LUKE CAREY & ORS v INDUSTRIAL RELATIONS COMMISSIONOF NEW SOUTH WALES & ORS

JUDGMENT 1 SPIGELMAN CJ: By summons the claimants seek orders in the nature of prohibition certiorari and mandamus directed to the Industrial Relations Commission of New South Wales quashing a decision of that Commission in Court Session and requiring that Commission to hear and decide proceedings that it disposed of on 16 October 1998. These were proceedings, in which Vision Publishing Pty Limited was the appellant (the second opponent in this Court) and P K Lane Holdings Pty Limited, Luke Carey and Paul Lane (the claimants in this Court) were the respondents. 2 The appeal to the Commission in Court Session was from a judgment of Marks J. His Honour had made findings that a particular contract between P K Lane Holdings Pty Limited (to which I will refer to as "Lane") and Vision Publishing Pty Limited (to which I will refer to as "Vision") were parties. His Honour found the contract to have been unfair within s275 of the Industrial Relations Act 1991 and made certain consequential orders. 3 The issue in this appeal was directed to a particular aspect of the reasons for judgment of the Industrial Relations Commission in Court Session. That aspect, it was said, gave rise to a denial of procedural fairness to the claimants in that the Full Bench proceeded to determine the matter before it, or proceeded to determine material matter before it, without giving the claimants an opportunity to be heard. 4 It is not necessary to set out in any detail the factual background to the contractual arrangements between the parties which were the subject of extensive treatment by Marks J and by the Full Bench. In general terms the personal claimants, Carey and Lane, were at one stage employees of Vision performing certain services relating to sales of the publications of which Vision was the publisher. Subsequently, by reason of a re-arrangement on the part of Vision, the company Lane came into the picture as a party to a contract which assumed certain rights and obligations with respect to the sales promotion of Vision's publications. That contract was for a period of three years. It came to be terminated by Lane, although the proceedings before Marks J were based on an assertion that in some way Vision had terminated that contract. 5 The passage in the reasons of the Full Bench on which the claimants focused their attack was a passage in which reference was made to "an excessively interventionist approach" said by the Full Bench to have been taken by Marks J during the course of the trial. It is submitted in this Court that this passage proved to be "pivotal" in the reasons of the Full Bench and that the failure of their Honours, it is asserted, to afford the claimants an opportunity to be heard with respect to, in general terms, the issue as to whether or not there had been any "excessive intervention", or such intervention of a relevant kind, by the trial judge deprived them of their rights of procedural fairness and, accordingly, that the appeal to the Commission in Court Session miscarried in a respect that this Court should remedy. 6 One of the issues in this case is whether or not the privative provision in s179 of the Industrial Relations Act 1991 protects the judgment of the Commission in Court Session from review by this Court. However, on the view of the facts that I take, it is not necessary to decide this issue. 7 It is by no means clear to me that the issue to which their Honours were referring in the passage which I will presently set out was not properly before their Honours on the basis of the pleadings. There is no doubt that the issue which was referred to was mentioned in the pleadings but it is not necessary to decide the case on this basis. 8 In my opinion, the finding referred to in terms of "an excessive interventionist approach" on the part of the trial judge was not a finding that played any material role in the determination of the proceedings unfavourably to the claimant and, on that basis, I would dismiss the appeal. 9 The passage to which attention was directed was in the following terms: "The excessive interventionist approach to the hearing inevitably, it seems to us, resulted in erroneous conclusions being reached by his Honour. We turn to those matters." 10 As the last sentence, "We turn to those matters" indicates, their Honours were going on to deal with the substantive issues that were argued before them. 11 I will presently set out in full the conclusions to which the Commission came after a consideration of the relevant facts and matters after some ten pages of reasoning. The passage to which attention has been directed occurs at the end of a page and a half of consideration of the approach adopted by Marks J. It is reasonably clear that the use of the phrase "resulted in erroneous conclusions", in the passage complained of, was simply a reference to the course which the trial took, rather than any form of link between "an excessive interventionist approach" and the findings which the Full Bench proceeded to make, being contrary to the findings of the trial judge on the substantive issues. 12 The words "resulted in" hark back to a passage on p38 at the commencement of the section in which the Full Bench is considering the approach adopted by his Honour, where their Honours said: "We have come to the conclusion that the approach adopted by Marks J which, at the outset of the case, involved his Honour in prevailing upon the parties to allow him to deal with the matter on an 'in principle' basis, ultimately led to appellable error." 13 This, in turn, referred to submissions made on behalf of the appellant before the Full Bench and the second opponent, Vision, here in this Court, which is set out at p15 of the Full Bench's reasons for decision, where their Honours summarised the submissions in the following way: "Mr Hall QC, who appeared for the appellant with Mr Moses of counsel, submitted that the errors into which Marks J fell resulted from confusion introduced into the proceedings as a result of the way in which the respondents litigated the matter." 14 The Full Bench identified the excessive intervention by Marks J in terms of his Honour raising an aspect of unfairness, which his Honour eventually found to have been made out, that was not in any way raised in the pleadings. Nor, until his Honour raised it in the course of submissions, did it form part of the present claimants' case before his Honour. It was in that context that their Honours in the Full Bench said: "It is not a matter for a trial judge to determine a case on issues selected, espoused and pursued by the judge."

Their Honours emphasised that the applications under s275 of the Act were adversarial in nature. This was the nature of the "excessive intervention" to which their Honours were referring in the passage referred to. 15 Accepting for present purposes that the claimants were not afforded an opportunity of making submissions with respect to the nature of that intervention - a matter which I do not find it necessary to decide - it is clear to me that, on a proper reading of the judgment of the Court, the finding of "excessive intervention" did not play a role in the ultimate reasons for the decision of the Court. It did not serve as a trigger for any aspect of the reasoning that subsequently was set forth in the judgment of the Full Court. Nor would any aspect of those reasons have been different in any material respect, or indeed in any respect at all, if their Honours had made no observations as to the degree of intervention of his Honour in the course of the trial. 16 At pp46 and 47 their Honours summarised their conclusions in this respect: "In our view, his Honour's conclusion that the contract was unfair because it contained no provision as to termination on the giving of reasonable notice was not available given the evidence of the advantageous nature of the agency agreement for the respondents; that the respondents were not dissatisfied with the agreement; that the trial arrangements were initiated by Vision in a genuine desire to address difficulties which had developed in the parties' relationship; that the respondents were not financially disadvantaged by the trial; that they did not advise Vision of their concerns or frustration or of the view they had been placed in an untenable position; that they gave no warning of the steps they were contemplating; and that they terminated the agency without notice. A right of termination without notice could not, on any view, have been warranted in the circumstances of this case. Variation of the contract to give a right of termination with notice, because Mr Carey and Mr Lane might have become ill or because the ownership of Lane Holdings might have changed during the term of the agency (the matters postulated by Marks J), had no relevant connection with the circumstances of the case; further, it paid no regard to the unalterable fact that the contract had already been terminated by Lane Holdings without any notice or prior warning for reasons quite unconnected with those his Honour had predicated. The variation of the contract to redress the unfairness perceived by his Honour would still not have provided a proper basis for the approach Lane Holdings have adopted in terminating the contract. In the result, our view is that his Honour erred in the conclusion reached as to the unfairness of the agency agreement." 17 These findings are not challenged in this appeal. 18 Mr Gallagher SC, who appeared for the claimants, candidly conceded that he could not identify any part of the reasons, including the passage which I have set out above, and say that the Full Bench arrived at that particular conclusion as a result of the finding of "excessive intervention". He asserted, nevertheless, that the finding of "excessive intervention" was pivotal and coloured the subsequent analysis by the Full Bench of the facts of the case. 19 I am unable to accept that submission. In my opinion the reasons of the Full Bench, including in particular the passage I have set out above, states in clear unmistakable terms, that for a particular range of reasons found in the objective evidence before the Court and the actual findings of fact of Marks J, there was no relevant unfairness in the agreement which warranted the intervention of the Court under s275 of the Act. No aspect of those findings turns in any way on the particular conduct of his Honour to which the Court had earlier referred in terms of "excessive intervention". Accordingly, in my opinion, the claimants cannot make out their case that they have been denied procedural fairness in any relevant respect. 20 The test for determining whether or not procedural fairness has a relevant connection with the decision making process is a strict one. The Court was referred to the decision of the joint judgment of the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141. Their Honours said at p145: "For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate Court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial." 21 In addition their Honours postulated the test as one of possibility. At 147: "Alternatively, if the Full Court is properly to be understood as saying no more than that a new trial would probably make no difference to the result, their Honours failed to apply the correct criterion. All that the appellant needed to show was that their denial of natural justice deprived him of a possibility of a successful outcome. In order to negate that possibility , it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result." (Emphasis added) 22 The most recent consideration of this issue in this Court was in the case of Murray v Legal Services Commission (1999) 46 NSWLR 224. In the judgment of Sheller JA the relevant passages are set out and the conclusion that was reached was that on the facts of that case the Court could not conclude that there was no possibility that the person denied natural justice had been deprived of a possibility of a successful outcome and accordingly made orders declaring that the decision, the subject of those proceedings, was void. 23 In the present case, in my opinion, the strict test determined in Stead can be applied given the structure of the reasoning of the Full Bench as I have interpreted it. Even if - a matter of which I am not convinced - the claimants had made out any basis for a conclusion that they were denied natural justice in the circumstances of this case, I would conclude that there is no possibility that they were deprived of a successful outcome. The reasons of the Full Court were directed to the substance of the issues and were not, in my opinion, impinged upon in any way by the finding of "excessive intervention" on the part of Marks J. 24 Accordingly, in my opinion, the summons should be dismissed with costs. 25 PRIESTLEY JA: I agree. 26 SHELLER JA: I also agree. 27 SPIGELMAN CJ: The order of the Court is that the summons is dismissed with costs. **********

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