Two alternative inferences can be drawn from that, either that Toll simply did not regard the sale of vehicle clause as forming part of its contract because Toll as evidence would show basically indicate as far as their sale would show [sic], that there will be no introduction of vehicles in its businesses, or, alternatively, it regarded the clauses as binding but it was using the discretion vested by the clause to block any incoming carrier in a way which we would say constitutes an arbitra[ry] … exercise of discretion. In either case we say that the contracts between the owner drivers and Toll are or have become unfair. (emphasis added)
109 Therefore, while the TWU's primary submission before Staff J was that cl 11 did not form part of the owner/driver contracts, it also advanced, as an alternative submission before his Honour, that cl 11 was not in the contracts because of Toll's policy or, if cl 11 was a term of the contracts, the contracts were or became unfair because the discretion conferred on the principal, Toll, under that clause, was, inter alia, exercised arbitrarily, capriciously and unfairly such as to make the contracts unfair.
110 That alternative submission was also elaborated upon by Mr Hatcher for the respondent in his closing address before Staff J as follows:
It is possible, again given the state of the evidence, that an alternative characterisation might arise, that is, that the clause was in some way incorporated, but that Toll has used its discretion to refuse to allow any sales to occur, however, we think the court would not be attracted to that alternative proposition because it is not consistent with Toll's conduct in which, rather than simply exercising its discretion for approval with respect of individual carriers based upon their personal characteristics, it has rather adopted a blanket policy in which no sale of vehicles may occur under any circumstances whatsoever.
111 Staff J acknowledged in his first judgment, the alternative submission had been a contest before him when at [95] he concluded:
An alternative characterisation, which I am not attracted to because of Toll's conduct, is that cl 11 was incorporated into the owner/drivers contracts but that Toll used its discretion to refuse to allow any sales to occur. The evidence prevents me finding that Toll exercised its discretion for approval with respect to individual owner/drivers because it adopted a blanket policy in which no sales of vehicles could occur under any circumstances whatsoever.
and at [100]:
... Indeed, the respondents' evidence went so far as to deny that Toll had any contractual obligations to maintain the sale of vehicle arrangements.
112 Mr Moses contended his Honour's comments at [95] and [100] were made in the context of the appellants' submission as to how the case could be viewed as a breach case. I cannot see that this submission does other than endorse the fact a number of alternative propositions were squarely placed before his Honour and Staff J gave each his consideration. Further, Mr Moses, on appeal also acknowledged the alternative submission was before Staff J when he submitted:
[T]hat's the basis upon which my friend invited the trial judge to draw that inference which flies in the face of the actual commercial transaction between Toll and Brambles and the provisions I have taken the court to, as well as the letter that was provided to each of the lorry owner drivers. The alternative inference my learned friend invited the court to find is that it regarded the clause as binding but it was using the discretion vested by the clause to block any incoming carrier in a way which we say would constitute an arbitrary exercise of discretion. ...
113 The appellants can gain no comfort in placing reliance solely upon the respondent's pleadings and to ignore the way the case was conducted before Staff J as the ground to deny the jurisdiction of a court. This is particularly so where the appellants, in their pleading at first instance, consistently and expressly denied the existence of a contractual provision which required Toll to consider any sale of trucks with work by the owner/drivers. The appellants in pleading in the Amended Reply to the Amended Summons, had pleaded at par 8:
(j) ... the Respondents dispute that the 1989 Agreement was binding upon the Respondents or either of them at any time, including following the Purchase.
(k) ... the Respondents contend that the 1989 Agreement lapsed and did not continue to have binding legal force following the repeal of the Industrial Arbitration (NSW) Act 1940 by the Industrial Relations (NSW) Act 1991, and/or following the repeal of the Industrial Relations (NSW) Act 1991 by the Industrial Relations (NSW) Act 1996;
(l) ...
(m) ... the Respondents deny that they had knowledge of any arrangements between Brambles and contract carriers, including the Contract Carriers, regarding the payment of goodwill or the existence of any entitlement by contract carriers, including he Contract Carriers, to sell such goodwill or to charge a premium for the introduction to work of a new driver, or that the communications outlined ... referred to or contemplated such arrangements or entitlements;
114 What was pleaded by the appellants, therefore, was the 1989 Agreement was not legally enforceable against Toll by virtue of it not being caught by the operation of the 1996 Act or the 1991 Act, yet it led evidence from witnesses the result of which, after cross-examination, caused Mr Moses at the hearing to properly concede as follows:
The appellants' evidence was in contradiction to its own pleading. The appellants' managers agreed they knew of the 1989 Agreement and generally had applied to the owner/drivers those working conditions.
115 Both parties changed positions from their pleadings in the conduct of the case and raised alternative propositions before Staff J. The respondent in its pleadings did not identify the terms of the contracts, but in the course of its submissions proposed two alternatives: first, if cl 11 was in the contracts, the conduct of the appellants was unfair and in the alternative, if cl 11 was not in the contracts, the appellants were misled by the representations of Toll and by post-contractual conduct.
116 The appellants conducted its case at first instance firstly, by denying the 1989 Agreement was binding and denying it had knowledge of the Brambles' practice regarding the payment of goodwill but then, after its witnesses gave evidence, it made a concession as to Toll's knowledge of the practice at Brambles. The appellants then proceeded to submit the 1989 Agreement with cl 11 constituted the contracts.
117 Given the way the case was conducted, Staff J considered a number of alternative propositions as to the terms of the contracts between the parties. Both parties approbated and reprobated as to what were the terms of the contract. His Honour was dealing with at least four alternative submissions placed before him in the conduct of the matter. While I find his Honour erred in his conclusion as to one term of the contract, I cannot accept, in such a circumstance, the determination of the most serious question, the jurisdiction of the court, should be made solely on an analysis of one single pleading amongst many and that of but one party. This is especially so given the alternative ways the case was both pleaded and conducted by each party at first instance.
118 The respondent's use of the word "right" in its first particular of the asserted unfairness is the essence of the appellants' attack on the pleadings. There was but one pleading by the respondent in its Amended Summons that contained the word "right". The singular use of the word is not considered by the court as a substantial ground to uphold the jurisdictional challenge. The Industrial Court is not a court of strict pleading. The use of the word "right" in pleading 34(a), in my view must be examined in its context. The "right" to sell was a practice acknowledged and accepted by Brambles and the pleading (at 34(a)), I accept, merely asserts the contracts did not provide for a continuation of that "right". In other words, having regard to its context when the pleadings are read as a whole, I do not regard the use of the word "right" as pleading a contractual right breached by Toll, but rather it was referring to a benefit enjoyed by the owner/drivers under Brambles in respect of which they had come to regard as being available as a matter of course and about which they held a legitimate expectation would continue under Toll, but which Toll denied. Other pleadings reinforce and give support for this view. On an analysis of all the particulars of the respondent, while each was fashioned as a separate ground, on my understanding of the particulars, when read as a whole there was, by the conduct of the appellants in refusing the sale of trucks with work, an unfairness in the performance of the contracts.
119 In any event, even if the pleading in paragraph 34(a) of the Amended Summons for Relief could, on its own, be regarded as a pleading of breach of contract because it refers to a denial of a contractual right, other pleadings of unfairness fit squarely into the mould of unfair contract pleadings.
120 Thus, if it be accepted by me, as it is, that the respondent was contending in its pleadings and in the case it presented, that the contract consisted of the 1989 Agreement minus cl 11, but in the alternative, inclusive of cl 11, a pleading, for example, that the terms of the contract (inclusive of cl 11) permitted Toll to unilaterally and fundamentally alter the conditions of engagement of the owner/drivers to the detriment of the owner/drivers (34(g)), is not a pleading that Toll breached the contract. Nor is it a breach of contract pleading that the contract (inclusive of cl 11) permitted Toll in its discretion, to act arbitrarily, capriciously or unfairly and without regard to the interests of the owner/drivers (34(e)), given that it was asserted in the pleadings the owner/drivers had a legitimate expectation of being able to sell their trucks with their positions or with "introductions to work" in the future.
121 In such a circumstance, I reject the contention of the appellants that the pleadings should be held to be persuasive evidence in support of the proposition the court has no jurisdiction to hear a claim pleaded under s 106 of the Act.
122 It follows from what I have said regarding the pleadings and the conduct of the respondent's case, the case the appellants were required to meet in the alternative, was that the contracts permitted the conduct by the appellants but that conduct, because of the contractual force of the promissory representation or simply because of the representation, made the conduct of the appellants unfair, thereby making the contract unfair. In Sydney Water, Mason J, President said at [33]:
A contract may "permit" certain conduct either by sanctioning it expressly or by failing to prohibit it. In either circumstance the other party has no contractual remedy to prevent that conduct. Either type of "permission" may properly lead to an appropriate remedy in the Commission, if the Commission finds that the contract is unfair.
123 On my finding, and consistent with the alternative case pleaded by the respondent, the contracts contained cl 11. Clause 11 provided to the appellants the absolute discretion as to whether it would offer work to the purchaser of the owner/driver's truck. Because of its promissory representation, however, the respondent pleaded, inter alia, that the appellants exercised its discretion under the contracts: arbitrarily, capriciously or unfairly vis a vis the owner/drivers; or so as to permit the appellants unilaterally and fundamentally to alter the conditions of engagement of the owner/drivers, to the detriment of the owner/drivers; or so as to deny the owner/drivers the legitimate expectation which they had at the time they entered into service for Toll that they would be able to sell the truck together with their positions or with "introductions to work" at a time of their choosing, provided that a period of three years had passed. By so doing, it was contended that each of the contracts was rendered unfair.
124 I reject the appellants' contention that on the authority of Sydney Water, the Court is without jurisdiction to hear the claim. While the conduct of the respondent was permitted under cl 11, the question as to whether that conduct was unfair such as to make the contracts unfair is a question within the jurisdiction of the Industrial Court under s 106 of the Act.
Ground 3 - The jurisdictional fact