Master Retailers' Association of NSW v Shop Assistants Union of NSW [1904] HCA 39; (1904) 2 CLR 94 (8 December 1904)

The Master Retailers' Association of New South Wales Appellants; and The Shop Assistants Union of New South Wales, the Grocers Assistants Union of New South Wales, F. Lassetter and Company, Limited, and the President and Members of the Court of Arbitration Respondents.

Holman and J.A. Brown, for the respondents, the Shop Assistants Union of New South Wales.

Holman, for the respondents, took the preliminary objection that there was nothing for the Court to prohibit.

[His Honor having stated the facts in connection with the making of the two agreements of 3rd December, proceeded:]

Upon the registration of the second agreement the position between the parties was that their relations were regulated by the two documents, as together forming one agreement or quasi-agreement, but the consequence also was that no obligations were imposed upon any of the parties to the agreement contained in the first document, although it has been called an agreement. It was an agreement in one sense, but it was an agreement incapable of enforcement, because it imposed no obligation upon any one.

[His Honor, having referred to the proceedings in the Arbitration Court and the Supreme Court, continued:]

The question raised is one of very great importance. The application is made by two industrial unions of employés, who have come to a common understanding with their employers, or rather, with one firm of employers, and by those employers, to impose the arrangement they have made as between themselves, upon the whole State of New South Wales, which is practically calling upon everybody who is engaged in this business in the State, to litigate with them in one proceeding for the purpose of regulating in all its details the business of those trades. The question for us to consider is whether the Arbitration Court has any such jurisdiction. If that Court has jurisdiction the Supreme Court cannot interfere with it in its exercise, but, if it has not such jurisdiction, the Supreme Court is bound, on being appealed to, to interpose its hand, and see that the limit is not transgressed. The matter turns entirely upon the construction of the Arbitration Act. We were asked by Mr. Holman to say that the Act is a remedial Act, and that, therefore, it ought to be construed liberally, as distinguished from a penal Act, which, as it used to be said, should be construed strictly. It may be remarked that the old distinction drawn between remedial and penal Acts has of late years been much discredited. What has been laid down in modern cases is that the duty of the Court is to interpret Acts according to the intent of the Parliament which passed them. On this point I have had occasion to quote more than once on this bench the opinion of the judges given in the House of Lords in the Sussex Peerage Case[1]. Lord Chief Justice Tindal, delivering the opinion of the judges, says:—"My Lords, the only rule for the construction of Acts of Parliament is that they should be construed according to the intent of the Parliament which passed the Act. If the words of the Statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do in such a case best declare the intention of the law giver." As was said by this Court in Clancy v. Butchers' Shop Employés Union[2]:—"In construing the Act it should be borne in mind that it is an Act in restriction of the common law rights of the subject, and, though that is no reason why the fullest effect should not be given to its provisions, it is a reason why the meaning should not be strained as against the liberty of the subject." The great fundamental principle of our jurisprudence is liberty. Where it is alleged that the liberty of individuals may be restrained, the party alleging the right of restraint must establish by some Statute or by judicial decision that the liberty has been restricted. It is not necessary to refer to the general objects of the Act, as they are familiar to all of us. They are recited in the title, which states in a summary and concise way the obvious purpose of Act, which is "to provide for the registration and incorporation of industrial unions, and the making and enforcing of industrial agreements; to constitute a Court of Arbitration for the hearing and determination of industrial disputes, and matters referred to it; to define the jurisdiction, powers, and procedure of such Court; to provide for the enforcement of its awards and orders; and for purposes consequent on or incidental to those objects." The object of the Act therefore is to establish a new tribunal, called a Court of Arbitration, for the hearing and determination of industrial disputes and matters referred to it. It is not to constitute a board of trade, or a municipal body with power to make by-laws to regulate trade, but a Court of Arbitration, for hearing and determining industrial disputes and matters referred to it. And it will be found, on examining the language of the Act, that the words used are always words apt to be used in speaking of a tribunal. The functions of the Court are described as "to hear and determine industrial disputes and matters." The manner in which a question within the jurisdiction of the Court is to come before it for its judicial determination is by "reference," which is the term always used in ordinary legal language for describing the process by which individual persons constituting a private tribunal of arbitration submit the matter to it. And the decision of the Court is spoken of as an "award," which is the apt word to describe a decision of a private tribunal of arbitration. All the provisions of the Act are in accordance with this view. The jurisdiction of the Court is conferred and limited by section 26, which provides: "The Court shall have jurisdiction and power:—(a) on reference in pursuance of this Act to hear and determine, according to equity and good conscience—(1) any industrial dispute; or (ii.) any industrial matter referred to it by an industrial union or by the registrar; (iii.) any application under this Act." So that the Court has no power to give an "award order or direction" except in pursuance of a "hearing and determination," which again are words apt for describing a judicial proceeding. Then follow a number of provisions incidental to judicial proceedings. Sec. 28 limits the persons who may invoke the jurisdiction of the Court. Sec. 29 provides that a union or persons entitled to invoke the jurisdiction may make application to the registrar. That is how proceedings are instituted. Sec. 30 provides: "Any party to a reference" (again assuming that it is a proceeding to which there are parties) "may apply for directions." The section goes on to say that "at the hearing ... particulars of the claims of the parties may be ordered," with other provisions, showing that the proceedings are judicial proceedings between parties, to be ended by a hearing or determination, which may be an award (which is in the nature of a judgment), order or direction. Then sec. 37 provides: "In any proceeding before it the Court may do all or any of the following things with a view to the enforcement of its award, order or direction." Among other things it may "(1) declare that any practice, regulation, rule, custom, term of agreement, condition of employment, or dealing whatsoever in relation to an industrial matter, shall be a common rule of an industry affected by the proceeding." Before examining this section in detail, I will refer to the opinion expressed by the learned judges of the Supreme Court upon it. The learned Chief Justice[3] says: "as I understand one part of the argument, it was that the industrial agreement should be made an award before being made a common rule. I do not see how this is possible. There is no provision in the Act for the purpose. An award is the adjudication of arbitrators terminating a dispute; but where there is an agreement inter partes there is no dispute to be terminated by arbitration. I do not see any difficulty in the matter. Under sec. 37 of the Act the Court may declare that any regulation, rule, or term of an agreement in relation to an industrial matter shall be a common rule. These words appear to me to expressly include industrial agreements." With great respect I point out that the Act does not say so. The section says that "with a view to the enforcement of its award order or direction," the Court may declare that any regulation, &c., shall be a common rule. I will call attention to that phrase directly. His Honor goes on to say: "Sec. 15 of the Act provides that an industrial agreement shall have the same effect as an award, and the Court shall have full and exclusive jurisdiction in respect thereof." With great respect again, these are not the words of the section, to which I shall call attention later on. If secs. 37 and 15 did provide what the learned Chief Justice thought, then it would be the natural consequence that this prohibition should be refused. Mr. Justice Owen, with reference to the same point, says[4]: "In the course of the argument we decided that the Industrial Arbitration Court had power under sec. 37 of the Act (1901 No. 59) to make an industrial agreement a common rule, and that the power in that respect of the Court was not limited to the case where an award had been made. That section is peculiarly worded. It says:" [His Honor read the section down to the end of sub-sec. (1).] "It was contended that the words with a view to the enforcement of its award implied that it was only after an award had been made that the Court could make a common rule for the purpose of enforcing its award; but that appeared to us to be too narrow an interpretation of the Act." The reasons why they came to this conclusion are not there clearly stated. It appears, however, that on the same day when the reserved judgment was given the Court had already given judgment in the case of Ex parte Leahy[5], in which case also they had under consideration the provisions of sec. 37. They were examining sec. 37 especially with regard to one provision of it, namely: "The Court may, with a view to the enforcement of its award order or direction, order ... the cancellation of the registration of an industrial union." They were examining it to see whether the words "with a view to the enforcement, &c.," limited the power of the Court to order the cancellation of an industrial union. That was the question immediately before them, and they thought that the words did not apply to that limb of the section or to some others, because they thought the powers in question were not in their nature capable of being exercised for such a purpose. Amongst those which they thought incapable of such exercise was the power to make a common rule, and the power of cancellation. They therefore read the section, as to those powers, without these words. This is what the learned Chief Justice said[6]: "On reading that section it will be seen that of its eight sub-clauses there are only three—the fourth, seventh and eighth—which directly refer to the enforcement of an award, order or direction. Of the remaining five, the first, second, and third relate to the power of the Court to declare and enforce a common rule. The fifth deals with the cancellation of registration of an industrial union, and the sixth gives the Court power to expel any member from an industrial union. I am of opinion that the words in the 37th section, with a view to the enforcement of its award, order or direction, must be read as being confined to those clauses of the section which deal with the enforcement of an award &c.; but leave the preceding words of the section to apply generally to the five clauses of the section, which do not deal with the enforcement of awards, &c." If the section is read with these words left out, there would, no doubt, be a general power in the Court to make a common rule whenever it thought fit. But we cannot leave out words in a Statute, if a sensible meaning can be given to them. Our business is to construe the law, not to make it. Primâ facie the meaning of the words is plain, "in any proceedings before it the Court may do all or any of the following things with a view to the enforcement of its award, order or direction." In my opinion all the powers enumerated in sec. 37 are capable of being exercised for that purpose. The words therefore cannot be rejected as to any of them. And surely, when power is given to take certain steps for the purpose of enforcing a judgment or judicial determination, it is assumed that there is in existence some judgment or judicial determination to be enforced. How, in the nature of things, can you enforce a non-existing judgment? On that point I will read a few words from the judgment of Collins, L.J. (cited by this Court in Maloney v. McEacharn),[7], in McIntosh v. Simpkins[8]. That was a case in which a Court of limited jurisdiction, as the Court of Arbitration is, had taken a step, as the Court of Appeal thought, without complying with a statutory condition. "We are not entitled to approach this case as if there were no provision enacting that an affidavit in a particular form should be the foundation of the proceedings. To say that the question is merely, and apart from the statutory conditions, whether a primâ facie case is made out would be to strike out these safeguards in the case of a debtor against whom it is proposed to put in force the provisions of the Debtor's Act, 1869." So here, we are not entitled to approach this case as if there were no provision that this power of making a common rule was conferred on the Court "with a view to the enforcement of its award, order or direction." Nor can we say that the question is whether apart from the condition a case can be made out for a common rule.

The reference here to a safeguard leads naturally to the inquiry whether this provision, that there should be an award as the foundation of a common rule, is or is not a statutory safeguard provided by the legislature. Now this Act confers enormous powers for the regulation of trade, and probably the greatest of all is the power to declare a common rule. If the view is correct that a common rule can only be declared as ancillary to an award or judicial determination, there is at least this safeguard provided by the legislature, that a common rule cannot be enforced, governing the whole community or a considerable part of it, without the previous sanction of a judicial determination by a tribunal constituted for the purpose of deciding it, and constituted in a manner which is supposed to render it specially competent for that purpose. There is no special provision contained in the Act that notice shall be given to any one before the making of a common rule, but the legislature has reposed the largest confidence in the Court, and amongst other things, it says that, if the Court in the course of a judicial determination has made an award, order or direction, and thinks it necessary for the enforcement of the award—that is I take it, in order to make the award of practical effect—it may declare a common rule. But the safeguard is that the judicial mind of the Court has been applied to the subject before it exercises that extraordinary power. No doubt the Court does generally require public notice to be given before strangers are to be made subject to its decree, but the Act does not expressly require it to be done. Nor does the Act prescribe in what way or under what circumstances the Court is to give its judicial determination, but it has apparently contemplated that it would be a real judicial determination, and not merely a consent order. Indeed, although a judgment made by consent is just as valid as a judgment made in any other way, if not obtained by fraud, it may, I think, be fairly inferred that the legislature supposed and expected that the Court, in making an award, to which effect might be given upon persons not parties to the litigation, would only exercise its power after a real judicial determination, which, in point of form, made an essential preliminary. Moreover, the provision is not in terms that the Court may make a code for the government of any industry or industries. The words are: "declare that any practice, regulation, rule, custom, term of agreement, condition of employment, or dealing whatsoever in relation to an industrial matter, shall be a common rule of an industry affected by the proceeding." It was suggested in the Supreme Court that a common rule is not a proceeding in the nature or form of an award. In making an award the Court is dealing with a contest between parties. As between them, it may appear reasonable to the Court that a particular term, condition, or custom of employment ought to be imposed, and that it would be a reasonable thing to impose it as between them; but it might also be manifest, when making an award or after making it, that if the terms were imposed upon the particular employers who were parties to the award, and not upon others engaged in the same business in competition with them, the competition of those not bound by the same restrictions would be unfair. Therefore, in order to enable the Court to do complete justice in any case, that is, to make an award fair to the parties, power is given to extend to the whole of the industry any condition of that sort. It is very likely that the Court, having power to extend one term, may extend all—though that does not seem to have been the intention of the legislature, but it may be within the words of the Act—and may have power to regulate the whole trade in accordance with the terms of a particular award. But that is not a matter which we have to decide now. The question is whether the foundation of the power to declare a common rule is not a previous judicial determination. It is asked, why should it be? It is no argument to say, why should it be, if the legislature has said that it shall be. But, if the question is asked, the answer is obvious. The safeguard to the community at large is that a judicial body has applied its mind judicially to the question in the presence of the parties interested in setting up the opposite view, and has come to a conclusion on the subject. That is the great protection to the public. If the same power existed with regard to a private agreement, that safeguard would be entirely gone. Any industrial union, however small, might make a bargain with its employers, perhaps in a very small way of business, and there would be absolutely no safeguard as to the terms of the agreement, and then application might be made to the Court, which, without any judgment of its own, might make the terms of the agreement a common rule. The question is whether the legislature has not imposed this safeguard before the Court can declare a common rule. These reasons seem to me and to my learned brothers to be absolutely conclusive to show that literal effect not only can, but ought, to be given to the statute, and that it is only with a view to the enforcement of an award that the Court can declare a common rule. If that is the meaning of the Act, the Court cannot, in the absence of that foundation, institute a proceeding to which the whole world at large would be parties for the purpose of declaring a common rule. I am unable to see any distinction in principle between that and the cases mentioned in the course of the argument, where the Matrimonial Causes Court has jurisdiction to modify a settlement after a decree for dissolution of marriage. In doing so it affects the rights of parties other than the parties to the suit. It is a special power given by the statute to affect the rights of persons not parties to the suit, but that power cannot be exercised without the existence of the condition prescribed as the foundation of the proceeding, that is, the judgment. So here, in the absence of an award, judgment, or judicial determination, there is no jurisdiction to make a common rule. It is said however that these are idle words, because it may be a friendly suit. The condition imposed by the legislature is that there shall be a judgment. No Court can impose upon the Arbitration Court the manner in which it shall perform its duties. If the Court is satisfied with consent between the parties before it, it may, if it thinks fit, exercise its judicial mind. That course is open to it, and no Court can interfere with it. But the legislature, I think, contemplated that it should be a real judgment, and not a merely formal one. That, however, is not a matter to give rise to interference by the Supreme Court. But although this is so, the position with regard to an industrial agreement is not the same. I have quoted the judgment of the learned Chief Justice on this point. He says that sec. 15 provides that an industrial agreement shall have the same effect as an award. The words of sec. 15 are—"An industrial agreement as between the parties bound by the same shall have the same effect as an award." It is impossible to leave out the words "as between the parties bound by the same." Secs. 13 to 15 contain a code as to industrial agreements. They provide that an industrial union may make an agreement with another industrial union or with an employer for a specified term, and the agreement must be filed. Then it becomes an industrial agreement, and may be rescinded or varied. The second part of sec. 14 goes on to describe the parties on whom an industrial agreement is binding. Having given the definition at considerable length, the Act goes on to say that an industrial agreement "as between the parties bound by the same" shall have certain effects. If you strike out these words, which is an extraordinary mode of construction, no effect is given to the concluding part of the preceding section, which is the foundation and definition of these words, and is devoted to defining the words "parties bound by the same." The Supreme Court rejects these words altogether and their definition. When an industrial agreement is entered into, the obligations of it are not imposed upon the parties against their will, but by their own agreement and assent. When the Act says that it may be enforced as between themselves, it simply means that the terms to which they have agreed by a registered agreement may be enforced as between them, but nobody else is bound by it. But an award also can only be enforced, qua award, as between the parties to the litigation. Yet, it is said, a common rule can be made after an award. That is true. The parties to the award are bound by it, but a common rule affects persons not parties to the award; and it is suggested that because an industrial agreement also binds the parties to it, who are expressly defined, therefore it also may be, like an award, enforced against others not parties to it. This seems to be a singular argument. It is said that there will be just as much difficulty in carrying out the terms of an industrial agreement as of an award, because it might contain conditions which expose the employer to great competition. But the answer is—then why make the agreement? The parties can alter it or rescind it. That is a matter entirely in the hands of the parties. If they make an agreement which proves to be inconvenient, they are allowed to rescind it. That is no reason why an agreement should be said to be on the same footing as an award. The president of the Arbitration Court thought it would be inconvenient if the Court could not have the advantage of an amicable settlement between the parties. That, however, is a matter for the legislature, and, if the Court is to be able to take advantage of it, they must be placed in that position by Parliament.

For these reasons it seems to me that it is impossible to say that a mere industrial agreement, which has not been made an award of the Court, may be enforced by making it a common rule without rejecting from sec. 15 the words "as between the parties bound by the same." The enforcement by means of a common rule is not the enforcement of an agreement between the parties at all. It is an enforcement against other persons, strangers to the agreement, and is an extension of the agreement to other persons. That is sufficient, of course, to dispose of the case.

But there is another point I should advert to. It is contended by the appellants that, even if an agreement could be made the foundation of a common rule, it must at least be an agreement capable of enforcement. It is provided by sec. 15 that industrial agreements, "as between the parties bound by the same shall have the same effect and may be enforced in the same way as an award of the Court of Arbitration, and the Court shall have full and exclusive jurisdiction in respect thereof." But how can an industrial agreement, incapable of being enforced, be enforced? It is a contradiction in terms. The present agreement is not capable of enforcement. No party to it can take proceedings against the other parties, and therefore, it cannot be enforced.

For these reasons it appears to me that the Arbitration Court has asserted a jurisdiction which the legislature did not intend to give it, and by means of a short cut, and without first providing the statutory foundation prescribed as what I may call the safeguard by the Act, has endeavoured to impose obligations upon persons over whom it had no authority.

Appeal allowed with costs against all respondents except the members of the Arbitration Court. Order of Supreme Court discharging Rule Nisi discharged with costs. Rule absolute for prohibition with costs.

[1] [1844] EngR 822; 11 Cl. & F., 85, at p. 143.

[2] [1904] HCA 9; 1 C.L.R., 181, at p. 201.

[3] (1904) 4 S.R. (N.S.W.), 384, at pp. 387-8.

[4] (1904) 4 S.R. (N.S.W.), 384, at p. 392.

[5] (1904) 4 S.R. (N.S.W.), 401.

[6] (1904) 4 S.R. (N.S.W.), 401, at p. 412.

[7] [1904] HCA 3; 1 C.L.R., 77.

[8] (1901) 1 K.B., 487, at p. 491.

High Court of Australia

Master Retailers' Association of NSW v Shop Assistants Union of NSW [1904] HCA 39; (1904) 2 CLR 94 (8 December 1904)

HIGH COURT OF AUSTRALIA