Windrum & Anor v Matrix Healthcare Pty Ltd trading as Combined Pathology & Anor

Industrial Relations Commission (NSW)|2007-07-01|Before: Staff J, Mr P

CITATION: Windrum & Anor v Matrix Healthcare Pty Ltd trading as Combined Pathology & Anor [2007] NSWIRComm 96

FIRST APPLICANT Dr Graham Windrum

SECOND APPLICANT Monkerai Pathology Services Pty Ltd PARTIES: FIRST RESPONDENT Matrix Healthcare Pty Ltd t/as Combined Pathology

CATCHWORDS: Unfair contract - Notice of motion - Jurisdiction - Whether contract and/or arrangement between the parties - Whether second respondent party to any contract or arrangement - Whether a number of separate contracts form part of a specific arrangement - Arrangement - Whether summons statute barred - Whether unfair conduct renders contract unfair - Whether culpability pre-requsite before money orders can be made against a non-party - Held - Contract includes arrangement - Contracts so associated with each other to constitute an arrangement - requirements of s 108B met - Unfairness more than a mere claim of unfair conduct - Culpability not a pre-requisite to making order against non-party - Notice of motion dismissed.

Anti-Discrimination Act 1977 LEGISLATION CITED: Industrial Relations Act 1996 Industrial Relations Commission Rules 1996

ACE Business Brokers v Phillips-Treby (2000) 100 IR 420 Agar v Hyde (2000) 201 CLR 552 AOS Group Australia Pty Ltd (in liquidation) v Arrogante (2004) 135 IR 44 Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council (2006) 227 ALR 425 Batterham v QSR Limited (2006) 225 CLR 237 Brown v Rezitis (1970) 127 CLR 157 Christopher Noel Dayton v Woolworths Limited [2006] NSWIRComm 215 Crowe v UCS Developments Pty Ltd (2003) 130 IR 266 Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98 Davies and Anor v General Transport Development Pty Ltd and ors [1967] AR (NSW) 371 Ex Parte Ashfield Brokers and Consultants Pty Ltd; Re Witek (1972) 14 AILR 486 Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180 Gough & Gilmour Holdings and ors v Caterpillar of Australia Ltd (No 13) [2003] NSWIRComm 26 CASES CITED: Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and ors (1991) 28 NSWLR 443 Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 Nagle (t/as WD & LJ Nagle & Sons) v Tilburg (1993) 51 IR 8 Production Spray Painting & Panel Beating Pty Ltd and ors v Newnham and ors (1991) 27 NSWLR 644 Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 49 NSWLR 551 Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney & Anor [2007] NSWSC 104 Solution 6 Holdings Ltd and Others v Industrial Relations Commission of New South Wales and Others (2004) 60 NSWLR 558 Stevenson v Barham (1976-1977) 136 CLR 190 Strathfield Group Ltd v Hall (2002) 121 IR 158 Sydney Water Corporation Ltd & Anor v Industrial Relations Commission of New South Wales & Anor (2004) 61 NSWLR 661 TNT Management Pty Ltd v White (1984) 7 IR 331 TNT Management Pty Ltd v White (1984) 7 IR 331 Truelove v Sydney Water Corporation Limited (2005) 146 IR 253 Walker v Industrial Court of New South Wales (1994) 53 IR 121

FIRST AND SECOND APPLICANTS Mr P Coleman of counsel Solicitor: Mr S Chapman TressCox Lawyers LEGAL REPRESENTATIVES: FIRST AND SECOND RESPONDENTS Mr A Britt of counsel Solicitor: Mr E Walker Turnbull Hill Lawyers

DR GRAHAM WINDRUM & ANOR V MATRIX HEALTHCARE PTY LTD t/as COMBINED PATHOLOGY & ANOR

Application under s 106 of the Industrial Relations Act 1996

1 The Court has been moved by the respondents ("Matrix Healthcare Pty Ltd t/as Combined Pathology and Peter John Court") for an order that the summons filed in this matter by the applicants ("Dr Graham Windrum and Monkerai Pathology Services Pty Ltd") be dismissed for want of jurisdiction. 2 By their summons, the applicants sought an order under s 106 of the Industrial Relations Act 1996 ("the Act") declaring void in whole or in part, from an appropriate date, the contract made on or around January 2001, and arrangements, whereby the first and second applicants performed work for the first respondent in an industry. An order was also sought that the respondents, jointly and severally, pay the applicants a sum representing 12 months remuneration under the contract. 3 On 7 March 2007, by consent, I made an order for the jurisdictional aspect to be determined as a preliminary point. The issue identified by the parties is whether there was a relevant contract and arrangements between the applicants and the first respondent and that the second respondent is not a party to any contract with either the first or second applicants, so as to bring the action within the scope of s 106 of the Act. It was also submitted by the respondents that the Court did not have jurisdiction to determine the summons brought by the applicants because it was out of time. 4 In order to appreciate the way in which jurisdictional arguments were put, it is necessary to examine the factual development of the matter and the way in which the applicants framed their case for relief under s 106 of the Act. For present purposes, the following facts did not appear to be in dispute. 5 In or around January 2001, the first applicant commenced working as a Pathologist for a company known as E-Path. Dr Katz was the proprietor of E-Path, which provided pathology services to a business known as Combined Pathology, which is the trading name of the first respondent's business. Combined Pathology was, and still is, owned and operated by the first respondent. 6 On or around June 2001, the first applicant had a discussion with the second respondent regarding the number of cases and days he was working and what would be fair remuneration. On 1 July 2001, the first applicant began providing pathology services directly to the first respondent on the basis of an agreement he had reached with the respondent as an independent contractor. 7 On or around 29 September 2003, the first applicant had further discussions with the second respondent regarding his remuneration. During these discussions, the first applicant contends that the second respondent asked him to form a company so that his services could be provided to the first respondent via the second applicant. The second applicant was incorporated on or around January 2004 when it commenced rendering invoices to the first respondent for services provided by the first applicant. 8 On 16 May 2005, the first applicant was met by a security guard when he arrived for work at the first respondent's premises. He was handed a letter stating that his contract was terminated. The summons for relief in this matter was filed on 27 May 2005. 9 The summons sought an order declaring void in whole or in part the contract and arrangements between the applicants and the first respondent on the ground that the contract and arrangements were unfair, harsh and unconscionable and against the public interest. The applicants seek 12 months remuneration under the contract, which they quantify at $795,000. Respondent's Submissions 10 Mr A Britt of counsel, who appeared for the respondents, provided an affidavit of Evan Andrew Walker, solicitor for the respondents, who was not required for cross-examination. The jurisdictional challenge by Mr Britt was based on, firstly, a challenge to the contract and arrangements in circumstances where the applicants do not explicitly define the contract in the summons as the summons refers to three contracts. Further, the contract is defined between the applicants and the first respondent in circumstances where each of the contracts referred to are different contracts since the parties to the contracts are different. Mr Britt contends that in respect of the first contract (January 2001 to July 2001), the first respondent was not a party to this contract, nor was the second applicant, as it did not exist at this time. Similarly, the second applicant could not be a party to the second contract (July 2001 to January 2004), as it did not exist at this time and in respect of the third contract (January 2004 to May 2005), the first applicant could not have been a party to this contract, as it was between the second applicant and the first respondent. It followed that there was no contract which fitted the description of being between the applicants and the first respondent. 11 Secondly, Mr Britt submitted that where, as in these proceedings, there are a number of separate contracts, and it is alleged that each formed part of a specific arrangement, that together constitute the means by which it is effectuated so as to produce particular results, or, put another way, the contracts are so sufficiently linked with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part, this must be pleaded, which was not done here. 12 Further, reference was made to the discussion of "arrangement" by Wright J, President and Walton J, Vice-President in Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 at [132]. It was also contended that the circumstances of this matter were quite different to those considered by the then Commission in Court Session in Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98 as there was no overarching plan, understanding or transaction between the applicants and the first respondent, nor did the applicants plead one. 13 Finally, in respect of this point, it was submitted that if the contract is itself legally enforceable, it cannot amount to an arrangement. Reliance for this contention was based upon the observations of Spigelman CJ in Solution 6 Holdings Ltd and Others v Industrial Relations Commission of New South Wales and Others (2004) 60 NSWLR 558 at [66]. 14 Nextly, Mr Britt relied on s 108B of the Act to submit that the Court was precluded from considering any contract which was terminated on or before 26 May 2004 (that being 12 months prior to the commencement of these proceedings). Mr Britt undertook an extensive examination of both Full Bench and single instance judgments of the Court that had considered s 108B. 15 Reliance was also placed on the Court of Appeal's decision in Sydney Water Corporation Ltd & Anor v Industrial Relations Commission of New South Wales & Anor (2004) 61 NSWLR 661 to submit that unfair conduct in breach of a contract of employment does not render a fair contract, unfair and amenable to relief under s 106 of the Act. Mr Britt submitted that it is the contract itself that must be demonstrated to be, or to have become, unfair. 16 The applicants allege that the contract is unfair since it failed to provide reasonable notice. Counsel for the respondents observed that at no stage in the summons do the applicants allege that any of the contracts were terminable by a specific notice period. In these circumstances, the respondents submitted that the contract was terminable by reasonable notice and the requirement to provide reasonable notice cannot be unfair. In respect of this submission reliance was placed on the discussion of good faith in commercial contracts in Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney & Anor [2007] NSWSC 104 at [107] - [115]. 17 It was submitted that the contract was not unfair since the applicants were left with remedies under the general law, including remedies under the Anti-Discrimination Act 1977. 18 In respect of the second respondent, it was submitted that the applicants had failed to indicate how the second respondent was culpably associated with the making or operation of the impugned contract. 19 Finally, it was submitted that the summons was deficient against the second respondent since it did not specify the nature and extent of the claims made against him, and more generally, because there was no mention of any matter of fact that touched upon the existence of the arrangement. It followed, it was submitted, that the summons fails to comply with r 18A of the Industrial Relations Commission Rules 1996 ("the Rules") and should be struck out in relation to an "arrangement". Applicant's Submissions 20 Mr P Coleman of counsel appeared for the applicants. Counsel's submissions may be summarised as follows: (i) at the date of termination of the contract in May 2005, there was a contract for work between the second applicant and the first respondent and a broader arrangement (within the definition of "contract" in s 105) between both applicants and the respondents under which the first applicant, through the second applicant, provided the services to the respondents and performed work in a New South Wales industry; (ii) the arrangement manifested itself in a series of contracts over several years, was directed at having the first applicant perform work for the first respondent. When E-Path left in 2001, it was assumed by everyone that the first applicant would continue working for the respondents. It was the respondents' request that the first applicant establish a company and contract through it from January 2004. At all times there was an arrangement to bring about the situation where the first applicant worked for the business of the respondents as a Professional Specialist Pathologist and for most of the period, as a Supervising Pathologist; (iii) between 2001 and his termination in 2005, there was an arrangement for the first applicant to work for the respondents and an expectation by all parties that the arrangement would continue indefinitely. In these circumstances there was a plan between the parties that the first applicant would work indefinitely for the respondents, the work relationship itself constitutes an arrangement, as the term was used in the definition of contract; (iv) the comments of Spigelman CJ in Solution 6 must be read and understood in the context of the facts and circumstances of that case, that being, a share sale contract standing alongside a contract of employment and an assertion that it, if standing alone, is not a work contract, it was nevertheless a "collateral arrangement" and therefore within jurisdiction. In any event, the statute has since been amended. See s 106(2A); (v) the earlier enforceable contracts in place from 2001 to January 2004 are not pleaded as separate contracts, subject to application for relief under s 106, except insofar as they form part of the broader arrangement. The requirements of s 108B have been met; (vi) the unfairness identified in the summons is more than a mere claim of unfair conduct by the respondents in breaching the contract. There is no common law remedy available in relation to the first of the series of contracts, because it is a broader arrangement manifesting itself in a series of contracts and the relationship between the parties. The final enforceable contract was not an employment contract and there is doubt whether it would contain an implied term of reasonable notice in any event. On the judgment of the Court of Appeal in Sydney Water Corporation , the matter is within jurisdiction; (vii) the fact that, hypothetically, the applicants either individually, or together, may have had an action at common law for breach of an implied term of reasonable notice, or some other breach of contract, is irrelevant as to whether there is jurisdiction under s 106 (see Kirby P in Walker v Industrial Court of New South Wales (1994) 53 IR 121); (viii) culpability is not a pre-requisite before money orders can be made against an individual (see Brown v Rezitis (1970) 127 CLR 157; TNT Management Pty Ltd v White (1984) 7 IR 331 at 333 - 335; ACE Business Brokers v Phillips-Treby (2000) 100 IR 420); (ix) in any event, the second respondent was intimately involved in all aspects of the "contract" from inception to termination and is a director of the first respondent; (x) the summons complies with r 18A, as it contains a full summary of matters of fact of law, forming the basis of the application, including identification of the contract. No request for further and better particulars was sought by the respondents in the matter in which all of the evidence has now been filed. In any event, the applicants remain willing to provide answers to any reasonable request to further particularise the contract or any other aspect of the claim. Statutory Provisions 21 The relevant statutory provisions of the Act are:

contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. 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. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss.

(1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. (2) The Commission does not have jurisdiction to extend the time for making any such application or, subject to subsection (3), to accept an application made after the time prescribed by subsection (1). (3) The Commission may accept an application made within 3 months after the time prescribed by subsection (1) if the applicant satisfies the Commission that there are exceptional circumstances justifying the making of the late application. Consideration 22 The jurisdiction given by s 106, in my view, arises for exercise, once it be established that there exists "any contract or arrangement", or "any related condition" or "collateral arrangement whereby a person performs work in any industry". See Stevenson v Barham (1976-1977) 136 CLR 190 at 201, 202; Production Spray Painting & Panel Beating Pty Ltd and ors v Newnham and ors (1991) 27 NSWLR 644 at 650 - 656; Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and ors (1991) 28 NSWLR 443 at 447 - 457 and 465; Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180 at [24]; Batterham v QSR Limited (2006) 225 CLR 237 at [13]; Sydney Water Corporation Ltd & Anor at [24]. 23 Once jurisdiction is established, it then becomes a matter to determine, according to the evidence, whether a necessary ground has been established to enable the jurisdiction so found, to be exercised, and, if so, whether as a matter of discretion, any orders will be made. Such matters of merit and discretion are of no present concern. However, even at this preliminary stage, it would be remiss not to at least refer to the words of caution expressed in earlier cases to the effect that s 106 and its predecessors should not be used to interfere with bargains freely made without constraint or inequality, its intention being to protect the victims of wrong dealings: see Davies and Anor v General Transport Development Pty Ltd and ors [1967] AR (NSW) 371 at 374 - 375 and Stevenson v Barham at 192. 24 It is clear that the term "contract" as defined in s 105 of the Act in both its primary and extended meaning, includes an arrangement. What the applicants are suing on is a collection of contracts. This is permissible and has been confirmed by judgments of Full Benches of this Court and the Industrial Relations Commission of New South Wales in Court Session, the predecessor to the Court. The Full Bench, after referring to a number of authorities, said in Custom Credit Corporation (at 131): ... But it must be true to say, we think , that it is significant that Parliament did not see fit to include in the Act any definition of "arrangement", which is not a term of art and is not a word which has a very precise meaning. Looking at the setting in which it is used in s.88F, we are of the opinion that in one of its meanings "arrangement" embraces transactions which do not give rise to contracts or obligations, that is to say, obligations enforceable at law; but we are also of the opinion that in another meaning it embraces a situation where there exist two or more separate contracts which, notwithstanding their separateness, are, given the facts, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a part. 25 Further, their Honours said (at 134 - 135): We think that all of these matters are consistent with the conclusion that there was a deliberately made plan or arrangement between the vendor and the lender for the purpose or to produce the effect of advancing the business interests of both and under which would be facilitated the obtaining of customers who would purchase dealerships from the vendor with moneys advanced by way of loan from the lender, and that neither the work contract nor the loan contract stands isolated from the other; and we are satisfied that the evidence of concerted action by both the vendor and the lender clearly establishes that such a plan or arrangement was in fact made and existed. The plan or arrangement, of course, could not at the time of its making come within s 88F because it did not at that stage result in or have the effect of a person working in an industry. We are of the opinion, however, that, when in a particular case the initial plan or arrangement was widened, as it were, by the involvement of a worker who entered into a work contract with the vendor and a loan contract with the lender, a new arrangement whereby a person performed work in an industry, and thus one falling within the ambit of s 88F, ipso facto sprang into existence, the parties to which were the vendor, the lender and the work and components of which were the work contract and the loan contract. It is nothing to the point that the lender may have acted in good faith in all that it did, or that its procedures, as related in evidence by Buxton and Lees, for procuring applicants for loans, for testing applicants for credit and assessing in each case whether to make a loan or not, for having the applicant advised by an introducer (in these cases, the vendor) when a loan was approved and for having the introducer make the arrangements for the borrower to call at the lender's office to execute the loan contract may have been those in general use by lenders of money, and were applied by this particular lender in the same way in all cases and irrespective of whether an applicant approached the lender through an introducer or not. We think that, however in good faith and however in keeping with commonly observed practices may have been its actions, once the lender became a party to an arrangement within the meaning of the section it exposed itself to whatever consequences that might bring, and, should the Commission decide that it was proper to declare void such arrangement, and with it any transaction which was part of it, was liable to bear that consequence." (my emphasis). 26 The Full Bench in Strathfield Group Ltd v Hall (2002) 121 IR 158, observed: [39] Third, we are satisfied that the line of authority on which his Honour's judgment relied is correct. It is well settled that an "arrangement" within the definition of s 105 of the Act may be constituted by more than one "contract" in the more general sense: Re Becker v Harry M Miller Attractions Pty Ltd (No.2) [1972] AR (NSW) 298; Custom Credit v Goldsmith [1976] AR (NSW) 98; Howitt v Retec Limited (1992) 45 IR 245; Legal & General Assurance Society Limited v Stock (1993) 49 IR 464; Stone Microsystems (Aust) Pty Ltd v Kwong (1997) 42 NSWLR 160; 85 IR 237; Bell v Macquarie Bank Limited (No 4) (1999) 93 IR 191; Cash Converters Pty Limited v Yildiz (1999) 94 IR 474; Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 49 NSWLR 551; 99 IR 69.

[40] Further, these authorities make it clear that the power to afford relief under s 106(3) extends to the whole of the arrangement, once that arrangement is found to be relevantly unfair within the meaning of the statute. As was held by the Full Bench in Bell v Macquarie Bank Limited (No 4) at 206: "[J]urisdiction of the Court to declare void, or vary, a contract or arrangement extends to a related arrangement which is collateral to the primary contract or arrangement under which work may be performed."

27 More recently, the Full Bench in AOS Group Australia Pty Ltd (in liquidation) v Arrogante (2004) 135 IR 44 stated after referring with approval to what was said in Custom Credit (at 131), as follows: [16] In coming to that conclusion the former Commission in Court Session had regard to what was said in Brown v Rezitis by Menzies J at 169: The section is clearly intended to confer a comprehensive power upon the Commission to go to the substance of an arrangement made for a person to perform work in an industry - and to do so in disregard of the legal dress in which the arrangement has been clothed - in order to put such a worker in no worse a position than if he had been working under a contract of employment protected by award conditions.

[17] What was decided in Custom Credit has been repeatedly approved and applied. For example, in Myer Stores Ltd (t/a Grace Bros) -v- Stowart (1994) 55 IR 21, the Full Court accepted the approach of Hungerford J in Bartolacci v Permanent Custodians Ltd (1992) 44 IR 388 that Custom Credit "is support for the proposition that two or more separate contracts may be so sufficiently associated with each other as together to constitute an arrangement under which work is performed in an industry so as to be comprehended within s.275" (a predecessor to s106). The Full Bench also went on to say that "[i]t is this flexibility of approach which, in the present case operates to allow an examination of all of the aspects of the relationships". [18] In Strathfield Group Ltd v Hall (2002) 121 IR 158 it was concluded by another Full Bench at [40], that 'the power to afford relief under s106(3) extends to the whole of the arrangement, once that arrangement is found to be relevantly unfair within the meaning of the statute'. 28 Applying the principles found in the above Full Bench judgments to the facts of this case, I am satisfied that even if the three contracts were to be viewed as separate and independent contracts, that they can properly be said to be so associated with each other in a practical sense as together to constitute an arrangement of which each contract is a part whereby work was performed in an industry. 29 I agree with Mr Coleman's submission that the arrangement manifesting itself in a series of contracts over several years, was directed at having the first applicant perform work for the first respondent. When E-Path left in 2001, it was assumed by all that the first applicant would continue working for the respondents. It was at the second respondent's request that the first applicant establish a company and contracted through it from January 2004. At all times there was an arrangement to bring about the situation that the applicant worked for the business of the respondents as a Professional Specialist Pathologist and for most of the period, as the Supervising Pathologist. Between 2001 and its termination in 2005, there was an arrangement for the first applicant to work for the respondents and an expectation by all parties that the arrangement would continue indefinitely subject only to the first applicant considering his future at the time of his 80th birthday. In these circumstances, where there was a plan between the parties that the first applicant would work indefinitely for the first respondent, the work relationship itself constitutes an arrangement as that term is used in s 105 of the Act. 30 Furthermore, the letter of termination dated 16 May 2005, provides as one of the grounds for the termination of the arrangement that the first applicant was "not fulfilling all of the duties outlined in the Statement of Duties (attached) for the Supervising Pathologist of Combined Pathology, which has applied to the position since 2001". 31 In my view, the "contract" is clearly identified and summarised in the summons and complies with r 18A. The purpose of this rule is to ensure that the parties to the litigation are on notice as to the case they are required to meet and that the summons sets out the issues for determination by the Court. There was no request for further and better particulars before the reply was filed. I have some difficulty now understanding the respondents' complaint, particularly after all the evidence has been filed in the proceedings. In any event, the applicants have issued an invitation to the respondents that they are willing to provide answers to any reasonable request to further particularise the contract, or any other aspect of the claim. Leave is granted to the respondents should they wish to avail themselves of this invitation. 32 In light of my determination that the arrangement terminated on 16 May 2005 and that the earlier enforceable contracts in place from January 2001 to January 2004 are not pleaded as separate contracts and subject to any application for relief under s 106, except insofar as they form part of the broader arrangement, the requirements of s 108B have been met as the summons was filed on 27 May 2005. This determination is, in my view, completely consistent with the approach that the Full Bench adopted to the construction of s 108B in Crowe v UCS Developments Pty Ltd (2003) 130 IR 266 where their Honours said: [44] The power to make orders under the legislative scheme is clearly dependent upon the power to make an order pursuant to s 106(1). That is, 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." The focus or target of the order is clearly "the contract" as defined. The term "contract" is defined in very wide terms in s 105 as meaning "any contract or arrangement, or any related condition or collateral arrangement". There is no reason to conclude that in enacting s 108B the legislature intended to cut across the scope of the expression "contract" beyond that explicitly achieved by the enactment of s 108A. The width of the expression has been consistently emphasised in the authorities: for example, Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98. It is significant that s 108B imposes a limitation by reference to "an application for an order under [the relevant] Division in relation to a contract" rather than by reference to, for example, the parties to the contract. 33 I turn to consider the respondents' contention that the judgment by the Court of Appeal in Sydney Water determined that unfair conduct in breach of a contract of employment does not render a fair contract unfair and amenable to relief under s 106 of the Act. It was submitted that the allegation by the applicants was that the contract was unfair since it failed to provide reasonable notice and at no stage is it alleged in the summons that any of the contracts were terminable by a specific period of notice. The respondents therefore submitted that the contract was terminable by reasonable notice and the requirement to provide reasonable notice cannot be unfair. 34 The Court of Appeal determined in Sydney Water that a contract could not be an "unfair contract" simply because one of the parties to it was in breach and where there was no claim that the contract was otherwise unfair in its terms of operation. The Court of Appeal was of the view that the majority decision in Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 49 NSWLR 551 was wrong in determining to the contrary and that if the claim was in substance solely one for damages for breach, then the appropriate course was to pursue a common law remedy seeking damages, unless such a course would not provide a satisfactory remedy. Nevertheless, the Court of Appeal made clear that the availability of a common law remedy did not necessarily remove the jurisdiction of the Commission. The Court of Appeal stated that a contract may be unfair because it permitted unfair conduct and unfairness may stem from what the contract failed to provide, for example, as regards termination procedures (see [25], [32] and [36]). 35 The Court of Appeal remitted the Sydney Water matter to be determined by the Full Bench of the Commission. In Truelove v Sydney Water Corporation Limited (2005) 146 IR 253, the Full Bench observed as follows: [19] The majority Full Bench decision in Reich, it would appear, has assumed a significance out of all proportion to its narrow and relatively orthodox application in the unfair contracts jurisprudence of the Commission. In short, Reich is perceived as being of more of a concern than it actually is.

[20] After an exhaustive examination of the terms of s 106 of the Industrial Relations Act 1996 and a long line of relevant authorities (including several decisions by the Court of Appeal of New South Wales and the Full Bench of the Industrial Relations Commission), the majority followed the orthodox position that a contract (or arrangement, related condition or collateral arrangement) may be found to be unfair due to the conduct of a party under the contract (or arrangement) at the time of termination. In Reich , the relevant conduct was the employer's failure to perform one of its obligations under the contract. The minority expressly agreed that conduct in breach of an implied term may, in the particular circumstances of a case, demonstrate the unfairness of the contract in question. Any other finding, in the face of the very wide language of s 106 when read with s 105, would have been revolutionary indeed.

[21] The reaction to Reich appears to be a reaction to the conclusion in that case that conduct in breach of a contract may render a contract unfair. There is a perception that the true remedy (or the only remedy) in such a case should be for breach of contract at common law. However, the conclusion in Reich is inescapable given the broad terms of the section and was explicitly acknowledged to be so by Mason P at [28] in Sydney Water Corporation Ltd & Anor v Industrial Relations Commission of New South Wales & Anor [2004] NSWCA 436. As Kirby P (as he then was) observed in Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 134-135, it is not unusual in our legal system for one set of circumstances to give rise to a number of remedies, but the existence of alternatives has never excluded a person from pursuing rights expressly conferred by statute. The existence of other remedies in this context (such as statutory claims for redundancy payments or common law claims for breach of contract) does not control or limit the ample language of the section (in Walker, Kirby P considered a predecessor to s 106, s88F(1) of the Industrial Arbitration Act 1940 (Repealed)). Notably, not one of those who seeks to impugn Reich has attempted to reconcile their argument with the clear words in ss 105 and 106. In our view, it cannot be done.

[22] It may also be a reaction to the idea that any conduct in breach of a contract will necessarily, without more, render the contract (or arrangement, related condition or collateral arrangement) unfair. This appears to be at the heart of Mason P's critique in Sydney Water Corporation Ltd. But this is not the case: as the decision in Origin Energy Limited v Smith (2001) 111 IR 476 (which we discuss later) makes clear, nothing in the decision of the majority in Reich substantiates such a principle. We also refer to the decision of the Full Bench in United Globalcom.Inc v McRann (2003) 132 IR 3, which endorsed the submissions of Mr J West QC in that matter that Reich stood for nothing more than the following proposition: a contract (or arrangement, related condition or collateral arrangement) may be found to be unfair due to the failure of a party at the time of termination to perform its obligations under the contract. 36 In summary, the Full Bench respectively reaffirmed Reich at [21], stated that Reich was perceived as to be of more of a concern than it actually is [19] and that a contract may be unfair, and within jurisdiction, even in circumstances where another remedy is available arising from the same facts at [21]. 37 Furthermore, the Full Bench stated that Reich was consistent with the wide and clear words of s 105 and s 106 of the Act. 38 The first point to make is that even if the unfairness pleaded was no more than conduct amounting to breach, there is no common law remedy available in relation to the arrangement, although there would be in relation to the final enforceable contract, which is also pleaded. The unfairness pleaded includes a claim that the contract was unfair in not containing, and in particular, not providing for 12 months notice of termination. In addition, it is claimed that the contract was unfair in that it failed to provide a term that the respondents would not discriminate against the first applicant because of his age; not terminate the contract because of the age of the applicant, or for reasons associated with the age of the first applicant; that the respondents would consult with the applicants if termination was contemplated and before any decision was made; that the contract would not be terminated without proper and fair reason, and should the respondents have any genuine concerns about the conduct or performance of the applicants under the contract, it would put such concerns to the applicants and provide substantive and procedural fairness. 39 The unfairness identified, in my view, is more than a mere claim of unfair conduct by the respondent in breaching the contract. No breach of contract is claimed, nor is there a claim, as was asserted by the respondents that the contract is unfair, and only unfair, due to the failure of the respondents to pay reasonable notice. 12 months notice is claimed as "fair" notice. Although this may have some overlap with the common law concept of "reasonable notice", it is not identical. Furthermore, it is doubtful that a common law court, assessing reasonable notice, would consider all of the matters set out above as to why it is claimed the contract was unfair. Indeed, as the final enforceable contract was not an employment contract, it is doubtful whether any of the matters claimed would be considered. There must also be some doubt as to whether a contract, silent on notice of termination, which is not an employment contract, will always contain an implied term of "reasonable notice" in any event. In my view, whilst unfair conduct is pleaded, substantial unfairness is claimed in relation to the contract itself, and not merely the conduct of the respondent in failing to give notice. In my view, even on the judgment of the Court of Appeal in Sydney Water Corporation, the matter would be within the jurisdiction of s 106 of the Act. On the analysis of the jurisdiction by the Full Bench of this Court in Sydney Water Corporation, it clearly is as well. In light of this finding, it is unnecessary to consider the subsequent amendment to s 106 by s 106(2A). 40 The final challenge by the respondents was that the applicants have not disclosed a cause of action against the second respondent because the summons does not indicate how the second respondent was culpably associated with the making or operation of the impugned contract. Mr Britt conceded that the second respondent, as a non-party to the contract, could be made the subject of an order under s 106(5). Essentially, the respondents' complaint, as I understand it, is that the summons is deficient against the second respondent since it does not specify the nature and extent of the claims made against him. See Gough & Gilmour Holdings and ors v Caterpillar of Australia Ltd (No 13) [2003] NSWIRComm 26 at [26]. 41 The applicants contend that the second respondent is a party to the broader arrangement and seeks orders against the second respondent, even if it is held that the second respondent is not a party to the "contract". 42 It is beyond doubt that orders can be made against persons who are not parties to the contract, provided there is a connection between the impugned contract and the person. In Brown v Rezitis, Barwick CJ stated, (at 165), that there needed to be a "close connexion" and a "real connexion" between the order made and the contract or arrangement varied or avoided. In that case, it was held at 167 that managers and beneficial shareholders of a company which was a party to an impugned contract, may be included in an order for the payment of money. 43 The Industrial Court considered whether culpability was a pre-requisite to the making of an order against a person who is not a party to a contract in TNT Management Pty Ltd v White at 333 - 336. The Full Bench examined the judgment of the High Court in Brown v Rezitis and the judgment of the Court of Appeal in Ex Parte Ashfield Brokers and Consultants Pty Ltd; Re Witek (1972) 14 AILR 486 and concluded that nothing more was said in either case to establish a principle that a person must be culpably involved before money orders could be made against them. 44 Culpability is not a pre-requisite and nothing said recently by the Full Bench in ACE Business Brokers Pty Ltd v Phillips-Treby changes the position. It is clear from Mr Walker's affidavit evidence that the second respondent was intimately involved in "all aspects of the contract from its inception to termination". Mr Walker annexed to his affidavit a company search of the first respondent, which demonstrated that the second respondent is a director and company secretary of the first respondent. The only other director of the first respondent is a resident of Victoria. It also shows that the first respondent has $10 in issued capital and is wholly owned by a company resident in Vanuatu. In such circumstances, there is a real concern that the first respondent may not meet any obligations arising from any orders, if made, by this Court. In any event, in my view, it is inappropriate to determine such an argument at this preliminary stage of the proceedings. It should be left to the final hearing. 45 The applicants accepted that, as some of the issues raised by the respondents in the notice of motion go to jurisdiction, it was appropriate to deal with them, as far as possible at this time. Both parties accepted that the principles governing strike out motions found in Nagle (t/as WD & LJ Nagle & Sons) v Tilburg (1993) 51 IR 8 should be applied in this matter. 46 The appropriate principles to be applied in determining motions such as this were recently stated by the High Court of Australia in Agar v Hyde (2000) 201 CLR 552. Gaudron, McHugh, Gummow and Hayne JJ at 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 (63), 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. 47 This statement of principle was more recently endorsed by Gleeson CJ, Hayne and Crennan JJ in Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council (2006) 227 ALR 425 at [46] and was followed by this Court in Christopher Noel Dayton v Woolworths Limited [2006] NSWIRComm 215 at [37]. 48 It follows, I would conclude on the facts, as found, that the contracts formed an arrangement whereby work was performed in the Health Industry so as to be within the scope of s 106 of the Act. 49 The objection to jurisdiction is overruled. I reserve the question of costs. The matter may be restored to the list on the application of any party. ORDERS

The notice of motion is dismissed. 2. Costs are reserved. 50 I fix this matter for hearing on commencing at 10.00 am on Monday 29 October 2007 and I reserve 30 October 2007; 31 October 2007; 1 November 2007; 2 November 2007; 5 November 2007 and 6 November 2007.

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