Industrial Relations Commission of New South Wales in Court Session CITATION: Graeme Kenneth Breese & Anor v Gloucester Shire Council [2006] NSWIRComm 179 FIRST APPLICANT - Greame Kenneth Breese PARTIES: SECOND APPLICANT - Robyn Lynette Breese RESPONDENT - Gloucester Shire Council FILE NUMBER(S): 2502 of 2004 CORAM: Marks J CATCHWORDS: PRACTICE & PROCEDURE – applicant filed all evidence in substantive proceedings – application to amend summons to further particularise the arrangement/ agreement/ contract – applicant also filed s 365 claim – whether this constitutes abuse of process – whether the operation s 108B creates time bar to amended summons. Held: Abuse of process claim dismissed – amendment clarifies basis on which the applicants bring their claim – where parties are at issue about evidentiary material and inferences drawn an interlocutory proceeding is not the appropriate time to deal with the issue – respondent's right to renew application pursuant to s 108B specifically reserved. LEGISLATION CITED: Industrial Relations Act 1996 Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 CASES CITED: Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 McIver v Hilton Nursing Home Pty Limited [1999] NSWIRComm 152 HEARING DATES: 12/05/06 and 18/05/06 DATE OF JUDGMENT: 06/01/2006 APPLICANTS: Mr P C Moorhouse of counsel Solicitor: Mr M M Morris LEGAL REPRESENTATIVES: RESPONDENT: Mr A T Britt of counsel Representative: Mr J McConnell JUDGMENT: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Marks J Thursday 1 June 2006 Matter No IRC 2502 of 2004 Graeme Kenneth Breese & Anor v Gloucester Shire Council Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2006] NSWIRComm 179 1 By summons filed in this court on 27 April 2004, the applicants Graeme Breese and Robyn Lynette Breese have sought certain relief under s 106 of the Industrial Relations Act 1996 ("the Act") against the respondent Gloucester Shire Council. The summons seeks inter alia an order that "the contract or arrangement between the applicants and the respondent under which the applicants performed work in an industry ("the arrangement") was an "unfair contract" as defined in s 105 (sic) of the Industrial Relations Act 1996." 2 The summary of matters of fact and law narrate that in about September 1992 the applicants responded to an advertisement placed by the respondent for persons to operate the Gloucester Olympic Pool. The applicants entered into an operational contract on about 7 October 1992 with respect to the 1992/93 swimming season. Thereafter, either both applicants or Mr Breese alone entered into different forms of contracts with the respondent by which both applicants performed work at the Gloucester Olympic Pool in each of the successive swimming seasons up to and including 2002/03 season. Some of those contracts were entitled "Operating Agreement", some consisted of a lease of the swimming pool and some were employment contracts simpliciter. Either or both applicants were also entitled by contract either separately or as part of the overall contract to operate the kiosk at the pool. 3 The stage has been reached in the proceedings where the applicants have professed to have filed all of the affidavit material upon which they wish to rely. 4 On 29 November 2004, each of the applicants filed in this court an application for the recovery of money brought under s 365 of the Act alleging underpayment of wages by reference to the relevant industrial award. 5 By notice of motion filed 25 January 2006, the respondent asserted that much of the applicants' claims were time-barred by s 108B of the Act and also sought to have the s 365 proceedings stayed, this constituting an abuse of process. 6 In essence, the s 108B point was to the effect that in each of the successive years commencing 1992 and terminating in 2003 the circumstances in which work was performed by the applicants in and about the operation of the swimming pool and the associated kiosk was pursuant to a separate and discrete contract negotiated and entered into after the conclusion of each swimming season with respect to the next forthcoming season. 7 S 108 B of the Act is in the following terms: S 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. 8 By reference to the provisions of s 108B the respondent submitted that these proceedings could only be brought directed to any contract which had terminated within the time limited by s 108B. 9 For completeness I set out also the provisions of ss 105 and 106 of the Act which are in the following terms: s 105 Definitions In this Part: "contract" means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. "unfair contract" means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. s 106 Power of Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as: (a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and (b) the performance of work is a significant purpose of the contractual arrangements made by the person. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. 10 The applicants' response to the respondent's motion consisted predominantly of an assertion that all of the work performed by the applicants at the swimming pool was performed pursuant to an overarching arrangement which came into existence either shortly before the initial operating agreement was entered into or some time thereafter. For present purposes I note that the gist of the arrangement asserted on behalf of the applicants was to the effect that if everything worked out all right, then the applicants would continue to be engaged to operate the pool and the associated kiosk. This, is in fact, what transpired, said the applicants, because up until the termination of their association with the respondent in about May 2003 they continued to be engaged to operate the pool for each swimming season without any contract being put out to tender. Furthermore from time to time they performed work in and around the pool outside the period of the swimming season. 11 When the interlocutory proceedings first came on for hearing, there was discussion with and between counsel about whether the summons in its original form complied with the provisions of rule 18A of the rules of this court and, in any event, adequately and usefully described the overarching arrangement upon which the applicants sought to rely so as to avoid the application of s 108B in the manner contended for by the respondent. The proceedings were adjourned to allow the applicants to draft any proposed amendment to the summons as they saw fit and to forward a copy of any proposed amendment to the respondent prior to the adjourned hearing. 12 The summons in its original form described (in paragraph B 28) the arrangement as being constituted by "The various contracts and arrangements under which the applicants worked at the pool over each swimming season from 1992/93 to 2002/03 inclusive….". The particulars of the contracts and agreements were said to be each of the written and oral agreements relating to each of the successive years during which the applicants worked at the pool. 13 The proposed amendment described the arrangement as being "The various contracts and agreements" as opposed to "arrangements" and contained also an alternative basis. That alternative basis was described as "The various contracts and agreements under which the applicants worked at the pool over each swimming season from 1992/93 to 2002/03 inclusive, each formed part of a single arrangement between the applicants and the respondents under which the applicants worked at (and in connection with) and operated the Pool ("the arrangement"), and constitutes a "contract" as defined in s 105 of the Act." The particulars of the arrangement were said to include the written agreements for each of the successive years and also "oral terms, such as the agreement for the hiring of the applicants possibly as maintenance equipment….and the rental of the kiosk….. It also includes implied terms (or alternatively related conditions or collateral arrangements), such as the requirement for the first applicant to work at the pool prior to the opening time and after the closing time each day….in order to properly operate and maintain the pool." 14 A proposed paragraph B 28A said that "prior to the conclusion of the 1992/93 swimming season, or alternatively prior to the conclusion of each subsequent season, there was a plan and/or understanding between the applicants and the respondent that the applicants would continue to work at and operate the pool during the following seasons." Finally, a proposed paragraph B 28B stated as an alternative that "the whole of each applicant's work at the pool or alternatively each applicant's work at the pool since the commencement of the 1997/98 swimming season has been under a continuing employment contract between each applicant and the respondent." 15 It was asserted by Mr Moorhouse of counsel who appeared for the applicants that the manner in which the proposed amendment to the summons describes the arrangement was consistent with particulars which had been furnished by the applicants' solicitors to the respondent and was consistent with the manner in which the applicants had always conducted the proceedings. 16 The interlocutory proceedings were conducted on the understanding that I had dispensed with the formality of the applicant being compelled to file a notice of motion and affidavit in support of the amended summons. The respondent did not advance any submission that it was prejudiced in any way by the proposed amendment. 17 I am of the opinion that the applicants should be entitled to amend the proceedings in the manner sought, on the basis that the amendment clarifies and elucidates the basis on which the applicants bring their claim against the respondent. However, the rights of the respondent to renew any application that the proceedings as amended are caught by s 108B are specifically reserved. In doing so I have in mind any argument available to the respondent that the arrangement as formulated in the proposed amendment is not the same arrangement which is the subject of the proceedings as originally constituted. If this were not the case then it is arguable that any new arrangement constituted by virtue of the proposed amendment would be caught by s 108B. The respondent's rights are reserved accordingly. I would also propose ordering that the applicants pay the respondent's costs thrown away by the amendment. I would further propose making orders requiring the applicants to file an amended summons. 18 It is now convenient to proceed to deal with the respondent's motion on the basis of the grant of leave to the applicants to amend in the manner indicated. The summons in its amended form allows the applicants to advance an argument that there is an overarching arrangement which falls within the definition of "contract" as referred to in s 105 of the Act which may arguably preclude the respondent from relying on s 108B in the manner contended for by it. 19 In making these observations I shall not traverse in any detail what is meant by "arrangement" when used for the purpose of s 106. What is comprehended by an arrangement is the subject of detailed discussion in the joint judgement of Wright J President and Walton J Vice-President in Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 commencing at paragraph [132]. I would refer in particular to that paragraph and paragraphs [135] to [138]. These observations have been referred to on many occasions and I do not propose to set them out. It is sufficient to note that there needs to be some mutuality of understanding or some comprehension by the parties with respect to some form of plan or concerted action to bring about a particular result. There has to be a degree of understanding shared by the parties about something. 20 It was asserted on behalf of the applicants that there were references in the affidavit material and documentation annexed or exhibited thereto which was filed on their behalf from which it might be inferred either expressly or impliedly that an arrangement of the kind relied upon in the amended summons existed. The respondent submitted that on the basis of that evidentiary material no such inference was permissible or should properly made. When the parties are at issue about the state of the evidentiary material and about inferences that can be drawn from it, there is created, in my opinion, concern as to whether an interlocutory proceeding is indeed the "appropriate" time at which to consider such an application as made by the respondent. 21 The principles established by appellate authority as to the approach to be taken by a court when dealing with interlocutory application of this kind are conveniently summarised by Wright J President in Virtue v New South Wales Department of Education and Training (1999) 92 IR 428. 22 At page 447, in summarising the relevant principles, Wright J said, in part that: "(2) As a general rule it is desirable that an objection to jurisdiction be determined as early as circumstances will conveniently admit so that the tribunal does not embark on a hearing which it lacks authority to conduct. The course of a court entertaining a challenge to jurisdiction in a preliminary or threshold way is often a sensible one where a party has a substantial threshold argument which, if it succeeds, will knock out the claim and save the costs and inconvenience that attend a protracted hearing of proceedings on the merits. (3) However, a further general proposition is that all issues arising should be dealt with in the substantive proceedings unless the basis for a challenge, either on jurisdictional grounds, or for lack of a reasonable cause of action, be clearly demonstrated. (4) Threshold relief of the kind sought here must be conserved to a clear case where it is plain that the invocation of the jurisdiction impugned is wholly misconceived or, upon analysis, lacks an arguable legal foundation. (5) Necessarily, refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Court might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. The resulting burden is a heavy one. (6) Accordingly, whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings. That is, where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such a determination to be made." 23 I respectfully proceed on the basis of the above principles. 24 As I have previously indicated, I am not comfortable in dealing with the respective assertions made on behalf of the parties that there is, or is not, any material filed in the proceedings to date which supports the assertion made by the applicants in the amended summons. This is the case, even assuming that the affidavits and other documentation upon which the applicants rely are eventually admitted into evidence and even taking them at their highest in favour of the applicants. Given the nature and extent of the evidentiary material and the stage of preparation reached in the proceedings I conclude that this is not the appropriate time and that, in all probability, the factual material against which this controversy will be resolved will in all likelihood not be available until the substantive hearing. 25 It follows that it cannot be determined at the present time that the invocation of the jurisdiction of this Court "is wholly misconceived, or, upon analysis, lacks an arguable legal foundation." It follows that the reliance which the respondent wishes to place on the application of s 108B of the Act must await a determination at the appropriate time, but that this is not the appropriate time. 26 It is also necessary to deal with the abuse of process argument based on the concurrent proceedings filed under s 365 of the Act. The applicants have stated through their counsel that to the extent that they are successful in these s 106 proceedings, they would not pursue any claim under the s 365 proceedings with respect to the same period. The applicants stressed that the s 365 recovery proceedings are in the nature of an alternative claim brought before the same Court as the s 106 proceedings. They relied on principles discussed by Schmidt J in McIver v Hilton Nursing Home Pty Limited [1999] NSWIRComm 152. 27 In my opinion the concurrent issue of summonses under s 365 of the Act in the circumstances which apply to these proceedings, does not create a situation constituting or in the nature of an abuse of process such as to justify an order for the permanent stay of these s 106 proceedings or warranting any order for the stay of the s 365 proceedings. In this regard I note for completeness that consent orders have already been made that the two sets of proceedings be heard together and that evidence in one set of proceedings be the evidence in the other. This circumstance also militates against the granting of any order by way of permanent stay. The application is refused accordingly. 28 It is also necessary to deal with the question of costs. Although the respondent is entitled to an order for costs thrown away by reason of the amendment, I agree with the submissions made on behalf of the respondent that the balance of the costs of these interlocutory proceedings should be reserved and I propose to do so accordingly. 29 I make the following orders 1. Leave is granted to the applicants to amend the summons in accordance with the form of proposed amended summons which accompanied the applicants' supplementary outline of submissions forwarded by Mr Moorhouse of counsel to my associate by facsimile transmission on 16 May 2006. 2. The summons as amended should be filed and served within 21 days of the date hereof. 3. So much of the respondent's notice of motion seeking a stay of the proceedings on the basis that they constitute an abuse of process is dismissed. 4. The balance of the respondent's motion is stood over with liberty to apply. 5. The applicants are to pay the respondent's costs thrown away by reason of the amendment to the summons. Otherwise the costs of the interlocutory proceedings are reserved with liberty to apply. 6. The parties are to reach agreement on an appropriate timetable and to forward a copy to the Registrar within 28 days. If the parties are unable to reach agreement on a further timetable for the preparation of proceedings within this period the applicants' solicitor is to have the proceedings re-listed for further directions accordingly. 7. Liberty to apply generally. 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