Industrial Relations Commission of New South Wales in Court Session CITATION : Hall & Anor v Strathfield Group Ltd [2001] NSWIRComm 266 FIRST APPLICANT Steven Hall SECOND APPLICANT PARTIES : I-World Technologies Pty Ltd RESPONDENT Strathfield Group Limited FILE NUMBER: IRC 4353 of 2000 CORAM: Marks J CATCHWORDS : Unfair contract - Application to strike out in part by respondent - Whether a contract or arrangement within s105 and s106 - Application dismissed. LEGISLATION CITED : Industrial Relations Act 1996 s3 s105 s106 Vaughan v O'Meara (1989) 31 IR 21 Production Spray Painting and Panel Beating Pty Ltd v Newham (1991) 27 NSWLR 644 Virtue v NSW Department of Education (1999) 92 IR 428 CASES CITED : Bartolacci v Permanent Custodians (1992) 44 IR 388 General Steel Industries v Commissioner for Railways (NSW) (1964) 12 CLR 25 Kwong & Anor v Stone Microsystems (Aust) Pty Ltd & Anor (1996) 82 IR 255 Custom Credit Corporation Ltd v Goldsmith (1976) AR (NSW) 98 HEARING DATES: 10/18/2001 DATE OF JUDGMENT: 10/31/2001 APPLICANT Mr P M Kite SC and M r J E Keesing of counsel SOLICITORS Gells Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr M J Watts of counsel SOLICITORS Potts Latimer JUDGMENT: - 18 - INDUSTRIAL RELATIONS OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Wednesday 31 October 2001 Matter No IRC 4353 of 2000 STEVEN HALL & I WORLD PTY LTD v STRATHFIELD GROUP LTD Application under s106 of the Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT 1 These interlocutory proceedings concern two notices of motion filed by the respondent, the first seeking the striking out of part of the summons filed in the proceedings and the second relating to the terms of a notice to produce. 2 The first applicant, Steven Hall and the second applicant I World Technologies Pty Ltd seek certain relief under s 106 of the Industrial Relations Act 1996 ("the Act") against the respondent Strathfield Group Ltd by way of summons filed on 1 September 2000. 3 Sections 105 and 106 is in the following terms: 105 Definitions In this Part: 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 the 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. (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. 4 The relevant factual background is contained both in the summons and in certain affidavit and documentary material that was relied upon by the parties for the purpose of the interlocutory proceedings. In summary, the second applicant carried on a business involved in the development of computer programmes and systems integrations for use principally with "PDA's" which expression appears to mean Personal Digital Assistants, mobile computing and similar devices. The business was known as E-World. The first applicant was a director and shareholder in the second applicant which was the trustee of a unit trust. The first applicant's family trust owned units in that unit trust. Negotiations were entered into between the first applicant and another director of the second applicant for the sale of the E-World business to the respondent. 5 On 20 August 1999 the respondent entered into an executive service agreement with the first applicant. Recitals to that agreement provided that he would commence as National Manager, Sales and Marketing for E-World and that he would commence with the company "as the result of the acquisition of the business (E-World) previously owned and operated by the (the first applicant) in order to utilise his skills and abilities in this business." 6 By written agreement dated 24 August 1999 the second applicant sold the E-World business to the respondent. The second applicant was described as being a trustee of a unit trust which carried on the business. A recital stated that "the Directors are all Directors and Shareholders in the Vendor and personally give the same warranties and indemnities to the Purchaser that are given by the Vendor under this agreement." 7 The respondent as purchaser agreed to pay the second applicant as vendor goodwill of $150,000. There was also provision for the payment of additional goodwill which was to be calculated by reference to a percentage of the earnings of the business over the next three years assessed before interest and tax. 8 Clause 22 of the Sale Agreement is significant. It refers to employees and provides in part that "the Vendor acknowledges that it is fundamental to the completion of this Agreement that Service Agreements be entered into with each of the Directors ….. If any one or more of such parties fail to enter into an Agreement in the form approved by the Purchaser then the Purchaser may at its option rescind this Agreement." There were then set out provisions relating to the Service Agreements of the Directors. It will be remembered that the first applicant was one of the Directors. 9 The provisions of clause 6 assumed some significance in the interlocutory proceedings and I set out hereunder the relevant portion of clause 6, being clauses 6.1 to 6.4: 6. Exclusion of pre-contractual and other representations 6.1 Entire Agreement. 6.1.1 This Agreement constitutes the entire agreement between the Vendor and the Purchaser relating to the sale of business. 6.2 Earlier Agreements Supplanted. 6.2.1 This Agreement supplants and supersedes any previous written or oral negotiations or preliminary agreements between the parties, which have ceased to be legally effective from the date when the parties entered into this Agreement. 6.3 No Collateral Agreements. 6.3.1 The parties have not entered into and are not bound by any collateral or other agreement apart from this Agreement. 6.4 Warranties Imposed in Agreement or by Statute. 6.4.1 The parties are not bound by any warranty, representation, collateral agreement, or implied term, under the general law or imposed by legislation unless: a. such warranty, representation, agreement or term is contained in the express terms of this Agreement; or b. it is an implied term or warranty imposed by statute which is mandatory and cannot be excluded by the parties' agreement. 10 It is now necessary to direct attention to the summons for relief filed in the proceedings. The first order sought is a variation of "a contract for sale of business and an Executive Service Agreement (collectively referred to as "the arrangements")." The variation sought to the Executive Service Agreement is to remove any post-termination restrictions. The variation sought to the sale of business agreement is the substitution of a different amount to the sum of $150,000 shown as the amount payable for goodwill and a variation "in this Honourable Court's discretion". 11 The strike out motion filed by the respondent is confined to the claim brought by the second applicant and the claim for variation of the sale agreement by substitution of a different amount for goodwill. It is alleged in the notice of motion that "the summons for relief cannot be supported by reference to s 106 or any other section of the Industrial Relations Act." 12 The submissions made on behalf of the respondent by Mr Watts of Counsel were helpfully based on written submissions prepared by him. I shall deal with each of these submissions in turn: 13 The first substantive submission was that the second applicant was not a person who is able to perform work in an industry, because of its corporate status. This submission should be rejected, in my opinion, because it misconceives the jurisdiction conferred on this Court under s 106 of the Act. All that is necessary is that there be a contract whereby a person performs work in any industry. The person performing the work need not necessarily be a party to the contract and in many cases is not a party. So long as a person performs work in an industry and that work is performed in circumstances having the necessary nexus with the contract required by s 106(1) the contract will come within s 106. I rely upon the decision of Glynn J in the Industrial Commission of New South Wales in Vaughan v O'Meara (1989) 31 IR 21 and the Full Bench decision of the Commission referred to in her Honour's judgment. 14 The second submission was that the Sale Agreement did not constitute a contract whereby the second applicant performed work in an industry. This submission, in that it is based on a hypothesis that it must be the second applicant who performs work under s 106 must fail for the reason set out above. However during the course of his submissions Mr Watts developed the proposition that the Sale Agreement was not one whereby any person performed work in an industry. This submission can conveniently be considered by reference to the decision of the New South Wales Court of Appeal in Production Spray Painting and Panel Beating Pty Ltd v Newham (1991) 27 NSWLR 644. 15 In discussing the meaning of the word "whereby" Priestley and Handley JJA contrasted work done in an industry "in consequence of" the making of the contract and work to be done "in fulfilment" of the contract. Their Honours concluded: The impugned contract, etc therefore must directly, that is under or pursuant to its terms, provide for the performance of work in an industry. Accordingly the contrast …. is between a contract which leads directly to the performance of work in an industry on the one hand, and on the other a contract which does so only indirectly or in a remote or consequential manner. (at 657). 16 Mahoney JA approached the matter in a different way, but with the same practical result. His Honour said: In my opinion the section looks to the purpose of the transaction itself and to whether the purpose of the transaction was that relevant work be performed. In the terms of the section, it is the transaction, that is, the "contract or arrangement or …" that is to be the cause of ("whereby") the work being performed. This suggests, I think, that what is in question is not merely an accidental consequence of the transaction but that which was its purpose to bring about. If this be so, then, in my opinion, the purpose must be that of both of the parties. If, for example, X a car dealer sells Y a motor vehicle, it may be the purpose of Y that it be used as a taxicab and so that a person be employed to drive it in the transport industry. Y's purpose in buying the car was that such work be done and in that sense the performance of the work was a consequence of the sale of the car. But, in my opinion, it is not to that kind of transaction that the section is directed. It is the transaction which, in the contemplation of the section, is to be seen as having as its purpose the performance of the relevant work and, in that sense, it is to be the purpose of both of the parties which leads to the work being performed. (at 649-50). 17 One way of distinguishing the type of transaction which does not fall within s 106 and that which does is by looking to the intention and purpose of the parties in terms of the carrying out of work. In Production Spray Painting, which was concerned with the sale of a business, although the vendor may have assumed that someone would have performed work in carrying on the business which was being sold, there was no such requirement by the vendor and therefore no contractual requirement that any work be carried out. The same situation applies with respect to the example given by Mahoney JA extracted above. In these proceedings, as submitted by Mr Kite SC who appeared for the applicants to resist the notice of motion, it is arguable that clause 22 of the Sale of Business Agreement did not only contemplate but required that the first applicant perform work in the business which was being acquired by the purchaser. The entry into the Service Agreement was said to be fundamental to the completion of the Agreement and a failure to do so would give the Purchaser at its option the right to rescind. Clause 22.1.3 provided that the Directors' Service Agreements shall provide for a term of two years with a further option of one year. I should hasten to add that these observations about the provisions of the Agreement are made solely for the purpose of dealing with these interlocutory applications and are not intended and could not be intended to reflect any final view about the provisions of the Agreement and any factual matter at issue in the proceedings. As Mr Watts submitted, the proper approach to a consideration of these interlocutory proceedings involves accepting the allegations of fact contained in all relevant material at their highest in favour of the applicants. 18 It is appropriate at this juncture to refer to the principles which apply when dealing with strike out applications in connection with summonses filed under s 106 of the Act. The relevant principles have been conveniently summarised by Wright J, President of this Court in Virtue v NSW Department of Education (1999) 92 IR 428 at 447-8. His Honour said: "1) The discretion of a court to determine a case at an early stage, when appropriate, has been repeatedly accepted. 2) As a general rule it is desirable that an objection to jurisdiction be determined as early as circumstances will conveniently admit so that the tribunal does not embark on a hearing which it lacks authority to conduct. The course of a court entertaining a challenge to jurisdiction in a preliminary or threshold way is often a sensible one where a party has a substantial threshold argument which, if it succeeds, will knock out the claim and save the costs and inconvenience that attend a protracted hearing of proceedings on the merits. 3) However, a further general proposition is that all issues arising should be dealt with in the substantive proceedings unless the basis for a challenge, either on jurisdictional grounds, or for lack of a reasonable cause of action, be clearly demonstrated. 4) Threshold relief of the kind sought here must be conserved to a clear case where it is plain that the invocation of the jurisdiction impugned is wholly misconceived or, upon analysis, lacks an arguable legal foundation. 5) Necessarily, refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Court might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. The resulting burden is a heavy one. 6) Accordingly, whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings. That is, 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, 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 a determination to be made. 7) Similarly, the jurisdiction to terminate an action summarily for want of a cause of action is to be sparingly employed and ought not to be used save where the lack of the cause of action was clearly demonstrated." (at 447-8). 19 I refer in particular to principles 6 and 7 set out above. The substantive proceedings are at a very early stage, and no detailed affidavit evidence has yet been filed. Accordingly, it is important to proceed cautiously with respect to the factual material, particularly to the extent that that material is to be considered in connection with questions of jurisdiction. 20 Based upon the provisions of clause 22 of the sale Agreement in conjunction with my understanding of the factual circumstances surrounding these proceedings, I am not satisfied that it is appropriate to accede to the submission of Mr Watts that the Sale Agreement cannot be regarded as a contract or part of a contract or arrangement whereby work is performed in any industry. 21 The next submission was to the effect that the order sought by the second applicant, namely one directed to the variation of the Sale Agreement was outside the objects of the Act. The written submissions made in support of this proposition are as follows: The order sought by the Second Applicant is not an order which remedies an "unfair contract" within the meaning of s 106(1). The Second Applicant seeks a variation of the amount of goodwill payable to the Second Applicant under the Sale Agreement. As such the order sought by the Second Applicant is not properly characterised as an order adjusting an unfair "work" contract but rather should be characterised as an order which seeks to vary the sale price the Second Applicant would otherwise receive for the sale of its business. If the order sought by the Second Applicant cannot be properly characterised as an order which provides a remedy in relation to " the performance of work in an industry " s 106 has no operation and the Commission has no power to make such an order. If there was any doubt about the nature of remedial orders the Commission is empowered to make, reference to the objects of the Act set out s 3 of the Act would dispel any doubt. 22 The objects of the Act are found in s 3, which is in the following terms: 3 Objects The objects of this Act are as follows: (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, (f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value, (g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality, (h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 23 As I understand the submission made by Mr Watts it is directed to the consequences of the successful outcome of the proceedings in favour of the second applicant. The submission seeks to characterise the adjustment of the amount of goodwill paid as being a remedy which is unrelated to, or does not have the necessary nexus with a contract as defined whereby a person performs work in an industry. In my opinion such an approach is not permissible. It is necessary, when considering matters of this kind to address the powers and jurisdiction of the Court and the manner in which remedies may be formulated and assessed to determine whether the processes are appropriate and permitted. Whilst the end result may appear to be unrelated to the philosophical approach of the powers and jurisdiction of the Court, if all of the processes are conducted within jurisdiction, and are otherwise appropriate, then the result cannot be attacked in this way. In any event merely because an attack is made on the amount of goodwill paid in conjunction with the sale of a business does not take a matter outside of the normal purview of s 106 proceedings. Proceedings of this kind were commonly encountered in connection with the sale to persons of trucks in work, involving the payment of goodwill. It was a common feature of those proceedings that the goodwill payment was attacked. It is possible to characterise the factual circumstances which have given rise to the allegations made in these proceedings in a similar way. In a simplistic sense, the first applicant in conjunction with another person conducted a business utilising a trust structure. They were approached to sell that business on the basis that they would continue to work for it. They allege that the business was operated by the purchaser in a manner which created relevant unfairness. In circumstances of this kind it matters not whether the person applying for relief under s 106 of the Act is the purchaser or the vendor; in appropriate circumstances either party to a transaction may feel wronged and may make allegations of unfairness. Provided that there is a contract as defined in s 105 which is found to be an unfair contract by reason of the combination of the definition contained within s 105 and the operation of s 106(2), then this is sufficient to confer jurisdiction and power on this Court to make orders under s 106. 24 To the extent that this submission has a philosophical basis and involves an "in principle" approach it is rejected for the reasons set out above. To the extent that this submission attacks the basis for the exercise of jurisdiction, it is rejected for reasons contained elsewhere in these reasons for judgment. That is, as I have found, it is arguable in all the circumstances that the proceedings are based upon a contract as defined in s 105 whereby a person performs work in an industry as contemplated by s 106(1). 25 The next submission was to the effect that the sale agreement is not an agreement collateral to the Executive Service Agreement. 26 The first argument raised in connection with this submission is based upon the provisions of cl 6.3.1 of the Sale Agreement which provides, "the parties have not entered into and are not bound by any collateral or other agreement apart from this Agreement." Mr Watts submitted that the provisions of cl 6.3.1 estopped the second applicant from denying the contractual provisions that it had entered into. That is, the second applicant as vendor under the Sale Agreement was estopped from relying in any way on the provisions of the Executive Service Agreement entered into between the respondent as employer and the first applicant as executive. 27 The difficulty with this submission is that cl 6.3.1 clearly contemplates that the parties will be bound by the provisions of the Sale Agreement. I have previously referred to the provisions of cl 22 of the Sale Agreement. Those provisions state that it is fundamental to the completion of the Agreement that the Service Agreements be entered into with each of the directors and that failure to do so will allow the respondent at its option to rescind the Sale Agreement. Accordingly, any collateral or other agreement referred to in cl 6.3.1 cannot include the Service Agreements contemplated by cl 22. Accordingly, to the extent that this submission is based on this argument, it must fail. 28 A second argument put by Mr Watts in support of this submission was that the Sale Agreement was not a collateral contract or arrangement as referred to in s 105. That is, it was not collateral to the Service Agreement which was clearly one whereby a person performs work in any industry. On one view of it, there is no necessity to deal with this submission because, as I have found, it is arguable that the Sale Agreement is itself an agreement whereby a person performs work in an industry, by reason of the provisions of cl 22 to which I have previously referred. 29 Hungerford J in Bartolacci v Permanent Custodians (1992) 44 IR 388 considered the circumstances in which a contract could be said to be collateral to another contract or arrangement. His Honour firstly observed that to be collateral, an arrangement must also be related to the primary contract or arrangement. In referring to what was intended by the meaning of the words "collateral arrangement" in the context of the predecessor to s 106, namely s 275 of the Industrial Relations Act 1991 his Honour said: The phrase "collateral arrangement" requires consideration in terms of the meaning of the two words which comprise it. "Collateral" in its commonly accepted meaning, according to The Concise Oxford Dictionary 6th ed. 1976, means "side by side, parallel; subordinate but from same source; contributory, connected but aside from main subject, course, etc". The proposition that somehow a collateral arrangement could relevantly be within the section as sitting side-by-side with or parallel to, but not related to, a contract or arrangement under which work is performed in an industry does not sit comfortably with what the word "collateral" ordinarily means. It seems to me that 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. In other words, in the context of a s 275, unless there be some necessary connection or relationship between the collateral arrangement and the primary contract or arrangement under which work is performed, then, in my view, there would be no relevant function for "collateral arrangement" to perform in the context of a s 275 which is essentially concerned with what might be called in a shorthand way "work contracts or arrangements". (at 398). 30 The decision of Hungerford J was upheld by a Full Bench of the Industrial Court of New South Wales in Bartolacci v Permanent Custodians Ltd (No 2) (1992) 94 IR 122. 31 I shall assume for the purpose of the discussion which follows that an arrangement contemplates within its terms a contract. That this is so may be seen from the judgment of Hungerford J in Bartolacci at 399 and following. 32 In my opinion it is arguable that because of the provisions of cl 22 of the Sale Agreement there is the necessary connection with or necessary relation between it and the Service Agreement. There may be difficulties in determining whether, for the purpose of the discussion, the overall Sale Agreement needs to be subordinate to the Service Agreement or whether it is sufficient that the subordination, to the extent that this is required, apply in the context of the circumstances in which work is to be performed in an industry. It is not necessary to examine this matter any further. For the purpose of dealing with the respondent's strike out motion there has to be established by the respondent, as contemplated by Barwick CJ in the High Court of Australia in General Steel Industries v Commissioner for Railways (NSW) (1964) 112 CLR 125, that the second applicant's claim is 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 etc. (see generally at 129). I am not satisfied that the respondent has established such a position with respect to this matter. In any event, the factual circumstances are not sufficiently established at this stage of the proceedings to constitute this as being an appropriate time at which to determine the matter on this basis. 33 For these reasons this submission must fail. 34 The final submission made by Mr Watts was that in order to succeed in its claim the second applicant would have to rely on pre contractual representations made by the respondent and that it was precluded from relying on those representations because of the provisions of cl 6 of the Sale Agreement which I have previously set out. In the absence of any application to delete or vary cl 6 then, it was said, the second applicant could not rely on it. The difficulty I have in dealing with this submission is that it is unclear at this early stage of the proceedings as to the precise basis upon which the applicants, and in particular the second applicant will formulate their case. It is obvious from the manner in which the summons is framed that the second applicant's claim is based significantly on events which occurred after the respondent became the owner of the business. Whether and to what extent the second applicant will rely upon expectations which were unfulfilled, and the basis for those expectations, will not emerge until all of the relevant evidence has been put on, so as to establish the factual circumstances against which the proceedings will be conducted. I do not think that this is the appropriate time of the proceedings to consider such an argument. Indeed my assessment as to what is involved can be gleaned from a subsidiary argument put by Mr Watts in support of this submission. It was as follows: "The second applicant does not plead, with respect the element of unfairness which it must establish, that there was any breach of any agreement or any fault of the respondent. Rather it alleges that after the respondent became the owner of the business , the second applicant's expectations as to what would happen were not met as a consequence of various factors but not as a consequence of any breach of the Sale Agreement - see paragraph 4.1 - 4.11 of the Summons for Relief. In such circumstances, and independently from the reasons set out in the preceding paragraph, the required element of unfairness cannot be made out so as to establish a basis for a s 106 claim. The second applicant bore the relevant commercial risks as to what the respondent might do once ownership of the business changed." 35 I should add that this is, in my opinion, not the appropriate stage of the proceedings to discuss this subsidiary argument. In any event the argument may more be directed to the consequences of what occurred rather than any element of unfairness which might be asserted by the applicants. 36 I have endeavoured to deal with each of the submissions made on behalf of the respondent in these proceedings. There is, however, another reason why the respondent's strikeout motion must fail. This is because, as Mr Kite stated during the course of submissions, the applicants rely essentially on a single arrangement constituted by the two contracts. It is said that when both contracts are taken together they become an arrangement, and that arrangement as a whole satisfies the definition of s 105 and the provisions of s 106(1). That is the arrangement itself which provided for the sale of the business and the engagement by the respondent as purchaser of the business of, inter alia, the first applicant to work in the business became a contract as defined whereby a person performs work in an industry. This approach is consistent with that adopted by Hungerford J in Kwong & Anor v Stone Microsystems (Aust) Pty Ltd & Anor (1996) 82 IR 255. At 309 his Honour said: "The interaction of two or more separate contracts between different parties as being able to constitute together an "arrangement" under which work was performed in an industry within s.88F of the former Industrial Arbitration Act (comparable to s.275 of the present Act) was considered by the Industrial Commission in Court Session in Custom Credit Corporation Limited v. Goldsmith (1976) AR (NSW) 98. The Commission said (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 . (italics added) The Commission further 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 product 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 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 worker 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 good in 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. (at 309-310) (italics added) 37 In my opinion it is arguable that the same circumstances apply to these proceedings. Once it is assessed that such a position is arguable, then the power to grant interlocutory relief so as to strike out the proceedings should not be utilised. For completeness I repeat conclusions which I have already made namely that it is arguable that the Sale Agreement is collateral to the Service Agreement and it is arguable that the Sale Agreement itself may be an agreement whereby work was performed by the first applicant in an industry. All of these conclusions are sufficient to determine these proceedings in favour of the applicants and to require that the respondent's motion be dismissed. 38 I now turn to the notice of motion filed by the respondent with respect to the applicants' notice to produce. The notice to produce sought production of documents which were concerned with matters relevant to the Sale Agreement including pre-contractual negotiations and representations concerning the Sale Agreement. Two bases were advance in support of the respondent's application that it be excused from compliance with the notice to produce. The first was that if the respondent had been successful in striking out the second applicant's claim then the notice to produce must be set aside. The respondent having failed in connection with the substantive strike out application it follows that it is unable to resist compliance with the notice to produce on this ground. 39 The second basis was that the summons for relief did not seek to vary any part of cl 6 of the Sale Agreement. Accordingly, the provisions of cl 6 operated and the first applicant was prevented from referring to pre-contractual representations "because they have no relevance to the Executive Service Agreement." 40 To the extent that the basis for this submission is associated with matters to which I have referred in dealing with the substantive strike out motion, the submission must fail. In accordance with my reasons for judgment I have determined that it is arguable that cl 6 will not preclude the applicants from relying on pre-contractual representations, but this conclusion has been formulated in the context of dealing with the substantive strike out motion. I am conscious that other considerations may apply when a party seeks to resist compliance with a notice to produce including the in principle question as to whether or not there is, to adopt a loose phraseology, any apparent relevance. This aspect of the basis for relief claimed by the respondent was not fully argued during the course of the hearing of the interlocutory proceedings. Accordingly, in these circumstances, I do not propose to make any final determination about this matter. It seems preferable in the circumstances that I reserve the respondent's rights with respect to the notice to produce. I trust that having considered the reasons for judgment set out with respect to the substantive strike out motion that the parties will be able to reach some sensible agreement concerning the provisions of the notice to produce and compliance with it. In the event that this does not occur I grant liberty to apply. 41 The parties requested that I reserve costs and I shall do so. 42 Before concluding I wish to reproduce an exchange which occurred between Mr Watts and me at the conclusion of the hearing on 18 October last. "HIS HONOUR: I should indicate I will endeavour to hand down my reasons as soon as possible but it is more likely than not that the application that you make, Mr Watts, will fail. I only indicate that so that the parties can contemplate timetabling the matter, leading onto eventual hearing and I would hope, the computer system not failing, that I should be able to hand down a decision next week, but in fairness to the parties and because I do not want to see time passing by, particularly with the Christmas vacation coming up, I think you should contemplate some timetabling to get on to the matter, if there can be some discussions between the parties in the interim - - - WATTS: I think my instructions will be to tackle that decision if it is adverse to us, so we will be resisting progressing this case strenuously, as long and as hard as we can. I just indicate that to my friend." 43 The exchange which I have set out above is one which causes me some concern in terms of the case management of these proceedings. If the respondent appeals this decision then the proceedings may be delayed significantly. Whilst it is obviously the right of the respondent to appeal any decision, including an interlocutory decision, I am concerned that the respondent may have anticipated instructions to its legal representatives which are in the nature of stalling the proceedings. So much, it seems to me, can be gleaned from what was said by Mr Watts its counsel and this is a conclusion which one could reasonably make in circumstances where a party indicates that it will appeal a decision without having considered the reasons for judgment of the judicial officer. 44 In these circumstances I intend progressing the matter by fixing it for pre hearing directions so that a timetable can be set leading up to the preparation of the case for final hearing. If the respondent wishes to delay setting such a timetable, it will be necessary for it to do so by seeking a stay from the Appeal Bench. 45 The parties will be notified of a pre hearing directions shortly. ORDERS 46 I make the following orders: 1. The notice of motion of the respondent is dismissed. 2. Liberty to apply with respect to the applicants' notice to produce. 3. Costs are reserved. ____________________ 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.