Industrial Relations Commission of New South Wales in Court Session CITATION : Lieu & Anor v Deng & Anor [2001] NSWIRComm 305 FIRST APPLICANT: Paul Lieu SECOND APPLICANT: Landmark Enterprises Pty Ltd (ACN 073 117 496) PARTIES : FIRST RESPONDENT: Margaret (Jiasha) Deng SECOND RESPONDENT: Dengs Investments Pty Ltd (ACN 073 154 480) FILE NUMBER: IRC 2821 of 2001 CORAM: Schmidt J CATCHWORDS : Practice and Procedure - notice of motion - orders sought for extension of time for compliance with Rule 82 a declaration that the Court had no jurisdiction to deal with shareholder's agreement and dismissing the summons - contract expressly required the performance of work by one respondent - jurisdiction found - motion dismissed LEGISLATION CITED : Industrial Relations Act 1996 AMP & Anor v Avis & Anor, Avis & Anor v AMP & Anor (Unreported, Bauer, Peterson and Marks JJ, 18 December 1997) Anderson v Boner (No 2) (1993) 52 IR 114 Minister for Youth and Community Services v Health and Research Employees' Association of Australia (1987) 10 NSWLR 543 at 558 CASES CITED : Nagle (t/as WD and JL Nagle & Sons) v Tilburg (1993) 51 IR 8 Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited (1998) 81 ALR 397 at 401 Production Spray Painting & Panel Beating Pty Ltd v Newnham (1991) 27 NSWLR 644 Stevenson v Barham (1997) 136 CLR 190 at 201-2 Western Sydney Area Health Service v Gibson [2001] NSWIRComm 290 HEARING DATES: 11/23/2001 EXTEMPORE JUDGMENT DATE : 11/23/2001 APPLICANTS/RESPONDENTS ON MOTION: Mr MJ Steele of counsel SOLICITORS: Somerville & Co Solicitors LEGAL REPRESENTATIVES: RESPONDENTS/APPLICANTS ON MOTION Mr ID Roche of counsel SOLICITORS: Christopher Lee & Associates JUDGMENT: - 4 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 23 November 2001 MATTER NUMBER IRC 2821 OF 2001 PAUL LIEU AND ANOTHER v MARGARET DENG AND ANOTHER Application under s106 of the Industrial Relations Act 1996 JUDGMENT (extempore) 1 This judgment concerns a Notice of Motion filed by the respondents seeking orders extending time for compliance with Rule 82, a declaration that the Court has no jurisdiction to deal with the claim, and an order dismissing the proceedings. 2 A Full Bench of the Court has recently considered similar questions in Western Sydney Area Health Service v Gibson [2001] NSWIRComm 290. I am satisfied, insofar as it is necessary, that the extension of time sought should be granted. I am also satisfied that the question of jurisdiction which has been raised by the respondents may now be dealt with on the evidence, having regard to the approach outlined by the Full Bench in Nagle (t/as WD and JL Nagle & Sons) v Tilburg (1993) 51 IR 8. 3 The contract here in question concerns a shareholder's agreement between various of the parties, which was entered as part of an arrangement concerning the partial sale and ongoing operation of a video store. The shareholder's agreement expressly required that one of the respondents, Ms Deng, work in the business. It also contemplated that others might be employed therein. 4 Here, it was the case of the respondents that a relevant factor was that the contract in question did not require the applicant to perform work. It is well established on the authorities that the necessary jurisdictional fact in the case of applications brought under s106 of the Industrial Relations Act 1996 ('the Act') is that there be a contract, as defined, under which a person performs work in an industry, which arises for consideration in the proceedings. So the High Court decided in Stevenson v Barham (1997) 136 CLR 190 at 201-2. The same point was examined by McHugh J in Minister for Youth and Community Services v Health and Research Employees' Association of Australia (1987) 10 NSWLR 543 at 558. 5 The question has now arisen for consideration before the Court in a variety of cases and situations. Here it was argued for the respondents that the shareholder's agreement in question did not have the necessary industrial colour or flavour, it in reality being a dispute between shareholders of a company which came before the Court in these proceedings. 6 That may be a fair characterisation of the parties' dispute, it nevertheless cannot provide a basis upon which the Court may decline to exercise jurisdiction under the section, if it be established that the necessary jurisdictional fact be present, namely, that the shareholder's agreement required the performance of work - be it work to be performed by an applicant, a respondent, a director or shareholder, or indeed some other person. 7 It is unarguable here that the agreement expressly required the performance of work by Ms Deng as manager of the business. That was work in the video rental industry. It is unarguable that performance of that work was one of the purposes of the transaction, not merely an accidental consequence of the transaction or a consequential performance of work, not directly required by the contract. The work was expressly required and did not arise indirectly or in a remote or inconsequential manner from the parties' agreement. These were the types of tests discussed by various members of the Court of Appeal in Production Spray Painting & Panel Beating Pty Ltd v Newnham (1991) 27 NSWLR 644, upon which the respondents relied in the case they advanced. 8 It was also argued for the respondents that it was relevant that it was the respondent, not the applicant or some third party, who was obliged to perform work under the contract and that this removed the shareholder's agreement from the Court's jurisdiction. I cannot accept that argument. It is one inconsistent with the express provisions of section 106 itself and takes nothing away from the existence in the facts here, of the relevant jurisdictional fact. 9 The section is concerned with the performance of work, not who performs it. In those circumstances the declaration as to jurisdiction and orders dismissing the application must be refused. 10 It was submitted for the applicants that in the circumstances the appropriate order as to costs was to award costs on an indemnity basis in their favour. The proper approach to indemnity costs has been discussed in various decisions of Full Benches of this Court, where reference has been made to the decision of Hill J in Anderson v Boner (No 2) (1993) 52 IR 114. 11 In AMP & Anor v Avis & Anor, Avis & Anor v AMP & Anor (Unreported, Bauer, Peterson and Marks JJ, 18 December 1997) the Full Bench observed at page 72: Despite certain decisions (referred to by Hill J in Boner v Anderson (No. 2) to the effect that there should be an increased tendency towards the awarding of indemnity costs, we consider that there is still in existence and operation a general approach to the effect that costs will be normally awarded on a party-party basis with the indemnity costs to be awarded in the more exceptional case where conduct of a party justifies it. Hill J referred to those matters this way: ". . . . a case in which there are special or unusual features of an unmeritorious or improper nature surrounding the case of one party (usually the loser) which make it unreasonable and unfair that the successful party should be out of pocket as a result of the proceedings." The view of Morling J in the Tobacco Industry Case , consistently with our thinking, was that fierce opposition to the claim was insufficient to ground indemnity costs; something more is needed.' 12 The applicant relied upon the judgment of Woodward J in Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited (1998) 81 ALR 397 at 401. I am not, in the circumstances of this case, prepared to infer that the motion advanced by the respondents was commenced for some ulterior motive or in disregard of known facts or clearly established law, even though the motion plainly had but little prospect of success. It follows that the usual order as to costs should be made in this case. Order 13 For these reasons, I dismiss the motion and order the respondents to bear the applicants' costs of the motion, as agreed or 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.