Commonwealth is a superior law making body and a State law which operates inconsistently is bad. The State tribunal was bound to follow the lead of Commonwealth law and it did not do so.

(4) The Commission failed to give any significance to the fact that the Bank Opponents were clearly linked credit providers and even if they personally were free of fault because of their close association with the Tartak Opponents, orders should have been made against them as well. 12 The applicant acknowledges that there is need for the Attorneys General to be notified under s 78B of the Judiciary Act 1903 (Cth). This has been done but none of the Attorneys took up the invitation to become involved in the proceedings. 13 It is difficult to know whether to deal with s 179 first or deal with the arguments of the applicant on the merits. Perhaps, though it is a little illogical, I will deal with the merits first. 14 As I have said, there are four basal arguments. The first reflects the fact that the Full Bench found that the misrepresentation was made out, but declined to give relief. This was because it ruled that the applicant's behaviour also materially brought about the contract and that the applicant was given early opportunities to escape from it, which he declined to take. 15 The applicant quarrels with the statement that his conduct was in any way misleading or blameworthy and, as to the chances of escape, he points out that these were at a time when the misrepresentations were still operative, and it is really unfair to say that his relief is to be denied on that basis. The applicant says that once the Commission finds that there is an operative material misrepresentation, it has no option to exercise some so-called discretion to dismiss his case. 16 That may be the situation of a court of law that was hearing an application under the Trade Practices Act or a court of equity hearing a case to set aside a contract on the ground of misrepresentation. However, it must be remembered that the present application was neither of these. It was an application to a statutory body, the NSW Industrial Relations Commission, under a particular statute which gives the Commission limited powers. The authorities tend to show that the Industrial Relations Commission has no jurisdiction to exercise the powers under the Trade Practices Act or indeed any Commonwealth Act. It is a body that has been created for particular purposes, including to exercise the jurisdiction under s 106. 17 I have set out the text of s 106(1) and that does appear to give the Commission a discretion as to whether it will make any order, even if it finds that there is an unfair contract - note the word "may". Indeed, consistent decisions of the Commission, which as far as I know have not been attacked, such as Finch v Copperart Pty Ltd (1995) 62 IR 162 and Westfield Holdings v Adams (2001) 114 IR 241, show that that is a way in which the Commission has consistently carried out its jurisdiction under that particular section. 18 Accordingly, in my view, it is a gross overstatement to say that the Commission was bound once it came to the view that there was a material misrepresentation to make an order. It had statutory powers, it had statutory discretionary powers and it was in my view entitled to do what it did. It may be that Mr King is quite correct to say there was some mistake made by the Commission as a matter of fact in putting the blame on him to an unfair extent but tribunals need to evaluate the whole of the evidence. The Commission could have come to that view on the facts and did so, and there is nothing that this Court would be able to do about it on an ordinary appeal, even putting aside the effect of s 179 of the Industrial Relations Act. 19 As to the second ground, I have not seen anything in the papers which suggests that the Commission was unduly influenced by the fact that the applicant was a self-represented litigant. As to bias, I think, with respect, Mr King misapprehends the way in which that term is used in the law. There is nothing to suggest that there is bias as a matter of law in his complaint. If he considers that the reasons of the Commission unduly put the blame on him and ignored some of the problems caused by the franchisor, well then that is one of the problems that frequently come to litigants when a court has made a decision of fact against them. Just because a court or commission makes a decision against a person does not mean at all that there was any bias involved. 20 The third and the fourth points can be put together. The applicant never relied on the Trade Practices Act until the end of 2004. In the initial hearing before Marks J and before the Full Bench, the point was not raised. Mr King submits that covering cl 5 of the Australian Constitution compels the Commission to apply the Commonwealth law. Covering cl 5 reads: "This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State..." 21 That section is of course observed by every court including the Commission, but it only operates in respect of the laws of the Commonwealth that are actually applicable to any particular question that is before the Commission. In the instant case, the Act was not raised before Marks J or the Full Bench. There was limited jurisdiction in the Commission to have regard to anything outside s 106 and it is not, with respect, correct to say that because, had the proceedings been brought under the Trade Practices Act or under the general law, a particular result would follow, Commonwealth law mandates that the same must follow under s 106. 22 Accordingly, if this Court had jurisdiction to deal with the appeal or application for prerogative orders on the merits, the applicant would fail. 23 Because of this it is unnecessary in my view for this Court to consider the operation of s 179. I have already referred to Mitchforce. In the instant case, Mr King submitted that s 179 is invalid and he relies on both covering cl 5 of the Australian Constitution as well as the dictum of McHugh J in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 114. I do not need to quote it as it is quoted by Spigelman CJ in Mitchforce at p 237 para 120. 24 The point was taken before the Court of Appeal in Mitchforce but as Spigelman CJ said at para 123 and Mason P at 149, the Court should not decide the point unless it was necessary to do so. I take the same view here and indeed this is why I dealt with the merits first, because it seemed to me on the merits the point was unnecessary to decide and the Court has not heard argument from people who are interested in the point which would aid it to come to a definitive decision. 25 However, it must be remembered that s 179 is a very wide provision. It is not so wide, as Mitchforce demonstrates, that it excludes supervisory review by this Court in a very narrow range of cases. As the Chief Justice said in Mitchforce at p 233 [92]: "Section 179 should be construed so as not to protect from review a 'purported decision' which fails to satisfy the threefold Hickman principle (see R v Hickman; E parte Fox and Clinton (1945) 70 CLR 598 at 614-5) or, if it be a separate proposition, which fails to observe an inviolable restriction or restraint. However, jurisdictional error that cannot be so categorised is exempt from review." 26 Accordingly, unless the Court had decided that s 179 was invalid, there would be a very strong argument that it inhibited the Court from giving any relief in this matter. For the above reasons, my view is that the summons should be dismissed with costs. 27 GILES JA: I agree with Young CJ in Eq, with two additional observations. 28 First, I do not see that the issues before us require us to enter into the question of whether or not the Commission was mistaken as a matter of fact in attributing blame to the applicant, or indeed whether that is a correct description of what the Commission did, and I should not be taken to have indicated anything on that subject. 29 Secondly, in addition to the applicant's reliance on covering cl 5 of the Constitution I understand that he also relied on its s 109, the inconsistency provision whereby in the event of inconsistency between a State and a Federal law, the Federal law shall prevail. The argument was related to that described by Young CJ in Eq, and was to the effect that the Trade Practices Act prevailed over s 106 and, because the High Court in I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Limited (2002) 210 CLR 109 had held that contributory negligence was not a defence to a claim for damages under s 82 of the Trade Practices Act, it was not open to the Commission to exercise a discretion (which the applicant equated with ascribing contributory negligence to him) when it came to its decision as to unfairness and the consequences of unfairness and whether the franchise agreement should be varied. 30 The argument has a number of difficulties, one being that the question of contributory negligence under the Trade Practices Act is not the same as the question of the exercise of a discretion conferred by s 106. More fundamentally, s 106 is a separate and independent basis of jurisdiction for the Commission. It was not exercising any jurisdiction by way of a claim for damages under the Trade Practices Act, and so there was no question of Federal law prevailing over State law. 31 With those additional observations, I agree with the orders proposed by Young CJ in Eq. 32 HUNT AJA: I agree with the Chief Judge in Equity and the further observations of the presiding Judge. 33 GILES JA: That will be the order of the Court.

13/09/2005 - September spelt incorrectly in heading of judgment - Paragraph(s) 0

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