Vetterli v Palin

Summons for Relief 5The matters of fact relied upon by the applicants in the summons for relief may be summarised this way: (i) In or about March 2010 the applicants entered into an arrangement with the respondents or alternatively, agreements collateral to each other pursuant to which the applicants: a. purchased from the respondents the businesses known as "R & D Goods" and "Elba Grissini" which were then conducted from premises situated at lots 10 and 11/10 - 12 Childs Road, Chipping Norton in the state of New South Wales for $180,000; b. paid to the respondents the sum of $100,000 as part payment of the purchase price; c. borrowed from the respondents the sum of $80,000 being the balance of the purchase price of the said businesses; d. agreed to repay the said sum of $80,000 within one year; e. granted to the respondents a charge over goods to secure repayment of the said sum of $80,000; f. leased from the respondents the premises of the businesses as aforesaid for a period of three years commencing on 8 March 2010 at a rent of $45,760 inclusive of GST payable by monthly instalments in advance. (ii) The applicants did not have the benefit of independent legal advice in relation to the arrangement and/or the said contracts and lease; (iii) The applicants contend that the respondents knew or ought to have known that the only practical means by which the applicants could obtain monies which could be applied to the repayment of the vendor finance and the payment of the rent was by the first applicant working in the business; (iv) The first applicant undertook work in the business as a Baker on a fulltime basis from about 6 April 2010 until 17 September 2010. 6The applicants therefore contend that the performance of work by the first applicant was a significant purpose of the whole of the contractual arrangements and each of the said contracts entered into between the parties. 7There are a range of other issues in dispute between the parties. These include whether the Bakery business had the benefit of a contract for a period of 12 months to supply 2000 loaves of bread each week to Seda Bakery; whether the bread baked for Seda Bakery had a limit of 1 per cent salt content which the applicants contend was insufficient for the proper manufacture of bread, and that the bread produced to the Seda Bakery had to be Kosher. 8In mid March 2010, Seda Bakery reduced the amount of bread it purchased to 1000 loaves each week. On or about 22 April 2010, Seda Bakery stopped ordering bread from the applicants.

Statutory provisions Industrial Relations Act 1996 106 Power of Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as: (a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and (b) the performance of work is a significant purpose of the contractual arrangements made by the person.

Respondents' evidence 9Mr P Folino-Gallo of counsel who appeared for the respondents/applicants on the motion, read an affidavit of the first respondent. In summary, the first respondent acknowledged that the parties had entered into a contract for the sale of a wholesale bakery business known as "R & D Goods" as well as "Elba Grissini" for a total sale price of $180,000; a chattel mortgage of $80,000, which was required because the applicants only paid an amount of $100,000 and the respondents provided vendor finance for the remaining $80,000, and a lease agreement under which the applicants agreed to lease the premises known as Units 10, 11, 10-12 Childs Road, Chipping Norton, being the premises that the business was operating from at the time of the sale. 10The first respondent's evidence was that from about 4 March 2010 to 6 April 2010, he and his wife, the second respondent, continued to attend the premises for the purpose of the post completion training, to ensure a smooth transition of the business and to ensure that the supply remained steady for his former clientele, many whom he had formed good relationships with over the years. 11The first respondent acknowledged that Seda Bakery was a customer of the business and under the contract for sale of the business, he and his wife were obliged to introduce to the applicants the clients, customers and suppliers of the business, including Seda Bakery. 12The first respondent stated that the applicants were in default of the terms of the chattel mortgage agreement and the lease agreement and that on 27 February 2011, he had initiated proceedings in the Supreme Court of New South Wales seeking, among other things, possession of items subject to the chattel mortgage so as to recover the sum of $80,000 that remained outstanding under the sale of business agreement. 13The Supreme Court proceedings also seek recovery of outstanding rent owed pursuant to the lease agreement.

Applicants' evidence 14Mr RW Tregenza of counsel appeared for the applicants/respondents on the motion and read an affidavit of the first applicant. The first applicant's evidence was that he was a qualified Pastry Chef and had known the first respondent for approximately 30 years. Their respective families were friends and saw each other socially. The first applicant annexed to his affidavit the contract for the sale of the business, which was in the standard form approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales. The contract included an additional clause in respect of the vendors advancing the purchasers' part of the balance of the purchase price being $80,000 and the purchasers being required to pay this amount to the vendors within one year from the date of completion of the contact for sale. 15The first applicant annexed the lease agreement which was in the standard form. It included a covenant relied upon by the applicants that the lessee would not, without the consent in writing of the lessors, use or occupy the premises otherwise than for a wholesale bakery and would ensure that the conduct and management of the premises would at all times be of such a standard as to enhance the status of and preserve the premises for that purpose and that the lessee would during all proper business hours keep the premises open for business and would not in any case use the premises as a sleeping place.

Submissions of the respondents/applicants on the motion 16Mr Folino-Gallo emphasised the preconditions, the existence of which the Court was required to be satisfied as found in s 106 of the IR Act . My attention was drawn to various recent High Court authorities including Fish v Solution 6 Holdings Ltd [2006] HCA 22; (2006) 225 CLR 180 and Batterham v QSR Ltd [2006] HCA 23; (2006) 225 CLR 237, which counsel submitted resulted in the insertion of s 106(2A) of the IR Act. 17Reference was also made to Spigelman CJ's judgment in Caterpillar of Australia Pty Ltd v Industrial Court (NSW) [2009] NSWCA 83; (2009) 181 IR 286; (2009) 255 ALR 131, in which the Chief Justice explained the rationale that underpinned the introduction of s 106(2A) of the IR Act . 18Despite the legislative amendment that resulted in s 106(2A), counsel submitted that an ordered approach must still be taken in determining whether this Court has jurisdiction. Mr Folino-Gallo emphasised that there must be an instrument which falls within the broad meaning attributed to the word "contract" in s 105 of the IR Act . Counsel conceded that the term "contract" as found in s 105, was wider than its common law meaning and included arrangements or collateral arrangements. Counsel contended the "arrangement" or "contract" must be a related agreement or "collateral arrangement", that is, it must be related or auxiliary to a primary contract. For the arrangement to fall within the ambit of s 106(2A) of the IR Act , it must fulfil the preconditions set out in that section. 19Counsel submitted that it was only at the stage of whether the performance of work was a significant purpose of the contractual arrangement for the purpose of s 106(2A)(b) of the IR Act that the entire contractual arrangement as a whole could be considered. Counsel contended that there was no obligation, enforceable or otherwise, that required the applicants to perform work in the said business. 20It was also submitted that cases such as Caltex Oil (Australia) Pty Ltd v Feenan (1981) 1 NSWLR 169 and Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 were of little assistance as there was no analogy that could be drawn between the situation of "franchisee" vis a vis "franchisor" and the present case which constituted an arms length business transaction for the facilitation of the sale of a business.

Submissions of the applicant/respondent on the motion 21Mr Tregenza commenced his submissions by emphasising that any application to strike out under the Uniform Civil Procedure Rules 2005, r 14.28(1)(a) was governed by the decision of the High Court in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 in which Barwick CJ summarised the established threshold to strike out a pleading at 129. 22Counsel referred to the close relationship between the vendor finance and the obligation to repay it and the contract for sale of the business and the lease entered into between the parties. The key issue was whether these contracts or arrangements were one whereby the applicants performed work in an industry. 23Mr Tregenza also referred to the High Court's decisions in Fish and Batterham as setting out the questions that must be asked in determining whether or not s 106 of the IR Act was applicable in light of s 106(2A) being introduced into the IR Act . After these decisions, counsel submitted that the questions to be asked were: (a) whether the first applicant performed work in an industry? (b) if so, what was the contract or arrangement and/or related condition or collateral arrangement according to which or in fulfilment of which or in consequence of which that work was performed? (c) in the case of any related condition or collateral arrangement, was the performance of work a significant purpose of the contractual arrangements? 24Counsel submitted that the first applicant clearly performed work in an industry. The work was performed in consequence of the obligation pursuant to the lease of the premises and the vendor's finance, both of which were with the respondents. The contract for sale of business clearly formed a related condition or collateral arrangement as recognised in Fish and Batterham. The performance of work in the business by the first applicant was necessary to maintain and continue the business. It was thereby a significant purpose of the contractual arrangements. 25It was submitted that the first applicant had no other financial means of meeting the repayment of the vendor finance and the rent pursuant to the lease, other than by running the business and working in it. Although it was submitted that it was not necessary that the respondents had notice of this financial necessity in order to establish jurisdiction, it was apparent that the respondents should have known this to be the position. 26Counsel observed that the applicability of s 106 (prior to the amendment to add s 106(2A)) had been recognised, specifically, to apply to a contract for the sale of business in appropriate circumstances: Production Spray Painting & Panel Beating Pty Ltd v Newnham (1991) 27 NSWLR 644. Counsel acknowledged that Priestley and Handley JJA found that the predecessor to s 106 did not apply to contracts for the sale of business, but excluded from that exclusion the cases where the vendor continued to have an indirect interest in the business. Their Honours set out various criteria in finding that the section did not apply to a contract for the sale of a business in which a purchaser intended to work as a working proprietor. 27Counsel submitted that the first applicant undertook work in the business to meet the obligation to the respondents to pay the rent and the obligation to repay the vendor finance. This was a result of the practical requirement of earning the money sufficient to meet these obligations. Each of these factors was the real interest of the respondent in work being performed. It followed, so it was submitted, that the question of proximity between the work done and the contract/arrangement was clear. Furthermore, it was submitted that in any event, the nature and extent of the proximity was a triable issue and did not come even close to the standard required by the High Court in General Steel Industries Inc. 28The application of the causation test being "was an appropriate matter to be determined at a final hearing having regard to all the facts and circumstances of this case" had not been discharged. Finally, counsel submited the monies claimed by the first applicant also have sufficient connection with the contract and arrangement as to support the relief sought.

Principles re strike out applications 29Marks J recently summarised the principles dealing with interlocutory strike out applications in SW & JD Reilly & Sons Pty Limited v Australian Co-operative Foods Limited [2009] NSWIRComm 176 at [39] - [44]: [39] There is a well-known line of authority that deals with interlocutory strike out applications and the circumstances in which they should be dealt with. [40] A convenient starting point is the judgment of Barwick CJ in the High Court of Australia in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. In a judgment which is often cited, Barwick CJ said: [8] The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r. 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". [9] At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". [10] As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1949) 78 CLR, at p 84, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." (At pp 128 - 130) [41] More recently, in Agar v Hyde (2000) 201 CLR 552, Gaudron, McHugh, Gummow and Hayne JJ in the High Court of Australia said: [57] It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways ( Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91, per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130, per Barwick CJ), but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. [42] In Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27, Gleeson CJ, Gummow, Hayne and Crennan JJ in a joint judgment observed that "The statements in General Steel should not be given canonical force." Their Honours then cited [73] from Agar v Hyde , previously set out. [43] As the authorities make clear, an interlocutory strike out application should not be entertained by a court until the "appropriate stage" has been reached in the proceedings, namely where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, it seems to us, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such determination to be made. (Per Fisher CJ, Hungerford and Peterson JJ in the Full Court of the Industrial Court of New South Wales in Nagle v Tilburg (1993) 51 IR 8 (at 11-12).) [44] Before dealing with the relevant principles and their application to the factual circumstances of these proceedings I observe that, in accordance with well established authority, the respondent bears a heavy onus in convincing the Court that there is "a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way." 30I propose to apply these principles in determining this application.

Consideration 31The question required to be answered in order to determine whether the Court has jurisdiction pursuant to s 106 of the IR Act is what was the contract or arrangement pursuant to which the persons performed work. In order to determine this question, it is necessary to consider whether the statutory preconditions of s 106 have been met. The preconditions may be stated as follows: (a) is the contract or arrangement one whereby a person performs work in an industry; or (b) is the contract or arrangement one that does not relate to the performance of work but: (i) is collateral to a contract whereby the person performs work in an industry; (ii) the performance of work is a significant purpose of the contractual arrangements made by the parties. 32These proceedings arise from a sale of business pursuant to which three discreet transactions arose. They were: (a) a contract for sale of the business between the applicants on the one part, and the respondents on the other part pursuant to which the respondents agreed to sell the wholesale bakery business known as R & D Goods, as well as Elba Grissini for a total purchase price of $180,000; (b) a chattel mortgage that secured an amount of $80,000. This was required, as the applicant's only paid an amount of $100,000 with the remaining $80,000 paid by way of vendor finance. It was that vendor finance that was secured by operation of the chattel mortgage; (c) a lease agreement under which, the applicants agreed to lease the premises at 10-12 Childs Road, Chipping Norton. These are the premises that the business was operating from at the time of the sale. 33It is beyond doubt that the enactment of s 106(2A) of the IR Act does not, in its operation, render the authorities of Fish and Batterham redundant. In Sin Yong Yim v Industrial Relations Commission of NSW [2007] NSWCA 77; (2007) 162 IR 62, Spigelman CJ explained the rationale that underpinned the introduction of s 106(2A) of the IR Act at [70], [71]: [70] The new s106(2A) was directed to this Court's reasoning that the context of the legislative scheme confined the power under s106(1) to aspects of a contract or arrangement which are "closely relate[d] to the performance of work" ( Solution 6 supra at [80] and [83]) or which relate in some reasonably direct manner to the performance of work (at [87]). The reformulation of the test in Solution 6 in the High Court differs from this formulation. [71] Clearly s106(2A) is a new element which must be included in the context to which the High Court had regard when interpreting the reference to the performance of work as "the hinge" of the jurisdiction. 34Later, in Caterpillar , Spigelman CJ went further, observing at [145] - [147]: [145] Subsequent to the decisions in this Court which led to the trilogy of cases in the High Court, the New South Wales Parliament amended s 106 by the insertion of subsection (2A). The subsection was not applicable to the cases considered by the High Court in those judgments. [146] Part of the reasoning in the joint judgment in Fish referred to the fact that what may be declared void or varied pursuant to s 106(1) is the arrangement in accordance with which a person performs work. The addition of subsection (2A) confers a power to declare void or vary a related condition or collateral arrangement, even though it does not relate to the performance by a person of work in an industry. [147] Nevertheless, by express provision in par (a) subsection (2A) applies only if the contract or arrangement to which the condition is related or the arrangement is collateral "is a contract whereby the person performs work in an industry". Accordingly, it remains accurate to say, as the High Court joint judgment said at [18] and [41] of Fish and [22] of Old UGC, performance of work in an industry is "the hinge about which s 106 turns". Section 106(2A)(a) reaffirms that proposition. 35The High Court in Fish (at [18]) noted that "The Act is concerned with matters industrial." After referring to the objects of the IR Act set out in s 3 of the IR Act , the High Court noted that s 106 was within Ch 2 of the IR Act which was titled "Employment". 36In Caterpillar , the Court inferred that the High Court in Fish regarded the unfair contract provisions of Pt 9 of Ch 2 of the IR Act as serving the object of the IR Act observing at [96]: ... "providing a framework for the conduct of industrial relations that is fair and just". Indeed, it is difficult to see any other object of the Act that is served by the unfair contract provisions of Pt 9 of Ch 2. It is pertinent to note that the focus of the relevant "unfairness" is as part of a "framework for the conduct of industrial relations". 37The applicant sought to distinguish the factual background of both Yim v Industrial Relations Commission of NSW and Caterpillar from this matter. However, it is the principles that emerge from these judgments of the Court of Appeal that I am bound to apply. 38It would be to fall into error to determine the questions that I have earlier set out by only looking at the entire commercial arrangement, determine whether the performance of work will be required to facilitate any part of it and upon such a finding, declare that there is jurisdiction and examine whether the contract or arrangement is unfair. 39In my view, it is only at the stage of determining whether the performance of work is a significant purpose of the contractual arrangement for the purpose of s 106(2A)(b) of the IR Act that the entire contractual arrangement as a whole can be considered. This approach was adopted in Barataud v Chipperfield (No 3) [2006] NSWIRComm 249, where the Court observed at [36]: Section 106(2A) empowers the Commission to declare void or vary any "related condition" or "collateral arrangement" to a contract whereby a person performs work in an industry, even if the related condition or collateral arrangement does not relate to the performance of work, so long as the performance of work is a significant purpose of the contractual arrangements made by the person. In our view, this latter condition requires a factual assessment of the contractual arrangements, viewed as a whole, to determine whether the performance of work could be described as a significant purpose. In this case, we are satisfied on Mr Barataud's evidence (as discussed below), that it was. 40In my view, it is critical that there is a requirement that there be an agreement between the parties pursuant to which work is done as part of an arrangement. Mr Tregenza submitted that the relationship between the vendor finance, the obligation to repay it, the contract for the sale of the business and the lease cannot be doubted. That is so, however, there was no obligation, enforceable or otherwise, that required the applicants to perform work in the business. Although the applicants relied upon cl 2 of the lease that required the premises to be used as a wholesale bakery, this to my mind was not a contractual obligation that the applicants perform the work. As Mr Folino-Gallo submitted, if that be the case, each mortgage agreement, pursuant to which work was to be done so as to service debt, would fall within the rubric of the IR Act ; each contract for the sale of a business that is related to an industry, would be within the purview of the Court's jurisdiction and each commercial lease in relation to a premises used for industrial purposes would be also within the Court's jurisdiction. 41The touchstone of s 106 has been that work is required to be performed. In my view, the delineation between such an arrangement and that of a commercial transaction could not be more clear than in the instant case. 42Although reliance was placed by the applicants upon both Caltex Oil (Australia) Pty Ltd and Majik Markets Pty Ltd , in my view, no analogy can be drawn between cases dealing with franchises and this case, which constitutes an at arms length business transaction for the facilitation of the sale of a business. 43Similarly, the reliance placed by the applicants on the judgment of Priestley and Handley JJA in Production Spray Painting & Panel Beating Pty Ltd gives little support to the applicants' case. Although their Honours found that s 88F, the predecessor to s 106, did not apply to contracts for the sale of business, the Court excluded from that exclusion, cases where the vendor continued to have an indirect interest in the business. However, their Honours found that the section did not apply to a contract for the sale of a business in which the purchasers intended to work as a working proprietor where the contract did not require the purchasers to work in the business or to employ others to do so; or the vendors did not retain an interest in the business after completion, or there was no contract under which the purchasers were to obtain goods or services from the vendors or associated persons. 44Each of these factors are applicable in this matter despite the fact that the vendors retained an interest in the land on which the business was conducted. I am not inclined to the view pressed by the applicants, that in answer to the requirement that there be a contract under which the purchasers were to obtain goods or services from the vendors or associated persons, this should be read to include a reference to the provision of the land by the lease. Nor am I inclined to the view that the vendor finance and lease amounted to a "relevant agreement or arrangement outside the contract of sale as meeting one of the further requirements outlined by their Honours." 45Similarly, I am unable to agree with the applicants' submission that the recent judgment of the Full Bench of this Court in Australian Co-operative Foods Limited v SW & JD Reilly & Sons Pty Limited [2010] NSWIRComm 110; (2010) 198 IR 195 at [113] - [114] which applied the test as to whether a party against whom relief was sought had a "real interest" (applying Majik Markets at 465). The Court rejected an application by the respondent to strike out the proceedings, finding it was premature to determine that there was a lack of a reasonably arguable case in respect of whether work was being performed by the applicant. 46In my view, this case is distinguishable from the issues under consideration in the above matter. In that case, Australian Co-operative Foods Limited entered into a supermarket delivery contract with SW & JD Reilly & Sons Pty Limited to deliver milk to supermarkets. This involved an ongoing relationship and a significant level of control over the contractors, whose relationship was analogous to that of a franchise arrangement. The demutualisation and takeover of Dairy Farmers Milk Co-operative by an international corporation occurred one month after the contract commenced. At issue was how the relationship between the parties (two corporations) played out in respect of the performance of work. It was held by the trial judge and confirmed on appeal that it was not the appropriate time to determine a notice of motion to strike out the summons. 47A challenge to this Court's decision that it did not have jurisdiction to hear the application was recently rejected by the Supreme Court of New South Wales, Court of Appeal: see Australian Co-operative Foods Ltd v SW & JD Reilly & Sons Pty Ltd [2011] NSWCA 148. 48The Court of Appeal (Basten JA, Giles and Hodgson JJA agreeing) observed at [49] - [51]: [49] First, the initial inquiry required by the section is whether a person "performs work in any industry": at [18]. Read in isolation, that question lacks content. However, if it is understood as requiring identification of the relevant person, the relevant work and the relevant industry, it will provide an answer against which the next question can be determined. In the present case, the person was treated as Mr Stephen Reilly; the work included the driving of a delivery truck and related activities, such as loading, unloading and maintaining appropriate records. The industry was variously described as milk vending and transport of milk products for the purpose of sale. The precise description did not matter in the present case: narrower descriptions focused on the precise activities undertaken by Mr Reilly, whilst broader descriptions treated his operations as part of the broader industry in which Dairy Farmers was engaged. [50] The second question is whether the contract which the applicant in the Commission seeks to have varied is in fact a contract whereby an identified person performs work in an industry. In the present case, the contract sought to be varied was the delivery contract. It follows that the jurisdiction of the Commission will not be engaged unless it can properly be said that the work Mr Stephen Reilly performed was performed pursuant to that contract: see Fish at [19] and [41]. [51] The third proposition derived from Fish concerns the operation of the expanded definition of "contract", which includes the phrase "or any related condition or collateral arrangement". If that definition is simply fed into the operative provision, it permits the Commission to make an order varying "any contract or arrangement, or any related condition or collateral arrangement, whereby a person performs work in any industry". As explained in Fish , to focus on related conditions or collateral arrangements, when, whatever the identifiable source, it is that which gives rise to the performance of work, risks losing sight of the need to identify the source of any obligation to perform work. 49In my view, and I find, there was no term in any of the three contracts that required the active or passive participation of the applicants to work in the business. It was completely open for the applicants to finance the business how they saw fit. This matter involved the sale of a business. It was a commercial arrangement. If the Court was to find jurisdiction it would invite all financial transactions pursuant to which a party must work to service a financial obligation to be amenable to review under s 106 of the IR Act. 50To my mind, the contracts or arrangements sought to be and declared void are not contracts or collateral arrangements with an "industrial flavour". As Spigelman CJ observed in Caterpillar (at [145]) after considering the addition of s 106(2A): ... it remains accurate to say, as the High Court joint judgment said at [18] and [41] of Fish and [22] of Old UGC, performance of work in an industry is "the hinge about which s 106 turns". Section 106(2A)(a) reaffirms that proposition. 51This was a commercial transaction despite the financial obligations arising from the contract or arrangement that ultimately resulted in the applicants being required, due to their financial circumstances, to work in an industry. This factor represents an insufficient connection as to warrant the Court's intervention pursuant to s 106 of the IR Act . Taking the evidence at its highest, I find that the test of lack of a reasonably arguable case as to jurisdiction has been made out. 52In view of the conclusions I have reached, this is the appropriate time to determine the respondents' motion. The summons is accordingly dismissed for want of jurisdiction. 53At the conclusion of the hearing, the applicants foreshadowed filing an amended summons. This was attached to further written submissions filed in the proceedings by the applicants. The respondents, subject to the Court finding that it had jurisdiction, did not object to the proposed amendment to the summons which seeks that a Deed of Charge also be declared void. In light of the conclusion that I have reached, it is unnecessary to determine the application to amend the summons.

Orders 54I make the following orders:

1. The summons for relief under s 106 of the Industrial Relations Act 1996 is dismissed.
2. The applicants in the substantive proceedings/respondents on the motion are to pay the respondents'/applicants' on the motion costs, as agreed or as assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 June 2011