Minproc Limited v Killinger

New South Wales Supreme Court CITATION : Minproc Limited v Killinger [1999] NSWSC 564 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 1206/99 HEARING DATE(S) : 25/05/99 JUDGMENT DATE : 25 May 1999

Minproc Limited (P1) PARTIES : Peter W F Anderton (P2) William Frederick Killinger (D1) Killinger Consultants Pty Limited (D2) JUDGMENT OF : Young J

COUNSEL : Plaintiffs: L Foster QC and J Murphy Defendants: H J Dixon SOLICITORS : Plaintiffs: Corrs Chambers Westgarth Defendants: Blake Dawson Waldron CATCHWORDS : Industrial Law [237]; Void contracts; Nature of jurisdiction; Judicial or arbitral; Power to order cross-vesting to another State Supreme Court; Procedure [26]; Cross-vesting; Western Australian proceedings commenced; Defendant commences proceedings in NSW Industrial Relations Commission; Overlapping issues; Transfer to Western Australia ordered ACTS CITED : (NSW) Industrial Relations Act 1996 ss 105, 106, 151, 152(1), 163(1), 163(2) (Cth) Trade Practices Act 1974 Bruning v Kingmill (Australia) Pty Ltd (1998) 44 NSWLR 180 CASES CITED : Ex pare Herman; Re Mathieson (1961) 78 WN (NSW) 6 Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 DECISION : See para 32

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

JUDGMENT 1 HIS HONOUR : This is an application to cross-vest proceedings which are currently pending in the Industrial Relations Commission of New South Wales to this Court and then on to the Supreme Court of Western Australia. 2 The facts and parties in the various proceedings are more complicated than these reasons would suggest, but essentially the dispute is between Mr Killinger and the first plaintiff. Mr Killinger at one stage was a chief executive officer of the first plaintiff and the dispute arose out of his activities with the first plaintiff under and after a service agreement, which was entered into on 24 November 1993. 3 Chronologically, the first piece of litigation was proceedings Civil 2279/97 in the Supreme Court of Western Australia, in which the present first plaintiff was the plaintiff, Mr Killinger was the first defendant and three other persons were also named as defendants. Later a fifth defendant was added. 4 The Western Australian proceedings were commenced by writ on 28 November 1997. The plaintiff in due course filed a statement of claim, the latest version appearing to be on 27 March 1998. The plaintiff claimed damages against the defendants, it would appear, basically for breach of duty to exercise reasonable care and skill in and about the tasks that they were supposed to do under their service agreement. 5 On 19 November 1998 Mr Killinger, together with a company controlled by him, Killinger Consultants Pty Ltd, commenced proceedings in the Industrial Relations Commission of New South Wales in Court Session against the first plaintiff and one Peter W Anderton for orders declaring void in whole or in part or varying the service agreement, and contracts after the service agreement as being unfair contracts. 6 The present first plaintiff challenged the jurisdiction of the Industrial Relations Commission, but that application was dismissed and in giving her reasons on 12 May 1999 Kavanagh J held that Mr Killinger had performed work in an industry in and of New South Wales sufficient to ground jurisdiction of the New South Wales Industrial Commission to hear the application. She dismissed the first plaintiff's motion with costs and ordered that the claim be referred for conciliation and, if that fails, for hearing. 7 The service agreement, which is exhibit PX10 before me, expressly provided that it was subject to the laws prevailing in Western Australia and that the parties agreed to submit to the exclusive jurisdiction of the Courts of that State. That matter was drawn to Kavanagh J's attention. She said of it two things: (a) (page 6 in the judgment) "this fact does not, standing alone, extinguish the jurisdiction of New South Wales Courts"; and (b) (judgment page 15): "The service given by Mr Killinger between 1985 and 1991 was not bound by the 1993 contract ... . Most of Mr Killinger's service was not bound by this contract, that is, the service he gave before 1991 and after 1996." 8 The only question before Kavanagh J was whether the Industrial Relations Commission had jurisdiction and she held that it did. 9 The question that I have to deal with in this application is whether it is in the interests of justice that the application under s 106 of the Industrial Relations Act 1996 stay with the Industrial Relations Commission in New South Wales, to be heard as a separate matter, or whether it should be transferred into this Court so that it can be in turn transferred to the Supreme Court of Western Australia to be heard with the matters that are already pending in that Court. 10 An initial problem is that there is to be found in the Industrial Relations legislation the flavour that the Commission is the sole court that should consider applications of this nature. 11 This problem has been considered by this Court on previous occasions. There are two tranches of cases, the first dealing with whether this Court could grant an injunction to protect people pending an application under s 106 of the Industrial Relations Act, the second as to whether such application could be transferred into this Court, usually with a view to being transferred to the Federal Court, which could exercise similar jurisdiction under provisions of the Trade Practices Act 1974. After some hesitation, this Court decided that there was jurisdiction to do that despite the general flavour of the Industrial Relations Act; see Winron Pty Ltd v Shell Company of Australia Ltd (1996) 66 IR 64 and Bruning v Kingmill (Australia) Pty Ltd (1998) 44 NSWLR 180, 182. The profession really should assume that the decision in Bruning is this Division's last word on the matter until the Court of Appeal determines otherwise. 12 Mr Dixon in his well reasoned submissions for the defendants said that I should not follow that line of territory and referred to an earlier decision of McLelland CJ in Eq in Wood v Boral Resources (NSW) Pty Ltd - 28 October 1993. I merely record that submission and follow Bruning's case. 13 The next problem is whether it is in the interests of justice that the matter remain where it is or be transferred to Western Australia. 14 As in all cases of this sort there are factors that go both ways. The factors in favour of going to Western Australia are that the court there can deal with all issues at one and the same time and both the principal opponents are involved in both sets of proceedings. 15 Secondly, if proceedings are to be dealt with separately in New South Wales and Western Australia involving overlapping issues there is a danger that there will be inconsistent findings or the creation of estoppels, which will make the Western Australian proceedings even more complex than they presently are. 16 Thirdly, the proceedings were commenced first in Western Australia. There is a strong connection with Western Australia because the principal service agreement elected to have Western Australian courts the exclusive forum, yet the New South Wales proceedings were instituted well after the Western Australian proceedings. 17 On the other side the New South Wales jurisdiction under s 106 is a peculiar jurisdiction to New South Wales. The general flavour of the Industrial Relations Act is apart from cross-vesting matters those applications are to be dealt with in the Industrial Relations Commission. The Commission has developed expertise in the matters and has knowledge of what is fair in the various industries from its activities generally, and so has a yardstick from which to measure whether a contract is unfair within the meaning of s 105 of the Industrial Relations Act. Moreover, the parties to the two sets of proceedings are different. 18 Another factor that was raised by Mr Dixon was that the power of the Industrial Relations Commission is arbitral rather than judicial and that the decision-making process involved playing havoc with the classic principles of contract (Port Macquarie Golf Club Ltd v Stead (1996) 64 IR 53, 59) in not following the "traditional" contractual principles and making decisions according to equity and good conscience (s 163(1) of the Industrial Relations Act 1996). 19 There was considerable debate on this last submission. Mr Dixon referred to the decision of the Court of Appeal in Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543, particularly the judgment of McHugh JA at 559-561. His Honour at 559-60 pointed out that there were strong indications that the jurisdiction of the Commission was arbitral not judicial because the relevant union could invoke the jurisdiction, thus a stranger to the contract could obtain an order that a contract was void, the Commission could vary a contract, independently of the circumstances which existed at the time of its making, and could vary a contract with reference to a worker, notwithstanding that the worker was not the person who made the contract. 20 Mr Foster QC, who appeared with Mr J Murphy for the plaintiffs, put that the case in which McHugh JA gave judgment was decided before the 1996 Act made it fairly clear that the Industrial Relations Commission had to deal with these matters as judicial rather than arbitral matters. He pointed out that the Act required that these matters be dealt with by the Commission in Court Session, that meant that a judge had to exercise the powers of the Commission under s 151; that the Commission in Court Session was a court of record under s 152(1) and that under s 163(2) the rules of evidence and other formal procedures of a superior court of record applied. 21 Mr Dixon said, first of all, that the factors mentioned by McHugh JA still showed that the matter was arbitral and, secondly, the proper construction of s 163 was that even in Court Session in this sort of matter the Industrial Relations Commission had to act according to equity, good conscience and the substantial merits of the case without regard to technicality or legal form. 22 With respect, this last submission is not correct. It is not uncommon to require courts, particularly inferior courts, to be both courts and act in accordance with good conscience, but that has been held to mean that the court must still be bound by the laws of evidence and by the law of the land; see eg Ex parte Herman; Re Mathieson (1961) 78 WN (NSW) 6. 23 However, the first point still holds good. It may be that the matter is one where the Commission is exercising arbitral powers, but has to do its fact-finding in a judicial way. 24 There seem then to be three possible situations, all of which point toward transferring this case to Western Australia. First, if the proceedings before the Industrial Relations Commission are judicial proceedings then they can just as easily be heard in Western Australia as in New South Wales. Secondly, if they are arbitral proceedings there must be very great doubt as to how far the decision of the New South Wales Industrial Relations Commission can affect non parties or can affect the assets of the parties outside New South Wales. 25 There is certainly jurisdiction in the New South Wales Industrial Relations Commission, as Kavanagh J has found, but that is quite a different thing to how far the decision can be enforced and what is its effect outside New South Wales. One needs to analyse very closely whether the proceedings are judicial proceedings or not; see EMG v Guardianship and Administration Board of Victoria [1999] NSWSC 501. 26 The third possibility is that the proceedings are arbitral proceedings to be dealt with in a judicial manner, in which case the defendants get the worst of both worlds. 27 Accordingly, it is unnecessary to determine this point finally, save to say that whichever way it is dealt with it tends toward proceedings in Western Australia rather than New South Wales. 28 I must confess that I commenced the day thinking that it would be better to have the proceedings heard separately because I was particularly concerned that the defendants would be involved in very complicated proceedings in Western Australia on a whole number of issues, which many issues could be avoided if there was a determination in New South Wales. I am also concerned that in States which do not have very many Supreme Court judges it is difficult to hear cases in the long matters list without delay. 29 However, they are not the only matters to take into account. The problem of issue estoppels being created in New South Wales, if the matter here is heard first, is a very real one. Even if the decision is that of an arbitral tribunal, it could still have issue estoppel ramifications. 30 The possible delays in Western Australia can be dealt with to a degree by all parties keeping strictly to the timetable. The major factors are, it seems to me, the fact that the Western Australian matter was started first; the whole of the proceedings can be dealt with in Western Australia; they involve overlapping issues and the problem of the consequences that might flow to non parties outside New South Wales of the New South Wales Industrial Relations Commission dealing with part of this dispute, lead to the view that it is in the interests of justice that the orders sought by the plaintiffs should be made. 31 Kavanagh J did order that these matters should go to conciliation. I think that that is appropriate because it may be, though I very much doubt, that the matters can be resolved by conciliation. I am told that that might take three months. Accordingly, I will make the order in the summons, but order that it not be entered until 25 August 1999, or other order of the court, so that the conciliation process can take place. It may be, however, that when both parties direct their minds to the delay they may wish me to delete that. 32 Accordingly, I make orders 1, 2 and 3 in the summons. I direct that these orders not be taken out until 25 August 1999 or such other date as the court may order. The exhibits may be returned.

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