Industrial Court of New South Wales CITATION: Lowe v BEA Systems Pty Limited [2008] NSWIRComm 220 DAVID ARTHUR LOWE Appellant PARTIES: BEA SYSTEMS PTY LIMITED (ABN 49 073 908 004) Respondent FILE NUMBER(S): IRC 1015 of 2008 CORAM: Boland J President; Walton J Vice-President; Schmidt J CATCHWORDS: Appeal - application for leave to appeal and appeal from an interlocutory decision - leave to amend - whether amendment time barred by s 108B(1) of the Industrial Relations Act 1996 - leave to amend should be granted - leave to appeal granted and appeal upheld - leave sought to further amend the amended summons granted - respondent's strike out motion dismissed LEGISLATION CITED: Industrial Relations Act 1996 BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session & Anor (2005) 63 NSWLR 347 CASES CITED: Crowe v UCS Developments Pty Ltd (2003) 130 IR 266 Illawarra Breads Pty Limited v Baker's Delight Holdings Limited (2007) 167 IR 393 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 HEARING DATES: 18 November 2008 DATE OF JUDGMENT: 21 November 2008 APPELLANT: Mr RM Goot AM SC with Mr SEJ Prince of counsel SOLICITORS: Lakos & Company LEGAL REPRESENTATIVES: RESPONDENT: Mr IM Neil SC SOLICITORS: Baker & McKenzie JUDGMENT: - 11 - INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: Boland J, President Walton J, Vice-President Schmidt J 21 November 2008 Matter No IRC 1015 of 2008 DAVID ARTHUR LOWE v BEA SYSTEMS PTY LTD Application by David Arthur Lowe for leave to appeal and appeal against a decision of Justice Marks given on 10.6.2008 in matter no. IRC1645 of 2002 JUDGMENT OF THE COURT [2008] NSWIRComm 220 1 This is an application for leave to appeal and appeal from an interlocutory decision given by his Honour Justice Marks in June 2008, dismissing the appellant's application for leave to amend the amended summons upon which these proceedings are advancing. (See Lowe v BEA Systems Pty Ltd [2008] NSWIRComm 108.) 2 The proceedings were brought under s 106 of the Industrial Relations Act 1996 ('the Act'). There was no question that the Court had the power to grant leave to further amend such a summons, which it considered 'to be necessary in the interests of justice', given the provisions of s 170 of the Act. The exercise of that discretion is ordinarily to be approached in the way discussed by the High Court in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146. In this case, however, the respondent claimed that the leave sought could not be granted, the amendment proposed being time barred by the provision of s 108B(1) of the Act. The section provides: 108B Time for making application (1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. (2) The Commission does not have jurisdiction to extend the time for making any such application or, subject to subsection (3), to accept an application made after the time prescribed by subsection (1). (3) The Commission may accept an application made within 3 months after the time prescribed by subsection (1) if the applicant satisfies the Commission that there are exceptional circumstances justifying the making of the late application. 3 Marks J accepted the respondent's arguments, having found that the effect of the further amendments proposed was to attack a different contract or arrangement, to that sought to be attacked in the amended summons. Such an application was time barred and hence his Honour refused the leave sought. 4 The appellant challenged his Honour's conclusions, arguing that his Honour had fallen into error, having come to a different view in relation to what contract was attacked in the amended summons, to that reached by the Court of Appeal, which had already considered and determined that question as between the parties. (See BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session & Anor (2005) 63 NSWLR 347 ). 5 The respondent's case was that there was no such error made by his Honour; that the matters in issue between the parties before the Court of Appeal were different to those which his Honour was required to determine and that his Honour had correctly applied the law to the appellant's application for leave to further amend the amended summons. Leave to Appeal 6 For reasons which we will explain, we are satisfied that his Honour fell into error of a kind which requires that leave to appeal be granted. The effect of his Honour's decision was to bring the proceedings to a conclusion, without any hearing on the merits, in circumstances where his Honour came to an entirely different view as to what contract the amended summons was concerned with, to that already reached by the Court of Appeal in the earlier proceedings. In the circumstances justice requires that leave to appeal be granted. The Court of Appeal decision 7 These proceedings were commenced in March 2002. The appellant amended the summons in September 2003. There is no question that it was this amended summons which the Court of Appeal was called upon to consider, in proceedings brought by the respondent. 8 The appellant's amended summons pursued the proceedings originally brought against the respondent, BEA Systems Pty Ltd, an Australian company, which is a subsidiary of an American company, BEA Systems Inc. The amended summons claims that the contract or arrangement, and any related or collateral arrangement, between the appellant and the respondent, whereby the appellant performed work for the respondent in the information technology industry, was unfair, harsh and unreasonable or contrary to the public interest. Orders of variation and avoidance of that contract were sought, as well as consequential money orders and costs. 9 As Handley JA observed in his judgment, the respondent always claimed that the appellant had brought the proceedings against the wrong entity, because it had never had the claimed relationship with the appellant; he had only ever had a consultancy contract with the American company. 10 In December 2004, the appellant sought leave to join the American company as a respondent in the proceedings and to further amend the amended summons, to seek orders in relation to a contract or arrangement between the appellant and the American company. This application led the respondent and the American company to commence proceedings in the Court of Appeal, challenging this Court's jurisdiction to grant the leave sought, because the claims against the American company were time barred. 11 Handley JA, with whom Mason P and Giles JA agreed, held: 11 The Commission has a wide power of amendment (s 170) and its Rules, made pursuant to s 185, confer power to direct parties to be joined (r 83(d)). Compare Visalli v Southwell (1988) 12 NSWLR 502. If no other relevant provision has been made the Supreme Court Rules apply (r 89(5)). The Act and the Rules do not in terms authorise an amendment, or the joinder of a new party, which would defeat an accrued time bar. SCR Pt 8 r 8 gives power to add additional parties as plaintiff or defendant, but r 11(3) makes it clear that, except in cases under Pt 20 r 4(3), such an order does not defeat an accrued time bar. The exception in r 4(3) is not applicable. It provides: "(3) Where there has been a mistake in the name of a party and the Court is satisfied that the mistake was not misleading or such as to cause reasonable doubt as to the identity of the person intended to be made a party, the Court may make an order for leave to make an amendment to correct the mistake, whether or not the effect of the amendment is to substitute a new party." 12 There was no such mistake in this case. The summons in the Commission identified both companies by their correct names and made it clear that it was the Australian company that was being sued. 13 The jurisdiction and power of the Commission to order that additional respondents be added by amendment after the 12 months limitation period in s 108B has expired was considered by the Full Bench in Crowe v UCS Developments Pty Ltd (2003) 130 IR 266 ( Crowe ) and by this Court in Unitedglobalcom Inc & Ors v Industrial Relations Commission of New South Wales & Anor [2005] NSWCA 131 ( Unitedglobalcom ). These cases establish that s 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 s 106(5). 14 Brown v Rezitis (1970) 127 CLR 157 establishes that orders for the payment of money may be made under s 106(5) against persons who are not parties to the contract avoided or varied provided, in the words of Barwick CJ at 165, there is "a close connexion between the order made and the contract or arrangement varied or avoided". 15 In both Crowe and Unitedglobalcom the amendments did not seek the avoidance or variation of a different contract. There was no claim that the additional respondents were parties to the contract attacked in the original proceedings or were parties to a different contract whereby the applicant worked in an industry. The applicants sought their joinder for the sole purpose of obtaining consequential relief against them. 16 The present case is fundamentally different. The original summons in the Commission sought the avoidance or variation of a contract with the respondent. The summons as proposed to be further amended seeks an order declaring void the contract between the applicant and both companies jointly or severally. The operative provisions are not alleged to be different, but a contract with both companies jointly, or one with the US parent severally, would not be the same contract as that alleged in the original summons. 17 The applicant in the Commission does not seek to add the US parent for the sole purpose of obtaining consequential relief against it. The terms of the proposed further amended summons demonstrate that he seeks to initiate "a separate application for an order under the Division" ( Crowe (above) at 280). The Full Bench there said: "… the amendment in substance … [would] amount to an application for an order in respect of a different contract or arrangement." 18 Mr de Meyrick, for Mr Lowe, contended that the contracts were really, or in substance, the same, that the respondent was not independent from its US parent, and that initially the proceedings were conducted on the basis that the respondent was being sued on behalf of itself and its parent. There is no trace of any consensus on the latter point since para 57(f) of the respondent's Reply alleged that the applicant had sued the wrong party. 19 Mr de Meyrick's other submissions must also be rejected. The original summons in the Commission sought relief against the respondent based on a contract made with it, and no order could have been made against the US parent. Monetary orders under s 106(5) are enforceable in the manner provided in s 182. The Industrial Registrar must give a certificate as to the amount due which "must identify the person liable to pay the certified amount" (s 182(2)). The certificate can then be filed in a court having jurisdiction to give judgment for a debt of the same amount and when filed operates as a judgment of that court (s 182(3)). The identity of the party or parties against whom relief is sought under s 106(1) is a matter of substance and the case made by the claimants cannot be answered in the manner suggested. 20 Mr de Meyrick submitted that s 108B applied on its proper construction only in the case of contracts terminated after 24 June 2002. The words of the section do not permit that operation. He submitted that s 108B had no operation at all in relation to an interlocutory application in an existing summons but it does if the application is to join an additional respondent whereby there will be an application for an order in relation to a contract terminated more than twelve months previously. To the extent that he submitted that s 108B did not preclude such an application because, on the termination of the contract, he had a right protected by s 30 of the Interpretation Act or s 108B should be read down on the common law presumption that Parliament does not intend to interfere with vested rights, the reasons in Colley v Futurebrand FHA Pty Ltd [2005] NSWCA 223 (which was heard at the same time as the present case) require that the submission be rejected. 21 In my judgment the Commission has no jurisdiction to amend the summons to add the US parent as a respondent sued as a party to a contract with the applicant. The following orders should be made: (1) Order that the Industrial Relations Commission be prohibited from granting leave to David Arthur Lowe, the applicant in proceedings No IRC 1645 of 2002, to file the Further Amended Summons for Relief annexed to his notice of motion of 17 December 2004 which would join BEA Systems Inc as a respondent to those proceedings. (2) Order that the second opponent pay the claimant's costs of the proceedings including the costs of the first opponent as a submitting party. 12 Contrary to these conclusions, Marks J concluded that the amended summons was not capable of being read as seeking to impugn a contract or arrangement between the appellant and the respondent; rather it concerned an arrangement between the appellant and the American Company (at [32] and [41].) Given that the further amended summons in respect of which leave was sought by the appellant in the proceedings before his Honour was concerned with a contract or arrangement between the appellant and the respondent, his Honour concluded that the claims were time barred by s 108B and so leave to amend was refused (at [46]). 13 While his Honour referred in his judgment to the fact of the Court of Appeal's decision having been made, he did not consider what had been determined. Had he done so, his Honour would have appreciated that contrary to the conclusion which he reached, the Court of Appeal had already decided that in the amended summons upon which the litigation was proceeding before this Court, the appellant was suing the respondent in respect of the contract and arrangement alleged to exist between them. 14 Both the Court of Appeal and his Honour were concerned with the operation of s 108B, albeit in relation to two different applications for leave to further amend the amended summons. The Court of Appeal concluded that given the contract and arrangement attacked in the amended summons, namely as between the appellant and the respondent, the addition of the American company and the application for orders in respect of an alleged contract between it and the appellant was time barred. A pleading that the contract was one between the appellant and the American company, or the appellant and the American company and the respondent jointly, was not contained in the original summons. 15 His Honour came to the contrary view, namely that the amended summons was concerned with a contract between the applicant and the American company, so that a further amendment addressed to a contract or arrangement between the applicant and the respondent was time barred. 16 It is not possible that both constructions of the same pleadings are available, despite the respondent's argument before us, that the questions which arose to be determined before the Court of Appeal and his Honour were different. In each case the starting point was a consideration of what the amended summons was concerned with. In our view it was simply not open to the respondent to urge some view contrary to that reached by the Court of Appeal on that very question in the proceedings below, and that his Honour fell into error, in failing to deal with, or follow the conclusion which the Court of Appeal had already reached, as to that matter. What was the amended summons directed to? 17 In any event, we are also satisfied that his Honour fell into error, in his identification of what orders the amended summons was directed to, given what is apparent on the face of the amended summons. 18 By its terms, s 108B is concerned with the time at which 'an application for an order' under s 106 may be made. The orders sought in proceedings brought under s 106, appear in Part A of the initiating summons. In the amended summons in this case, each of the orders of avoidance and variation sought in Part A of the amended summons are expressly directed to 'the contract or arrangement, and any related or collateral arrangement, between the Applicant and the Respondent, whereby the Applicant performed work for the Respondent in the information technology industry'. Orders that the applicant was an employee, not a contractor of the respondent, are also sought, as well as various money and other consequential orders directed to the respondent. There is reference made to the American company in those orders, in the context of shares in the American company, which the appellant seeks as a benefit of employment with the respondent. Otherwise, the orders sought in Part A of the amended summons make no reference to the American company. They certainly do not seek any orders in relation to any contract or arrangement between the appellant and the American company. 19 The amended summons goes on in Part B to identify the matters of fact and law upon which the orders specified in Part A will be sought. There are undoubted deficiencies in what there appears. Were the matters to be heard and that was all which the evidence established, it would appear likely that the appellant's claims would fail. This difficulty is what the further amended summons in respect of which leave was sought, seeks to address; the appellant's attempt to have the American company joined in the proceedings having failed before the Court of Appeal. 20 It does not follow from this, however, that it was open to his Honour to conclude that the orders sought in Part A of the summons were directed to the American company, not the respondent. 21 As the Full Bench in Crowe v UCS Developments Pty Ltd (2003) 130 IR 266 discussed at [52], what had to be determined by his Honour was what applications for order the amended summons and the proposed further amended summons were respectively concerned with: [52] Clearly, the original summons filed constitutes an application for an order under s 106(1) in respect of a particular contract or arrangement. It was filed well before the commencement of s 108B and the original summons and the orders sought therein are therefore not affected by the limitation period created by that section. What then, is the effect of the amendment sought to the summons? Does it constitute a separate application for an order under the Division or should it be characterised as being an amendment to an application for an order already made and with respect to which s 108B has no effect? Or, to put the matter in a slightly different way, does the amendment, in substance rather than in mere form, give rise to an application for an order declaring wholly or party void or to vary the same contract or arrangement as that identified in the original application, or does it amount to an application for an order in respect of a different contract or arrangement? 22 Difficulties of proof of the orders sought in Part A of a summons, given deficient drafting of Part B of the summons, cannot alter the nature of the orders sought. Drafting difficulties are not infrequent problems which arise in proceedings such as this, hence the first of this Court's standard directions, given after a conciliation under s 109 of the Act, which has failed to produce an agreement: (a) The applicant shall file and serve any amended summons within 14 days. Any objection to the amendment shall be raised within 14 days by way of motion, supported by affidavit. 23 As discussed in Illawarra Breads Pty Limited v Baker's Delight Holdings Limited (2007) 167 IR 393 at [10], such amendments can, on occasions, as here, be substantial: [10] The proposed further amended summons represents a very significant restructuring and alteration of the amended summons. Indeed, the extent of the restructuring and alteration, prima facie , raises a real question of whether the proposed further amended summons is a new and different application by the applicants. However, any inquiry to determine whether an amended summons is statute barred by virtue of s 108B is not to be directed to the quantity of the amendments but rather their true nature or character, in the sense that the question has to be asked whether, in substance, the amendments constitute an application of such a different quality or character to the original application that it may be said the application incorporating the amendments has not been made within the time prescribed by s 108B. 24 The question which thus arises if a s 108B point is raised, is whether the nature of the amendments sought are such as to constitute an application of a different character to the original application. Because of the view which his Honour reached, it was not necessary for him to consider this question. In Baker's Delight Holdings it was further observed at [15] that: It is apparent that the franchise and license agreements and the Disclosure Document were common to both summons; these contracts or arrangements lie at the heart of the applicants' claims. Whilst the amended summons contained a vague reference to other arrangements, these have now been elucidated in the proposed further amended summons. In substance, the contracts and arrangements pleaded in the proposed further amended summons are the same as those pleaded in the amended summons, although the applicants have sought to be more precise in identifying what are the contracts and what are the arrangements in respect of which they seek relief, with particular reference to the fundamental question of performance of work under each of those contracts or arrangements. We do not regard this aspect of the amendments as constituting an application of a different character. 25 In this case, the further amended summons proposes changes both to the orders sought in Part A of the Summons, as well as the matters of fact and law identified in Part B. Undoubtedly, the changes are substantial. Nevertheless, we are satisfied, given the nature of the amendments proposed, that leave to amend should be granted, in order to ensure that the claims sought to be advanced by the appellant from the outset, namely, that he was an employee of the respondent and not a contractor, whose contract of employment was unfair in various respects, including being denied certain benefits of such employment, may be determined by this Court. 26 We do not regard the amendments proposed to the amended summons as constituting an application of a different character, albeit that they undoubtedly address some of the problems with the claim identified from the outset, by the respondent. 27 The appellant continues to pursue a claim made from the outset, namely that he was, in truth, an employee of the respondent, working under a contract or arrangement to which he and the respondent were parties. The amendments clarify with more precision what the terms of those contracts or arrangements were claimed to be. They are, nevertheless, undoubtedly the same contracts and arrangements to which the current amended summons is directed. 28 The amendments leave open the fundamental question of whether or not, as the respondent has always claimed, it never had any contract or arrangement with the appellant. That issue remains to be litigated between the parties. 29 It was common ground between the parties that if we reached the conclusion that the appeal must be upheld, that would dispose both of the appellant's application for leave to further amend the amended summons, as well as a motion filed by the respondent in June 2006, seeking that the proceedings be struck out, which Marks J had not yet determined. Orders 30 Accordingly, for the reasons given, we order: 1. Leave to appeal is granted and the appeal upheld. 2. The leave sought to further amend the amended summons is granted. 3. The respondent's strike out motion is dismissed. 31 Costs are reserved, with the parties having liberty to approach in that respect within 14 days. ------------------------ 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.