Industrial Relations Commission of New South Wales in Court Session CITATION: Vic Cherikoff Food Services Pty Ltd v Cherikoff Rare Spices Pty Ltd. [2005] NSWIRComm 270 APPLICANT: Vic Cherikoff Food Services Pty Ltd PARTIES: RESPONDENT: Cherikoff Rare Spices Pty Ltd. FILE NUMBER(S): IRC 6408 of 2002 CORAM: Haylen J CATCHWORDS: Unfair contract - Industrial Relations Act 1996 - s 106 - notice of motion - application to join two directors of a company already a respondent - respondent company placed in liquidation after the proceedings commenced - sufficient connection established between the respondent company, the two directors and the alleged arrangement - joinder granted BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session and anor [2005] NSWCA 227 Cooke & Co Pty Limited & anor v The Commonwealth & anor (1922) 31 CLR at 411 Long v Crossley (1879) 13 Ch Division 388 at 391 CASES CITED: Montgomery v Foy Morgan & Co (1895) 2 QB 321 at 324 Vasalli v Southwell & ors (1988) 12 NSWLR 502 at 511 HEARING DATES: 07/28/2005 EXTEMPORE JUDGMENT DATE: 07/28/2005 APPLICANT: Mr M Hurley, Solicitor SOLICITORS: Kells the Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Mr R A Campbell of counsel SOLICITORS: Cordato Partners JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Haylen J 28 July 2005 Matter No IRC 6408 of 2002 VIC CHERIKOFF FOOD SERVICES PTY LTD v CHERIKOFF RARE SPICES PTY LTD. Application under s 106 of the Industrial Relations Act 1996 EX TEMPORE JUDGMENT [2005] NSWIRComm 270 In these section 106 proceedings the applicants, by way of notice of motion, seek to join as respondents two additional persons. I have heard evidence both by way of affidavit and oral evidence with cross-examination in support of that application. In brief, without attempting to be exhaustive, that evidence is as follows: the applicants claim unfairness in relation to a contract, as widely defined in the Act, which includes, of course, an arrangement in relation to the parties' involvement in the original respondent, Cherikoff Rare Spices Pty Limited. Having initiated these proceedings under section 106 of the Act and while the proceedings were on foot, it appears that steps were taken by the directors to have that respondent placed in liquidation and that has since occurred. The thrust of the material that is before the Court, as I understand, is that the applicants now seek to join two directors of the original respondent in order, at least, to ensure that there are viable financial entities against whom any relief the applicants are successful in obtaining may be levied. That seems to me to be the primary purpose of the application, although there are some indications that there were additional matters being considered and raised by the applicants, and that led to some submissions from the proposed respondents as to the connection between the contract or arrangements sought to be impugned, and those proposed respondents. Without detailing here the evidence that I have before me, it is accurate nevertheless to state that the substance of the applicants' case on this notice of motion is that they seek to join the additional respondents to make effective the claim that they had originally commenced against Cherikoff Rare Spices Pty Limited, the original respondent. Those directors were the governing mind of the original respondent: the alleged unfairness of the arrangement was unfairness they procured, permitted or authorised. The principles in relation to joinder of parties are well established and well recognised. This Court applies the same approach as found in the general courts. Joinder generally will be allowed if there is a sufficient commonality of law or fact or transaction. The basic principle is that the Court should take the course that is most conducive to the just resolution of the dispute, having regard to the desirability of limiting the costs and delay of litigation, and to ensure that all matters in dispute in the proceedings may be effectively and completely determined and adjudicated upon. It has been described as a very wide power. In Vasalli v Southwell & ors (1988) 12 NSWLR 502 at 511, Priestley JA said this about one of the predecessors to s 106, namely section 88F of the 1940 Act: Section 88F authorises the Commission to make a variety of orders or awards in regard to contracts of a defined kind, if any one of the various grounds are found to exist. There is no restriction in the action limiting persons who may be the subject of orders made under it. It is settled that the operation of the section is not limited to persons who are in law the parties to the contract all or part of which is in question in an application under the section. Any person who can reasonably be thought to have a real connection with the contract is within the Commission's jurisdiction under the section. Persons having no conceivable connection with the contract are not. See Brown v Rezitis (1970) 127 CLR 157 at 164, 165. It has also been said that a rule permitting joinder should be liberally construed. One can find authority for that going as far back as Cooke & Co Pty Limited & anor v The Commonwealth & anor (1922) 31 CLR at 411. The rule is said to be permissive but is to be read liberally so that all parties to the dispute relating to the one subject matter may be dealt with at the one time. Authority for that proposition goes back as far as Montgomery v Foy Morgan & Co (1895) 2 QB 321 at 324. Whether a proposed applicant or co-applicant has a cause of action is a question not to be considered on an application for joinder. That proposition has supporting authority dating back to Long v Crossley (1879) 13 Ch D 388 at 391 and following. These general propositions have been applied by this Commission in relation to joinder and, in particular, joinder in the exercise of the unfair contracts jurisdiction. There are a number of authorities to the effect that a party will be joined if there is an arguable case that it has a sufficient connection with the impugned arrangement. A party will have a sufficient connection if it is itself a party to the impugned arrangement. However, it need not be a party to the arrangement in order to be a party to the proceedings. It is enough that it has a sufficient connection with the impugned contract. In the present proceedings, on the material that is before the Court, I am satisfied that there is a sufficient connection between the arrangement impugned by the applicants and the two proposed respondents. As I have already mentioned, it seems to me that the substance of the applicants' case on its notice of motion is to ensure that there are parties - here the directors of the original respondent - against whom any relief which the applicants are successful in obtaining, who can meet the terms of a money order. Recently the New South Wales Court of Appeal has given consideration to amending a summons for relief under section 106 and the joining of a new respondent and the approach appropriate to take in such circumstances. In In BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session and anor [2005] NSWCA 227 Handley JA, speaking for the Court, said this at paragraph 13, The jurisdiction and power of the Commission to order that additional respondents be added by amendment after the 12 months limitation period in section 108B has expired was considered by the Full Bench in Crowe v UCS Developments Pty Limited (2003) 130 IR 266, and by this Court in Unitedglobalcom Inc & ors v Industrial Relations Commission of New South Wales In Court Session & anor [2005] NSWCA 131. These cases establish that section 108B does not prevent the Commission adding additional respondents outside the limitation period where this is done for the sole purpose of obtaining orders against them under section 106(5). It seems to me that this is the case here. In BEA the Court of Appeal had before it a circumstance where the joinder, of necessity, required the applicant to rely upon a new and different contract. The evidence on this notice of motion is that the original summons for relief pleads a contract or arrangement in the widest sense of those terms and that arrangement remains central to the case pursued by the applicants. The addition of these two respondents will not alter that central fact. It is in those circumstances that I grant the application and the orders sought in the notice of motion to join to the proceedings Frederick Theodore Gulson and John Stephen Bax. That is my decision in relation to the notice of motion. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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