Industrial Relations Commission of New South Wales CITATION: Regan & Anor v Redeemer Baptist School Limited & Anor [2006] NSWIRComm 58 FIRST APPLICANT Robyn Janet Regan SECOND APPLICANT Micah Timothy Regan PARTIES: FIRST RESPONDENT Redeemer Baptist School Limited SECOND RESPONDENT Redeemer Baptist Services Limited FILE NUMBER(S): IRC 1100 of 2005 CORAM: Staff J CATCHWORDS: Unfair contract - Notice of Motion - Second respondent seeking to set aside summons for production - Whether production sought is a fishing expedition - Whether summons directed to unincorporated association - Whether relationship between unincorporated association and corporate proprietor - Documents sought relevant - Summons not to be set aside - Motion dismissed - Respondents to bear applicants' costs of the motion as agreed or as assessed Industrial Arbitration Act 1940 LEGISLATION CITED: Industrial Relations Act 1996 Industrial Relations Commission Rules 1996 CASES CITED: Brown v Rezitis (1970) 127 CLR 157 Cameron v Hogan (1934) 51 CLR 358 HEARING DATES: 20/02/2006 DATE OF JUDGMENT: 02/24/2006 FIRST AND SECOND APPLICANTS Solicitor: Mr B Watts as agent for Dooley & Associates LEGAL REPRESENTATIVES: FIRST RESPONDENT No appearance SECOND RESPONDENT Mr T J Dixon of counsel Solicitor: Mr B Quilty Glasheen & Quilty JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J 24 February 2006 Matter No IRC 1100 of 2005 ROBYN JANET REGAN AND ANOTHER V REDEEMER BAPTIST SCHOOL LIMITED & ANOR Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2006] NSWIRComm 58 1 By notice of motion filed on 9 February 2006, Redeemer Baptist Services Ltd ("the second respondent"), sought to have parts of a summons for production dated 9 January 2006, issued by the applicants to the second respondent, trading as Redeemer Baptist Church, set aside. 2 It was alleged that certain paragraphs in the summons for production were purportedly directed to the Redeemer Baptist Church and not the second respondent. A further ground of objection was taken in respect of paragraph 3 of the summons for production. It is contended that the documents sought in this paragraph are not relevant to any material fact in issue in the substantive proceedings, or alternatively, are cast too wide and constitute fishing. 3 The proceedings were brought in March 2005 under s 106 of the Industrial Relations Act 1996 ("the Act"). The summons is directed to the contract of employment between Robyn Janet Regan ("the first applicant"), and Redeemer Baptist School Ltd ("the first respondent"), which commenced on 4 July 1994. The first applicant contends she was employed in various classifications including as a registered nurse, OH&S Nurse, school registrar's assistant and school registrar until the termination of her employment on 1 November 2004. That employment was alleged to have been regulated by various awards made by this Commission. It was alleged that the first applicant had not been paid her entitlements under the various awards during the course of her employment. It is claimed this failure had also led to an underpayment of her statutory benefits. In addition, the first applicant claims losses arising from the sale of the family home and the taking of the proceeds by the first respondent, less repayments. Losses arising from the taking of a bank cheque for $15,000 by the first respondent for which no repayments have been made is also sought. 4 Micah Timothy Regan, ("the second applicant") claims by reference to an employment contract that commenced on 6 November 2003 with the second respondent. The second applicant was employed as a builder's labourer and as a general assistant until 28 October 2004. That employment was alleged to have been regulated by the Building and Construction Industry (State) Award. It was alleged that the second applicant had not been paid his entitlements under that award during the course of his employment and that this had also resulted in an underpayment in respect of his statutory entitlements. 5 On 8 September 2005, the applicants filed a notice of motion seeking an order that they be permitted to file an amended summons joining various named persons ("the proposed third respondent"), who it is contended, operate the Redeemer Baptist Church (an unincorporated association). 6 The applicants' grounds for joinder are set out in an affidavit of Simon James Dooley, solicitor, sworn 8 September 2005. Relevantly, Mr Dooley deposes as follows: … 3. The First and Second Respondent subsequently filed a Reply in the proceedings alleging that the work was carried out by the Applicants for and on behalf of the proposed Third Respondent. 4. The First and Second Respondent subsequently filed a Reply in the proceedings alleging that the relationship was between the Applicants and the proposed Third Respondent. … 7 The first, second and proposed third respondents all opposed the application for joinder. This notice of motion was listed for hearing on 10 February 2006. 8 The applicants served a summons for production of documents on the second respondent on 9 January 2006 seeking documents, which they contend, are relevant to the hearing of their notice of motion for joinder. 9 On 8 February 2006, the applicants sought an adjournment of the hearing of their notice of motion to enable the present notice of motion seeking to set aside parts of the summons for production to be determined. The adjournment was granted. 10 The summons sought production of documents such as rules and by-laws, loan and rental agreements, applications to open bank or other financial institution accounts, membership register and financial reports issued by any person purportedly on behalf of the second respondent, trading as, Redeemer Baptist Church from 1993 to date. 11 Mr T J Dixon of counsel, who appeared for the second respondent, submitted that the second respondent did not trade as the Redeemer Baptist Church. The Redeemer Baptist Church is an unincorporated association, and accordingly, is comprised of its members. Counsel referred to the decision of the High Court in Cameron v Hogan (1934) 51 CLR 358 at 370 - 371, where Rich, Dixon, Evatt and McTiernan JJ described unincorporated associations concluding at 377: …The policy of the law is against interference in the affairs of voluntary associations which do not confer upon members civil rights susceptible of private enjoyment. 12 Mr Dixon took the court to the reply to the summons which sets out the description of the first and second respondents and other entities associated with these respondents. The interrelationship is clearly complex, although not a matter that requires determination at this stage. However, I set out the relevant extracts from the reply to the summons filed by the first and second respondents. 1. The First Respondent does not admit paragraph 1 of the Summons for Relief (`the Summons') and says further that at all material times the First Respondent: a. was a non-profit public company incorporated pursuant to the Companies (New South Wales) Code (Sub-section 35(2)); b. was an income tax-exempt charitable entity; c. was a Ministry of the non-profit, unincorporated Redeemer Baptist Church; d. operated a School registered under the Education Act 1990 (NSW); e. had no employees; f. was operated by members of the Ministry Order of Redeemer Baptist Church on a voluntary basis. Particulars Ministry Order Document g. was governed by a Board of Directors comprised of persons who held the positions of Elders of the Redeemer Baptist Church. Particulars (i) The First Respondent's Articles of Association clauses 2, 4B and 25 (ii) The First Respondent's Memorandum of Association dated 10 June 1983 clause 8 (iii) The Ministry Order of the Redeemer Baptist Church h. had a membership comprised of persons who held the positions of Elders of the Redeemer Baptist Church i. was incorporated for the purpose of inter alia: (i) delivering educational services for, inter alios, members of the Redeemer Baptist Church congregation and the public; and (ii) promoting the Redeemer Baptist Church's benevolent and charitable activities as pleaded in paragraph 2C of this Reply. Particulars The First Respondent's Memorandum of Association clause 2 The Second Respondent 2. The Second Respondent does not admit paragraph 2 of the Summons and says further that at all material times the Second Respondent: a. was a non-profit public company incorporated pursuant to the Companies (New South Wales) Code (Sub-section 35 (2)); b. was an income tax-exempt charitable entity; c. was a Ministry of the not for profit, unincorporated Redeemer Baptist Church; d. Employed from time to time no more than 3 people; e. was staffed by, inter alios, members of the Ministry Order of the Redeemer Baptist Church on a voluntary basis; f. was governed by a Board of Directors comprised of persons who held the positions of Elders of the Redeemer Baptist Church. Particulars (i) The Second Respondent's Articles of Association clauses 2, 4B and 25 (ii) The Ministry Order of the Redeemer Baptist Church g. had a membership comprised of persons who held the positions of Elders of the Redeemer Baptist Church h. was comprised of the following 5 Divisions performing various activities as follow (sic): 1. Redeemer Baptist Bookstore, which sold Christian and educational books and stationery; 2. Redeemer Baptist Press, which was a printer and publisher of religious titles and educational resources; 3. Redeemer Baptist Uniforms, which designed, manufactured and merchandised uniforms for school students of the First Respondent; 4. Redeemer Baptist Maintenance, which carried out the activities of a licensed builder serving the needs of the Ministries of the Redeemer Baptist Church; and 5. Sarcom, which primarily served the information technology requirements of the Ministries of the Redeemer Baptist Church. i. was incorporated for the purpose of inter alia promoting the Redeemer Baptist Church's benevolent and charitable activities as pleaded in paragraph 2C of this Reply. Particulars The Second Respondent's Memorandum of Association clause 2 The Redeemer Baptist Church and its members 2A. The Redeemer Baptist Church was at all material times an exclusively charitable body. 2B. The Ministries of the Redeemer Baptist Church included the First and Second Respondents and: (a) the Redeemer Baptist Church Property Limited, which at all material times: i. had as its principal activity the provision of accommodation necessary to promote the benevolent and charitable activities of the Redeemer Baptist Church; ii. was a non-profit public company incorporated pursuant to the Companies (New South Wales) Code; iii. was an income tax-exempt charitable entity; iv. had no employees; v. was staffed by, inter alios, members of the Ministry Order of the Redeemer Baptist Church on a voluntary basis vi. was governed by a Board of Directors comprised of persons who held the positions of Elders of the Redeemer Baptist Church. vii. had a membership comprised of persons who held the positions of Elders of the Redeemer Baptist Church (b) the Redeemer Community Aid Limited, which at all material times: i. had as its principal activity the furtherance of the benevolent and charitable activities of the Redeemer Baptist Church through the provision of financial, physical, familial, emotional and health care to people in need irrespective of gender, religious belief or ethnicity; ii. was a non-profit public company incorporated pursuant to the Corporations Law of New South Wales; iii. was an income tax-exempt charitable entity; iv. had no employees; v. was staffed by, inter alios, members of the Ministry Order of the Redeemer Baptist Church on a voluntary basis vi. was governed by a Board of Directors comprised of persons who held the positions of Elders of the Redeemer Baptist Church. vii. had a membership comprised of persons who held the positions of Elders of the Redeemer Baptist Church (together, the "Ministries of the Redeemer Baptist Church") 2C. The Ministries of the Redeemer Baptist Church were incorporated with the principal goal of promoting the Redeemer Baptist Church's benevolent and charitable activities. Particulars The Redeemer Baptist Church's benevolent and charitable activities include, inter alia, the following: (i) the practice, study, teaching and propagation of Christian religious beliefs; (ii) the alleviation of poverty through the provision of both monetary, educational and physical aid; (iii) the instruction of Biblical doctrine and scripture; (iv) the advancement of Christian religion through the delivery of religious services; (v) the provision of counselling, home support, comfort and financial assistance for people in need including members of the Public and members of the congregation of the Redeemer Baptist Church. 2D. From time to time, members of the congregation of the Redeemer Baptist Church entered into a voluntary consensual compact with each other on one hand and with the Redeemer Baptist Church and its Ministries on the other hand ("the Ministry Order"). Particulars of the voluntary consensual compact (i) There was no intention to create binding legal relations between the members of the Ministry Order as between each other, or between themselves and the Redeemer Baptist Church or its Ministries; (ii) There was no mutuality of obligation between members of the Ministry Order as between each other, or between themselves and the Redeemer Baptist Church or its Ministries; (iii) the members of the Ministry Order shared a common charitable and spiritual purpose which included, inter alia, the promotion of the Redeemer Baptist Church's benevolent and charitable activities; (iv) A commitment to the voluntary consensual compact was made by the Members of the Ministry Order at a number of meetings commencing about 1978 and including the meeting of the members of the congregation of the Redeemer Baptist Church on or about 26 March 1995 pleaded in paragraph 60 of this Reply 2E. The express written terms of the Ministry Order included, inter alia, the following: (a) The primary activity of all members of the Ministry Order was to practice, study, teach and propagate religious beliefs; (b) All members of the Ministry Order must live together within a community structure in households designated by the Elders of the Redeemer Baptist Church to enable them to pursue religious life; (c) All members of the Ministry Order must undertake any duties as specified by the Elders of the Redeemer Baptist Church; (d) All members must renounce in principle any possession of property upon joining the Ministry Order; (e) Any property that is renounced shall be held by the Redeemer Baptist Church in stewardship and becomes available to the Redeemer Baptist Church for use in any of its Ministries; (f) Members of the Ministry Order agree to make any self-sacrifice to promote the benevolent and charitable activities of the Redeemer Baptist Church as pleaded in paragraph 2C of this Reply; (g) The Elders of the Redeemer Baptist Church have responsibility for the care and well-being of the members of the Ministry Order; (h) The Redeemer Baptist Church may pay a stipend to members of the Ministry Order at the discretion of the Elders to allow members to promote the Redeemer Baptist Church's benevolent and charitable activities as pleaded in paragraph 2C of this Reply; (i) Book of Acts of the Apostles 2:44 - 2:45 (Bible New King James Version) (j) Book of Acts of the Apostles 4:32 (Bible New King James Version) Particulars (i) The Ministry Order Document was created in or about 1992 (ii) The written express terms of the Ministry Order applied to the members of the Ministry Order from on or before 1992. (iii) The Members of the Ministry Order committed to be bound by the express written terms of the Ministry Order including at meetings in or about August 1995 at Sargood Hall at Redeemer Baptist School; and at the meeting on or about 26 March 1995 pleaded in paragraph 60 of this Reply 2F. The express oral terms of the Ministry Order included, inter alia, the following: a. The members of the Ministry Order commit to be separated from secular society to pursue full-time religious life as a community; b. The members of the Ministry Order commit to voluntarily perform regular prayer, teaching, missionary work, and care of the poor and elderly; c. The Ministry Order be funded by the Redeemer Baptist Church where possible and at the discretion of the Elders of the Redeemer Baptist Church; d. The members of the Ministry Order renounce in principle any possession of property, e. The members of the Ministry Order commit to living a life generally of moral and spiritual self-sacrifice at the expense of their own material well-being. f. The Members of the Order commit to making a long-term commitment to the Ministry Order and the Redeemer Baptist Church. Particulars The Members of the Ministry Order committed to be bound by the express oral terms of the Ministry Order including at meetings in or about August 1995 at Sargood Hall at Redeemer Baptist School; and at the meeting on or about 26 March 1995 pleaded in paragraph 60 of this Reply 2G The members of the Ministry Order from time to time underwent a spiritual act of ordination by the imposition of hands signifying commitment to the terms of the Ministry Order pleaded in paragraphs 2D to 2F inclusive of this Reply. 2H The Ministries of the Redeemer Baptist Church were at all material times dependent on the voluntary contributions by members of the Redeemer Baptist Church congregation, including the voluntary contributions made by members of the Ministry Order, in order to remain as going concerns and promote the Redeemer Baptist Church's benevolent and charitable activities pleaded in paragraph 2C of this Reply. 13 It is the second respondent's case that the first applicant entered into the Ministry Order, which it is contended, confirms her voluntary status in her employment. Such contentions will ultimately give rise to jurisdictional issues that will need to be determined later in these proceedings. 14 Mr B Watts, solicitor, who appeared for the applicants, tendered a business name extract for Redeemer Baptist Church obtained from the New South Wales Business Registry Database. The extract discloses that the corporate proprietor is the Redeemer Baptist Services Ltd, which commenced to operate as a public company on 8 November 1996. It ceased to operate as such on 25 January 2006. 15 An additional objection was taken to paragraph 3 of the summons for production served on the second respondent. This paragraph sought all loan and rental agreements entered into by Redeemer Baptist Services Ltd, trading as Redeemer Baptist Church from 1993 to date. 16 Mr Dixon submitted that it was only the claim made by the second applicant that alleged a contract of employment with the second respondent. Counsel submitted that as this contract operated between November 2003 and October 2004, the documents sought in this paragraph could not be relevant to any material of fact in issue in the proceedings, or alternatively, were cast too wide and constitutes impermissible "fishing". 17 Mr Watts sought an amendment to paragraph 3 so that it sought all loan and rental agreements between Redeemer Baptist Services Ltd, trading as the Redeemer Baptist Church and Robyn Janet Regan from 1993 to date. 18 Mr Watts submitted, correctly in my view, that it was not necessary to determine any jurisdictional issues at this stage of the proceedings. 19 Mr Watts contended that the first applicant was required to convey real property to the respondents for no consideration, or in the alternative, for below market value and, further, that the respondents, controlled the first applicant's finances as part of her employment relationship. Mr Watts accepted that this is largely a matter for evidence later in the proceedings, although he submitted that there is clearly a forensic purpose in obtaining the documents sought in the summons for productions. That forensic purpose was said to be, particularly in the light of the first respondent having no employees, for the applicants to be in a position to cross-examine witnesses of the second respondent about the conditions of employment of the first applicant. Consideration 20 The material sought in the summons for production is said to be relevant to the determination of the applicants' notice of motion to join certain named persons as the third respondent who, it is contended, operate the Redeemer Baptist Church, an unincorporated association. 21 I do not propose to refer to the various cases that have dealt with the operation of the Court's rules in relation to conciliations conducted under s 109 of the Act, particularly those that have considered r 18A of the Industrial Relations Commission Rules 1996 and whether summons for production of documents and particulars should be provided prior to a conciliation. 22 I am satisfied that the summons should not be set aside. 23 I cannot see that it can properly be concluded that the summons is merely speculative, or that it will not bring forth material relevant to the case. 24 What is at issue between the parties is that the first and second respondents derived a benefit from the unfairness of which is complained. The basis of the claim being made is explained in the summons. The applicants seek the production of documents to assist in the proof of the allegations and in pressing their notice of motion for the joinder of certain further named persons who operate the Redeemer Baptist Church. 25 The information sought was plainly exclusive to the second respondent until 26 January 2006. The Redeemer Baptist Church, in its corporatised style was the Redeemer Baptist Services Ltd, the second respondent. It is a corporate proprietor using a business name to conduct a business, at least it appears, until 26 January 2006. Ultimately, a determination may have to be made in this respect if the second respondent maintains its contention that that it did not trade as the Redeemer Baptist Church. Mr Watts observed that the first respondent contends that it does not have any employees, although the first applicant contends that she had a contract of employment with the first respondent. That being so, the applicants may wish to cross-examine witnesses called by the second respondent. The documents in question are obviously relevant to any cross-examination of these respondents on the issues as pleaded and in respect of motion for joinder. 26 As long ago as 1970, the Chief Justice of the High Court of Australia, Sir Garfield Barwick, in considering s 88F of the Industrial Arbitration Act 1940, a predecessor to s 106 of the Act, observed in Brown v Rezitis (1970) 127 CLR 157 at 164: …It must be borne in mind that one of the purposes of the section is to deal with subterfuges, subterfuges which will take the worker out of the relationship of master and servant and therefore out of the operation of an industrial award designed, amongst other things, for the protection of workers in industry. There may be persons involved in the subterfuge who are not parties to the contract or arrangement but who are in reality the actors deriving benefit from the making or the execution of the contract or arrangement. 27 It is relevant to this conclusion that these are not documents sought from third parties. They are sought from the second respondent, who engaged the second applicant and who used the business name Redeemer Baptist Church until January 2006. It clearly had an interest in the church through its corporate entity. It needs to be recollected that one of the purpose of the section is to unravel subterfuge, including that which results from the use of corporate vehicles to run businesses which employ people, in circumstances where the contract which they enter are proven to be unfair. In those circumstances, it may readily be seen how persons in the position of these respondents, may derive a benefit from a corporate respondent's failure to make payments due to an applicant which it employed. At the least, the corporate respondent would have had the use of that money, while it remained. This can lead to a variety of benefits for those who ultimately own the corporation as well as those who hold directorships. 28 However, these are questions which are not necessary to determine at this stage of the proceedings. I propose to grant the amendment sought by the applicants to paragraph 3 of the summons to produce. In my view, it is sufficient that I am unable to conclude, either that any of the documents sought are clearly irrelevant to the issues lying between the parties, or that the exercise is one of mere fishing. ORDERS 1. The second respondent's motion is dismissed. 2. The second respondent is to bear the applicants' costs of the motion, as agreed or assessed. 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