Larsen v Ondeo Nalco Australia Pty Ltd

APPLICANT Mr A Moses of counsel Solicitor: Leonard Lozina Dibbs Barker Gosling

LEGAL REPRESENTATIVES: RESPONDENT Mr H Dixon SC of counsel Solicitor: Kelly Godfrey Australian Business Lawyers

JUDGMENT: - 26 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Thursday 20 May 2004 Matter No IRC 365 of 2004 WILLIAM EDWARD LARSEN v ONDEO NALCO AUSTRALIA PTY LTD Application under s 106 of the Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT ON STRIKE-OUT APPLICATION NSWIRComm 123

1 The applicant in these proceedings, William Edward Larsen, has sought certain relief against the respondent, Ondeo Nalco Australia Pty Ltd, under s 106 of the Industrial Relations Act 1996 ("the Act"). The summons for relief was filed on 29 January 2004. It seeks orders with respect to an employment contract between the applicant and the respondent made in or about October 1973, which, the summons asserts, was terminated on 15 October 2001.

2 The respondent filed a notice of motion seeking to strike out the summons on the basis that this court lacked jurisdiction. The precise reason for want of jurisdiction was said to have been created by s 108B of the Act which was inserted by the Industrial Relations Amendment (Unfair Contracts) Act 2002 which came into effect on the date of assent, namely 24 June 2002. This judgment deals with this interlocutory application. It is involved essentially with the effect of s 108B.

3 In order to deal with the competing arguments of the respondent and applicant it is necessary to set out the relevant statutory provisions.

4 Sections 105, 106 and 108B of the Act are in the following terms:

105 Definitions In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument . unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument .

106 Power of the Commission to declare contracts void or varied (1) 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. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss.

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).

5 The respondent submitted that s 108B had effect so as to operate from 24 June 2002. That is, from that date (a date prior to the filing of the summons in these proceedings), no application for relief under s 106 could be filed in this court if the relief sought was in relation to a contract that had been terminated where the summons was filed later than 12 months after that termination. The applicant submitted that s 108B could not be construed or applied so as to impact upon a contract of employment which had been terminated prior to 24 June 2002. Accordingly, s 108B would not apply so as to preclude the applicant from filing a summons in these proceedings even though it was filed later than 12 months after the termination of the applicant's contract of employment with the respondent.

6 It is also necessary to have regard to certain provisions of the Interpretation Act 1987.

7 Section 5 of the Interpretation Act is in the following terms:

(1) This Act applies to all Acts and instruments (including this Act) whether enacted or made before or after the commencement of this Act. (2) This Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned. (3) Wherever appropriate, this Act applies to a portion of an Act or instrument in the same way as it applies to the whole of an Act or instrument. (4) Nothing in this Act excludes the application to an Act or instrument of a rule of construction applicable to it and not inconsistent with this Act. (5) This section does not authorise a statutory rule to exclude or modify the operation of Part 6 (statutory rules and certain other instruments).

8 It is also necessary to refer to s 30 of that Act which is in the following terms:

30 Effect of amendment or repeal of Acts and statutory rules

(1) The amendment or repeal of an Act or statutory rule does not: (a) revive anything not in force or existing at the time at which the amendment or repeal takes effect, or (b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or (d) affect any penalty incurred in respect of any offence arising under the Act or statutory rule, or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability or penalty, and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed. (2) Without limiting the effect of subsection (1), the amendment or repeal of an Act or statutory rule does not affect: (a) the proof of any past act or thing, or (b) any right, privilege, obligation or liability saved by the operation of the Act or statutory rule, or (c) any amendment or validation made by the Act or statutory rule, or (d) the operation of any savings or transitional provision contained in the Act or statutory rule. (3) This section applies to the amendment or repeal of an Act or statutory rule in addition to, and without limiting the effect of, any provision of the Act or statutory rule by which the amendment or repeal is effected. (4) In this section, a reference to the amendment or repeal of an Act or statutory rule includes: (a) a reference to the expiration of the Act or statutory rule, (b) a reference to an amendment or repeal of the Act or statutory rule effected by implication, (c) a reference to the abrogation, limitation or extension of the effect of the Act or statutory rule, and (d) a reference to: (i) the exclusion from the application of the Act or statutory rule, or (ii) the inclusion within the application of the Act or statutory rule, of any person, subject-matter or circumstance.

9 It will be seen that s 5(2) of the Interpretation Act provides that the Interpretation Act applies to an Act except in so far as the contrary intention appears in that Act. Accordingly, the provisions of s 30 of the Interpretation Act and in particular s 30(1)(c) will not apply to the Industrial Relations Amendment (Unfair Contracts) Act 2002 (which inserted s 108B into the Act) if a contrary intention appears in that amendment Act.

10 Consistent with authority, and, as a matter of logic, the first step in the approach to construction which is involved in the resolution of this issue is to examine the provisions of s 108B to determine the intention of the legislature in terms of whether a contrary intention appeared in the amending Act and to determine whether the language used permits of a presumption that the amending Act would not adversely impact upon any existing entitlements that may have accrued before the amendment came into effect. Such a presumption will apply except to the extent that the legislature can be said to have intended to the contrary.

11 The seminal statement of the common law principle is contained within the judgment of Dixon CJ in the High Court of Australia in Maxwell v Murphy (1956-1057) 96 CLR 261. At 267 his Honour 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 and 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." His Honour then went on to qualify this general statement of principle by reference to laws which appoint or regulate the manner in which rights or liabilities are to be enforced or by reference to the manner in which they are to be "secured by judicial remedy". His Honour distinguished between the accrual or removal of rights, liabilities, immunity or privilege and the manner in which they were secured or enforced. This is a distinction which has come to be one referred to by reference to amendments which are substantive (where the presumption against retrospectivity may be applied) and procedural (where no such presumption applies).

12 The most recent definitive statement of principle in this area is to be found in the several judgments in the High Court of Australia in Attorney-General (QLD) v Australian Industrial Relations Commission (2002) 76 ALJR 1502. At paragraph [6] Gleeson CJ said: "When a statute changes the law, the effect of the change upon existing rights, liabilities, claims, or proceedings is determined by the meaning of the statute. The common law developed rules of statutory construction as an aid to discovering that meaning. Such rules involved presumptions; but, being rules of construction, they were subject to any contrary intention evinced with sufficient clarity in the statute. When expressed in summary form, those rules distinguished between retrospective and prospective effect, and between procedural provisions, and provisions affecting rights or liabilities. However, such distinctions are not always clear-cut. The terms retrospective and prospective may often be a convenient shorthand, but in a given case it may be necessary to identify more precisely the particular application of the alteration to the law in question. And, as the present case shows, there may be rights which, in their nature, are closely bound up with procedures and remedies."

13 I refer also to observations made by Kirby J in the same proceedings. At paragraph [75] his Honour said: "The primary rule for resolving such questions is that, if the new legislative requirements are valid, the decision-maker must obey and give effect to them according to their terms. When the new law is clear there is no problem. Thus, provisions in the new law may deal with transitional cases explicitly. However, it is often suggested that the new law has failed to address transitional cases, or at least to do so clearly. In such circumstances, subject to any contrary indication, both the common law and statute have established principles to help decision-makers reconcile any continuing effect of the repealed law with the duty of obedience to the law that has taken its place."

14 The Industrial Relations Amendment (Unfair Contracts) Act 2002 was discussed by a Full Bench of this court in Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234 ("Crowe"). Those proceedings were directed predominantly to a consideration of whether s 108B precluded an amendment being made to existing proceedings which had been commenced within the time limitation period referred to, but where the amendment was sought to be made later than 12 months after the termination of the contract. In particular, the amendment sought to join additional respondents to the existing s 106 proceedings.

15 In the course of considering the amending Act which, inter alia, inserted s 108B into the Act the Full Bench observed: "The intention of the amending Act in relevant respects is reasonably plain on its face…. (It) required that any application for an order under section 106(1) be brought within 12 months of the termination of the relevant contract or arrangement." (paragraph 34).

16 Later, in considering the approach to construction, the Full Bench observed: "It is elementary that it is the provisions of the amending Act to which consideration must be first given. The parties were ad idem in the view that s 108B interfered with the right to seek relief under s 106 of the statute, and as a consequence should be strictly construed. However, on the respondents' contentions, there was to be found in s 108B a "clearly expressed" intention that the Commission must not make orders under Division 2 of Part 9 of Chapter 2 of the Act where an application for such an order has been made later than 12 months after the termination of the contract. This, on the respondents' contention, would comprehend the amended summons for relief that would issue in these proceedings if the amendment sought in the notice of motion were granted. On its face, s 108B has the effect of imposing a time limitation on the filing of a summons seeking relief in respect of a particular or identifiable contract. That is, on and after 24 June 2002, a summons cannot be filed in the Court seeking relief under s 106 "in relation to a contract" terminated more than 12 months prior to the filing of the summons and there is no jurisdiction to extend the time so limited. Although there are well known principles of construction which would point against giving any retrospective effect to the amendment made by s 108B, to apply that principle broadly would result in s 108B applying only to contracts terminated on and after 24 June 2002. Whilst we consider that there may be some difficulties with such a construction, it is unnecessary to deal with this matter on that precise basis as it was not in issue that both the substantive proceedings and the notice of motion seeking to join additional respondents were filed prior to the commencement of s 108B." (at paragraphs 38, 39 and 40).

17 In approaching the construction of s 108B I note that there are no transitional provisions which specifically deal with the intention of the legislature as to the manner in which s 108B is to be applied. However, it seems clear from the specific language used that it was the intention of the legislature to preclude the making of an application for an order under s 106 after the expiry of the period referred to in that section. This is reinforced by the provisions of subsection (2) which deny this court the ability to extend the time for making any such application or even to accept an application made after the time period has expired.

18 Prima facie, there is nothing contained within the provisions of s 108B which would give any indication that it was the intention of the legislature that the section was not to operate other than by reference to its clear terms.

19 Mr Moses of counsel, who appeared for the applicant to resist the notice of motion, proffered an explanation as to how s 108B would operate if its intention was to be construed other than in the manner reflected by its prima facie terms. He submitted that with respect to contracts of employment which were terminated prior to 24 June 2002, no time limitation would apply for the commencement of proceedings under s 106. Thus only contracts terminated on and after 24 June 2002 would be the subject of the 12 months time limit for the making of applications. This articulation of the alternative approach to construction of the section provides support for the more literal construction and rejection of this alternative approach. Put simply, the manner in which s 108B is framed does not permit of it being interpreted in this way, and there is no hint of the legislature having intended that it should be interpreted in this way. Indeed, it would have been simple for the legislature to have framed s 108B so that it would be applied in this way, either within its terms or within the terms of any transitional provisions. It seems improbable that the legislature would have contemplated that this court would continue to receive applications brought under s 106 of the Act with respect to contracts terminated prior to 24 June 2002 over many years but be deprived of jurisdiction with respect to applications brought after the expiry of 12 months with respect to contracts terminated on and after 24 June 2002.

20 Accordingly, I reject any interpretation of s 108B that would allow for any contrary intention which would have the effect of creating any presumption against retrospectivity. I hold that s108B should be construed so as to create an intention that s 30 of the Interpretation Act should not apply.

21 The parties' submissions addressed the effect of the operation of s 30(1)(c) of the Interpretation Act on the alternative hypothesis that I concluded that the relevant contrary intention did not appear within s 108B. Lest I be held incorrect in the approach to construction which I have concluded should apply, I propose to deal with the competing arguments concerning the application of s 30(1)(c). In summary, it was submitted on behalf of the respondent that no right, privilege, obligation or liability had been acquired or incurred or had accrued to the applicant under s 106 which was affected by the operation of s 108B. It was submitted on behalf of the applicant in reply that the ability or entitlement to commence proceedings under s 106 of the Act constituted a right which accrued to the applicant and which was obviously affected by the operation of s 108B.

22 In submitting that the ability to commence and maintain an action under s 106 was such a right Mr Moses relied substantially on a number of decisions of the New South Wales Court of Appeal and of Full Benches of this court and its predecessors. It will be necessary to consider these decisions and other authorities which will assist in a determination of this issue.

23 A convenient starting point is the decision of the Privy Council in Director of Public Works v Ho Po Sang (1961) AC 901. The factual circumstances which were being considered by the Privy Council in those proceedings were far removed from the factual subject matter of these proceedings. The lessee of Crown lease premises in Hong Kong had served by way of cross-petition a notice to the Governor in council challenging the issue of a rebuilding certificate by the Director of Public Works which had the effect of requiring vacant possession of the leased premises. The underlying legislation was repealed after the cross-petition had been lodged and the Privy Council was required to consider whether the repeal of the legislation was saved by the Hong Kong interpretation ordinance, the relevant part of which is for present purposes in identical terms with s 30(1)(c) of the Interpretation Act. The Privy Council distinguished between "an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given." (at 922). Their Lordships did not characterise the right to lodge a cross-petition as being an accrued right for the purpose of the interpretation ordinance. Their Lordships adopted the approach taken in a previous Privy Council decision, Abbott v Minister of Lands (1985) AC 425, to the effect that a "mere right…. existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a 'right accrued' within the meaning of the enactment." (at 1895 AC 431). That is, a power to take advantage of an enactment may be a "right", but it is not an accrued right for the purposes of the interpretation legislation. The Privy Council characterised the consideration by the Governor in Council of the cross-petition as being in the nature of an investigation as to whether there was a right at the time that the underlying enactment was repealed, being an investigation which of itself would decide whether a right should or should not be given. Such an entitlement was not of itself a right or privilege which was preserved by the interpretation ordinance.

24 The decision in Ho Po Sang was applied by Gibbs J (as His Honour then was) in the High Court of Australia in Mathieson v Burton (1970-1971) 124 CLR 1. At 23 His Honour stated that the relevant interpretation legislation did not apply "where there is merely a hope or expectation that a right will be created", citing Ho Po Sang, but continued that that legislation "does protect anything that may truly be described as a right" and referred to rights which "might fairly be called inchoate or contingent". As will be seen, Mr Moses submitted that the applicant in these proceedings had a contingent right and it will be necessary to deal with this argument later in these reasons for judgment.

25 There are other appellate decisions which have touched upon this area. I refer in particular to Esber v The Commonwealth of Australia (1991-1992) 174 CLR 430, a decision of the High Court of Australia and also to re Ross ex parte Australian Liquor Hospitality and Miscellaneous Workers Union (2001) FCA 770, a decision of the full Federal Court of Australia. Without in any way intending any disrespect to the various judgments contained within both of those decisions, I am of the view that I may conveniently deal with the principles considered in those decisions by again referring to the more recent decision of the High Court of Australia in Attorney-General (QLD) v AIRC. Those proceedings considered applications made by certain trade unions under the Workplace Relations Act 1996 (Cth) to the Australian Industrial Relations Commission seeking that certain awards be made as against certain named employers. The Commission commenced to hear the applications for the making of those Awards but whilst it was part-heard the Workplace Relations Act was amended to require the Commission to cease dealing with certain industrial disputes. The Commonwealth Acts Interpretation Act 1901, s 8, contained provisions which were identical to those of s 30(1)(c) of the New South Wales Interpretation Act. One of the questions for determination by the court was whether s 8 of the Commonwealth Acts Interpretation Act preserved the ability of the AIRC to continue dealing with the particular industrial disputes. Accordingly, it was necessary to ascertain whether the unions had acquired or accrued a "right" of the kind referred to in the saving provision of the Interpretation Act. The majority judgment (Gaudron, McHugh, Gummow and Hayne JJ) put the matter this way: "The respondent unions do not assert that they had acquired or accrued a "right" to an award. Rather, they submit that they had acquired or accrued the "right" to have their disputes arbitrated in accordance with s 104 of the 1988 Act. Describing the putative right in this manner, however, says little about its legal nature or the way in which it may be enforced. The right acquired or accrued by the respondent unions is more accurately described as a public law right to require the Commission to observe its duty to comply with the law as it exists from time to time. A right of that nature, where it exists, is a right to have a claim or application considered in accordance with the statute that governs its determination." (at paragraph 40).

26 In the course of considering this matter the majority judgment focussed on the fact that the AIRC was exercising arbitral powers as opposed to judicial power in the context of characterising such rights that an applicant for a determination has. The members of the court said: "Where what is involved is the exercise of judicial power, that often will require the determination of pre-existing rights or liabilities. This is illustrated by those functions which are appropriate exclusively to judicial action, including the determination of criminal guilt, actions in contract and tort, and suits to enforce trusts. The term "pre-existing rights" will take its content from the state of affairs at some stage before the judicial determination, such as the accrual of a cause of action or institution of an action or application. Hence the ready accommodation here of notions of accrued rights within the sense of s 8 of the Interpretation Act. Different considerations applied to the exercise of arbitral functions under the 1904 Act and the 1988 Act. The arbitrator was empowered to make a determination not of existing legal rights and liabilities, but as to the conditions to prevail in the future between the parties to the dispute; the statute gave to the terms of the determination the character of legal rights and obligations. Thus, in R v Kelly; Ex parte State of Victoria , the Court said: 'When it is said that industrial awards are of a legislative character, the point of the statement is to be found in the fact that such awards prescribe rules of conduct for the future in respect of the disputing parties and do not determine the rights and duties of those parties under the law as it already exists.' The requirement, enforced by mandamus, that the arbitrator hear and determine a matter according to law allowed for changes in the content of that law which founded the duty which attracted the remedy. If before the making of the award prescribing rules of conduct for the future, the law was changed to place additional restraints or conditions upon the exercise of the power to make the award, then the obligation to make a determination according to law was correspondingly modified. In this way, the content of the public duty and correlative right to its discharge was fluid rather than fixed and notions of "accrued" rights in the law as it stood at any particular stage in the arbitral processes had no place." (at paragraphs 44, 45 and 46).

27 In his submissions Mr H Dixon SC, who appeared for the respondent in the notice of motion, relied heavily on this analysis in support of a contention that the ability to commence proceedings under s 106 of the Act did not constitute an accrued right for the purposes of s 30 of the Interpretation Act. He compared by way of analogy the process of determination undertaken by this court in considering s 106 applications with that undertaken by an industrial tribunal in carrying out its award-making function.

28 The trigger for the exercise of power under s 106 is a finding that a contract as defined in s 105 is an unfair contract, also as defined in s 105. It is only if such a finding is made that this court is empowered to declare the contract wholly or partly void or to vary it and concurrently to make any order for the payment of money under s 106(5).

29 I do not understand that the ability to have this court make a determination that a contract is an unfair contract constitutes an accrued right for the purpose of s 30 of the Interpretation Act. It is more akin to the right to have an investigation made as to whether an order for variation or avoidance should be issued as discussed in Ho Po Sang or a right to have a claim considered by this court, as referred to in the joint judgment in A-G (QLD) v AIRC.

30 In coming to this conclusion I have derived assistance from the analysis undertaken by Hope JA in the NSW Court of Appeal in NSW Aboriginal Land Council v Minister (1988) 14 NSWLR 685. Samuels and Clarke JJA agreed with his Honour's judgment.

31 The New South Wales Aboriginal Land Council had made a claim under the Aboriginal Land Rights Act 1983 (NSW) that certain land should be transferred to it. The relevant Minister had declined the claim and the Land Council appealed to the Land and Environment Court as it was entitled to do under the Act. At the time the claim was made and at the time that the appeal was instituted that Act gave entitlement to the claimed land if the claim was granted on the basis of a transfer in fee simple. Later the Act was amended to provide that any land transferred pursuant to the claim would be by way of lease in perpetuity. Before the matter was dealt with on appeal by the Land and Environment Court, the Minister approved the land claim but in doing so proposed to transfer the land by way of lease in perpetuity. The proceedings before the New South Wales Court of Appeal were ultimately concerned with whether the later amendment to the Act was or was not effective to allow the transfer by way of lease in perpetuity or whether the Land Council was entitled to have the land assigned to it in fee simple.

32 Before discussing relevant authorities, Hope JA determined by reference to the legislation providing for an appeal to the Land and Environment Court that the power vested in that court was "not a discretionary power but a power which it is bound to exercise in favour of the claimant in the circumstances specified in the subsection". His Honour then considered the nature of the right which accrued to the Land Council after it had made its claim, whilst its claim was being investigated by the Minister and after the appeal had been lodged with the Land and Environment Court. His Honour commenced his discussion by saying "It is easier first to say what (the right) was not. It was not a mere right existing in the members of the relevant class of the community to take advantage of an enactment, without any act done by an individual towards availing himself of that right…nor was it a right to set in train an application for a grant which the Minister or on appeal, the court might, as a matter of discretion, grant or refuse." (at 693). His Honour then considered the decision of the Privy Council in Ho Po Sang. After noting the conclusion of the Privy Council that the lessee in Ho Po Sang "had no more than a hope or expectation that he would be given a rebuilding certificate even though he may have had grounds for optimism as to his prospects," Hope JA concluded that the rights conferred by the Aboriginal Lands Right Act did not fall into that category. His Honour said: "On the other hand the Act does not in terms expressly confer a right in the land on the applicant at the time the claim is made. It envisages that there will be an investigation by the Minister of the facts and if the facts establish that the conditions in the definition are satisfied the Minister is then bound to grant the claim. If the Minister refuses, the court on appeal again investigates the same matters but the onus is put on the Minister. As it seems to me, assuming the conditions were in fact satisfied, the Land Council did not merely have a right to have its claim investigated; it had a right to have the claim granted. If the Minister wrongly refused to grant it, it had the right to have the court grant it. The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional. In this regard the legislation is quite different from that considered by the High Court in R v Kearney; Ex parte Northern Land Council (1984) 158 CLR 365 where under the relevant Land Rights Act, as Gibbs CJ pointed out (at 373), an application, to be successful, 'must attract the favourable exercise of three independent discretions - those of the Commissioner, the Minister, and the Governor-General ...'." (at 694).

33 After considering a number of authorities Hope JA concluded: "These decisions satisfy me that a statutory right will be preserved notwithstanding the repeal or amendment of the statute even though the right can only be implemented by a non-discretionary decision of an official or a court, provided that the statutory machinery for obtaining that decision has been set in train before the repeal or amendment." (at 696) .

34 One of the authorities referred to by Hope JA was a decision of the Privy Council in Free Lanka Insurance Co Ltd v Ranasinghe (1964) AC 541. The facts in those proceedings related to a statutory compulsory motor accident scheme under which owners of vehicles were insured against liability for personal injury to third parties where that injury was sustained through negligence of the driver of an insured vehicle. The respondent in the proceedings was injured in March 1948 and commenced proceedings against the owner of the vehicle whose driver had negligently injured him. In September 1951 he was awarded damages against the owner in the Ceylon District Court. However, it seems that he may not have recovered any damages against the owner. Accordingly in September 1957 he commenced proceedings against the third party insurer and obtained a judgment against the insurer in the District Court of Ceylon which was later affirmed on appeal to the Supreme Court of Ceylon. The Ceylon courts and the Privy Council on appeal were asked by the insurer to deny the respondent any entitlement to claim against it on the basis that the relevant legislation in force as at the date of the injury had been repealed as and from 1 September 1951 and replaced by new legislation. That new legislation only extended indemnity where a certificate of insurance had been issued under one of its provisions. It was said by the insurer that no such certificate had issued in 1948, being a date prior to the commencement of the legislation, and therefore it was not obliged to make any payment to the respondent.

35 It should be noted that the relevant Ceylon Interpretation Ordinance contained a provision which, for present purposes, is in the same terms as s 30 of the Interpretation Act.

36 In delivering the judgment of the Privy Council Lord Evershed said "the distinction between what is and what is not 'a right' must often be one of great fineness. But their Lordships agree …that on September 1 1951, the respondent had as against the appellants something more than a mere hope or expectation - that he had in truth a right, within the contemplation of [the equivalent of s 30 of the Interpretation Act] although that right might fairly be called inchoate or contingent." (at 552).

37 Lord Evershed then referred to the distinction drawn in the speech of Lord Morris in Ho Po Sang between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. Lord Evershed continued: "In the present case, as it seems to the Board the appellants cannot now be heard to say that the respondent was not immediately after the accident an injured third party entitled to recover damages against [the owner of the vehicle] and, as they think, his service upon the appellants of the notice of his claim (together with a copy of his plaint) pursuant to section 134 of the 1938 ordinance was an assertion by him of his statutory right against the appellants; and nonetheless effectively so because the quantum of his claim was dependent upon the finding of the court in a decree made in his favour in his action against [the driver]." (at 553).

38 I readily concede that the distinction here is, as stated by Lord Evershed in Free Lanka, a fine one. On either analysis such right as exists in connection with the bringing of a claim under s 106 may be called inchoate or contingent. However it is the underlying characterisation which is important. The entitlement to commence proceedings in this court given by s 106 may be contrasted with a claim for monetary compensation consequent upon personal injuries being sustained as a result of alleged negligence. The cause of action is complete when relevant damage is sustained caused by the negligent act. At that point of time there is an entitlement to maintain a claim for compensation prosecuted in any competent court. The same situation prevails in the case of a suit or action seeking relief consequent upon a breach of contract. A cause of action arises which is obviously contingent upon the plaintiff proving all of the relevant elements to the satisfaction of the court. Under s 106, however, not only is this court compelled to find that the relevant contract exists but that, with respect to it, it is an unfair contract. It is the finding of unfairness which triggers the exercise of a discretion and the making of a value judgment, a process which seems to me to be sufficiently removed from the establishment of the cause of action of the usual kind recognised at law. It is this additional element which, it appears to me, creates something which can more readily be characterised as a "mere hope or expectation" rather than a right of the kind contemplated by s 30 of the Interpretation Act. The entitlement to commence proceedings under s 106 is more analogous to the right to seek the making of an award before an industrial tribunal.

39 My analysis of the provisions of s 106 and the manner in which it operates leads me to conclude that it is a precondition to the making of an order that there be an investigation as to whether there has been relevant unfairness in connection with a contract of employment which is analogous to an investigation which is to decide whether some right should or should not be given. This is to be contrasted with an investigation in respect of a right per se.

40 In resisting this line of reasoning Mr Moses referred me to a number of appellate decisions which he submitted dictated that a contrary view should prevail.

41 The first such decision was Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443. In those proceedings the New South Wales Court of Appeal was called upon to consider the provisions of s 88F of the Industrial Arbitration Act 1940, which, for present purposes, may be considered the ultimate predecessor of s 106. That consideration was in the context of whether there was any inconsistency between s 88F and the provisions of legislation of the Australian Parliament being the Petroleum Retail Marketing Franchise Act 1980 as they applied to franchise agreements for the retail marketing of petrol. In essence, the proceedings were concerned with the operation of s 109 of the Commonwealth Constitution.

42 Mr Moses relied in particular upon the judgment of Handly JA in considering the effect of the conferring of jurisdiction by s 88F. At 467 his Honour said: "Section 88F confers jurisdiction on the Commission to avoid or vary contracts and to make consequential orders for the payment of money. The effect of legislation which in terms does no more than confer jurisdiction on a court to grant particular relief was considered in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141. Latham CJ said (at 155): '... A right is created by the provision that a court may make an order, and such a provision also gives jurisdiction to the court to make the order. The fact that the court may not be bound to make an order, but may exercise a discretion, does not alter the effect of such a provision .... Such a provision gives a new jurisdiction to the court and ... if the court exercises its discretion in favour of the applicant, a new right to the applicant.' Similarly Dixon J (at 165-166) said in reference to such a provision: '... it must be taken to perform a double function, namely to deal with substantive liabilities or substantive legal relations and to give jurisdiction with reference to them. It is not unusual to find that statutes impose liabilities, create obligations or otherwise affect substantive rights, although they are expressed only to give jurisdiction or authority ....' Section 88F therefore creates substantive rights and since proceedings under the section comprise a suit or action (see Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 560) there is every reason for concluding that it gives rise to rights of action.…".

43 It seems to me that in the above passage his Honour is discussing firstly the "right" created in the court to grant particular relief. In addition, his Honour was not required to touch upon and deal with the precise matter which is the subject of this interlocutory judgment namely whether a right of the relevant kind exists absent the commencement of proceedings in this court by the filing of an application in the nature of a summons. There can be no doubt that a different complexion would arise if proceedings had been commenced prior to the operation of s 108A because, quite clearly, s 108A can have no application to proceedings commenced before the date of its operation. Accordingly, I do not regard the observations of Handley JA in Majik Markets as assisting in the resolution of the present issue with which I am here dealing.

44 However, as Mr Dixon observed, Mahoney JA (as his Honour then was) also made comment about the nature of the entitlement to maintain proceedings under s 88F. His Honour said: "In my opinion, s 88F, as such, is not inconsistent with the Federal Act. Section 88F does not, by its own operation, create any rights or obligations. Its function is to grant jurisdiction to the Industrial Commission. That jurisdiction involves, inter alia, two things: it may categorise, as I have described it, a particular arrangement as "unfair", "harsh or unconscionable", "against the public interest" or otherwise as falling within the subpars (a) to subpars (b) of s 88F(1); and, secondly, it may declare void the whole or part of such arrangement and make an order for payment of money or otherwise as set out in the section. It is only if and in so far as that power is exercised that rights or obligations arise by virtue of s 88F." (at 461). These observations of his Honour reinforce my own approach to the determination of the way in which s 106 operates and reinforce the conclusion that on the basis of the authorities to which I have referred it does not create any accrued right absent the making of an application by way of the filing of a summons in this court.

45 Mr Moses also relied on a decision in the New South Wales Court of Appeal in Fisher v Madden (2001) 54 NSWLR 179. Those proceedings dealt with the interrelationship between s 106 of the Act and s 556 of the Corporations Law which is concerned with priority debts and claims with respect to the assets of a corporation after the appointment of a receiver. The proceedings arose out of a claim brought by an employee made redundant by the receiver of her employer corporation seeking relief under s 106 of the Act. The proceedings had not been heard by this court. Nevertheless the employee had sought a declaration in the Supreme Court of New South Wales that she was entitled to a priority payment by reference to any monies which might ultimately be awarded to her by this court in the s 106 proceedings as being retrenchment payments within the meaning of s 556(1)(h) of the Corporations Law. The court held that even if the employee had succeeded in obtaining relief under s 106 and even if her contract had been varied ab initio to provide for any such payment any monies payable would not be a retrenchment payment entitled to priority. In determining the matter the members of the Court of Appeal made certain observations about the right of action created by s 106 of the Act.

46 In his judgment Meagher JA stated categorically that "Section 106 of the Industrial Relations Act does not of itself confer any rights or obligations on anyone. Not only does she not have a right to a quantifiable order, she does not have a right to an order at all. She has the right to apply for an order, nothing more." His Honour embraced comments by Mahoney JA in Majik Markets (previously referred to) to the effect that s 88F "does not, by its own operation, create any rights or obligations. Its function is to grant jurisdiction to the Industrial Commission." His Honour concluded that the employee did not have such rights as may be characterised as a "contingent" debt or claim. "She has the bare right to make a claim, nobody knowing whether it will succeed or not, or if so in what amount, or subject to what terms or conditions." (at 184).

47 Beazley JA agreed with the judgment of Sheller JA. In his judgment Sheller JA described the employee's situation qua her s 106 entitlement as "(The employee) had only a right to take proceedings in the Industrial Relations Commission to vary the contract to that end". His Honour referred to the judgment of Mahoney JA in Majik Markets (previously extracted). His Honour also referred to that part of the judgment of Handley JA in Majik Markets which I have previously extracted. His Honour concluded: "However [the employee's] right under section 106 of the Industrial Relations Act be categorised, her right to invoke the jurisdiction of the Industrial Relations Commission did not until such time as an order was made create any obligation on [the employer] to make a retrenchment payment to her." (at 194).

48 For my part I am unable to discern any observation made in the course of any of these judgments which would lend support for the position contended for by Mr Moses. To the contrary, I do not understand the judgment of Sheller JA as necessarily being in disagreement with the observations of Meagher JA that s 106 does not of itself confer any rights or obligations and that the section does not create any right to an order under s 106. It creates a right to apply for an order only. That right, as I have previously concluded, is not in my opinion one which is protected by s 30 of the Interpretation Act. It is, as I have previously observed, one that is protected only when the machinery for obtaining a decision of the court has been set in train before the amendment.

49 Mr Moses relied also on a decision of a Full Bench of this court in Hollingsworth v Commissioner of Police (1998) 47 NSWLR 104. The judgment of Hill J in those proceedings extracted the joint judgment of the court given in GIO Australia Limited v O'Donnell (1996) 70 IR 1 which dealt with those transitional provisions of the Industrial Relations Act 1996 which applied when that Act replaced the former Industrial Relations Act 1991. The judgment of Hill J contains both a useful extraction of previous decisions and a helpful discussion of the effect of transitional provisions in legislation. There is an insightful analysis of the relevant general principles to be derived from decided cases including the observations of Hope JA in NSW Aboriginal Land Council previously referred to. However there is, in my opinion, no discussion of the particular matter with which I am dealing in these proceedings and, in my opinion, nothing which will assist in the determination of these proceedings.

50 Beahan v Bush Boake Allen Australia Limited (1999) 47 NSWLR 648 is another decision of a full bench of this court. It dealt with the interrelationship between s 106 of the Act and s 109A which in general terms provided that a s 106 claim cannot be brought with respect to an unfair contract for which an application has been or could have been made by the employee under the unfair dismissal provisions of the Act. In the course of its judgment the Court (Wright J, President, Walton J, VP and Hungerford J) embraced observations of counsel appearing in the proceedings to the effect that s 106 created "fundamental principles of civil rights". Observations were also made concerning "existing statutory rights", and "basic rights". So much is incontestable. However observations of this kind do not, in my opinion, impact upon the determination of the discrete issue with which I am dealing in these proceedings. These observations were made in the context of a discussion about the rights created by s 106 of the Act in terms of the application of s 109A. They were not made by reference to any issue of retrospectivity or in the context of the characterisation of a right created by s 106 in terms of the provisions of s 30 of the Interpretation Act. Accordingly, it is impermissible to rely on this judgment by way of assistance in determining this issue.

51 Accordingly, I conclude that there is no right or other matter referred to in s 30(1)(c) of the Interpretation Act which could be said to be affected by the operation of s 108B, on the hypothesis that there was the necessary contrary intention to allow s 30 to operate.

52 I now refer to three previous first instance decisions of this court which were relied upon by the parties in submissions.

53 The judgment of Peterson J in Kennedy v Contract Transport Solutions [2003] NSWIRComm 158 also dealt with the provisions of s 108B. It was not necessary for his Honour to consider in a definitive sense the matter which I am now asked to consider in these proceedings, because of the factual circumstances applying in those proceedings. His Honour expressed a tentative view which is contrary to the conclusion which I have reached in these proceedings. However it is clear from the judgment that his Honour was not given the benefit of reference to the extensive authorities and the detailed submissions which I have received during the course of submissions in these proceedings. In Bowker v Software Engineers Australia [2003] NSWIRComm 213 Schmidt J also reached a conclusion as to the operation of s 108B which is contrary to the conclusion which I have reached in these proceedings. Again, as appears from the judgment, her Honour was not referred to the recent decision of the High Court of Australia in Attorney-General (QLD) v Australian Industrial Relations Commission and many of the other authorities to which I have been referred in these proceedings. In Mullins v People Bank of Australia Pty Ltd [2003] NSWIRComm 457 Haylen J dealt with the provisions of s 108A, which arguably may attract different considerations than those applying to s 108B. Unfortunately, as appears from his Honour's judgment, his Honour was not referred by counsel in those proceedings before him to the High Court of Australia judgment in Attorney-General (QLD) v Australian Industrial Relations Commission and does not appear to have been assisted also in terms of the operation of s 30 of the Interpretation Act in the context of the right to bring an action under s 106 of the Act.

54 For completeness, I refer also to one final alternative submission made by Mr Dixon in support of the notice of motion. This was to the effect that s 108B "abridged the time within which an application for orders under s 106 could be made to 12 months. After the introduction of the section the applicant was left with time for an application to be made within the 12 month limit. No existing rights were extinguished on the introduction of the law". On this basis, as the amendment applied to the circumstances of the applicant's proceedings, it was procedural only and not substantive. Therefore, it was submitted that the common law presumption against retrospective application to accrued rights was displaced. In making these submissions Mr Dixon relied upon a number of High Court Authorities, including Yrttiaho v Public Curator (Queensland) (1971) 125 CLR 228 at 242, Rodway v R (1990) CLR 515 at 519 and Carr v Finance Corporation of Australia Limited (No 21) (1982) 150 CLR 139 at 149-150. This submission was postulated on a third alternative basis, namely that s 108B would not be construed according to its literal terms so as to permit of the application of s 30 of the Interpretation Act, and that s 30 of the Interpretation Act would have applied to the right to make a claim under s 106 of the Act. As I have upheld the respondent's submissions with respect to both these issues there is no necessity for me to deal with this third alternative argument. In any event, as the authorities make clear, the distinction between amendments of a substantive and procedural nature is sometimes unclear, and the differential application of the distinction depending upon the particular circumstances of the particular parties in the proceedings may not afford a particularly sound basis for the application of any such principle. In these circumstances, I do not propose to deal with this submission.

55 The parties agreed that costs should be reserved and I will do so.

56 ORDERS I make the following orders:

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