Industrial Relations Commission of New South Wales in Court Session CITATION : (i) Mark Andrew Evans and others v Veta Ltd (a company incorporated in Hong Kong) and Cathay Pacific Airways Ltd: Applications under s106 of the Industrial Relations Act (ii) Veta Limited and Cathay Pacific Airways Limited v Mark Andrew Evans and others: Remitted proceedings from the High Court of Australia: [2004] NSWIRComm 203 (i) APPLICANTS: Mark Andrew Evans, David Michael Honner, Brett Kenneth Rosewall, David Bruce Spong and Charles Bruce Burton FIRST RESPONDENT: Veta Limited (a company incorporated in Hong Kong) SECOND RESPONDENT: PARTIES : Cathay Pacific Airways Ltd (ii) PLAINTIFFS: Veta Ltd (a company incorporated in Hong Kong) Cathay Pacific Airways Ltd (ii) DEFENDANTS: Mark Andrew Evans, David Michael Honner, Brett Kenneth Rosewall, David Bruce Spong and Charles Bruce Burton FILE NUMBER: (i) 5824; 5825; 5826; 6024 and 6027 of 2001 (ii) 3251 of 2004 CORAM: Staunton J CATCHWORDS : Applications under s106 of the Industrial Relations Act 1996 together with remitted proceedings from the High Court of Australia - issue as to how matters should be procedurally dealt with - appropriate that factual matrix relevant to determining jurisdiction under s106 of the Industrial Relations Act be heard contemporaneoulsy with constitutional and jurisdictional questions raised in remitted proceedings - power exercised by Commission in Court Session in dealing with s106 applications is judicial power - decision of Full Bench of Commission in Court Session in Taudevin v Egis Consulting Australia Pty Limited and the Commonwealth (No 1) [2001] NSWIRComm 340 followed - matters to be heard together and relisted for directions as appropriate. LEGISLATION CITED : Industrial Relations Act 1996 Judiciary Act 1903 (Cth) Nagle v Tilburg (1993) 51 IR 8 Taudevin v Egis Consulting Australia Pty Limited and the Commonwealth (No 1) [2001] NSWIRComm 340 CASES CITED : Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch and ors (1987) 10 NSWLR 543 Tszyu v Fightvision Pty Ltd (2001) 104 IR 225 HEARING DATES: 07/15/2004 DATE OF JUDGMENT: 07/20/2004 Applicants in s106 proceedings: Defendants in remitted proceedings: Mr R Kenzie QC Mr S Prince of counsel Solicitors: Abbott Tout LEGAL REPRESENTATIVES: Respondents in s106 proceedings Plaintiffs in remitted proceedings Mr R Ellicott QC Mr G Hatcher SC Solicitors Freehills JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Staunton J DATE: 20/7/2004 IRC Matter No's 5824/01; 5825/01; 5826/01; 6024/01 and 6027/01 Mark Andrew Evans and others v Veta Ltd (a company incorporated in Hong Kong) and Cathay Pacific Airways Ltd Applications under s106 of the Industrial Relations Act 1996 and IRC Matter No. 3251/04 Veta Limited and Cathay Pacific Airways Limited v Mark Andrew Evans and others Remitted Proceedings from the High Court of Australia Interlocutory Judgment NSWIRComm 203 1 The matters before me have a somewhat lengthy history that should briefly be recounted if only to put the current position that has been reached into context. 2 IRC Matter No's 5824; 5825; 5826, 6024 and 6027 of 2001 are proceedings commenced in August 2001 by the five applicants in the Industrial Relations Commission of New South Wales pursuant to s106 of the Industrial Relations Act 1996 seeking variation or avoidance of their employment contracts. Those contracts were made in Hong Kong. 3 The respondents to those above-mentioned proceedings are Veta Ltd (a company incorporated in Hong Kong) and Cathay Pacific Airways Ltd. 4 Subsequent to the commencement of proceedings before the New South Wales Industrial Relations Commission in Court Session, Veta Ltd and Cathay Pacific Airways Ltd commenced an action by way of summons invoking the original jurisdiction of the High Court of Australia. That summons requested the High Court to state a case reserving certain questions for the Full Court of that Court to determine. 5 The defendants to the High Court proceedings, being the applicants in the s106 proceedings, argued for the matter to be remitted to the New South Wales Industrial Relations Commission in Court Session pursuant to s44 of the Judiciary Act 1903 (Cth). 6 In the judgment given on 2 July 2003, his Honour Justice McHugh ordered, inter alia, that: · the further proceedings in this action be remitted to the New South Wales Industrial Relations Commission in Court Session; and · the action proceed in that Court as if the steps already taken in the action in this Court had been taken in that Court and if Sydney had been stated in the Writ to be the place of trial. 7 Those proceedings having been remitted, they are for the moment being dealt with concurrent with the s106 proceedings subject to the further threshold argument as to joinder. 8 It should be noted that since being remitted, the s106 proceedings have been the subject of conciliation proceedings pursuant to s109 of the Industrial Relations Act 1996. Those conciliation proceedings were unsuccessful and all matters, including the remitted matter, have been allocated to me by the President to deal with. 9 The issue now before me is how the initial s106 proceedings, together with the remitted proceedings, should be procedurally dealt with. 10 It is appropriate at this point to identify the questions raised in the draft stated case before McHugh J. They are: · Question A asks whether, by reason of the Air Navigation Act 1920 and schedules of the Commonwealth and the regulations thereunder and the Civil Aviation Act 1988 and regulations of the Commonwealth, the provisions of section 106 of the Industrial Relations Act (NSW) are invalid and inoperative under section 109 of the Constitution insofar as section 106 purports to permit the variation or avoidance of contracts, whereby a person performs work in the international air transportation industry. · Question B asks whether section 106 of the Industrial Relations Act, insofar as it relates to or purports to relate to the variation of the avoidance of contracts, whereby a person performs work in the international air transportation industry, is wholly invalid and inoperative under section 109 of the Constitution by reason of inconsistency with the laws of the Commonwealth contained in the Air Navigation Act and the schedules and regulations thereunder and the Civil Aviation Act and the regulations thereunder and the Workplace Relations Act 1996 (Cth) and the schedules thereto. · Question C asks whether the international air transportation industry or any part thereof in which any of the defendants perform work in the services of Veta was an industry in and of New South Wales. · Question D asks whether any of the contracts between Veta and each of the defendants under which the defendants performed work in the services of Veta is a contract in respect of which the Industrial Relations Commission has jurisdiction under section 106 of the Act. · Question E asks whether section 106, insofar as it purports to confer jurisdiction on the Industrial Relations Commission of New South Wales to vary or avoid each of the contracts entered into between each of the defendants and Veta, is invalid and inoperative as not being a law for the peace, order and good government of New South Wales. · Question F asks whether, by reason of an affirmative answer to any one or more of the questions posited about the Industrial Relations Commission, it lacks jurisdiction to entertain the claims referred to in paragraph 44 of the statement of facts in the draft case. · Question G asks whether any or all of the questions posited at D to E are matters reserved to the Industrial Relations Commission of New South Wales in Court Session by reason of section 179 of the Industrial Relations Act (NSW). 11 On behalf of Veta Ltd and Cathay Pacific Airways Ltd, it has been argued that the issues raised in the remitted proceedings should be dealt with first, and separate from, the initiating s106 proceedings. The basis for that course, it was submitted, was because of the constitutional issues that require to be determined as part of the questions raised in the remitted proceedings. As well, it was said it would be inappropriate for the Commission to attempt to proceed to exercise the jurisdiction conferred under s106 of the Industrial Relations Act 1996, being perhaps arbitral or non-judicial in character, in conjunction with the judicial exercise of federal jurisdiction arising from the remitter of the matter from the High Court. 12 On behalf of the applicants in the s106 proceedings it is put, by way of notice of motion, that the remitted proceedings from the High Court be joined to the s106 proceeding on foot in the Commission in Court Session. I have read the affidavit of Bryan Robert Belling that accompanies that notice of motion. 13 I have also considered both the written and oral submissions made by both parties. In doing so, I have come to the view that the remitted proceedings from the High Court of Australia and the s106 proceedings currently before the Commission in Court Session should be joined in the sense that they are heard together. 14 My reasons for coming to that view can be shortly expressed. 15 It is well settled by authorities of this Court that where arguments as to jurisdiction are raised in matters arising under s106 of the Industrial Relations Act 1996 (or its statutory predecessor) the most appropriate course is for the substantive issue to be heard encompassing all relevant factual evidence. Only then can the Court come to a definitive view on matters going to the Court's jurisdiction, particularly in relation to the need to be satisfied as to whether the work performed was an industry in and of New South Wales: see Nagle v Tilburg (1993) 51 IR 8. 16 In the context of the initiating s106 applications, there is a real issue to be tried as to whether or not the work performed by the applicants in the services of Veta was an industry in and of New South Wales. The determination of that fundamental jurisdictional issue will require relevant factual evidence currently not before the Court and not contained in the draft stated case that was placed before McHugh J in the High Court proceedings. 17 In support of their written submissions, Mr Ellicott identified Questions A and B as being questions going to the constitutional issues raised. Questions C, D and E, it was agreed between the parties, involve consideration of the various treaties raised by Veta and Cathay Pacific. Mr Ellicott conceded that Questions C, D and E involve determination of factual matters. Those factual matters, it was contended on behalf of the defendants in the remitter proceedings, have not been fully identified and settled between the parties. Certainly McHugh J accepted that there would need to be a hearing of evidence at trial to determine Questions B, C, D and E as expressed in the draft stated case. As his Honour said: The parties have agreed on a considerable number of facts which are set out in 71 paragraphs of the draft stated case, but the defendants have made it plain that there are other facts upon which they would seek to rely. It seems to me that some of the important additional facts which they say are relevant to the question of connection with New South Wales concern the internal arrangements between Veta and Cathay Pacific regarding their operations in New South Wales, the interaction between those two companies and third parties located in New South Wales during the course of the plaintiffs' operations of their business interests in New South Wales. The latter concern, among other matters, passengers originating from New South Wales, travel agents located in New South Wales, hotel facilities in New South Wales, tour operators in New South Wales and similar matters. 18 Further, McHugh J expressed on more than one occasion in words that are compelling as to their inference that a fact finding hearing was imperative and, on any view, the remitted proceedings would be dealt with in the normal course and contemporaneously with the substantive proceedings. The following extracts from his Honour's judgment are instructive as to that approach, as follows: Again, even if the constitutional issues are reached in this case, it seems to me that it is a case where the arguments of the parties would be better understood if the Court had the benefit of evidence rather than the summary of facts concerning that evidence. There does not seem here to be any claim of textual collision between a law of the Commonwealth and section 106 of the Industrial Relations Act . The argument seems to rest on a 'covering the field' test. Alternatively, it may depend upon what in the jurisprudence is called operational inconsistency. In the case of a 'covering the field' test and in the case of operational inconsistency, it is obviously much better from the Court's point of view that it is in a position to examine the evidence in detail rather than upon the confined nature of facts stated in a case to the Full Court. and further: Mr Ellicott asks me, if necessary, to refer to any facts that need to be dealt with for this Court to properly deal with the constitutional issues. However, it does not seem to me, for the reasons I have already given, that any assistance would be gained by my pointing to areas which may require further elaboration than is presently to be found in the stated case. As I indicated, I regard the stated case procedure, before the facts are found or evidence taken, as an unsatisfactory procedure. But, more significantly, the constitutional issues that Mr Ellicott seeks to raise may never need to be determined for the reason that he may succeed either on the substantive point that section 106 does not apply or, if it does, that in the exercise of its discretion the Commission in Court Session should not make orders in favour of the plaintiffs. If he succeeds on either of those alternatives, it follows that the constitutional issues will not arise for decision. 19 Secondly, Mr Ellicott's submission that to proceed to deal with all of the matters together would, as I would paraphrase his submission, be inappropriate because of the conjoining of arbitral and judicial powers is not a submission with which I agree. On that point, I refer to the decision of the Full Bench of the Commission in Court Session in Taudevin v Egis Consulting Australia Pty Limited and the Commonwealth (No. 1) [2001] NSWIRComm 340 in particular at para [92] and following, particularly when referring to Dawson J's dissenting judgment in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at para [96] the Full Bench said as follows: On the other hand, Dawson J, albeit in a minority judgment, emphasised that there is no separation of powers doctrine under the New South Wales Constitution, and that the federal Parliament, in investing State courts with federal jurisdiction, must take them as it finds them. His Honour held that in the Boilermaker s' principle did not apply to State courts invested with federal jurisdiction. His Honour held, at 85 - 86, that State courts, even those exercising federal judicial power, may exercise powers (such as non-judicial powers) which could not be exercised by a Chapter III federal court: What is incompatible with the exercise of the judicial power of the Commonwealth by a Ch III court may not be incompatible with the exercise of the judicial power of the Commonwealth by a court which is not restricted by any separation of powers. Of course, only judicial functions may be vested by the federal Parliament in State courts pursuant to s 77(iii) (see Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144.), but that is an entirely different thing. 20 Further, in the context of considering submissions made on behalf of the Commonwealth in the matter then before them, the Full Bench stated at para [123]: We consider that the fundamental basis of the Commonwealth's submissions depends upon a flawed premise. That is, that a State court that is or may be exercising the judicial power of the Commonwealth is not able to exercise, either at all or when exercising the judicial power of the Commonwealth, power of a non-judicial nature. There is no authority to support that proposition and there are a number of authorities which clearly tell against it. Relevantly, the most important authority is the judgment of the High Court in Kable where at 106 ( Gaudron J), 109 - 110 ( McHugh J), and 132, 136 - 137 ( Gummow J) it was held that there is nothing to prevent the Parliaments of the States from conferring powers in their courts which are non-judicial provided that they are not inconsistent with the exercise by those courts of the judicial power of the Commonwealth. See also Commonwealth v Western Australia at 414 (per Gleeson CJ and Gaudron J); H A Bachrach Pty Ltd v Queensland at 562 and also Re Dingjan; Ex parte Wagner at 333, 341, 342, 355, 360 and 361. 21 As to the nature of the power exercised by the Commission in Court Session under s106 of the Act, the Full Bench concluded at para [124] as follows: We conclude that it is clear that the nature of the power exercised by the Commission in Court Session under s106 of the Industrial Relations Act is, or involves, the exercise of judicial power. We have earlier referred to the authorities which make clear that a relevant consideration in ascertaining the nature of the power being exercised is the nature of the body exercising it. This involves a consideration of the nature of the Commission in Court Session. An important feature of that consideration is that the Industrial Relations Commission of New South Wales in Court Session is a significantly different body to the Industrial Commission of New South Wales which was considered in 1987 by McHugh JA in Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch. 22 And again at para [140] relevant to the above conclusion: We also consider the approach of Austin J in Heath v Hanning (1999) NSWSC 719 at [49] to [54] ... provides confirmation of the conclusions we have reached. 23 As is clear from a reading of the paragraphs referred to, Austin J also considered that the view expressed by McHugh JA (as he then was) in Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch and ors (1987) 10 NSWLR 543 as supporting the proposition that the power conferred by the then s88F was an arbitral rather than a judicial power was not a view that was directly apposite to s106 of the Industrial Relations Act 1996. In this respect, see also Tszyu v Fightvision Pty Ltd (2001) 104 IR 225 at 235. 24 In any event it seems to me, in the remitter proceedings before him, McHugh J rejected Mr Ellicott's submissions on this point in the following terms: However, I do not see that as an impediment to a remitter. If the questions under section 106 involve the exercise of judicial power, no problem can arise. If on the other hand they are not, then arguably this Court had no jurisdiction over them in the first place and all that the Commission in Court Session on remitter would be able to exercise would be the issues remitted that are concerned with the exercise of judicial power. 25 In his submissions, Mr Kenzie stated the Commission should have regard to the notices of motion filed on behalf of Veta and Cathay Pacific in each of the s106 proceedings. Those notices of motion were filed on behalf of the respondents to the s106 proceedings but were stood over pending the outcome of the remitted proceedings before the High Court. 26 The notices of motion so filed raised jurisdictional objections. Determination of those jurisdictional objections could only be determined, it was said, by consideration of a factual matrix that overlapped significantly with the issues raised for determination by the remitted proceedings. In particular, it was said, Questions C, D and E of the remitted proceedings dealt with the same connectedness issue raised in ground 2(A)(2) of the notices of motion. 27 By way of response to that point, Mr Ellicott pointed out that the notices of motion had been overtaken by the remitter proceeding. More importantly, they were filed pursuant to Rule 82 of the Industrial Relations Rules and in particular, Rule 82(1)(b) which enable the Court, by order, to set aside the service of the originating process. Pursuant to Rule 82(3), the making of an application under the rule is not to be treated as a voluntary submission to the jurisdiction. 28 Regardless of those procedural provisions, it cannot be denied that at all times Veta and Cathay Pacific have sought to pursue what they perceive as valid jurisdictional arguments in relation to the substantive s106 matters before the Commission. 29 With equal emphasis, it must be said that McHugh J was fully appraised of the arguments wishing to be ventilated by the plaintiffs to the remitter proceedings in pressing their constitutional and jurisdictional arguments. Notwithstanding those arguments, his Honour was firm in his view that the most appropriate course was to remit the matters to the NSW Industrial Relations Commission in Court Session. In doing so, it seems to me his Honour acknowledged the inter-relationship between the matters raised in the remitter proceedings and those issues that must be determined by the Commission not only to satisfy itself as to jurisdiction but also whether the disputed contracts are unfair within the meaning of s105 of the Industrial Relations Act. Those issues, it is apparent, require a trial of all of the factual evidence relevant to determine the issues raised within the remitted proceedings within the context of the substantive s106 proceedings. 30 I propose to re-list the matters at my earliest convenience in order to programme the future progress of these matters accompanied by directions as appropriate. 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.