Noakes and anor v Adams and anor

Noakes and anor v Adams and anor - [2005] NSWIRComm 48 - NSWIRComm 2005 case summary — Zoe

[44]

30 It will be remembered that the applicants based their submissions in defence of the strike out application to a large part on the existence of an arrangement. That which constitutes an arrangement was discussed by Wright J, President and Walton J, Vice-President, in some detail in Mitchforce v Starkey (No 2). In paragraph [132] their Honours said: "What may constitute an "arrangement" insofar as the section is concerned was discussed by the Full Bench in Legal & General Assurance Society Limited v Stock (1993) 49 IR 464 (at 480 - 481): The authorities make clear that the term "arrangement" where used in the section is a wide one and encompasses transactions or plans which are not legally enforceable agreements. The following principles may be drawn from decided cases in the matter in relation to the ambit and reach of the term "arrangement" where used in the section ( Unconscionable Contracts and Economic Duress - Peter M Hall, at 55-56): (1) The word 'arrangement' in its ordinary meaning and particular statutory context is a word of much wider import than the word 'contract'. (2) An 'arrangement' will be found to exist where there is a bilateral or multilateral plan or concerted action to bring about a particular result. (3) An 'arrangement' may envisage a transaction in the nature of a bargain which may not be legally binding or enforceable, something in the nature of an understanding between two or more persons. (4) The section speaks of an arrangement of a particular kind, namely, an arrangement whereby a person performs work in an industry, that is, a transaction which directly leads to the performance of work in an industry. (5) The term 'arrangement' possessing a broad and extensive meaning may be found disclosed in a document comprising or specifying its terms, or there may be no document specifying the arrangement in which event resort will be had to oral evidence of discussions whilst in other cases an arrangement may be implied or inferred from the circumstances or the conduct of the parties. An arrangement may be discovered in a combination of documentary or verbal communications and the conduct of the parties. The relationship between the parties may itself manifest an arrangement. (6) There may exist two separate contracts each forming part of a specific arrangement and together constituting the means by which it is effectuated so as to produce particular results and whereby a person performs work in an industry. (7) The section accordingly comprehends not only the initial plans but all transactions by which the arrangement is carried into effect. It applies to any dealing the purpose or the effect of which is to achieve a situation as a consequence of which or wholly or partly in fulfilment of which a person performs work in an industry. (8) The term 'arrangement' embraces a situation where there exists two or more separate contracts which, notwithstanding their separateness, are, in a particular factual context, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part. (9) The arrangement, including the relationship leading to the performance of work and another contract, need not necessarily have sprung into existence at the same time."

[45]

31 Later, their Honours said: [135] "For an "arrangement" to be one whereby work is performed in an industry, there need merely be "a plan or concerted action by a number of persons to bring about [that] particular result": see Hall v Alison Clint Floral Delivery Pty Ltd at 64; and also Custom Credit Corporation Ltd v Goldsmith at 131, where the Full Bench held: But it must be true to say, we think, that it is significant that Parliament did not see fit to include in the Act any definition of "arrangement", which is not a term of art and is not a word which has a very precise meaning. Looking at the setting in which it is used in s 88F, we are of the opinion that in one of its meanings "arrangement" embraces transactions which do not give rise to contracts or obligations, that is to say, obligations enforceable at law; but we are also of the opinion that in another meaning it embraces a situation where there exist two or more separate contacts which, notwithstanding their separateness, are, given the facts, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a part. [136] It is difficult to speak of an element of a "plan or concerted action by a number of persons" as being a "term" of such an arrangement in the manner with which that word was used by the majority in Production Spray Painting. Whilst such language was clearly appropriate in the circumstances of that matter, in the context of an arrangement, as we have described it, such a word is somewhat misplaced. We agree with the respondent that in such circumstances, a reference to "purpose" will clearly be of greater utility and directs attention to the substance of the transaction between the parties. [137] What may constitute an arrangement against which the jurisdictional test (as earlier identified by us) is to be measured is clearly a matter of fact to be determined in all the circumstances. [138] One thing, however, is certain and was emphasised by Mahoney JA in Majik Markets (at 455) "it is in principle necessary [to] know what the arrangement in question is so that [the Court] can determine whether the arrangement is one which falls within s 88F" (our emphasis). This is consistent with observations within the first Full Bench consideration of the section in In Re Becker & Harry M Miller Attractions Pty Limited (No.2) [1972] AR (NSW) 298, where it was stated at 304: Merely reading the contract in vacuo supplies no answer on the issues both jurisdictional and discretionary which will face the single judge".

[56]

42 The respondents also relied upon another argument based on the judgment of the New South Wales Court of Appeal in Sydney Water Corporation v Industrial Relations Commission of New South Wales [2004] NSWCA 436. The principal judgment in those proceedings was that of Mason P with whose reasons for judgment Hodgson and McColl JJA agreed. The judgment in Sydney Water emphasises that in determining whether a contract is unfair one has to have regard to the provisions of the contract, whether either by way of those which are contained within its terms or by reference to those which have been omitted and are not dealt with. His Honour emphasised that it is impermissible to find that a contract is unfair "based on no more than conduct in breach of contract, ie even if it attracts an appropriate and presumably adequate remedy under the general law…" (at paragraph [44]). It was submitted by the respondents in these proceedings that the proposed amended summons was so confined in the allegations relating to unfairness that it fell within the impermissible boundaries established by Sydney Water. In my opinion such a submission cannot be sustained. This is particularly so in the context of an arrangement, the provisions of which have not been established with any certainty. In addition, many of the bases for the alleged unfairness rely on representations which the applicants said were made to them by the respondents, inducing them to acquire the business and operate it. Also, the specific allegations of unfairness in their terms fall outside the strictures established by Sydney Water. I instance an allegation of unfairness created by the absence of a secure tenure by way of lease, the absence of any right to sell alcohol in the manner originally represented, the failure of the respondents to construct a new bistro area and the like. In my opinion the respondents have failed to make out any such case on an interlocutory basis and this aspect of the notice of motion must fail also.

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