Vision Publishing Pty Limited v Commonwealth Bank of Australia

SIXTH APPLICANT Lisa Curry-Kenny

RESPONDENT Commonwealth Bank of Australia FILE NUMBER: IRC 3707 of 2002 CORAM: Boland J Unfair Contract - Summons under s 106 of Industrial Relations Act - Notice of Motion by applicant seeking joinder and leave to file further amended summons - Related condition or collateral arrangement - Failure to comply with Industrial Relations Commission Rules - Whether application out of time - Whether arrangement or collateral arrangement a contract under s 108 of Industrial Relations Act - Application granted CATCHWORDS : Practice and Procedure - Summons under s 106 of Industrial Relations Act - Notice of Motion by applicant seeking joinder and leave to file further amended summons - Related condition or collateral arrangement - Failure to comply with Industrial Relations Commission Rules - Whether application out of time - Whether arrangement or collateral arrangement a contract under s 108 of Industrial Relations Act - Application granted Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Commission Rules 1996 Supreme Court Rules 1970 Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388 Bell v Macquarie Bank Limited (No 4) (1999) 93 IR 191 CASES CITED : Bishop v Bridgelands Securities (1990) 25 FCR 311 Hyde v Energy Australia (1999) 92 IR 409 Metrocall Inc v Electronic Tracking Systems Pty Limited (No 2) (2000) 102 IR 309 HEARING DATES: 03/10/2003 DATE OF JUDGMENT: 03/28/2003

APPLICANTS Mr A Moses of counsel Solicitor: Mr L Schofield Browne & Co LEGAL REPRESENTATIVES: RESPONDENT Mr R Goot, SC Solicitor: Mr J Lanser L E Taylor

JUDGMENT: - 13 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter No IRC 3703 of 2002 VISION PUBLISHING PTY LIMITED AND ORS v COMMONWEALTH BANK OF AUSTRALIA

Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2003] NSW IRComm 83 1 On 24 June 2002, Vision Publishing Pty Limited ("first applicant"), Brad Cooper ("second applicant"), Ian Elliott ("third applicant"), Rodney Adler ("fourth applicant"), Dawn Fraser ("fifth applicant") and Lisa Curry-Kenny ("sixth applicant") filed a summons for relief under section 106 of the Industrial Relations Act 1996. The respondent named in the summons was the Commonwealth Bank of Australia.

2 Briefly, the facts alleged in the summons were that in 1998 the first applicant and the respondent entered into a sponsorship agreement under which the first applicant agreed to arrange, promote and stage a series of five seminars and the respondent agreed to sponsor these seminars and pay sponsorship fees. The seminars were called the "Winning Edge" seminars and took place from October to November 1998.

3 The 1998 seminars were successful and in early 1999 discussions occurred between the first applicant and the respondent about the sponsorship of a further 30 seminars. An agreement was reached between the first applicant and the respondent whereby the respondent would sponsor the seminars at $50,000 per event. In February 1999 the first applicant began engaging staff, reserving venues, organising speakers and generally preparing for the 30 seminars. The first applicant reached agreement with the other applicants and Mr John Coutis on a speaker's fee for each seminar.

4 In May 1999 the respondent confirmed the agreement with the first applicant as to the conduct of the seminars and the amount of sponsorship. It was also said by the respondent as part of the agreement that it would inject additional funds to a maximum of $50,000 per seminar in the event there was a shortfall due to poor attendance. $650,000 was provided by the respondent to the first applicant as working capital to commence preparation for the seminars.

5 Between August and November 1999 five seminars were held but attendance figures were lower than projected. The first applicant sought additional funds from the respondent but these were refused by the respondent on the basis the sponsorship agreement provided that additional funds were payable in the respondent's absolute discretion. The second applicant alleged that he signed the 1999 sponsorship agreement on the understanding that it reflected the terms of the 1998 agreement but subsequently discovered this was not so in relation to the discretion reserved to the respondent in respect of the provision of additional funds.

6 The second applicant alleged that at a meeting in December 1999 he was assured that the total funds payable under the sponsorship agreement of $1,500,000 would be paid to the first applicant and the discretionary provision in the sponsorship agreement giving the respondent the right to withhold the additional sponsorship fees would be removed.

7 A further six seminars were conducted in November and December 1999. In February 2000 "A Current Affair" aired a program on the Channel 9 television network featuring the second applicant in his capacity as Chief Executive Officer of FAI Home Security Pty Ltd. The program made allegations against FAI Security which were critical of the sale of its home security products. Following the airing of the program the second applicant was informed by the respondent that it did not wish to pay the balance of the sponsorship fee due to concerns about the impact of any negative publicity.

8 In the result, the respondent did not pay any further monies to the first applicant and the first applicant was no longer in a position to proceed with the seminars. The first applicant found it necessary to retrench staff, it was not able to pay speakers' fees and alleged that it had suffered considerable damage to its reputation.

9 The first applicant claimed some $3 million in compensation. The remaining applicants claimed various amounts for unpaid speaker's fees totalling approximately $500,000. 10 On 3 October 2002 the fourth applicant, Rodney Adler, filed a notice of discontinuance. On the same day the remaining applicants filed a notice of motion seeking: 1. An order granting leave to the first, second, third, fifth and sixth applicants to be joined together as applicants in the proceedings. 2. An order joining John Coutis to the proceedings as the seventh applicant. 3. An order giving leave to file an amended summons for relief.

4. An order that the costs of the motion be reserved.

11 In an affidavit read in support of the motion Mr L E Schofield, solicitor for the applicants, deposed that: · He had received instructions for his firm, Browne & Co to act for John Coutis who requested he be joined as an applicant to the proceedings. Mr Coutis, together with the second, third, fifth and sixth applicants had been engaged by the first applicant to speak at seminars conducted by the first applicant and sponsored by the respondent. · The sixth applicant had signed a speaker's agreement with the first applicant dated 16 September 1998. · Copies of signed speaker's agreements between the first applicant and the second, third and fifth applicants had not been located but the deponent believed that signed copies did exist. · He had been instructed and believed that the signed speakers' agreements between the first applicant and the second, third and fifth applicant were in identical terms to unsigned agreements between the first applicant and the second and sixth applicants annexed to his affidavit. · Both the first applicant and Mr Coutis are presently unable to locate a signed copy of the speaker's agreement between them. Annexed to the affidavit is an unsigned copy of the agreement between the first applicant and Mr Coutis. · The cause of action giving rise to Mr Coutis' claim is identical to that pleaded in the summons filed on behalf of the applicants. · If leave is granted for Mr Coutis to be joined as an applicant to the proceedings his claim will be in an amount of $28,500. 12 Mr A Moses of counsel appeared for the applicants and Mr Coutis. Mr Moses referred to the claims in the proposed amended summons where an order was sought declaring unfair, harsh and unconscionable the "arrangement" under which: the first Applicant agreed to perform work in an industry by promoting, arranging and staging 30 Winning Edge Seminars ("the Events") for the Respondent: and the Second, Third, Fourth, Fifth and Sixth Applicants and Rodney Adler (together referred to as "the Speakers") agreed to speak at the Events.

13 The proposed amended summons described the "arrangement" as being "constituted by a Sponsorship Agreement entered into by the First Applicant and the Respondent on or around 10 August 1999 … and collateral agreements with the Speakers to speak at the Events".

14 In support of the motion for joinder of the applicants, including Mr Coutis, and in the absence of any specific provision relating to the joinder of applicants in the Industrial Relations Commission Rules 1996, Mr Moses relied upon r 89(5) of those Rules and Pt 8 r 2 of the Supreme Court Rules 1970. Rule 89(5) provides: 5) Where: (a) there are no relevant provisions, and (b) there is no established practice, procedure or usage, and (c) there is no Rule, order, direction or Practice Direction in force, the practice, procedure or usage for the time being of the Supreme Court or, in the case of appeals, the practice, procedure or usage for the time being of the Court of Appeal or the Court of Criminal Appeal, as may be appropriate, is, as far as practicable, to regulate the practice, procedure or usage of the tribunal

15 Part 8 r 2 of the Supreme Court Rules provides: 2. Joinder of parties generally Two or more persons may be joined as plaintiffs or defendants in any proceedings: (a) where: (i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings, and (ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions, or (b) where the Court gives leave so to do. 16 Mr Moses also relied on the affidavit of Mr Schofield and the decision of Wright J, President in Hyde v Energy Australia (1999) 92 IR 409. In broad terms, Hyde involved an application by notice of motion that nine employees of the respondent be joined for the purpose of pursuing claims under s 106 of the Act. The nine employees had been made redundant. The respondent employer opposed joinder and submitted each of the applicants' claims were based on different allegations of fact and representation.

17 In considering how he might exercise his discretion as to whether to join the applicants in the proceedings, Wright J referred to a decision of Wilcox J in Bishop v Bridgelands Securities (1990) 25 FCR 311 where Wilcox J at 314-315 said: The basic principle, as it seems to me, is that the Court should take whatever course seems to be most conducive to a just resolution of the disputes between the parties, but having regard to the desirability of limiting, so far as practicable, the costs and delay of the litigation. Considerations of costs and delay may often support the grant of leave under sub-rule (b); but, in my opinion, leave ought not to be granted unless the Court is affirmatively satisfied that joinder is unlikely to result in unfairness to any party. Secondly, regard must be had to practical matters. For example, it would normally be inappropriate to grant leave for the joinder of applicants who were represented by different solicitors. There must be a single solicitor, or firm of solicitors, who is accountable for the conduct of the proceeding on the applicants' side of the case. Similarly, although all applicants might propose to rely upon some common, or similar facts, there may be such differences between the evidence intended to be relied upon in support of the claims of particular applicants as to make it inexpedient to join the claims. The discrete material may overbear that which is common to all the claims. Again, there may be cases in which the sheer number of the claims, if joinder is permitted, will impose an undue burden on the respondent; although it seems to me unlikely that this will be so except in cases where separate evidence is proposed to be adduced in support of individual claims.

18 After quoting Wilcox J, Wright J said at 426 of the decision in Hyde v Energy Australia: I therefore approach the exercise of the relevant discretions raised by the Notices of Motion in this matter in terms of the approach formulated by Wilcox J. I consider that considerations of costs and potential delay in this litigation point strongly in favour of the proceedings continuing in their present form, subject to any necessary amendment of the initiating process filed. On the material available, I can be affirmatively satisfied that continuance of the proceedings is unlikely to result in unfairness to the respondent. I do not accept the basis or detail of the respondent's submissions in this regard. Further, if one has regard to practical matters it is pertinent to note that all of the applicants are represented by the same solicitors, and there are not such differences in the facts or circumstances of the various claims as will impose an undue burden on the respondent. It must be recognised that, in relation to the facts of this matter, the essential common ingredients are that each of the applicants was employed by the respondent; that the employment of each of them terminated within a short time of each other; that each of them took a redundancy package; that each of the redundancy packages was if not the same, at least from the same round of redundancy packages being offered (which round has been referred to in the proceedings as the Mark 2 redundancy package); that each of the applicants has claimed that the circumstances which led them to take the Mark 2 package was such that unfairness resulted; and that the alleged resulting unfairness can be measured by the subsequently offered package (referred to as the Mark 3 redundancy package). It is also relevant to note that there are only nine individual applicants and thus only nine claims are being made. I am confident that the course being proposed by the applicants, notwithstanding some of the difficulties that will be raised by it, is the course most conducive to a just resolution of the disputes between the parties, particularly having regard to the desirability of limiting the costs and delay of the litigation. In coming to this conclusion, I am not unmindful of some potential complications, such as the possibility (and it is certainly no more than that) of some conflict of interest between the respective applicants, which might cause some difficulty with legal representation. However, although that matter was adverted to by the respondent, there is no material before me which would provide any basis to that question being any more than a mere possibility.

19 Mr Moses referred to the grounds in support of the motion, which drew heavily on the reasoning of Wright J in Hyde: 1. Orders permitting the First, Second, Third, Fifth and Sixth Applicants and John Coutis to be joined together as applicants in the proceedings would be conducive to a just resolution of the disputes between the parties and having regard to the desirability of limiting the costs and delay of the litigation. 2. Such joinder is unlikely to result in any unfairness to any party including the Respondent.

3. Each of the claims of the said Applicants and John Coutis arise out of a common substratum of facts. The only difference between each claim of the applicants being the amount claimed by each such applicant against the Respondent.

4. Each of the said Applicants and John Coutis are represented by the same firm of solicitors.

5. For such other grounds and reasons as set out in the affidavit of Lee Eric Schofield sworn on 3 October 2002 in support of this Notice of Motion. 20 Mr R Goot SC appeared for the respondent Bank. Mr Goot opposed the orders sought in the notice of motion and, indeed, submitted that the proceedings, in so far as they related to the second to sixth applicants in the proposed amended summons, ought be struck out. Mr Goot's submissions in opposition to the application may be summarised as follows:

· There was no relationship by way of contract or arrangement or related condition or collateral arrangement between the respondent and the applicants except for the first applicant.

· There were two separate sets of transactions: one between the first applicant and the respondent (the 1999 sponsorship agreement) and the other between the first applicant and each of the second to sixth applicants (the speakers' agreements), although the only evidence of any agreement between the applicants is a signed agreement between the first applicant and the sixth applicant. There was no evidence that the respondent was party to or even aware of the alleged agreements between the first applicant and the other applicants.

· The alleged speakers' agreements could not be regarded as collateral agreements to the contract between the first applicant and the respondent given that the respondent had no knowledge of or involvement in the making of the alleged speakers' agreement.

· Given the separate nature of the transactions, one being a contract in relation to the arranging, promoting and staging of a series of 30 seminars (first applicant/respondent) and the other being in relation to a guarantee of speakers' fees for 30 seminars (first applicant/second to sixth applicants) there is no proper basis upon which joinder could be ordered. Indeed, it may be that that the solicitor for the applicants finds himself in a position of conflict of interests.

· The applicants have failed to comply with r 18A(6) of the Commission's Rules in that the second and subsequent applicants did not verify the matters of fact set out in the application.

· There is no evidence of any agreement between the first applicant and the proposed sixth applicant, Mr Coutis. The is no affidavit by Mr Coutis verifying the facts set out in the amended summons. There was no explanation given as to why there was a delay in having Mr Coutis joined as an applicant in the proceedings.

· The contract between the first applicant and the respondent was terminated in late 2000. The contracts between the first applicant and the other applicants were terminated at about the same time. Section 108B(1) of the Act provides that application for an order in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. Further, s 108B(2) provides that the Commission does not have jurisdiction to extend the time for making any such application or to accept an application made after the time prescribed by s 108B(1). Therefore, the application by Mr Coutis (filed and served on 3 October 2002) is out of time.

· The application by the applicants for relief is in respect of a contract between the first applicant and the respondent and in respect of alleged collateral agreements. The second to sixth applicants were not a party to that contract and the respondent was not a party to any collateral agreement. Therefore, pursuant to s 108 of the Act, the second to sixth applicants have no standing to make the application because they were not a party to any contract within the meaning of s 108 with the respondent. Consideration

21 The question the Court has to determine in these proceedings is whether the applicants referred to in the proposed amended summons for relief should be joined so that six causes of action against the respondent Bank, in effect, become one.

22 The applicants rely on Pt 8 r 2(b) of the Supreme Court Rules as the basis upon which the Court should order joinder. Rule 2(b) provides that plaintiffs or defendants may be joined "where the Court gives leave to do so." The pleadings contended that the speakers' agreements are collateral agreements and together with the 1999 sponsorship agreement constitute an arrangement within the meaning of s 106 of the Act. If this is so, it would seem to follow on the basis of the reasoning in Hyde, that leave should be granted to join the applicants.

23 To be collateral to something there must be some necessary connection with or necessary relation to the primary thing, that is, subordinate to but from the same source, and even though that which is collateral may be separate or aside from the main subject: Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388 at 398, affirmed on appeal in Bartolacci v Permanent Custodians Ltd (unreported, Cahill Deputy CJ, Glynn and Peterson JJ, 9 October 1992) and cited with approval in Bell v Macquarie Bank Limited (No 4) (1999) 93 IR 191 at 206. In Bartolacci, Hungerford J at first instance observed that the collateral arrangement must also be related to the primary contract or arrangement.

24 An examination of the sponsorship agreement reveals the following provision under the heading "Organiser's Obligations": the Bank shall have at its discretion, an opportunity to have a guest speaker (Brad Cooper, Ian Elliot, Tom O'Toole, Lisa Curry-Kenny or John Coutis) at any of the Bank's functions.

25 This would strongly suggest that the first applicant and the Bank had come to some agreement or arrangement in respect of the guest speakers. I note that Mr O'Toole is not an applicant in the proceedings but that Dawn Fraser is an applicant, although she was not mentioned in the sponsorship agreement. It is possible that Mr O'Toole pulled out and Ms Fraser took his place. But in any event, given the respondent's particular concern about its reputation as reflected in a number of the provisions of the sponsorship agreement (for example, the seminars were not to be associated with any disreputable person) it is highly probable that the Bank reserved the right to approve the speakers.

26 It is open to me to find that there was some agreement or arrangement between the respondent and the first applicant as to who were to be the speakers and, based on this agreement or arrangement, the first applicant engaged the second to sixth applicants. In that sense the speakers' agreements could be said to be collateral to the sponsorship agreement. If I am wrong about that, I consider that it is open to me to find that there was an arrangement between the first applicant and the respondent that the first applicant would engage certain agreed persons to speak at the seminars. Accordingly, the arrangement is one whereby a person performs work in any industry thereby satisfying the jurisdictional requirement in s 106(1) of the Act.

27 The respondent contended that there had been a failure to comply with r 18A(6) of the Commission's Rules in that the second and subsequent applicants did not verify the matters of fact set out in the application. This is not fatal to the motion and is merely an irregularity that can be overcome pursuant to s 170(3) of the Act which provides: (3) If this Act, the regulations or a rule of the Commission is not complied with in relation to the institution or conduct of proceedings before the Commission, the failure to comply is to be treated as an irregularity and does not nullify the proceedings, any step taken in the proceedings, or any decision in the proceedings. The failure by the applicants to comply with the Rules is a matter that will need to be attended to.

28 The respondent further contended that the application by Mr Coutis to be joined was out of time: see s 108B. The sponsorship agreement provided in clause 2: This Agreement shall commence on 8 June 1999 and shall, subject to any outstanding obligations of the Organiser, expire on 31 August 2000 unless terminated in accordance with Clause 13.

29 The question of whether the sponsorship agreement was terminated in accordance with clause 13, and whether the first applicant still has outstanding obligations, are live issues in the proceedings and I am in no position to make a judgment at this stage about whether or not the sponsorship agreement has in fact or in law been terminated. Similarly, there is no evidence before me that the speakers' agreements have been terminated. Accordingly, there is no basis upon which I could find that the application to join Mr Coutis is out of time.

30 As to the respondent's contentions that the second to sixth applicants are not parties to a relevant contract and, therefore, have no standing to make a claim, these applicants are parties to either a collateral arrangement (the speaker's agreements) or an overall arrangement involving the respondent. "Contract" for the purposes of s 108 of the Act, is defined by s 105 of the Act to mean "any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument": see Metrocall Inc v Electronic Tracking Systems Pty Limited (No 2) (2000) 102 IR 309 at 313-314. I do not consider the second to sixth applicants are precluded by s 108 from making claims under s 106.

31 Mr Goot contended that, with the exception of Ms Curry-Kenny, there was no evidence that the second to sixth applicants had each entered into a speaker's agreement with the first applicant. Mr Schofield's evidence was that the second to sixth applicants were engaged by the first applicant as speakers for the seminars although there had been some difficulty in locating the signed agreements. The was no evidence to suggest that the second to sixth applicants had not been so engaged.

32 For the reasons expressed herein I make the following orders: 1. Orders 1,2, 3 and 4 as sought in the applicants' notice of motion are granted. 2. Leave is granted to the applicants to take steps to remedy the irregularities in the initiating process. __________________________________

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