Industrial Relations Commission New South Wales Medium Neutral Citation: Jennifer Courtney v Jane Courtney [2011] NSWIRComm 19 Hearing dates: 12 January 2011 Decision date: 16 March 2011 Jurisdiction: Industrial Court of NSW Before: Backman J Decision: Application of the second respondent brought by way of notice of motion granted. Costs reserved. Catchwords: PRACTICE AND PROCEDURE - Application by second respondent to join additional respondent in s 106 proceedings - power to order joinder resides in s 170 Industrial Relations Act 1996 - principles applicable to joinder applications discussed - relevant factors considered in exercise of discretion - application granted - costs reserved Legislation Cited: Industrial Arbitration Act 1940 Industrial Relations Act 1996 Partnership Act 1982 Cases Cited: BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session [2005] NSWCA 227; (2005) 63 NSWLR 347 Brown v Rezitis (1970) 127 CLR 157 Eslick v Exben Pty Ltd and Ors [2001] NSWIRComm 68 Robberds & Anor v Turner Franchising and Allied Services Pty Ltd & Ors [2004] NSWIRComm 157 Stonham v Speaker of the Legislative Assembly of New South Wales (No 4) [2001] NSWIRComm 277; (2001) 110 IR 417 Visalli v Southwell and Others (1988) 12 NSWLR 502 William John Lyons v Caltex Australia Petroleum Pty Limited [2001] NSWIRComm 11 Category: Interlocutory applications Parties: Jennifer Courtney (Applicant) Jane Courtney (First Respondent) Mark Eades (Second Respondent) Rodney Courtney (Respondent on the motion) Representation: Mr P Moorhouse (Applicant) No appearance (First Respondent) Mr J Knackstredt (Second Respondent) Harmers Workplace Lawyers (Applicant) No appearance (First Respondent) McArdle Legal (Second Respondent) Rodney Courtney (Respondent on the motion - in person) File Number(s): IRC 2085 of 2009 Judgment 1On 31 December 2009, Jennifer Courtney (the applicant) filed a summons for relief under s 106 of the Industrial Relations Act 1996 (the Act). The nominated respondents were Jane Courtney (first respondent) and Mark Eades (second respondent). On 5 November 2010, the second respondent filed a notice of motion seeking to have Rodney Courtney joined as a respondent to the substantive proceedings. The application was opposed by Mr Courtney. The applicant on the summons did not wish to be heard on the issue. The first respondent is an undischarged bankrupt and took no part in the proceedings. 2The notice of motion was heard by me on 12 January 2011. I granted the application and ordered that Mr Courtney be joined as the third respondent. I now give my reasons for granting that application. Background facts 3The first and second respondents, and Mr Courtney carried on a partnership which owned and operated a luxury accommodation retreat in the Hunter Valley, known as Wild Edge Retreat (the Retreat). There is no dispute between the parties that the respondent-parties and Mr Courtney were partners who owned and operated the Retreat. The partnership commenced some time in about August 2001. The second respondent also alleges that Mr Courtney was a senior partner. This is disputed by Mr Courtney. 4According to the applicant she performed work for the respondents under an arrangement or series of contracts. The first contract was dated 5 April 2007 with a nominated term of 12 months. It set out the terms and conditions of her employment as a manager of the Retreat. This contract was signed by Mr Courtney, a fact conceded by him. According to the second respondent it was also signed by him and by the first respondent. The second contract was signed by the applicant on 1 May 2009. It included an arrangement that purported to apply in circumstances where the respondents had failed to pay the applicant her entitlements and recognised that she had worked an excessive number of hours. According to Mr Courtney, the second respondent was the only respondent-signatory to the second contract. The second respondent disputes this, alleging that he does not recall either viewing or signing the second contract. On 20 June 2009 the applicant and the respondents entered into a third contract requiring the applicant to undertake marketing and advertising work in addition to her role as manager of the Retreat. According to Mr Courtney, the third contract came into being as a result of discussions between himself and the applicant. 5In submissions, Mr Courtney readily conceded that he was a partner in the business and he is aware that he is jointly liable for the debts of the partnership. 6On 5 November 2010 the second respondent filed a summons for relief under s 106 of the Act, nominating Mr Courtney and Jane Courtney (the first respondent to the applicant's summons) as the first and second respondents, respectively. The summons seeks orders declaring that the partnership agreement was unfair and consequential orders for monetary relief. On 10 January 2011, Mr Courtney filed a summons for relief under s 106 of the Act nominating Mr Eades and Jane Courtney as the first and second respondents, respectively. This summons also seeks orders that the partnership agreement was unfair and consequential orders for monetary relief. Jurisdiction 7It was not suggested by any of the parties that the Court lacked jurisdiction to hear and determine the application. The second respondent relied on s 170 of the Act as the source of the Court's power to order the joinder of Mr Courtney as an additional respondent. 8There is no express or specific provision governing this Court's procedure regarding the joinder of parties. The applicable rules, the Industrial Relations Commission Rules 2009, contain no such provisions. Recourse to Part 6 of the Uniform Civil Procedure Rules (UCPR) is not possible because that Part (which does govern the procedure for joinder of additional parties) has been specifically excluded from operation in the Industrial Court by virtue of Part 1 Rule 1.5 and Schedule 1 of the UCPR, in relation to civil proceedings in the Industrial Court. 9The absence of specific provisions which govern the procedure for joinder was not considered an impediment in Visalli v Southwell and Others (1988) 12 NSWLR 502. In that judgment, the Court of Appeal held that this Court has power to order joinder of a party within the jurisdiction to proceedings before it brought under s 88F of the Industrial Arbitration Act 1940 (one of the predecessor provisions to s 106 of the Act). According to Priestley JA, in the absence of any provisions enabling the addition of a party after the commencement of the proceedings, s 88F carried with it an incidental power that the Court may join necessary parties to an application at any time: at 512A. 10In my view, s 170 of the Act is sufficiently wide to confer power on this Court to order joinder of a new party to proceedings under s 106 of the Act: see BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session [2005] NSWCA 227; (2005) 63 NSWLR 347 at [11] per Handley JA; see also Robberds & Anor v Turner Franchising and Allied Services Pty Ltd & Ors [2004] NSWIRComm 157 at [42] [43] per Staff J. Parties' submissions 11The second respondent submitted that Mr Courtney has a "sufficient connection" with the impugned contracts, principally because he was a signatory to the first contract and was responsible for bringing about the second and third contracts. In addition, Mr Courtney was a partner in the business of the Retreat in which the applicant was employed under the contracts as a manager. 12It was also submitted by the second respondent that because Mr Courtney was a person with "sufficient connection" to the contracts, procedural fairness requires that he should be given the opportunity to be heard: see Visalli v Southwell per Kirby P at 507E-F; Brown v Rezitis (1970) 127 CLR 157 at 164 per Barwick CJ. 13In addition, the second respondent submitted that even if no orders were to be made against Mr Courtney his joinder as a party is justified in circumstances where the other partners are entitled to be indemnified by him in respect of a partnership debt, to the extent of his interest in the partnership: see Partnership Act 1982 , ss 9, 10 and 12. In the event orders were made against the second respondent it is open to him to approach the Supreme Court under the Partnership Act and initiate proceedings against Mr Courtney. If, therefore, Mr Courtney were not joined as a party to the proceedings under s 106, he would have had no opportunity to participate in the substantive question as to whether liability should arise at all. As a corollary of this, according to the second respondent, Mr Courtney should be joined to prevent multiplicity of proceedings, that is, any further action being taken in the Supreme Court against him to determine the extent of his interest in the partnership and the level of indemnification he should be required to provide. 14As to the issue of prejudice, the second respondent submitted that there was no prejudice to Mr Courtney arising in the event he is joined as a party because if he does not wish to participate in the proceedings he may file a submitting appearance under rule 10.4 of the 2009 Rules. The second respondent on the other hand would suffer significant prejudice if Mr Courtney were not joined as a party because the second respondent would be unable, in the event the applicant was successful, to make submissions that orders should be made against Mr Courtney. He would also need to commence proceedings in the Supreme Court under the Partnership Act . 15Mr Courtney, who appeared for himself on the motion, volunteered that he was a partner and that he invested most of the money in the business. He denied being a senior partner and said that he did not live on site at the Retreat. He conceded that he was a signatory to the first contract which he said was drafted by the first respondent. He said the second respondent signed the second contract because he was a manager at that time. There was also an ongoing dispute between Mr Courtney and the first respondent (in the Family Court). With regard to the third contract Mr Courtney said that was "thought up" between the applicant and himself because they had the expertise for running the business and knew the local area. He said that the second respondent agreed with the terms of the third contract. 16Mr Courtney could not point to any relevant prejudice in the event he was joined as a party to the proceedings. Consideration 17Applications by respondents to join additional respondents in s 106 proceedings have successfully been made in a number of interlocutory judgments in this jurisdiction: see, for example, William John Lyons v Caltex Australia Petroleum Pty Limited [2001] NSWIRComm 11; Eslick v Exben Pty Ltd and Ors [2001] NSWIRComm 68. 18Whether the application should be granted is a matter of discretion: Eslick v Exben at [29]. 19Factors relevant to the Court's consideration in an application seeking joinder were set out in Visalli v Southwell by Priestley JA at 511. A factor of significance is that the person against whom the order for joinder is sought has a sufficient or real connection to the impugned contracts. It is not necessary that the person be a party to the contract. The reasons for the threshold requirement of a sufficient or real connection to the contract, or contracts, were identified by Priestley JA as follows (at 511 D-E): For the Commission to see whether, in any application under s 88F, any person has a sufficient connection with the contract in question to be within the Commission's jurisdiction in regard to that contract, it needs to have that party before it when it deals with the application. This serves the necessary purposes (i) that the Commission may exercise jurisdiction properly, (ii) that the person who may be affected by any order made under the section will have had due opportunity to make any case that party wants to make in regard to the application and (iii) that the party may unarguably be bound by any decision of the Commission. 20On the evidence available at this interlocutory stage it may be concluded that Mr Courtney was a partner in the business of the Retreat and was actively involved in that business. He was a signatory to the first contract. He had a sufficient connection, at least to the third contract in that it came into being as a direct result of discussions between himself and the applicant. With regard to the second contract he was aware of its existence. 21These matters, if proven to be correct, provide a sufficient foundation justifying Mr Courtney being added as an additional respondent to the substantive proceedings. As a party to the proceedings Mr Courtney will have the opportunity to meet any case put against him and he will be bound by any decision made by the Court determining the substantive application. In addition, the Court will have before it all relevant parties to the alleged contracts which will enable a full determination of the disputed issues between the parties: see Stonham v Speaker of the Legislative Assembly of New South Wales (No 4) [2001] NSWIRComm 277; (2001) 110 IR 417 at [24] per Hungerford J. A further factor of significance in favour of granting the application is that in the event the applicant on the substantive application is successful, the joinder of Mr Courtney may prevent a multiplicity of proceedings, that is, any further action being taken against him in the Supreme Court to determine the extent of his interest in the partnership and the level of indemnification he may be required to provide. 22For these reasons, I granted the application of the second respondent brought by way of notice of motion and I ordered that costs be reserved. 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. Decision last updated: 23 March 2011