United Globalcom.Inc v McRann

PARTIES : FOURTH APPELLANT: Austar Entertainment Pty Limited

FIFTH APPELLANT: CTV Pty Limited

SIXTH APPELLANT: STV Pty Limited

RESPONDENT: Robert McRann FILE NUMBER: IRC 2552 of 2003 CORAM: Wright J President; Walton J Vice-President; Boland J Appeal - Unfair contract - Application for leave to appeal - Interlocutory decision at first instance to refuse application to dismiss proceedings - Factual matrix - Principles settled - Leave to appeal refused - Appeal dismissed - Costs. CATCHWORDS : Unfair contract - Appeal - Application for leave to appeal - Interlocutory decision at first instance to refuse application to dismiss proceedings - Factual matrix - Principles settled - Leave to appeal refused - Appeal dismissed - Costs. McRann v United Globalcom.Inc and ors [2003] NSWIRComm 131 Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8 CASES CITED : Origin Energy Limited v Smith (2001) 111 IR 476 Pacific Healthcare (Australia) Ltd v AHI Healthcare Systems Pty Limited (2001) 112 IR 122 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 Western Sydney Area Health Service v Gibson (2001) 109 IR 359 HEARING DATES: 09/25/2003; 09/26/2003 EXTEMPORE JUDGMENT DATE : 09/26/2003

APPELLANTS: Mr G J Hatcher SC with Mr N C Poynder of counsel Solicitors: Acuiti Legal (Mr M Davis and Mr M Easton) LEGAL REPRESENTATIVES: RESPONDENT: Mr J N West QC with Mr A D Justice of counsel Solicitors: Harmers Workplace Lawyers (Ms E Pritchard and Mr H Black)

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: Wright J, President Walton J, Vice-President Boland J

Matter No IRC 2552 of 2003 UNITED GLOBALCOM.INC AND OTHERS v ROBERT McRANN

Application by United Globalcom.Inc and others for leave to appeal and appeal an interlocutory judgment of Justice Peterson given on 24 April 2003 in Matter No IRC 3104 of 2001.

JUDGMENT OF THE FULL BENCH Extempore [2003] NSWIRComm 318

1 The present proceedings involve an application for leave to appeal and, subject to leave to appeal being granted, an appeal against the judgment of Peterson J given on 24 April 2003 in respect of an interlocutory application by the appellants, United Globalcom. Inc, UIH Asia/Pacific Communications, Inc, Austar United Communications, Inc, Austar Entertainment Pty Limited, CTV Pty Limited, STV Pty Limited, which sought the dismissal of the proceedings at first instance: see McRann v UnitedGlobalcom.Inc and ors [2003] NSWIRComm 131.

2 The respondent to these proceedings is Mr Robert McRann, the applicant in the s 106 proceedings at first instance.

3 In the proceedings yesterday and today senior counsel for the appellants was permitted to argue his case on all issues, that is both as to leave to appeal and the appeal proper. The respondent's senior counsel's submissions were heard on a similar basis.

4 Notwithstanding the manner in which the parties were permitted to put their cases, we have concluded these proceedings should be dealt with on a leave basis. Although we gave some consideration to reserving our decision on leave so that we might make some more detailed observations on applications for leave such as the present, upon reflection, we decided that was not necessary or appropriate, particularly since the circumstances of this matter are such that there are public interest considerations in the application for leave being dealt with today.

5 The judgment appealed from shows a careful consideration, after reserving judgment, of the complex factual matrix before the court at first instance. Although there were some unusual features of the case, for example, the nature and scope of litigation in the United States District Court for the district of Colorado (Coram: Nottingham J), it was nevertheless, in substance, an application for the dismissal, by interlocutory application on limited evidence, of proceedings with which the trial judge was obliged to deal in terms of the settled principles (for example, Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8, Virtue v New South Wales Department of Education and Training (1999) 92 IR 428, Euphoric Pty Limited v Ryledar Pty Limited [2002] NSWIRComm 136 and Victor Lahoud v Joseph Lahoud [2003] NSWIRComm 179). His Honour did precisely that.

6 The principles in dealing with applications for leave to appeal and appeal such as the present are also settled (for example, Western Sydney Area Health Service v Gibson (2001) 109 IR 359, Caltex Petroleum Pty Limited v Harmer (1999) 92 IR 264 and National Australia Bank Ltd v Cassino [2002] NSWIRComm 241).

7 In any event, as the authorities, which include Nagle v Tilburg and Virtue make plain, refusal of relief at the threshold in applications such as that heard by his Honour at first instance will not finally determine that jurisdiction exists for any order the court might make between the parties. In other words, the dismissal of contentions such as those made by the appellants does not preclude the appellants from maintaining such contentions, subject to any questions of abuse of process, at the final hearing of the proceedings, since refusal of threshold relief does not finally determine the existence of jurisdiction in relevant respects.

8 We consider that, in matters such as the present, unless there are errors of law or principle, or errors of fact of substance (in the sense that such errors of fact can reasonably be said to have affected the exercise of discretion under challenge), it would not be appropriate in the usual course to grant leave to appeal or to provide extensive reasons for so doing.

9 We observe that the judgment of Peterson J contains a careful analysis of the factual circumstances before the Court. His Honour approached the matter in terms of the authorities binding on him and dealt with the matter in terms of the relevant principles. His Honour's conclusions, seriatim on the various matters falling for decision, included the following: [38] It seems, in the light of these authorities, that the substance of the issues arising in these s106 proceedings cannot be said to have been embraced to any degree in either the first or second Colorado proceedings. The aspect of interpretation and enforcement of the Agreement was not raised in the first Colorado proceedings and, as I apprehend it, the power to vary the Agreement neither was, nor could have been, raised. It is thus not possible to find that estoppel runs against the applicant's bringing the present proceedings. I would conclude that, on this ground, the respondents have not demonstrated that the applicant should be treated as estopped by his conduct of the proceedings before Nottingham J to which I have referred from having his case under s106 heard and determined on the merits. ... [47] In my opinion, the respondents have failed at this interlocutory stage to demonstrate that the Compensation and Release Agreement is necessarily outside the scope of the relief available under s106. ... [59] I would conclude that upon the material presently before the court the Compensation and Release Agreement, for the reasons advanced by the applicant, has a real and substantial connection with New South Wales and is a contract "in and of New South Wales". ... [68] Again, I consider the respondents' contentions in this regard are not able to be accepted. In the May 2002 proceedings, Nottingham J reacted to a suggestion that his judgment of 23 August 1999 capped any second payment under the Agreement for the incentive interest at $775,000 by describing the suggestion as absurd. He said: "There was no issue of Clause 6 before this court at any time raised by any party". [69] In his Honour's judgment on that day he said: "... my dialogue with counsel had to do with the suggestion that there was somehow a lid on the second payment by virtue of this Court's finding in the motion for summary judgment. And I was at pains and I am at pains to emphasise, that's not ... that that fact is taken out of context. That was not presented to the Court as an issue in the case, because the Court didn't have to decide the complicated formula for determining the deferred compensation arrangement." [70] Also in discussion with counsel for the respondents on 23 May 2002, Nottingham J responded to an argument dealing with the question of no irreparable harm and the suggestion that the release was supposed to be in part for peace and to stop proceedings going on this way: "They're litigating what's due under the release. That's what they're trying to litigate". ... [72] The respondents argued that this court is an inappropriate forum for the determination of, in effect, the issues between the parties. This argument relies upon the proper law clause in the Agreement; the fact the Agreement was entered into between United States citizens "whose only connection with Australia was that a contract was to be performed in Australia" (per Nottingham J); extensive litigation has already been undertaken in the District Court of Colorado and that the issue for determination, the interpretation and enforcement of the Agreement is presented for determination in the District Court of Colorado. [73] That final submission seems to me to be inaccurate. While the law of Colorado will govern the construction of the Agreement and the Agreement provides that it may be enforced in any court of competent jurisdiction, here the applicant relies on the particular power conferred by s106 of the Act in relation to the matter of share options. That issue, as I have found, was not raised by the applicant in the first Colorado proceedings and, as it appears to me, could not be raised. [74] In these circumstances, the observations of Callinan J in Regie National des Usines Renault SA v Zhang (2002) 187 ALR 1 to which the respondents referred, are inapplicable. There his Honour said: "So called globalisation, the deterrence of forum shopping, comity between nations with established judicial systems . . . require that, in general, suits should not be determined in a jurisdiction which has, with respect to the relevant events, no real connexion with the defendant." and finally, [75] The respondents' final argument was that the matter is ripe for determination; the court may here be satisfied that the appropriate material has been put before it and that it is desirable to resolve the issues raised at this early stage (see OJEH Pty Ltd and ors v Primus Telecommunication Pty Ltd [2001] NSWIRComm 27 at par.30). [76] In the light of certain evidence given by Mr Steele before Nottingham J, dealing with the propensity for jurisdictional objections such as this to be decided at an early stage, it was submitted that the applicant ought not now be entitled to claim as he did in his outline of contentions "that the Commission could not be satisfied on an interlocutory basis that the facts were sufficiently established "to enable the court to be satisfied it has the necessary material to reach a clear and final decision on the question". (cf. Western Sydney Area Health Service v Gibson (2001) 109 IR 359 at par.20). [77] In a sense this argument has already been determined by my rejection of the other arguments advanced by the respondent. However, once it is accepted that the nature of the relief sought is potentially wider than merely the interpretation and enforcement of the Compensation and Release Agreement, it seems to me to become impossible to accept that the matter may be finally disposed of at an interlocutory stage. I would reject this aspect of the respondents' argument. [78] Costs should follow the event so far as the motion is concerned. I order that the motion be dismissed and that the applicant shall have his costs of the motion in a sum as may be agreed or, in the absence of agreement, assessed.

10 We do not consider that, at the relevant level of decision-making applicable to the basis upon which his Honour was dealing with the matter, it could be said that these conclusions were not open.

11 There is one aspect, however, of his Honour's decision we should separately refer to. At para [60] et seq, his Honour referred to the contention of the appellants that no unfairness was capable of being established in respect of the contract the subject of the respondent's s 106 proceedings. His Honour made the following observations in para [61] of the judgment: [61] The respondents interpret this observation as meaning that the attack is not on the fairness of the Agreement but rather on the alleged non-performance of it, the claim for which is advanced under the principles in Reich v Client Server Professionals of Australia Pty Ltd (2000) 49 NSWLR 551. The submission was made that the majority in Reich overstated the position (at 567) in describing the way in which "... contravention of the contract of employment, particularly by committing a fundamental breach thereof, then that may only mean that the contract otherwise was unfair in so allowing or not preventing such unfair conduct or, indeed, in failing to make appropriate provision in the event occurring. In any of those situations, we think it clear that s106 could be called in aid by the aggrieved party to obtain relief."

12 After discussing the matter in some further detail his Honour said: [65] However, it was accepted by the respondents that the Commission is bound by the view of the majority in Reich . That is so. Reich is authority for the proposition that the unfairness necessary to enliven the jurisdiction of the Commission under s106 may be found in conduct of a respondent in relation to non-performance of an obligation under a contract, as was submitted for the applicant. Whether that conduct and the resulting unfairness is able to be established is a matter impossible of determination on an interlocutory motion and accordingly this ground of the motion must fail.

13 It should be made plain that, as is clear from the respondent's summons filed under s 106 and as confirmed by Mr West QC on his behalf today, the respondent's claim is not confined in the manner described in para [61] of the judgment under appeal. Nor, incidentally, should we be taken as accepting his Honour's analysis of the majority judgment in Reich. We note in that respect the submissions of Mr West for the respondent and the decision of the Full Bench of this Court in Origin Energy Limited v Smith (2001) 111 IR 476. This consideration, however, does not, in our view, result in his Honour's finding on this aspect involving relevant error in the exercise of discretion.

14 We would further observe, in any event, and as properly conceded by the appellants, the issues concerning the application of the judgment in Reich do not arise unless the appellants are successful, as they have not been on appeal, in relation to the estoppel point dealt with by Peterson J in his Honour's interlocutory judgment.

15 Considered therefore in this way, we do not consider the application for leave to appeal raises matters which should lead to the grant of leave to appeal as involving matters of such importance in the public interest that leave to appeal should be granted.

1. Leave to appeal refused. 2. Appeal dismissed. 3. The appellants shall pay the respondent's cost of the appeal in an amount agreed or, in default of agreement, as assessed.

17 The Court notes the application made by the respondent under rule 203(2) that the costs of the appeal and of the interlocutory proceedings before Peterson J be paid forthwith notwithstanding the proceedings are not concluded and also notes the agreement of counsel that counsel for the appellants shall provide written submissions on that issue within seven days, with the respondent's submissions being filed within seven days thereafter.

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