Reported Decision : 166 IR 237 New South Wales Supreme Court CITATION : Darc Rasmussen v Eltrax Systems Pty Limited [2005] NSWSC 1144 HEARING DATE(S) : 21 October 2005 JUDGMENT DATE : 11 November 2005 JUDGMENT OF : Newman AJ DECISION : Motion dismissed with costs. CATCHWORDS : Jurisdiction-inherent power of Supreme Court-application to remove matter pending in Industrial Relations Commission to Supreme Court- breach of contract- unfair contract-Jurisdiction of Courts (Cross-Vesting) Act 1987 Industrial Relations Act 1996 LEGISLATION CITED : Jurisdiction of Courts (Cross-Vesting) Act 1997 Supreme Court Act 1970 Bezera Pty Limited v Mezan Enterprises Pty Limited BC9800722 (unreported) 19 March 1998 Bruning v Kingmill (1998) 44 NSWIR 180 Idameneo (No 123) Pty Ltd v Koko Swe Pty Ltd [2003] NSWSC 384 CASES CITED : Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) [2000] 49 NSWLR 551 Sydney Water Corporation Limited v Industrial Relations Commission of NSW (2004) 61 NSWLR 661 Winron Pty Ltd v The Shell Company of Australia Limited (1996) 60 IR 64 Wood v Boral Reources (NSW) Pty Ltd (No 4980/92, 28 October 1993, unreported) Darc Rasmussen PARTIES : Eltrax Systems Pty Limited FILE NUMBER(S) : SC 20090/2005 Mr B. Hodgkinson SC with Mr G. Edwards (Plaintiff/Applicant) COUNSEL : Mr P. Newall (Defendant/Respondant) Carroll & O'Dea (Plaintiff/Applicant) SOLICITORS : Gadens (Defendant/Respondant) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION NEWMAN AJ 11 November 2005 20090/2005 DARC RASMUSSEN v ELTRAX SYSTEMS PTY LIMITED JUDGMENT 1 HIS HONOUR: By this Notice of Motion the plaintiff (applicant) seeks to remove proceedings brought pursuant to section 106 of the Industrial Relations Act 1996 (hereinafter referred to as the Act) from the Industrial Relations Commission into this court. 2 In the Industrial Relations Commission the plaintiff seeks relief against the present defendant in this court and four other parties. In this court the plaintiff has brought proceedings alleging breach of contract by the nominated defendant. 3 The proceedings in this court were commenced after those in the Industrial Relations Commission. Originally, in his action in the Industrial Relations Commission, the plaintiff sought relief pursuant to section 106 of the Act and also damages for breach of contract. 4 When the plaintiff commenced his action in the Industrial Relations Commission it was thought, pursuant to what had fallen from the full bench of that court in Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) [2000] 49 NSWLR 551, that the Industrial Relations Commission had jurisdiction to hear both proceedings pursuant to s106 of the Act and matters involving breach of contract. However, the Court of Appeal in Sydney Water Corporation Limited v Industrial Relations Commission of NSW (2004) 61 NSWLR 661 held that Reich was wrongly decided. It determined that the relief which s106 contemplates is relief flowing from a contract found unfair on the evidence and not merely in unfair conduct, which may or may not demonstrate the unfairness of the contract under review. It follows that the present plaintiff's claim in the Industrial Relations Commission for damages for breach of contract was a claim outside the jurisdiction of the Industrial Relations Commission. 5 Accordingly the plaintiff commenced action in this court for breach of contract and amended his summons in the Industrial Relations Commission to remove that part of his complaint in that court which related to breach of contract. 6 It is the plaintiff's contention that this court has power to hear the matter pursuant to s106 of the Industrial Relations Act because of the inherent power it has which is encapsulated in the provisions of s23 of the Supreme Court Act 1970. The defendant, on the other hand, contends that matters brought pursuant to s106 can only be heard by the Industrial Relations Commission and that this court's inherent jurisdiction can not override the exclusive jurisdiction invested in the Industrial Relations Commission pursuant to s106 to determine matters under that section. 7 S23 of the Supreme Court Act 1970 provides :- "the court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales". 8 S106 of the Industrial Relations Act 1996 is in these terms:- " SECTION 106 POWER OF THE COMMISSION TO DECLARE CONTRACTS VOID OR VARIED 106(1) [Vary or void contract by order] 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. 106(2) [Finding that contract unfair] 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. 106(3) [Contract declared wholly or partly void] A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. 106(4) [Public interest] 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. 106(5) [Payment of money order] 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. 106(6) [Action taken to mitigate loss] 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." 9 Senior Counsel for the plaintiff, quite properly, admitted that there is no authority in this State which would permit this court to exercise jurisdiction which is specifically given by the legislature to the Commission. Essentially, the plaintiff has argued that the breadth of the jurisdiction given to this court by s23 is sufficient, should the administration of justice demand it, to hear an action which is otherwise specifically reserved for the decision of the Industrial Relations Commission. 10 The plaintiff submits that the greater part of the action originally commenced in the Industrial Relations Commission involved the allegation of breach of contract. In the proceedings which the plaintiff has brought in this court, he claims an amount in excess of $900,000 under this head. The plaintiff contends that the proceedings in this court, and the Commission, will involve similar issues which would involve evidence being given by similar or the same witnesses for both sides. It is then argued on the plaintiff's behalf that accordingly the duplication of proceedings will expose both parties to significant costs which would be reduced if all the proceedings were heard in the one court. Thus, the plaintiff claims that it is necessary for the administration of justice that the proceedings in the Industrial Relations Commission be moved to this court to avoid the injustice that would arise as a consequence of duplication of proceedings. 11 While the plaintiff's argument has some attractive features to it, in my view it must fail. First, because while the argument relating to so far as involves the calling of witnesses and the expenditure of on-costs is attractive, it involves matters of convenience rather than necessity. In this regard it is instructive to note the remarks of Cohen J in Bezera Pty Limited v Mezan Enterprises Pty Limited BC9800722 (unreported) 19 March 1998 where he said :- "Considering these general and potentially very extensive powers the question is whether in the circumstances in this case it is for the better administration of justice that the proceedings should be transferred from the Local Court to this court. The fact that there are statutory provisions for the removal into the District Court does not limit the right of this court. In O'Toole v Scott, above, the Justices Act provided that a barrister or solicitor had a right of appearance before a Court of Petty Sessions but the Privy Council said that this did not limit the court in granting leave to others to appear. If this court has power to remove proceedings from lower courts, notwithstanding that there is no provision to do so in a statute or rules, it would be necessary to show that it was essential for the administration of justice in the particular proceedings for that course to be taken." Cohen J's conclusion followed a review undertaken by him of authorities including the article "The Inherent Jurisdiction of the Court" by Mr Keith Mason QC (as the learned President then was) in (1983) 57 ALJ 449-459. I should add that that article was referred to me and I have considered it in preparing these reasons. It seems to me that the plaintiff's main difficulty in this regard is that it cannot demonstrate that justice will not be done if the proceedings in this court and the Commission are allowed to run their respective courses. 12 The main difficulty that the plaintiff faces in seeking the relief which it does is that not only is there no authority which supports its contentions but there is in fact authority to the contrary. I should say, that in Bruning V Kingmill (1998) 44 NSWIR 180 Hodgson CJ in Eq did make an order transferring a matter from the Industrial Relations Commission where s106 was the relevant section. However, that was a case where the order was made by consent. In an earlier case, Wood v Boral Resources (NSW) Pty Ltd (No 4980/92, 28 October 1993, unreported) McLelland CJ in Eq declined to make an order of the type being sought by the plaintiff here. His judgment is particularly relevant to senior counsel for the plaintiffs' reliance on s9 of the Jurisdiction of Courts (Cross-Vesting) Act 1997 (Cth) in aid of his submissions. That section is in the following terms:- " 9 Exercise of jurisdiction pursuant to cross-vesting laws The Supreme Court: (a) may exercise jurisdiction (whether original or appellate) conferred on that court by a provision of this Act or of a law of the Commonwealth or a State relating to cross-vesting of jurisdiction, and (b) may hear and determine a proceeding transferred to that court under such a provision." 13 In Wood, McLelland CJ in Eq observed :- "My reasons for dismissing the application are as follows. In the first place, the jurisdiction under s275 is, by the Industrial Relations Act, conferred solely on a specialist Court, namely the Industrial Court, established primarily to deal with matters relating to industrial relations. The importance of the specialised nature of the Court is emphasised by the use of such a wide criterion as "against the public interest" in para(c) of subs(1), reinforced by the inclusion in the content of that expression of the matters described in subs(2), and also by the additional powers in proceedings under s275 conferred on the Industrial Court by s276. It is apparent that the legislature considered it appropriate that the wide discretional powers arising under s275 should, at least primarily, be exercised by a Court whose members had specialised knowledge and experience in the area of industrial relations. It is significant that the powers of the Industrial Court under s275 cannot be exercised by any other New South Wales court including the Supreme Court. It would therefore be somewhat anomalous if the mechanism of the Cross-Vesting Act were to be used to transfer proceedings properly pending in the Industrial Court to which its specialised nature is highly relevant, to another Court of relevantly un-specialised jurisdiction or composition, whose eligibility to receive such a transfer depends upon the fact that it is not a New South Wales Court. True it is that this did occur in Gallagher v Pioneer Concrete 113 ALR 159 (see at 194), but there is nothing in the report of that case to suggest that the transfer was other than by consent." 14 However, even if this court did have jurisdiction to remove the matter, the question is whether it has power to facilitate it by s9 of the Jurisdiction of Courts (Cross-Vesting) Act 1997, allowing it to exercise jurisdiction which is plainly, by s106, vested in another court. The doubts expressed by McCleland CJ in Eq in Wood v Boral Resources (supra) were shared by Young J in Winron Pty Ltd v The Shell Company of Australia Limited (1996) 60 IR 64. While Young J made an order, as requested, to remove the matter to the Supreme Court for transfer to the Federal Court pursuant to the cross-vesting legislation, he did so because the matter was done by consent. That did not stop him sharing, as I have said, the doubts expressed by McCleland CJ in Eq in Wood's case. Ultimately, that doubt was expressed in a firm fashion by Barrett J in Idameneo (No123) Pty Ltd v Koko Swe Pty Ltd [2003] NSWSC 384. Barrett J commenced his judgment in these terms :- "This is another case of conflicting contract-based proceedings in this court and in the Industrial Relations Commission, with each tribunal confined to its own jurisdiction and no facility for the whole of the matters in contention between the parties to be brought together and dealt with in one consolidated proceeding." I should say that Barrett J's statement was subject to critical arguments by senior counsel for the plaintiff. However, those criticisms involve stress being laid upon questions again of convenience rather than necessity. In these circumstances I am of the view that s23, in a case where objection is taken to the removal of a matter from the Industrial Relations Commission to this court, does not provide a basis upon which the plaintiff can rely for such removal. Accordingly I decline to make the orders sought in the Notice of Motion. The Motion is therefore dismissed with costs. ********** 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.