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Federal Court of Australia |
INDUSTRIAL LAW - Application under s 127A and s 127B of the Industrial Relations Act 1988 in operation on 3 February 1994 for review of a contract for services entered by independent contractors - non-compliance of interim orders made by the Commission - application to amend pleadings - application to strike out application - lapse of time - issues are moot.
Industrial Relations Act 1988 , ss 127A, 127B
Industrial Relations Reform Act 1993
Federal Court Rules, O 20 r 2(1)(a) & (b)
Gerrard & Anor v Mayne Nickless Ltd 58 IR 203
Gerrard & Anor v Mayne Nickless Ltd (1996) 135 ALR 494
La Roche v Cormack [1991] FCA 627; (1991) 33 FCR 414
Coutts v Ronstan International Pty Ltd (Northrop J, 4 June 1996, unreported)
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
ALLAN GERRARD & ANOR v MAYNE NICKLESS LTD
VI 1052 OF 1994
NORTHROP J
17 DECEMBER 1997
MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA BETWEEN: Applicants AND: Respondent COURT:
VICTORIA DISTRICT REGISTRY VI 1052 of 1994
ALLAN GERRARD & ANOR
MAYNE NICKLESS LTD
northrop j DATE OF ORDER: 17 december 1997 WHERE MADE: MELBOURNE
THE COURT ORDERS THAT:
1. The Applicants motion, notice of which is dated 18 September 1997 be refused.
2. The Respondent's motion, notice of which is dated 18 September 1997 be granted.
3. The application be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| VICTORIA DISTRICT REGISTRY | VI 1052 of 1994 |
|
BETWEEN: | ALLAN GERRARD & ANOR
ApplicantS |
|
AND: | MAYNE NICKLESS LTD
Respondent |
court:
northrop j DATE: 17 december 1997 PLACE: MELBOURNE
The applicants commenced this application in the Federal Court of Australia on 11 March 1994. The application was within the original jurisdiction of the Federal Court, see s 19 Federal Court of Australia Act 1976 and s 127B(5) of the Industrial Relations Act 1988 as then in operation (the Unamended Act 1988 ). Sections 127A and 127B of the Unamended Act provided a scheme by which an independent contractor was enabled to apply to the Australian Industrial Relations Commission for review of a contract for services on a number of grounds specified in s 127A(2) such as the contract was unlawful, harsh or against the public interest. If the Commission formed the opinion that a ground was established, it was empowered to make orders under s 127B setting aside or varying the contract. Under s 127B(3) the Commission was empowered to make an interim order to preserve the position of the independent contractor. Subsection 127B(5) provided:-
"(5) A party to the contract may apply to the Court to enforce an order by injunction or otherwise as the Court thinks fit."
Under the Unamended Act, "the Court" meant the Federal Court of Australia.
On 3 February 1994, the Commission made interim orders under ss 127A and 127B of the Unamended Act in favour of a number of owner/drivers ("the applicants") employed as independent contractors by Mayne Nickless Ltd ("Mayne Nickless"). The orders were complex. The orders were expressed to take effect from 10 am on 3 February 1994. On 4 February 1994, Mayne Nickless commenced terminating the contracts of a large number of its owner/drivers including the applicants. The applicants alleged that in so doing Mayne Nickless was acting in contravention of the interim order of the Commission. The interim order was expressed to have been made to preserve the position of the applicants under their contracts for services "until the completion of the hearing and determination of the application ....(under s 127A of the Unamended Act) .... as though (each contract) remains on foot as an executory contract ...". The interim order was to apply, notwithstanding any action by Mayne Nickless to terminate the contracts for any reason, other than specified reasons not presently relevant, during the term of each contract. In addition the interim order required Mayne Nickless, during the duration of its contractual relationship with its owner/drivers, to consult with them and their organisation of employees with respect to avoiding the burden of proposed termination or restructuring of the activities of Mayne Nickless and to offer alternative engagement or employment to the owner/drivers whose contracts were terminated including preference for engagement or employment.
The applicants believed that Mayne Nickless would not observe the terms of the interim order. Mayne Nickless had terminated contracts despite the interim order. It was not consulting with the owner/drivers or their organisation of employees. It was not offering alternative employment to the drivers. The applicants commenced their application in the Federal Court on 11 March 1994 seeking orders by way of injunctions under s 127B(5) of the Unamended Act to compel Mayne Nickless to perform its obligations under the interim order. They sought also an order that Mayne Nickless "pay damages (including exemplary damages)" to them arising from the failure of Mayne Nickless to observe and perform its obligations under the interim award. The statement of claim accompanying the application made it clear that the claims made by the applications were based on the terms of the interim order. The applicants were granted leave to amend their application and statement of claim but only for the purposes of making the application a representative proceeding under Division 6 of Part XIV of the Industrial Relations Act; compare Part IVA of the Federal Court of Australia Act 1976 . The substantive claims made in the amended application and statement of claim were limited to those in the original application and statement of claim.
The Industrial Relations Reform Act 1993 (the "Reform Act 1988 ") came into operation on 30 March 1994. The Unamended Act, as amended by the Reform Act, shall be referred to in these reasons as "the Amended Act". The Reform Act constituted the Industrial Relations Court of Australia. Under the Reform Act the application which had been brought in the Federal Court was transferred to the Industrial Relations Court. Section 127A and 127B of the Unamended Act were amended with the result that after 30 March 1994 an application under s 127A for the review of a contract for services had to be made to the Industrial Relations Court not the Commission.
The parties agreed that four questions be tried separately and before the further trial of the proceeding. The four questions were:-
"1. Did the Interim Order made by Justice Munro on 3 February 1994 cease to have effect on 30 March 1994 on the coming into operation of Section 71 of the Industrial Relations Reform Act 1993 ?
2. Is the Interim Order invalid and beyond power ?
3. Does the Industrial Relations Court have jurisdiction or power under section 127B of the Industrial Relations Act or at all to make an award for damages arising out of non-compliance with an Interim Order made under section 127A?
4. Is it appropriate that this proceeding continue as a representative proceeding under Part XIV Division 6 of the Industrial Relations Act 1988?"
During the course of the hearing of those questions, counsel for the applicants announced that the applicants would not pursue their claim for damages under s 127B(5) of the Industrial Relations Act. By motion, notice of which was dated 18 November 1994, the applicants sought leave to amend their application and statement of claim to include claims based upon associated matters or the accrued jurisdiction of the Industrial Relations Court. These claims were for damages based on breach of statutory duty namely to comply with the interim order and on breach of contract being the terms inserted into the contracts for services by the interim order. The hearing of the motion was adjourned and has not been heard and determined.
During the hearing of the preliminary questions, the parties agreed to adjourn the hearing with respect to questions 2 and 4.
By order made on 8 February 1995 the Industrial Relations Court found in favour of the applicants with respect to question 1. The Court answered the question in the negative and adjourned the further hearing of the application to a future directions hearing. The judgment is reported at 58 IR 203.
Thereafter, Mayne Nickless sought leave to appeal from the order made. Eventually, that application for leave to appeal, together with other proceedings involving a wide range of issues, came on for hearing before a Full Court of the Industrial Relations Court. The Full Court published its orders on 5 March 1996. The Full Court granted leave to Mayne Nickless to appeal from the order of 8 February 1995 but dismissed the appeal. The judgment of the Full Court is reported at (1996) 135 ALR 494.
Thereafter, long delays occurred in the interlocutory steps. On 5 August 1996, the High Court refused an application by Mayne Nickless for special leave to appeal from the orders of the Full Court. At a directions hearing held on 29 August 1996, question 4 listed above was directed to be heard as a preliminary question. Directions were given with respect to that question. That matter was listed for hearing on 18 November 1996 but by consent the hearing date was vacated. Nothing further happened.
On 26 May 1997 the jurisdiction of the Industrial Relations Court was transferred to the Federal Court. As a result, this application came back to the Federal Court. On 25 July 1997 a direction was given that the applicant have leave to file and serve a further amended application and statement of claim on or before 22 August 1997. The earlier motion, notice of which was dated 18 November 1994 had not been determined. The further amended documents dated 21 and 20 August 1997 respectively were filed and served.
At a directions hearing held on 29 August 1997, the Court refused a motion to set aside the directions given 25 July 1997, adjourned the directions hearing to 26 September 1997 and directed that notices of any motion by any party, together with supporting affidavits, be filed to enable the interlocutory matters to be heard and determined on 24 September 1997.
This long introduction has been necessary to assist in the understanding of the issues before the Court. Pursuant to notice, Mayne Nickless is moving the Court for an order that the application and statement of claim as amended and which had been filed should be struck out under O 20 r 2(1)(a) and (b) of the Federal Court Rules. The applicants are moving the Court for orders for leave to amend their application and statement of claim to the form being an exhibit before the Court. These documents were identified as the second further amended application and the second further amended statement of claim respectively. Each motion raised the same issue.
Mayne Nickless contended that because of the lapse of time between the interim order made on 3 February 1994, any cause of action the applicants may have had against Mayne Nickless had lapsed in the sense that the issues in controversy between the parties had no real practical significance and therefore the Court should not proceed with the hearing of the application. It was contended further that in these circumstances the Court should not grant the motion of the applicants because they raised new and separate causes of action against Mayne Nickless which did not come within the original jurisdiction of the Court and should not be brought within the accrued jurisdiction or the cross-vested jurisdiction of the Court to be joined to a proceeding properly before the Court but in which no justiciable issue remained in existence between the applicants and Mayne Nickless. Counsel for Mayne Nickless used the word "moot" in its meaning of being an argument or discussion of an hypothetical legal case to describe the existing application. He submitted that the claims under the application were spent, having no existing life. The claim for damages arising under s 127B of the Industrial Relations Act had been abandoned. The claims for the interim injunctions under s 127B were no longer available and the claim that agreements made between Mayne Nickless and other persons be declared null and void likewise was no longer available.
The original application of the applicants to the Commission under s 127A and s 127B of the Unamended Act has not been determined. The Commission has not formed the opinion that a ground referred to in s 127A(2) has been established; see s 127A(3). The Commission has not recorded an opinion under s 127B(1). The only order made by the Commission is the interim order made on 3 February 1994. The order is complex. With the exception of the list of applicants, the order is set out as an annexure to these reasons. The substantive orders are contained in paragraphs A(1), A(2) and A(3) of the interim order.
Paragraph A(1) varies the terms of the contracts for services by providing that each contract continue beyond any termination or purported termination by Mayne Nickless until the hearing and determination of the application under s 127A of the Industrial Relations Act.
Paragraph A(2) contains requirements relating to procedures to be followed by Mayne Nickless if it terminates the services of any owner/driver or with respect to any restructure of the company affecting the duration of the contract for services.
Paragraph A(3) likewise imposes obligations on Mayne Nickless relating to procedures to be followed by Mayne Nickless in the event of termination of a contract for services.
The application before the Court is under s 127B(5) of the Unamended Act 1976 . The interim order was made on 3 February 1994. Thereafter on or about 4 February 1994 Mayne Nickless terminated the contracts for services of a large number of its owner/drivers. Mayne Nickless, apparently, did not follow the procedures specified in paragraphs A(2) and A(3) of the interim order. Paragraph A(1) of the interim order extended the terms of the contracts for service after their termination.
Claim 1 of the application is for an order directing Mayne Nickless to give the applicants and other owner/drivers whose contracts for services were terminated "priority and preference for engagement or employment in vacancies for work within the Victorian operations of (Mayne Nickless) arising within 12 months of the date of the termination" (emphasis added). This period has expired.
Claim 2 of the application is for an order directed at preventing Mayne Nickless from offering or entering into any contract with any other person with respect to vacancies resulting from the termination of contracts for services of the owner/drivers "arising within 12 months of the date of the termination of the contracts" of the applicants or other owner/drivers (emphasis added). This period has expired.
Claim 3 of the application is directed at declaring null and void any contracts entered into by Mayne Nickless in contravention of Claim 2. There are obvious difficulties with respect to this claim but it is limited to a 12 months period in any event.
Claim 4 was a claim for damages which claim has been abandoned by the applicants.
Because of the lapse of time, claims 1 and 2 of the application can no longer have any effect. If made, the orders would be impractical. Claim 3 likewise is limited to the 12 months period even assuming the orders sought could be made because of their adverse effect against a person not a party to the proceeding.
On this analysis of the interim order, counsel for Mayne Nickless claimed "that all that which is within the original jurisdiction of the Court ...... is now dead and spent".
Accordingly, counsel contended, that on the assumption that the amendments sought by the applicants would come within the accrued jurisdiction of the Court, or could be cross-vested to the Court, that should not be done because the basis on which those new claims are said to be accrued or cross-vested is no longer in existence. The new claims arise out of matters which are within the jurisdiction of State courts. They are based upon breaches of contract, and should be heard by State courts. Counsel for Mayne Nickless referred to authorities to support his contentions. In La Roche v Cormack [1991] FCA 627; (1991) 33 FCR 414 Olney J made an order that an application be permanently stayed in circumstances where the passage of time had deprived the issues in controversy of any real practical significance. In coming to that conclusion his Honour at 415-416 referred to and cited the judgment of a Full Court of the Federal Court in Beitseen v Johnson as follows:-
"Another authority which perhaps is more relevant but which is not reported is Beitseen v Johnson (unreported, Full Court Federal Court, Woodward, Northrop and Ryan JJ, 29 November 1989). That case involved an appeal from a single judge who had made orders concerning the performance of the rules of an industrial union relating to the filling of an office by one of the parties to the proceedings. The officer in question, who was unsuccessful before the single Judge, had been appointed as assistant secretary for the unexpired term of office of the previous incumbent and it was common ground that the unexpired term would expire on 5 December 1989. The appeal was heard on 25 October 1989 when the Full Court announced that it would not proceed further with the hearing of the appeal. Detailed reasons were given on 29 November 1989. At the time of the hearing, an election was in progress to fill the vacancy that would occur after the expiration of the then current term. Without going into the details of the case any further and the arguments that were put, the court came to the conclusion that it should not proceed with the appeal.
In that case there was a suggestion that the position of the assistant secretary in respect of his salary entitlement might in some way be prejudiced if the appeal was not heard, but the court came to the conclusion that to proceed with the appeal would be tantamount to giving an advisory opinion which would be of no more than persuasive authority if the litigation with respect to his salary ever eventuated.
The Full Court was of the view that it had power not to proceed further with the appeal. That power was conferred on the court by implication by s 23 of the Federal Court of Australia Act (Cth) and O 20, r 2 of the Federal Court Rules 1979 (Cth). Their Honours said (p 5, transcript):
"We have been persuaded to exercise that power in this case primarily because the passage of time has, in the circumstances, deprived the issues in controversy of real practical significance. However, the court has been influenced as well by an indication that the cost of at least some of the parties to the appeal may fall on the public purse and any course which minimises those costs without doing violence to genuine and substantial rights of the parties is to be favoured." "
In addition, Olney J referred to and relied upon what was said by French J in Orison Pty Ltd v Strategic Minerals Corp NL (1988) 81 ALR 183.
The essence of the submission of counsel for Mayne Nickless in support of its motion and in opposition to the applicants' motion was that the issues raised by the application are now spent, the law is moot, and there is nothing in the original jurisdiction of the Federal Court to which the new claims could be attached or accrued. Accordingly the existing application should be dismissed generally and the motion of the applicants should be refused. The applicants would be free to pursue their claims in the State courts.
In the context of this case, reference should be made to what I said in Coutts v Ronstan International Pty Ltd (No. VG 275 of 1996, 4 June 1996, unreported), in relation to the accrued jurisdiction and cross-vesting provisions with respect to State matters.
Counsel for the applicants contended that upon its proper construction, the interim order should be construed as imposing an obligation on Mayne Nickless to observe the obligations imposed by order A whenever an owner/driver's contract for services was terminated during the period of 12 months from 3 February 1994. This, of necessity, involves a consideration of whether that obligation arises from contract, a term of the interim order, which to a large extent, takes on the form of an award or breach of a statutory duty. There is no claim for a penalty for a breach of an award. The other two claims are based on matters which come within the jurisdiction of State courts. The submissions made on behalf of the applicants have some attractiveness but only on the assumption that the terms of the interim order constitute terms of a contract which remain in existence after the termination of the contract (order A(1)). Thereafter orders A(2) and A(3) impose obligations on Mayne Nickless. To enforce those obligations, the applicants, in the absence of claiming a breach of an award, must rely upon State jurisdictions. This follows irrespective of whether the engagement of the persons occurred within the 12 month period or not.
The Court has had regard to the observations of Sir Garfield Barwick in General Steel Industries Inc v Commissioner for Railways(NSW) [1964] HCA 69; (1964) 112 CLR 125 as to the extent of satisfaction a Court must have before summarily dismissing a claim by a plaintiff. In the present case, the Court accepts the submissions made on behalf of Mayne Nickless. The claims made on behalf of the applicants are untenable. The substance of the claims are set out earlier in these reasons. On any view, the obligations imposed by the interim order had to be observed at the latest by 3 February 1995. It appears that in fact the applicants and the other owner/drivers had their contracts terminated in February 1994. It is now almost four years since those terminations occurred. Assuming the contracts for services had continued by reason of order A(1), the time for the performance of the obligations imposed by Order A(2) and Order A(3) have long since passed.
The passage of time has deprived the issues raised in the application of any real practical significance. To adapt the wording of the judgment in Beitseen v Johnson, to proceed with the hearing of the application would be tantamount to the Court giving an advisory opinion. The application would be similar to a discussion of an hypothetical legal case. The application is "moot".
Accordingly, the motion by the applicants for leave to amend the application and statement of claim must be refused. On the motion of Mayne Nickless, the application is dismissed.
It is noted that no submissions were made with respect to other pleading matters raised by the motions. No consideration was given whether, as a matter of discretion, the Court should allow the applicants to claim under the accrued jurisdiction of the Court. The Court has found that the issues raised in the application before the Court, had ceased to have any legal or practical consequence at the time leave was granted to the applicants on 25 July 1997 to file and serve a further amended application and a further amended statement of claim. At the time that order was made, the issues raised by the application that had been issued on 11 March 1994 had ceased to have any legal or practical effect. The order made on 25 July 1997 could not revive that application.
It is unfortunate that this lengthy and expensive litigation has taken so long to be concluded. It is a pity that the issues raised by the motions before the Court had not been raised at an early stage of the litigation. If this had been done, the defects in the formulation of the interim order would have become apparent. Claims under the accrued jurisdiction may have been permitted to be based on the application itself but it would have been necessary, possibly, to amend the application and the form of the claims before that could have been done.
I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice
Northrop
Associate:
Dated: 17 December 1997
|
Counsel for the Applicant: | Mr H Borenstein |
| Solicitor for the Applicant: | McMillan Coate & Co |
| Counsel for the Respondent: | Mr J Fajgenbaum QC and
Mr M Rinaldi |
| Solicitor for the Respondent: | Freehill Hollingdale & Page |
| Date of Hearing: | 26 September 1997 |
| Date of Judgment: | 17 December 1997 |
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
s.127A application to review contracts
Allan W. Gerrard and 27 others
and
Mayne Nickless Limited
(C No. 20040 of 1994)
JUSTICE MUNRO MELBOURNE, 3 FEBRUARY 1994
In the matter of applications pursuant to section 127A of the Industrial Relations Act 1988 (the Act) by Mr Gerrard and others, and pursuant to decisions in transcript issued by the Commission on 1 February 1994[1], and 3 February 1994.
Allan W. Gerrard and 27 others
and
Mayne Nickless Limited
Interim order for variation of contract
A. (1) The contract for services between Allan W. Gerrard and each of the applicants herein respectively of the one part, and Mayne Nickless Limited of the other part, be varied to the extent necessary to make it a term of the contract that: Subject to written agreement between the parties expressly varying this term, and notwithstanding any action by or on behalf of the Company to terminate the contract for reasons other than serious misconduct or breach of agreement covered by clause 9.3, the term of the contract extends beyond suchtermination, or purported termination, (including a termination based upon acceptance of a voluntary redundancy package) until the completion of the hearing and determination of the application made in relation to the contract under section 127A of the Industrial Relations Act 1988 in matter C No. 20040 of 1994, including any related appeal or judicial review proceedings, as though the contract remains on foot as an executory contract; provided that without derogation from rights arising under the contract up to the time of any such termination or purported termination, and subject to further order of the Commission or of the Industrial Relations Court of Australia this term does not operate otherwise to establish additional rights or duties in respect of any extended term herein provided for.
(2) In relation to any termination of the services of the Owner Driver other than under clause 9.3, or to any restructure of the company's operations affecting the duration of the contractual relationship, the Owner Driver and the Transport Workers Union of Australia (TWU) through the TWU Delegate and the Branch Secretary of the TWU (Victoria) shall be consulted and they or their representatives and the company shall negotiate in good faith about a process to be followed for avoiding, implementing and mitigating the burden of any proposed termination or restructure, and about the Owner Drivers likely to be affected being offered some acceptable alterative engagement or employment with the company after any such termination or restructure, provided that for the purposes of this term the consultation between the Company and representatives of Owner Drivers which commenced on 13 December 1993 in relation to a proposed reduction of "employees" within the Security Express Victorian operations from 279 to 167 shall be deemed to have been in performance of the requirements of this term.
(3) That in the event of the services of the Owner Driver being terminated other than under clause 9.3, the company, if it has not already done so, shall take measures that are reasonably practicable having regard to the company's operational and commercial requirements:
(i) (a) to find an acceptable alternative engagement or employment with the company for the Owner Driver; or, if no such engagement or employment is practicable within 14 days of the termination,
(b) to give the Owner Driver priority and preference for engagement or employment in vacancies for work within the Victorian operations of the company arising within 12 months from the date of termination, being work for which the Owner Driver is suitable, and for which the Owner Driver is qualified, ready and willing to perform at the time the vacancy is to be filled;
(ii) to establish a process whereby, after appropriate consultation with the Owner Driver and the TWU, the Owner Drivers whose services are to be retained (and the position and terms of the further engagement or employment) or not retained (and the terms of the termination) by the company are selected and determined according to fair and reasonable criteria.
(4) Sub-clauses (2) and (3) of this clause do not confer any rights on the company additional to those which it may have under other provisions of the contract, or at law, to terminate the services of the Owner Driver or to restructure its operations in a way that affects the duration of the services of the contractor, or to propose any such termination or restructure.
B. This order and the variation to which it gives effect takes effect from 10.00 a.m. on 3 February 1994.
BY THE COMMISSION
(signed)
JUSTICE P.R. MUNRO
[1] Print L1480
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