Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. Bevchain Pty Limited [2009] NSWIRComm 1038 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Bevchain Pty Limited FILE NUMBER(S): IRC 2263 of 2008 CORAM: Connor C CATCHWORDS: conntractual arrangements - transport industry - interpretation of a provision in a contract - cost of installation of tailgate on the vehicle of a contract driver - decision issued LEGISLATION CITED: Industrial Relations Act 1996 Bryce v. Apperley (1998) 82 IR 448 Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 CASES CITED: George A Bond and Company Limited v. McKenzie (1929) AR 498 Kellogg (Australia) Pty Limited v. National Union of Workers (1998) 89 IR 391 Kingmill Australia Pty Limited v. Federated Clerks' Union of Australia (2001) 106 IR 217 Perisher Blue v. Australian Workers Union (1999) 91 IR 274 HEARING DATES: 16/07/2009 DATE OF JUDGMENT: 5 August 2009 APPLICANT Greg Selig Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Laurie D'Aplice Linfox Australia Pty Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Wednesday, 5 August, 2009 Matter No IRC 2263 of 2008 Transport Workers' Union of New South Wales v. Bevchain Pty Limited Notification of an industrial dispute under S.332 of the Industrial Relations Act, 1996 re the cost of fitting a hydraulic tailgate to a contract driver's vehicle DECISION [2009] NSWIRComm 1038 The Issue 1 On Wednesday, 3 October, 2007 the Transport Workers' Union of New South Wales lodged a notification of an industrial dispute with Bevchain Pty Limited pursuant to the provisions of Part 4, Dispute Resolution, of Chapter 6, Public Vehicles and Carriers [S.332] of the 1996 Industrial Relations Act. Bevchain engages seven contract drivers in the delivery of beer and wine products in the Central Coast and Wollongong areas. The contract drivers were initially engaged by Linfox Australia Pty Limited under unregistered cartage contracts. When Linfox formed a new company (Bevchain) in late 2006 the seven contract drivers were transferred over to it under the terms of those contract agreements which have a nominal expiry date in the middle of 2010. 2 The contract agreements, among other things, required the contract drivers to comply with vehicle specifications required by Bevchain. In particular, Clause 6, Contractor Vehicle, of the Cartage Contract provides, among other things, as follows [6.2]: "In the event that the contractor is required to deliver packaged beer and/or provide cartage services outside the core Sydney metropolitan area, Linfox may require the contractor to upgrade the contractor's vehicle by the installation of additional equipment to meet the vehicle specifications... Linfox will pay or procure to be paid to the contractor the cost of that upgrade work, including installation and equipment. For the avoidance of doubt, the contractor will retain such equipment after installation and after termination of this cartage contract." 3 Mr Adam John, who trades as Ilenova Pty Limited, is one of the Bevchain contract drivers. He was involved in a serious motor accident and his vehicle was written off by his insurer. His replacement vehicle was not fitted with an hydraulically operated tailgate and Bevchain has insisted that he provide one on his vehicle in accordance with his obligations under the contract agreement. A dispute has arisen with the TWU asserting that the tailgate should be fitted at the expense of Bevchain and Bevchain arguing that it has no obligations to Mr John in that respect. Bevchain claim that Mr John is obliged to meet the cost of the replacement of the tailgate. 4 Bevchain issued Mr John with a notice that he was in breach of the contract agreement for his failure to fit a new tailgate to his vehicle and that if he did not rectify that breach within 14 days, his contract of carriage with Bevchain would be terminated. To avoid losing his work, Mr John has upgraded his vehicle. A new tailgate was fitted to his vehicle at a cost of $16,500.00. 5 The matter came before me for a conference on Thursday, 10 December, 2008 and Friday, 18 December, 2008. Conciliation failed to settle the matter. I programmed it for arbitration on Monday, 30 March, 2009 but, at the request of the parties I adjourned that hearing several times. It was not until Thursday, 16 July, 2009 that the hearing actually took place. In that hearing Mr Selig represented the TWU and Mr John and Mr D'Apice represented Bevchain. 6 Mr John had provided a written statement in support of the TWU claim on his behalf. He was not required for cross-examination by Mr D'Apice. In his written statement Mr John indicated that: "....I am aware that at the commencement of the agreement in 2006 Linfox required two carriers who perform work transporting Tooheys products to the central coast and Gosford region to upgrade their vehicles, specifically by fitting a hydraulic tailgate to them... The upgrades were paid for at the time by Linfox... My vehicle at that time was already fitted with a hydraulic tailgate. My tailgate was fitted at my expense prior to Linfox taking over..." Submissions 7 Mr Selig has argued that Clause 6 of the contract agreement obliges Bevchain to pay for the installation of the new tailgate and that its failure to do so constituted a breach of the contract agreement. Mr Selig points out that Clause 6 does not make it mandatory that a tailgate be fitted to the contractor driver's vehicle - the word "may" gave Linfox and thus Bevchain the right to seek the upgrade of the vehicle - but since Bevchain has insisted that Mr John provide the tailgate, the clear unambiguous meaning of Clause 6 was to require Linfox, and subsequently Bevchain, to meet the cost of that tailgate. 8 Mr D'Apice has argued that the TWU's claim on behalf of Mr John should be dismissed. He points out that Clause 13, Insurance, of the contract agreement under which Mr John operated provides [13.2] that: "The contractor shall take out and keep current a comprehensive vehicle insurance policy with a recognised insurer for the current market value of the contractor vehicle, including insurance for third party property damage to the sum of not less than $5,000,000.00 or such greater amount as may be required by Linfox." And that insurance should have covered the cost of the tailgate. It appears that Mr John has upgraded his vehicle and, implicitly, the settlement of the insurance claim with respect to the vehicle that had been written off allowed him to upgrade his replacement vehicle (but without the tailgate). 9 Mr D'Apice claimed in his submission that Clause 6 flowed out of the negotiations with the TWU when the contract drivers moved over from Linfox to Bevchain and the provision had to be considered in the context of the negotiations at that time. It was intended only as a "one-off" arrangement to accommodate the transfer and that it would have made "...no commercial sense..." for Bevchain to meet the cost of the installation of the tailgate on Mr John's vehicle, especially since Clause 6 provides that the tailgate would remain his property after the contract under which he works for Bevchain is ended. Conclusion 10 The interpretation of provisions of any industrial instrument (including unregistered contract agreements, as in this case) raises certain jurisdictional issues in proceedings initiated under S.332. S.175 does provide for members of the Commission the jurisdiction to interpret any industrial instrument - in this case a provision in an unregistered contract agreement, viz: "The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument." 11 That having been said, I do not propose to ventilate the complex legal arguments surrounding this issue except to say it is, I think, now sufficiently clear to suggest that what is being sought in these proceedings is really declaratory relief which, by virtue of S.154 is reserved to the Commission in Court Session [Kellogg (Australia) Pty Limited v. National Union of Workers (1998) 89 IR 391 at p.392]. Nevertheless, the issue before me in these proceedings is relatively uncomplicated and to my mind the procedure contemplated by S.154 would be a classic case of using a sledgehammer to crack a nut. Neither Mr Selig nor Mr D'Apice showed any great enthusiasm to intrude into the jurisdictional issues, seeking only to resolve the matter expeditiously as possible as an industrial dispute under S.332. It is my duty to do so. I propose to outline my position with respect to the matter and direct the parties into further discussions in the light of my observations. 12 As Mr D'Apice is implying in his submissions in these proceedings, I accept that contractual arrangements which represent a settlement of negotiations between parties in an industrial context are often expressed in words which do not lend themselves readily to close scrutiny as legal documents. But the contractual arrangements under which Mr John is engaged by Bevchain is still a legal document and it must be treated as such. That is not to suggest that I should not turn to consider the circumstances under which the contracts were made in the first place to assist in interpretation of provisions in that contract. I may do where I believe more information is needed [George A Bond and Company Limited v. McKenzie (1929) AR 498 at pp.503 and 504, Perisher Blue v. Australian Workers' Union (1999) 91 IR 274 at pp.283 and 284 and Kingmill Australia Pty Limited v. Federated Clerks' Union of Australia (2001) 106 IR 217 at p.229]. 13 But the words I have emphasised above - "...where I believe more information is needed..." are important. Primarily, provisions in any instruments must still always be interpreted by looking at what is actually said, not necessarily what may well have been the intention of the parties when they created that provision and external information may only be relied upon where there is some doubt as to the ordinary meaning of the words used, ie they should be interpreted in the same manner as any other legal instrument. Ultimately, it is the literal meaning of the words on which I should rely. For instance, in Bryce v. Apperley (1998) 82 IR 448 the Full Bench of the Commission (Hungerford, Marks and Schmidt JJ) explained the position (at p.452) in the following manner: "...In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning..." In the High Court judgment in Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 Mason J commented (at p.352) that: "…the true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning…" 14 In my opinion, the wording of Clause 6 is unambiguous, as Mr Selig has submitted in these proceedings. In the circumstances, I believe that Bevchain has an obligation under Clause 6 to recompense Mr John for the installation of the tailgate to his vehicle that it required him to provide. I direct the parties into further discussions concerning this matter in the light of those observations. P J CONNOR Commissioner 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.