92 After the decision in Gosper there appears to have been some hesitation within the Commission as to whether that case decided that the proper law of the contract was critical to the existence of jurisdiction under s.88F IAA and its successors. In Australian Entre Business Centres Pty Ltd v Smith (1989) 29 IR 172 ("Australian Entre"), the Full Bench of the Commission (Fisher P, Hill and Maidment JJ) had to consider an appeal on the question of jurisdiction to make an order under s.88F which raised the issue of the proper law of the subject contract. The contract did not expressly identify the law by which it was governed and the appellant contended that the system of law with which the transaction had the closest and most real connection was the law of Victoria. As noted by the Full Bench, the submission proceeded that "accordingly, on the authority of [Gosper], s.88F had no application".
93 In a joint judgment their Honours held that, in the absence of express stipulation in the contract, its proper law was to be decided according to the test in Bonython v Commonwealth ((1950) 81 CLR 486) and that, on the facts of the case, the system of law with which the contract had the closest and most real connection was that of New South Wales, not that of Victoria. At 181, the Court said:
"Accordingly, we hold that the contract is subject to the law of the State of New South Wales and in particular that there is jurisdiction to deal with the contract under s.88F."
94 It is notable that the Full Bench did not refer to Cosgrove, Maloney or Chevron at all nor did it comment upon the proposition of law submitted by the appellant which relied upon Gosper. The Court did not say that, even if the proper law of the contract had been the law of Victoria, that circumstance would not necessarily have excluded the Commission's jurisdiction under s.88F, as it could have said, adopting the proposition enunciated by Watson J in Maloney and approved in Chevron. Indeed, the Full Bench seemed to assume that if the appellant had been correct in its contention as to the identity of the proper law of the contract, then the appeal would have succeeded.
95 In BNY Australia Ltd v James (1992) 40 IR 1 ("BNY"), employees of BNY applied to the Commission for orders under s.88F varying their contracts of employment as they applied to the circumstances in which the employees' services had been terminated. One of the issues raised was whether the contracts of employment incorporated terms set out in a "Separation Policy", which expressly stated that the proper law of the Policy was the law of the United States of America. BNY had argued that the Policy formed part of the contracts of employment and that s.88F could have no application to that part of the contracts because of the principle enunciated in the majority judgment in Gosper (at 18).
96 The Judge at first instance held that the "Separation Policy" was not part of the contracts of employment but was a representation made to the employees. BNY appealed to the Full Bench of the Commission constituted by Hill, Maidment and Hungerford JJ.
97 Hill J referred to BNY's argument based on Gosper and set out the passage from the majority in Gosper which appears at paragraph 60 above. His Honour then said (at 19):
"It is therefore clear that what was sought to be varied or avoided in that case was a trust set up and administered in Victoria under the laws of that State. It was held that there was no jurisdiction under s.88F to vary or avoid the trust, it being governed as to its terms and administration by the laws of Victoria. However, in the present case, what is sought, at the lowest, is an avoidance or variation of each contract of employment. So far as the contract does not incorporate the provisions of the policy, the claim seeks to avoid the contract and/or to vary it by inserting the policy (except, inter alia, as to the governing law and administration clauses); alternatively so far as the provisions form part of the contract, the claim seeks to avoid it and/or vary it by deleting those clauses, on the grounds that they are, and thereby the contract is, unfair. His Honour found that the policy was not part of each contract and that this made the contract unfair; he therefore varied it to include the policy provisions with the exception, inter alia, of the proper law and administration clauses. On this basis his Honour, in my opinion, was clearly acting within jurisdiction."
98 In this passage, his Honour seems to suggest that Gosper is authority only for the proposition that there is no jurisdiction under s.88F IAA to vary the terms of a Victorian trust, but he founds his decision on the proposition that the contract of employment did not incorporate a foreign proper law clause.
99 Maidment J was "in general agreement with the conclusions and reasons of Hill J in relation to matters going to the jurisdiction and powers of the Commission in this case" (at 27). Hungerford J observed (at 46) that BNY's attack on jurisdiction founded on Gosper was "irrelevant" because the Commission had found that the Separation Policy and its proper law clause was not part of the contracts of employment. His Honour agreed with that finding so that it was not necessary for him to discuss further the submission based on Gosper.
100 Australian Entre and BNY were referred to in Goodgold Pty Ltd v Bumpa T Bumpa Automart Pty Ltd (unrep. NSW Ind Comm, 18 December 1992). There, a franchise was in issue. The applicants sought relief under s.275 IRA 1991 in respect of four agreements, three of which contained a clause expressly providing that the proper law of the agreements was the law of Queensland. The respondents took a preliminary objection to the jurisdiction of the Commission. The attack was two-fold: first, that s.275 IRA 1991 should be construed as not extending to contracts governed by foreign law; second that the "arrangement" under challenge involved "obligations, the proper law of which was Queensland law".
101 His Honour considered that the relief sought was really directed to the franchise agreement, the proper law of which was that of Queensland. His Honour said, at p.6: "Such a provision, in the circumstances of the case as have been recounted, would seem to me to be decisive on the question of whether an action in this Court in relation to that contract should be entertained". His Honour referred to Vita Food Products Incorporated v Unus Shipping Company Ltd (in liq) ([1939] AC 277) and to Hildred, quoting the passages from the judgment of Kerr CJ which are set out in paragraphs 80 and 81 above. His Honour then referred to Gosper, quoting in full the passage from the majority judgment set out in paragraph 60 above.
102 His Honour noted the submission of counsel for the applicants as to the degree of connection with New South Wales which the subject contracts had. His Honour observed, at p.10:
"Those matters would undoubtedly be of significance if the agreement was silent on the subject of the proper law of the contract and the Court was required to ascertain, from the express terms of the contract and relevant surrounding circumstances, what law 'the parties intended to apply'. In this case, however, the relevant clause of the agreement could hardly be in more explicit terms."
103 His Honour referred to submissions by the applicant relying upon Australian Entre and BNY. His Honour distinguished Australian Entre on the ground that there the relevant contract contained no express foreign proper law clause so that the proper law was found to be that of New South Wales, whereas in the case before him the contract expressly identified the proper law as that of Queensland.
104 As to BNY, his Honour again distinguished it on the basis that the contracts did not incorporate an express foreign proper law clause. At p.16 his Honour said:
"A consideration of the various matters to which I have adverted has led me to the conclusion that the express law of the contract provision appearing in the franchise agreement in this case is binding on the parties and that therefore an action under s.275 in the New South Wales Industrial Court is inappropriate and beyond the jurisdiction of that Court to entertain. The objection to jurisdiction is accordingly upheld and the summons dismissed."
105 It is clear that Cahill DCJ in Goodgold regarded Gosper as establishing a proposition of general application to contracts and did not regard the Full Bench in either Australian Entre or BNY as having made a binding decision that Gosper and the decision of Kerr CJ in Hildred were not applicable or binding where the contract in question contained an express foreign proper law clause. His Honour made no reference to Cosgrove, Maloney, Chevon or Soueid. Correspondingly, Peterson J in Stevens, which was decided shortly after Goodgold, made no reference to Goodgold.
The decision in Chrysler