Supreme Court New South Wales
Medium Neutral Citation
Union Link International Pty Ltd v Evan Ji Pty Ltd [2011] NSWSC 1078
Hearing Dates
08/09/2011
Decision Date
08/09/2011
Jurisdiction
Equity Division
Before
McDougall J
Decision
Plaintiff’s claim dismissed with costs. Judgment for cross-claimant on cross-claim with costs.

Catchwords
CONTRACT – contract for sale of business – construction of contract – whether contract was repudiated – whether specific performance available to vendor – no question of principle – COSTS – whether party entitled to indemnity costs where successful argument was introduced for the first time in submissions following close of evidence.
Cases Cited
Calderbank v Calderbank (1975) 3 All ER 333
Category
Principal judgment
Parties
Union Link International Pty Ltd (ACN 132 950 602) (Plaintiff)
Evan Ji Pty Ltd (ACN 144 898 340) (First Defendant)
Dabin Ji (Second Defendant)
Representation
Solicitors:
Haworth & Lexon (Plaintiff)
Wang & Associates (Defendants)Counsel:
D P O’Connor (Plaintiff)
N J Broadbent (Defendants)
File Number(s)
2011/239105

Judgment (EX TEMPORE)

 

1HIS HONOUR: On 28 July 2010, the plaintiff (Union Link) and the first defendant (Evan Ji) made an agreement for Union Link to sell to Evan Ji Union Link’s business at Leichhardt, known as the Amore Cafe Restaurant (the agreement).

2The restaurant business (as I shall call it) was one of two businesses then conducted by Union Link at Leichhardt. The other, known as Amore Gelato, was conducted from adjoining premises. That is of some significance in relation to a pre-contractual representation that was said to have been made.

3In these proceedings, Union Link seeks, among other things, an order that Evan Ji “do all things necessary to effect the transfer of lease [of the restaurant] as outlined in the document styled, deed of consent to assignment of lease”. It seeks a further order that the second defendant (Mr Ji, who is the principal of Evan Ji) “provide the necessary guarantee to allow for an assignment of lease from [sic] the plaintiff to the first defendant”. Other orders are sought, including a declaration that Evan Ji’s notice of rescission is invalid.

4Before the contract was made, Mr Ji discussed the proposed sale of the restaurant business with Mr Wen Cong Lin, the principal of Union Link. It is apparent that Messrs Lin and Ji reached an agreement in principle for Mr Ji to buy the restaurant business. Ultimately, as I have said, that transaction was effected through his company Evan Ji.

5In the course of those pre-contractual discussions, Mr Ji raised with Mr Lin what Mr Ji saw as the insufficiency of seating available to the restaurant business. According to Mr Ji, Mr Lin said that the restaurant could use otherwise unused seats in the adjacent gelato business to accommodate any overflow of customers. It is clear that this arrangement was perceived as being beneficial to all parties.

6As I have said, the agreement for sale that was struck orally was reduced to writing. Although the contract included a special condition, in the usual form, negating reliance on any pre-contractual statement etc that was not incorporated into the contract, that does not prevent me from finding, as I do, that discussions in relation to the use of the gelato bar’s seating occurred, substantially as alleged by Mr Ji in his affidavit.

7It will be apparent from what I have said that Union Link carried on the business pursuant to a lease. That lease had been assigned to Union Link when it commenced to operate the business.

8The contract contained a number of provisions that are of significance. I start by observing that, on the very first page, and before the details of the parties and the transaction are set out, the following words were contained in parentheses:

(A choice printed in BLOCK CAPITALS applies unless a different choice is marked)

 

9On the second page of the printed form of contract, there was a heading “Choices”. Each of the choices was followed by two boxes. One box had the word “NO” against it, in block capitals. The other box had the word “Yes” against it, in lower case print.

10One of the choices so indicated read:

Purchaser must provide suitable guarantee.

 

11Neither the “no” box nor the “yes” box was checked. Accordingly, the default position set out on the first page of the contract applied, and the answer “no” must be taken to apply.

12The reference to “suitable guarantee” might appear to be somewhat Delphic on its own. However, the contract made it clear that this “choice” was relevant to clause 27.2.3. That clause (again of the printed conditions) dealt with the situation that the premises from which the business was conducted were, or on completion would be, subject to a lease: that is to say, the facts of this case. Clause 27.2 imposed obligations on Evan Ji, as purchaser, in those circumstances:

27.2 The purchaser must -

27.2.1 supply references and other information reasonably required by the landlord to consider the application;

27.2.2 pay or bear the costs and expenses of the landlord (including the costs of a landlord’s mortgage) arising from any negotiations between the landlord and the purchaser for proposed changes to a lease disclosed in this contract, whether or not this contract is completed; and

27.2.3 if this contract says the purchaser must provide a suitable guarantee, provide any guarantee reasonably required by the landlord to support performance of the obligations of the tenant under the lease.

 

13Clause 29 of the printed conditions picked up the question of transfer of the lease. It read:

29. Transfer of existing lease

 

29.1 This clause applies only if -

29.1.1 the premises are subject to a lease; and

29.1.2 this contract does not say the sale is subject to the grant of a new lease.

29.2 The parties intend that the landlord is to consent to a transfer of the lease from the vendor to the purchaser .

29.3 The purchaser must serve the form of transfer at least 7 days before the completion date .

29.4 If the landlord does not consent to the transfer of the lease -

29.4.1 by the completion date , the purchaser can rescind; or

29.4.2 by the 90 th day after the contract date , a party can rescind.

29.5 A party cannot rescind under clause 29.4 after the other party has served notice of the consent of the landlord.

 

14The reference to rescission takes one back to clause 23 which, so far as it is relevant, read:

23.1 If this contract expressly gives a party a right to rescind, the party can exercise the right -

23.1.1 only by serving a notice before completion; and

23.1.2 in spite of any making of a claim or requisition, any attempt to satisfy a claim or requisition , any arbitration, litigation, mediation or negotiation or any giving or taking of possession.

 

15There were a number of special conditions. Special condition 3 required each party to do what was required “for the effective consummation of the transactions contemplated and/or stipulated by this contract”.

16Special conditions 12 and 17 dealt once more with the lease:

12. Condition precedent

Notwithstanding any other provision in this contract the sale of the business is subject to the lessor transferring the existing lease to the purchaser. Should the Landlord declines to give its consent to the transfer of lease, then the purchasers are entitled to rescind this contract ab initio and the vendor will refund and return to the purchaser their full deposit.

…

 

17. Completion

The completion of this contract is only conditional upon the Lessor consenting to transfer of the Vendor’s current lease to the Purchaser, the notification of such consent to the Purchaser, the Vendor and the Purchaser to sign all necessary transfer of lease documents and consent of settlement from the lessor.

 

17Special condition 27 dealt with transfer of the liquor licence:

27. TRANSFER OF LIQUOR LICENCE

Notwithstanding anything to the contrary, settlement of the sale of business is conditional upon the purchaser obtaining a provisional approval from the Department of Casino, Liquor & Gaming Control Authority. The Purchasers’ solicitors should submit to the Vendors’ solicitors the relevant documentations for the Vendors’ with SEVEN (7) days after exchange of contracts. Upon receipt of the executed documentations from the Vendors’ solicitors, the Purchasers should promptly submit the application without delay.

 

18There is no evidence that Evans Ji’s solicitors (in this case, in fact, conveyancers) did what was required to be done by the second sentence of that special condition.

19The existing lease, that had been assigned to Union Link, was annexed to the contract. That lease specified that a bank guarantee would be provided to cover three months’ rent and three months’ of the lessee’s proportion of outgoings. The requirement was elaborated in clause 16, which required delivery of an unconditional and irrevocable bank guarantee.

20There was also annexed to the contract the deed of consent to assignment of lease whereby the lease had been assigned (or agreed to be assigned) to Union Link. Mr Lin was named on the cover page of that document as “Guarantor”. Although he was not stated in the body of the deed to be a party, it is apparent that he signed it both in his capacity as director and secretary of Union Link and in his personal capacity.

21Mr Ji was cross-examined on the extent to which the various terms of the contract, and the documents annexed to it, have been drawn to his attention. He said, in substance, that he relied on his conveyancer, Mr Sherman Zhong, to explain matters to him; that he signed where Mr Zhong told him to sign; and that he read no more than the parts where he signed. I accept that evidence. It seems to me to be entirely consistent with the probabilities, including the evident fact that English was not Mr Ji’s first language, and that to the extent that he had capability in English, it is unlikely that he would have been familiar with legal documents.

22Mr Ji said also, in this context, that he told Mr Zhong that he did not wish to be a guarantor. That appears to relate to the possibility that a director of the purchaser would give a guarantee. That was covered by special condition 28, which condition was left incomplete. Mr Ji does not appear to have executed the contract in his personal capacity.

23The purchase price of $30,000 was paid on or before execution of the contract, and either Mr Ji or Evan Ji (it does not matter which) went into possession and ran the business. There is unfortunately a dearth of evidence as to what steps were performed during the course of the conveyancing transaction. It is apparent that the lessor of the premises was asked for its consent, and the licensor of some adjacent property (in respect of which Union Link held a licence, and which licence was to be assigned on completion of the contract) was asked for consent to assignment of the licence.

24Since there is some, although not particularly cogent, evidence that the licensor did give its consent before Evan Ji gave notice of termination of the contract, I will say no more about the licence.

25On 19 August 2010, the lessor’s solicitors wrote to Mr Zhong’s firm asking for information in relation to the proposed assignment. Three matters were raised:

1. The provisions of the Lease and in particular Clause 10 of the Lease, headed “Transfer and Sub-Lease”, will need to be satisfied in relation to the proposed assignment of the Lease to your client and the Lease provides that the proposed Assignee must provide the Lessor with certain information regarding the financial standing and business experience of the proposed Assignee.

 

2. In order for the Lessor to deal with the request for consent to the proposed assignment of the Lease, it will be necessary for your client to provide us with a completed Questionnaire and Statement of Assets and Liabilities, the form of which is attached . Such Statement is to be certified by your client’s accountant, and be provided to us together with any supporting documentation that your client wishes our clients to consider before making a decision in relation to the proposed assignment.

 

3. Please advise if the Lessee, Union Link International Pty Ltd, has furnished your client with a copy of the Disclosure Statement given to the Lessee in respect of the Lease (in accordance with the provisions of Clause 10.4 of the Lease), together with details of any changes that have occurred in respect of the information contained therein.

 

26It does not appear how, if at all, Mr Zhong replied. However, given that:

(1) on 22 October 2010, the lessor’s solicitors indicated that the lessor would consent to the assignment of the lease on certain conditions; and

(2) on 11 November 2010, Mr Zhong wrote to Union Link’s solicitors indicated that the (only) matter holding up completion was “the consent for Licence agreement”,

I would infer that the lessor’s solicitors received a reply, satisfactory to them and their client, to their letter of 19 August 2010.

27It should be noted that the letter of 19 August 2010, so far as it appears on the face of the document, did not ask for any information as to who might be prepared to guarantee Evan Ji’s obligations under the lease or what the standing and capacity of that person to meet his or her guarantee might be.

28It seems that the relationship between Messrs Ji and Lin broke down in late October 2010. At that time, according to Mr Ji, they had a conversation in the course of which, Mr Ji says, Mr Lin sought to change the basis on which the restaurant business could use the spare seating capacity of the gelato bar. According to Mr Ji, Mr Lin, when pressed to keep to his oral promise, said:

“Fine, I’m not selling the restaurant to you anymore.”

 

Mr Ji said that he replied:

“All right, would you return my $30,000.”

 

And that Mr Lin replied:

“You’ll get it”.

 

(Those conversations are set out in English in Mr Ji’s affidavit but, as he said, they took place in the Mandarin language.)

29Mr Lin disputes that the conversation was in the terms alleged. Specifically, he disputes that he said, “I’m not selling the restaurant to you any more” or that he agreed, on request made by Mr Ji, to return the $30,000.

30The conduct alleged is said to constitute a repudiation. It is said that the repudiation was accepted by Evan Ji when Mr Ji asked for the return of the money that he had paid.

31I am not prepared to find that a conversation took place in the terms alleged by Mr Ji. There are several factors that lead me to that view. The first is that there was no contemporary correspondence in which the alleged repudiation, and acceptance, were referred to. The parties do not appear thereafter to have proceeded on the basis that the contract was at an end. On the contrary, at least so far as Union Link’s solicitors and Evan Ji’s conveyancer were concerned, the contract was still on foot. It is, I think, particularly significant that (so far as one can tell, from the correspondence) Mr Zhong continued at least from time to time to do things directed towards settlement of the contract, presumably on the understanding that it was still on foot.

32Another matter that disinclines me to accept Mr Ji’s version of the conversation is that, I think, it was unlikely to have occurred. It is clear that Mr Lin was short of money at the time. It is clear that he could not afford to pay the rent on both premises and that he did not have the time or energy (at least on his view of the world) to run them both. In my view, it is less rather than more likely, in those circumstances, that he would have acted as Mr Ji says he did.

33There is a question of onus here. Since it is the defendants who allege repudiation, it is they who bear the evidentiary burden of proving it. The court needs to be satisfied, on balance, that the words alleged (more accurately, their Mandarin equivalent) were used. For the reasons that I have given, I am not satisfied that such words were used.

34I would add also that, when Mr Ji was questioned as to why he had not (as it seems he had not) told Mr Zhong of the alleged termination, occurring by accepted repudiation, the answer that he gave was not one that had any sensible content so far as I could discern.

35Thus, to the extent that the defendants rely on that alleged repudiation, their case cannot be upheld.

36That, however, is not the end of the matter. The notice of termination that was given on 30 May 2011 relied on the right given by clause 29.4.2 of the contract, in circumstances where (it was said) “90 days have passed since the contract date without the lessor’s consent”.

37Union Link relies on the fact that, on 22 October 2010, the lessor’s solicitors wrote to both parties (through their representatives) advising that the lessor would consent to assignment of the lease. Leaving aside formalities, that letter reads as follows:

We advise that the Lessor is prepared to consent to the Assignment of the Lease to your client on the following basis:

 

1. Execution and return to us of enclosed Deed of Consent to Assignment signed by all parties.

2. Provision of a new Bank Guarantee from the Assignee for an amount of $30,321.42.

3. Payment of Lessor’s costs of acting on the assignment of Lease in accordance with the invoice enclosed for $1,007.60.

4. Provision of a cheque for payment of the November rent.

5. Evidence of public liability insurance as required under the Lease.

 

Please advise when settlement of the sale is to take place.

 

38The draft deed of consent to assignment of lease described Mr Ji as “guarantor”. Further, and unlike the previous assignment, it actually named him as one of the parties between whom the deed was made. Clause 12 of that would constitute, on Mr Ji’s execution and delivery of the deed, an agreement by him to guarantee the obligations of Evan Ji under the lease and to indemnify the lessor in the event of default by Evan Ji.

39The question that is raised is whether the indication of consent that was given in the letter of 22 October 2010 is a sufficient consent for the purposes of clause 29 of the contract and (to the extent that they add anything) special conditions 12 and 17.

40It is clear, reading the letter with its attachment, that the lessor’s position was that it would consent to the assignment if the five conditions specified in the letter were met. One of those conditions required execution and delivery of the deed of consent. By necessary implication, the lessor was saying, among other things, that it required Mr Ji to execute the deed of consent in his own capacity as guarantor, and thus to give an offer of guarantee and indemnity in terms of clause 12 of that deed.

41The difficulty, with saying that Evan Ji was obliged to execute that draft deed, is that the requirement for Mr Ji to give a personal guarantee had been negated on the proper construction of the contract. I refer to what I have said as to the relevant “choice” in relation to a guarantee, the default selection of the answer “no” and thus the negation of the operation of clause 27.2.3.

42In circumstances where the contract did not require Evan Ji to procure Mr Ji to execute a guarantee of the lease, it seems to me that it could not be said that Evan Ji was required to procure him so to do, either by operation of special condition 13 or otherwise.

43Special condition 3 required the parties to do and “execute, acknowledge and deliver, all such further acts, documents or instruments as may be required for the effective consummation of the transactions contemplated and/or stipulated by this contract”. In the face of the matters to which I have referred as to the “choices” section of the contract, and the consequent negation of clause 27.2.3, it cannot be said that the execution of a deed of consent which did require Mr Ji to give his personal guarantee was something either contemplated or stipulated for by the contract. Thus, given that the requirement to do those things must be qualified by some implied obligation of reasonableness, it cannot be unreasonable for Evan Ji to have declined to do that which, on a proper view of the contract, it had said it would not do.

44In those circumstances, I conclude that the consent, or indication of consent, contained in the letter of 22 October 2010 was not an indication of consent sufficient to engage the relevant requirements of clause 29, or, for that matter, of special conditions 12 and 17.

45There was some question too as to the requirements of special condition 27, in relation to the transfer of liquor licence. Although there was no evidence that that condition had been satisfied, it is at least doubtful that Evans Ji could rely on this in circumstances where there is no evidence that its conveyancer, Mr Zhong, had complied with the second sentence of that condition.

46Thus, in my view, by the time 30 May 2011 rolled around, there was no consent as required by clause 29.4.2 of the contract and it was then open to Evan Ji to do as it did and rescind.

47There were other arguments raised. One related to misleading or deceptive conduct alleged against Mr Ji, apparently in working in the business allegedly knowing that he was required to give a guarantee, but not giving that guarantee and not advising Union Link that he would not do so. The short answer to that seems to me to be that, as I have said, on its proper construction the contract did not require him to give any guarantee (of the lease); on the contrary, it contemplated that he would not give such a guarantee.

48Another question raised related to alleged repudiatory conduct on the part of Union Link and Mr Lin, in offering the business for sale once the relationship between the parties had broken down following the events of October 2010. As I said in the course of argument, that evidence appears to me to be equivocal. If Union Link had acted in the manner alleged by Mr Ji, its further actions in seeking to sell the business were consistent. Equally, if Evan Ji had repudiated the contract by refusing to perform, Union Link’s actions in seeking to sell the business were consistent with its trying to mitigate its loss.

49The conclusions to which I have come as a matter of fact and on the proper construction of the contract, are sufficient to dispose of the proceedings. Before I turn to the cross-claim, I should, however, indicate that in my view there was a fundamental problem in the way that the case for Union Link was put. In essence, it was seeking specific performance of part only of a contract for sale. That is not consistent with the way that equity acts, in granting specific performance. It is usual that contracts for sale have interdependent obligations that are to be performed on completion. That is certainly the case with this contract. If there were to be the equivalent of specific performance, it would be of the whole contract to the extent that it remained to be performed.

50It is not appropriate to grant specific performance of an obligation in circumstances where, first, there is no evidence of readiness or willingness on the part of the party seeking specific performance to perform its own unperformed obligations, and, secondly, no offer (at least until the point was drawn to the attention of counsel in submissions) to perform.

51In those circumstances, even if I had been of the view that a case for relief had been made out, I would have refused relief of a discretionary kind and left Union Link to its case in damages at law (not under Lord Cairns’ Act).

52Evan Ji cross-claimed. It sought return of the deposit, alternatively damages and an indemnity against loss. On the view to which I have come, it is entitled to have the deposit refunded. There was no real evidence that it had suffered loss other than in relation to the deposit, and in circumstances where that is so I will do no more than reserve liberty to apply in respect of the prayer for damages if that is pressed.

53The result of all this is that the summons must be dismissed with costs, and I so order.

54On the cross summons, I direct entry of judgment in favour of the first cross-claimant against the cross-defendant in the sum of $30,000 together with interest from the date of payment of that amount to the date of judgment. I reserve liberty to apply in respect of damages; any such liberty is to be exercised by notice given to the other side and to my associate within 28 days of today’s date.

55I order the cross-defendant to pay the cross-claimant’s costs of the cross-claim.

(Counsel addressed.)

56Union Link seeks a variation of the costs orders that I have just made, to reflect the fact that the point on which I decided in favour of Evan Ji was raised only in submissions following the close of the evidence.

57Evan Ji seeks an order for costs on an indemnity basis from some time in August 2011. It does so on the basis of a letter that is said to have been sent in accordance with the principles in Calderbank v Calderbank (1975) 3 All ER 333.

58I do not propose to accede to either application.

59In relation to Union Link’s application, it chose to move for specific performance in circumstances where, on my view of the contract and the events that have happened, it could not possibly succeed. For the same reasons it could not possibly succeed either in its alternative claim for damages for breach or in its claim against Mr Ji personally for misleading or deceptive conduct.

60The general principle is that costs follow the event. The fact that what might be called the ‘killer point’ was referred to late in the day does not seem to me to be a sufficient reason to displace that principle.

61However, that fact is most relevant to the application for indemnity costs based on the so-called Calderbank letter.

62The Calderbank letter does not set out the reasons why it was appropriate for the parties to consider a “commercial outcome” except, of course, the obvious reason for saving costs. Specifically, in that context, there had been no flagging of the point in relation to clause 27.2.3. That point was not referred to until closing submissions. It had not even been referred to in the outline of the first and second defendants’ submissions that was provided to the court on 7 August 2011.

63In those circumstances, I think, the discretion to award costs on some basis other than the ordinary basis is not enlivened; or if it is enlivened, it should not be exercised in favour of the defendants.

64The orders are to be as I have indicated. The only outstanding matter is quantification of the amount to which the first cross-claimant is entitled, bearing in mind that the claim will carry interest from the date when the money was paid. I should go back I think on what I said in that regard because I indicated that interest should run from the date of payment. On reflection, I think, interest should run from the date of rescission, with interest before that date (if it is applicable) to be dealt with in accordance with the terms of the contract.

65Whether or not the defendants wish to press the claim for interest for what will only be a few months is a matter for them. I think that the best outcome is to stand the matter over for a day or so so that the parties can prepare short minutes of order to give effect for these reasons. If interest is claimed, I would expect it to be calculated by consent.

66I stand the matter over for orders at 9.30am on 16 September 2011 before me. I reserve liberty to apply in chambers in the event that the parties are agreed on the form of orders to be made.

Judgement

1CAMPBELL JA : I agree with Sackville AJA.

2HANDLEY AJA : I agree with Sackville AJA.

3SACKVILLE AJA: The application before this Court seeks orders, in effect, prohibiting the Industrial Court of New South Wales from continuing to hear a claim for relief brought by the second opponent (“ Mr Rose “). The Claimants (“ Meriton ” and “ Owners Corporation “, respectively) assert that the Industrial Court does not have jurisdiction to grant the relief sought by Mr Rose. By an amended summons filed on 24 June 2010, they seek orders in the nature of prerogative relief pursuant to s 69 of the Supreme Court Act 1970.

4The first opponent in this Court is the Industrial Court, which has filed a submitting appearance.

 

THE PROCEEDINGS IN THIS COURT

 

5Mr Rose’s claim for relief in the Industrial Court arose primarily out of a so-called Caretaker Agreement between Regis Towers Real Estate Pty Ltd (“ Regis Towers “) and Owners Corporation. Mr Rose, a non-practising solicitor, was a director of Regis Towers and held three of the four ordinary shares (his wife held the fourth). Meriton was the developer of an apartment complex located at Pitt and Castlereagh Streets, Sydney (“ the Complex “). Owners Corporation was created as a corporate entity when the strata scheme in respect of the Complex was registered. The Caretaker Agreement related to management of the Complex and conferred certain entitlements on Regis Towers in return for payments by Owners Corporation.

 

6Mr Rose’s summons in the Industrial Court sought relief under s 106(1) of the Industrial Relations Act 1996 (“ IR Act “), as follows:

 

“(1) A declaration that the contract (consisting of a Deed between [Meriton] and [Regis Towers] (now in administration, and formerly known as Cesscut Pty Limited), and additionally consisting of a contract or collateral arrangement between [Owners Corporation] and [Regis Towers] whereby [Mr Rose] performed work in an industry in and of New South Wales, was unfair, harsh or unconscionable or against the public interest.

 

(2) An order declaring the contract wholly or partly void, or varied, from the date of commencement or some later time, save for remuneration paid or payable to or on behalf of [Mr Rose].

 

(3) An order varying the terms of the contract (insofar as it consisted of a contract or a collateral arrangement between [Owners Corporation] and Regis Towers Real Estate Pty Limited (in administration), ‘the Caretaker Agreement’) to provide for … [express terms intended to establish mechanisms for increasing the remuneration payable to Regis Towers].”

 

7In addition, the summons sought an order pursuant to s 106(5) of the IR Act that the Claimants pay to Mr Rose a sum of money in connection with the contract “ so voided or varied ” by the Industrial Court. The particulars indicated that Mr Rose sought an amount equivalent to the sum he had personally invested “ on behalf of Regis Towers “, being $525,000. Mr Rose also sought the sum of $10 million “ representing the personal loss of financial benefit which [he] suffered by reason of the unfairness of the [Caretaker Agreement] “.

 

8The Claimants filed a motion in the Industrial Court seeking orders that Mr Rose’s summons be summarily dismissed. A Judge of that Court (Marks J) made an order for summary dismissal. His Honour held, among other things, that Mr Rose lacked standing to bring the proceedings under s 106(1) of the IR Act .

 

9Mr Rose succeeded in an appeal to the Full Bench of the Industrial Court. The Full Bench dismissed the Claimants’ motions, thus removing any barrier to Mr Rose’s claim for relief proceeding in the Industrial Court.

 

10The orders sought by the Claimants in this Court are as follows:

 

“1. An order prohibiting the [Industrial Court] from taking any further steps to exercise, or purporting to exercise, their power under section 106 Industrial Relations Act 1996 (NSW) in Industrial Court of New South Wales Proceedings Number 2131 of 2005 with respect to the contracts and arrangements described in the Summons for Relief filed on 27 March [sic: April] 2005.

 

2. An order that the judgment and orders of the Full Bench of the Industrial Court of New South Wales in Proceedings Number 2131 of 2005 delivered on 30 November 2007 concerning [Meriton's] motion filed on 23 February 2006 and [Owners Corporation's] motion filed on 2 March 2006 be called into this Court and quashed.”

 

LEGISLATION

 

11The relevant provisions of the IR Act are as follows:

 

“ 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.

 

 

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.

 

…

 

 

(2A) A contract that is a related condition or collateral arrangement may be declared void 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.

 

…

 

(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.

 

…

 

108 Who may apply for order

 

An order may be made under this Division on the application of:

 

(a) any party to the contract, or

 

(b) any person who, but for the making of such an order, would be a party to the contract, or

 

 

and not otherwise.

 

…

 

179 Finality of decisions

 

(1) A decision of the Commission (however constituted) is final and may not be appealed against, reviewed, quashed or called into question by any court or tribunal.

 

(2) Proceedings of the Commission (however constituted) may not be prevented from being brought, prevented from being continued, terminated or called into question by any court or tribunal.

 

(3) This section extends to proceedings brought in a court or tribunal in respect of a decision or proceedings of the Commission on an issue of fact or law.

 

(4) This section extends to proceedings brought in a court or tribunal in respect of a purported decision of the Commission on an issue of the jurisdiction of the Commission, but does not extend to any such purported decision of:

 

(a) the Full Bench of the Commission in Court Session, or

 

(b) the Commission in Court Session if the Full Bench refuses to give leave to appeal the decision.

 

(5) This section extends to proceedings brought in a court or tribunal for any relief or remedy, whether by order in the nature of prohibition, certiorari or mandamus, by injunction or declaration or otherwise.

 

(6) This section is subject to the exercise of a right of appeal to a Full Bench of the Commission conferred by this or any other Act or law.

 

(7) In this section:

 

decision includes any award or order.”

 

12For present purposes, three points should be noted about these provisions. First, ss 105-108 are contained in Pt 9 of Ch 2 of the IR Act. Proceedings instituted under Pt 9 of Ch 2 are to be heard and determined only by the Commission in Court Session: s 153(1)(c). The Commission in Court Session is the Commission constituted by a judicial member or members for the purpose of exercising the functions conferred by statute on the Commission in Court Session: s 151(1). The name of the Commission in Court Session is the Industrial Court of New South Wales: s 151A.

 

13Secondly, s 106(2A) of the IR Act was inserted by the Industrial Relations Amendment Act 2005 (“ 2005 Act “), which commenced on 9 December 2005. However, s 106(2A) was given retrospective effect: see Sch 1 to the 2005 Act .

 

14Thirdly, s 108 of the IR Act reproduces, with some variations, the language of s 88F(2C) of the Industrial Arbitration Act 1940, which was introduced by the Industrial Arbitration (Further Amendment) Act 1985. Prior to the 1985 amendment, the Industrial Arbitration Act did not specify who could bring an application under s 88F (broadly equivalent to s 106 of the IR Act). The words “ and not otherwise “, which now form part of s 108 of the IR Act, were part of the original s 88F(2C), introduced in 1985.

 

THE CARETAKER DEEDS

 

15Before considering the convoluted history of this litigation, it is convenient to explain the terms of the two deeds to which Regis Towers was a party. The first was a deed dated 20 April 1999 between Meriton and Regis Towers (“ April Deed “). The second was an agreement dated 6 August 1999 between Owners Corporation and Regis Towers (“ Caretaker Agreement “). The Caretaker Agreement was executed by Regis Towers by the affixation of its common seal. The seal was said to have been affixed in the presence of Mr Rose, whose signature appears on the document with the word “ Director ” written, presumably, in Mr Rose’s handwriting. I refer to both deeds together as the “ Caretaker Deeds “.

 

April Deed

 

16The April Deed recited that Regis Towers (referred to as the “ Caretaker “) had requested Meriton (referred to as the “ Developer “) to arrange for “ the Owners Corporation ” to grant to Regis Towers the caretaking and letting rights in respect of the Complex. The expression “ Owners Corporation ” was defined in the April Deed to mean the Owners Corporation which would come into existence on registration of the strata plan in respect of the Complex.

 

17Meriton was required to cause the Owners Corporation, as soon as practicable, to perform a number of acts. These included resolving to enter into a “ Caretaker-Management Agreement ” in respect of the Complex, the terms of which were set out in a schedule (cl 2.1(c)). Regis Towers warranted that it would apply for and obtain, within a specified period, either an “ On Site Property Manager’s Licence ” or a “ Restricted Real Estate Licence ” (cl 2.3).

 

18In consideration of Meriton using its best endeavours in accordance with cl 2 of the April Deed, Regis Towers agreed to pay Meriton $1,750,000 in accordance with a specified timetable (cl 3.1). The timetable provided for payment of:

 

• a deposit of $131,250;
• $1,017,500 on the completion of the “ Castlereagh Street Contract” ; and
• $601,250 on the completion of the “ Campbell Street Contract “. 

Each of the “ Castlereagh Street Contract ” and the “ Campbell Street Contract ” was defined to mean a contract between Meriton and Regis Towers whereby Regis Towers agreed to purchase from Meriton a specified lot in the Complex. The lots were identified as Lots 454 and 650, respectively.

 

19The amounts due to Regis Towers by the Owners Corporation under the Caretaker-Management Agreement were to be paid progressively as set out in the April Deed (cl 3.4). The sum of $365,000 was due on completion of the Castlereagh Street Contract and the first annual payment of $155,000 was due on settlement of the Campbell Street Contract.

 

20Regis Towers was to execute and return the Caretaker-Management Agreement to Meriton within five days of submission thereof (cl 5.1).

 

Caretaker Agreement

 

21Under the Caretaker Agreement, Owners Corporation agreed to engage Regis Towers to perform the duties set out in Sch 2 in a conscientious, expeditious and workmanlike manner, so as to maintain the common areas of the building and to permit them to be enjoyed to an appropriate standard. Regis Towers accepted the engagement (cl 1).

 

22The Caretaker Agreement was to subsist for an initial term of ten years, with Regis Towers having an option to renew the Agreement for three additional terms, each of five years (cl 8.1, 8.2). However, Regis Towers could terminate the Caretaker Agreement by giving three months written notice (cl 8.5.1). Owners Corporation could terminate the Caretaker Agreement in the event of certain breaches by Regis Towers or in other defined circumstances (cl 8.5.3).

 

23Regis Towers’ duties under the Caretaker Agreement included the following (cl 2, Sch 2):

 

“[Regis Towers] shall by its employees, contractors or agents:

 

(a) Maintain and care for the strata scheme and attend to the gardening, cleaning and building maintenance of the building and common property and any improvements thereon …

 

(b) Supervise the observance of the by-laws of the Owners Corporation by the proprietors and/or the occupiers including their guests and licensees for the time being of the lots in the said strata scheme. The Caretaker must serve notices on occupants in relation to breaches of by-laws and must Record all breaches for future reference.

 

…

 

(d) Reside, or if the Caretaker is a corporation, ensure that the principal person performing the duties of Caretaker pursuant to this Agreement resides in Lot 71 in the building and to permit its substitute from time to time to reside in that Unit.

 

…”

 

24Owners Corporation was required to pay Regis Towers an annual sum by fortnightly instalments for the performance of the latter’s duties specified in Sch 2 (cl 2). The annual sum was initially set at $676,000 (Sch 1, Item 2).

 

25Regis Towers was entitled to provide services as agent for lot owners, including collecting rents and buying, selling or leasing lots within the strata scheme. If Regis Towers performed these services, Owners Corporation incurred no liability to pay the remuneration for the services (cl 4).

 

26Regis Towers could conduct the business of providing the services referred to in cl 4 from Lots 454, 489 and 650, pursuant to the rights conferred on the owner of the “ Caretaker’s Lots ” by the terms of a proposed by-law set out in Sch 3 (cl 5). (The expression “Caretaker’s Lots ” was defined to mean Lots 454, 489 and 460.) Proposed by-law 36 prohibited the owner or occupier of every lot, except the three Caretaker’s Lots from performing the Caretaker’s duties as set out in proposed by-law 34 (which largely reflected the terms of Sch 2 to the Caretaker Agreement). It will be seen that two of the three Caretaker’s Lots were identified in the April Deed but the third (Lot 454) was not.

 

27In providing services under the Caretaker Agreement, Regis Towers was required to comply with the requirements of the Property, Stock and Business Agents Act 1941 and the regulations thereunder. Regis Towers was also obliged to treat all lot owners fairly (cl 7).

 

28The grounds on which Owners Corporation could terminate the Caretaker Agreement under cl 8.5.3 included the following:

 

“(e) the proprietor or one of the proprietors of the Caretaker’s lots, recorded on the folio of the Register comprising that lot, is not the Caretaker or any shareholder or principal of any Caretaker company … or is not an assignee under this Agreement …;

 

(f) The Caretaker does not hold any licence … or other qualification required for the lawful performance of its responsibilities or exercise of its rights under this Agreement.”

 

29In the event of termination pursuant to cl 8.5, cl 9(1) provided, somewhat ungrammatically, as follows:

 

“The Caretaker must sell or cause the owner(s) of the Caretaker’s Lots together with the Caretaker’s interest in this Agreement (‘the Caretaker-management rights’) to sell the Caretaker’s lots to a person nominated by the Owners Corporation.”

 

Owners Corporation was given the right to nominate a person to have the first right of refusal of the Caretaker’s Lots and the Caretaker-management rights at a price to be agreed or determined by a valuer (cl 9(2)).

 

30The Caretaker Agreement also included the following provisions:

 

“ Instructions

 

16. The Caretaker must ensure that its employees and agents have adequate instructions and supervision so as to permit discharge of its responsibilities to the appropriate standard.

 

…

 

Relationship

 

19. Nothing contained in this Agreement or inferred from it, of itself or with other circumstances, shall constitute a relationship of partnership or employer and employee between the parties. It is the express intention of the parties that any such relationship is denied.

 

Assignment

 

20. The Caretaker may not assign this Agreement without the consent under seal of the Owners Corporation which consent will not be unreasonably withheld. …

 

21.1 A change in the shareholding of the Caretaker which alters the effective control of the Caretaker shall constitute an assignment of this Agreement.

 

21.2 Upon assignment, the Caretaker must be released and discharged from any further liability under this Agreement but without prejudice to the rights and remedies of either party arising in respect of any matter or thing occurring prior to the date of assignment.

 

…

 

Caretaker-Manager a Corporation

 

27.1 If the Caretaker is a corporation, it will be the responsibility of the Caretaker to ensure at all reasonable times that an adequate number of its officers, managers, servants or agents are available on the complex to carry out the Caretaker’s duties and functions.

 

27.2 The persons used by the Caretaker to carry out the Caretaker’s duties and functions, who are not the principal shareholders or directors of the Caretaker, will require the prior approval in writing of the Executive Committee of the Owners Corporation, such approval not to be unreasonably withheld. The Caretaker must provide to the Executive Committee sufficient information concerning the persons involved to enable the Executive Committee to make a reasonable determination.”

 

31The Caretaker Agreement was varied on 17 October 2000 in a manner summarised by the Full Bench of the Industrial Court in its judgment (at [42.3], [52] below). Nothing turns on these variations.

 

HISTORY OF THE LITIGATION

 

Industrial Court Proceedings

 

32Mr Rose commenced proceedings in the Industrial Court on 27 April 2005. Mr Rose’s “ Matters of Fact and Law ” filed in the Industrial Court alleged that:

 

• in early 1999, Mr Rose was a director of Regis Towers (para 3);
• between February and March 1999, Mr Rose personally bought ten units in the Complex, which had been developed by Meriton (para 4);
• on 20 April 1999, following “ certain representations ” made by Meriton to Mr Rose and others, Meriton executed a Deed with Regis Towers: 

“whereby for consideration in the sum of $1,750,000.00, [Meriton] agreed inter alia , to procure a Caretaker Agreement between Regis Towers … and [Owners Corporation], whereby [Mr Rose] and others were to perform work in an industry in and of New South Wales … [Mr Rose] personally invested funds of $525,000.00, with the balance to be funded by way of a Vendor Finance arrangement with Meriton Finance Pty Limited.” (para 5);

 

• in August 1999, by the hand of Mr Rose, Regis Towers executed the Caretaker Agreement, whereby work was performed in an industry in New South Wales (para 6);
• contrary to Meriton’s representations, the standard of the strata scheme for the Complex was not satisfactory in that it did not comply with the Building Code of Australia : 

“and consequently the remuneration payable under the Caretaker Agreement was insufficient to permit Regis Towers … and [Mr Rose] to discharge their duties under the Caretaker Agreement. Consequently, Regis Towers … and [Mr Rose] bore considerable expenses at their own loss” (para 7);

 

• on 17 September 2004, Regis Towers and Mr Rose arranged for the appointment of a voluntary administrator to Regis Towers by reason of Meriton obtaining summary judgment against Regis Towers for $1,225,000 and Regis Towers not being able to service its debt because of the unprofitability of the Caretaker Agreement (para 9);
• by reason of the unfairness of the contract brought about by Meriton’s misrepresentations, the conduct of the Claimants: 

“and the terms of the Caretaker Agreement which failed to contain fair mechanisms for review of the remuneration …, [Mr Rose] suffered considerable personal loss and damage” (para 10);

 

at the date of the filing of the summons, Regis Towers continued to provide services to Owners Corporation (para 12); and

following the appointment of the Administrator to Regis Towers, Mr Rose commenced a contract of employment with the administrator, which terminated in February 2005 (para 13).

 

33Regis Towers was not a party to the proceedings in the Industrial Court. As Mr Rose’s summons in the Industrial Court indicated, Regis Towers was in administration at the time the proceedings were commenced. Although there was no evidence as to the subsequent fate of Regis Towers, this Court was informed from the bar table that the company had gone into liquidation long ago.

 

34On 21 June 2005, Mr Rose presented a debtor’s petition to the Official Receiver under s 55 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act “). By virtue of s 55(4A) he thereupon became bankrupt and his divisible property vested in his trustee in bankruptcy: s 58.

 

Motions in the Industrial Court

 

35On 14 February 2006, Owners Corporation filed a motion in the Industrial Court seeking orders that the proceedings be summarily dismissed or stayed. The grounds for the relief sought by Owners Corporation were, in summary, the following:

 

• Mr Rose had become bankrupt on 21 June 2005;
• Mr Rose’s trustee in bankruptcy subsequently purported to assign to Mr Rose the chose in action constituted by the Industrial Court proceedings;
• the purported assignment was contrary to the policy of the Bankruptcy Act and was beyond the power of the trustee and void; and
• in consequence, the proceedings were deemed by s 60(3) of the Bankruptcy Act to be abandoned by the trustee. 

36On 23 February 2006, Meriton filed a motion seeking similar relief on much the same grounds. However, Meriton’s motion also asserted that Mr Rose lacked standing under s 108 of the IR Act to claim the relief sought in his summons. By a separate motion filed on 2 March 2006, Owners Corporation also raised the issue of Mr Rose’s standing.

 

37Mr Rose filed a motion on 6 September 2006 seeking leave to file an amended summons in the Industrial Court proceedings. The proposed amended summons sought the same relief as in Mr Rose’s original summons, but included claims for orders making Mr Rose a party to both “ the contract with [Meriton] ” and “ the contract with [Owners Corporation] “.

 

38The matters of law and fact in the proposed amended summons were identical to those in the original summons. However, the proposed summons incorporated “ Grounds and reasons ” that included the following:

 

“4. At all material times, it was agreed between [Regis Towers], [Mr Rose] and [the Claimants] that [Mr Rose] would personally perform the work of the caretaker under the [Caretaker Agreement].

 

5. At all material times, [Mr Rose] was a Director and Shareholder of Regis Towers …

 

6. The [April Deed] provided that Regis Towers … was required to pay to [Meriton] the sum of $1,750,000.00.

 

[Mr Rose] personally paid [Meriton] $525,000.00. The [April Deed] also required [Meriton] to cause the Owners Corporation, amongst other things, to pass Special By-Laws and to enter into the [Caretaker Agreement] with Regis Towers … At a General Meeting prior to 1 September 1999, [Owners Corporation] passed Special By-Laws. Regis Towers … purchased certain lots in the strata scheme number 56443 being lots 149, 454, 488 and 650 to give it exclusive rights to carry out certain services including Caretaking/Managing services. [Mr Rose] personally paid in excess of $300,000.00 towards the purchase of those lots.

 

7. [Mr Rose] personally performed the work as Caretaker/Manager from 1999.

 

8. The amounts claimed [in] the draft Amended Summons for Relief relate specifically to the personal losses, past and future, of [Mr Rose].

 

9. Accordingly, [Mr Rose] seeks leave to file the draft Amended Summons for Relief so as to obtain an order from this honourable Court making him a party to the [April Deed] and the [Caretaker Agreement].”

 

Judgment of Marks J

 

39The motions were heard by Marks J in the Industrial Court on 12 September 2006. His Honour delivered judgment on 31 October 2006:Rose v Meriton Apartments Pty Ltd [2006] NSWIRComm 298.

 

40Marks J held (at [58]-[59]) that Mr Rose had no standing under s 108 of the IR Act to commence the proceedings in his own name and thus the proceedings were a nullity. His Honour reasoned as follows (at [57]):

 

“It is clear … that only a party to the contract sought to be impugned under s 106 has the standing to commence proceedings. There can be no doubt, based on the manner in which the summons for relief is framed that there is no claim that the applicant is a party to any contract sought to be impugned in the proceedings. Accordingly, the applicant was not entitled to commence the proceedings in his name because of the operation of s 108(a). Nor, does it seem to me, that the applicant is entitled to rely in any way on the provisions of s 108(b)….

 

41Marks J also held (at [54]) that the purported assignment by the trustee in bankruptcy to Mr Rose of the chose in action was ineffective and that the trustee was deemed to have abandoned the proceedings. In his Honour’s view, this provided a separate reason for dismissing the proceedings (at [55]).

 

42Marks J expressed (at [62]) “ grave doubt ” as to whether the Industrial Court is entitled under s 106 of the IR Act to grant relief at the suit of a person who is not a party to a contract, so as to make that person a party to the contract. However, having found that the proceedings were a nullity, his Honour had no need to deal with Mr Rose’s application to amend the summons.

 

43His Honour dismissed Mr Rose’s application to amend his summons and dismissed the summons.

 

Full Bench of the Industrial Court

 

44Mr Rose sought leave to appeal to the Full Bench of the Industrial Court from the interlocutory decision of Marks J. In a judgment delivered on 30 November 2007, the Full Bench granted leave to appeal and allowed the appeal: Rose v Meriton Apartments Pty Ltd[2007] NSWIRComm 264. The Full Bench:

 

• dismissed the motions filed by Meriton and Owners Corporation;
• dismissed Mr Rose’s application to amend the summons; and
• remitted the proceedings to a Judge of the Industrial Court to be dealt with in accordance with the Full Bench’s judgment. 

45The Full Bench identified two broad issues. The first was whether Marks J was correct in holding that Mr Rose lacked standing to bring proceedings under the IR Act. The second was whether Marks J was correct in holding that the effect of the Bankruptcy Act was that Mr Rose’s trustee in bankruptcy was deemed to have abandoned the proceedings.

 

46On the first issue, the Full Bench considered (at [30]) that the fact that Mr Rose was “ not personally a party to the relevant contract , in a common law sense ” did not resolve the question of standing, as there was no requirement in the relevant standing provisions that the “ right to bring proceedings is restricted only to common law contractual parties “. The question was whether Mr Rose satisfied the requirements of s 108(a) of the IR Act.

 

47On that issue the Full Bench accepted (at [31]) that, in order for the proceedings to be validly commenced, Mr Rose was required to be a “ party to the contract “. If Mr Rose could not be so characterised, he would lack standing to initiate proceedings by virtue of s 108(a) of the IR Act and would also lack standing to have the proceedings amended by including an additional individual party to the relevant contracts.

 

48However, the Full Bench did not agree (at [32]):

 

“with the contention that [Mr Rose] is not a ‘party to the contract’, and thus lacks standing, because he is not specifically named as an individual contracting with either [claimant] in the relevant agreements. What is required is that [Mr Rose] is able to be characterised as a ‘party to the contract’, pursuant to s 108(a). In our opinion, [Mr Rose] may be so characterised. Although not identified as a party to a contractual agreement, in the conventional common law sense, we consider that [Mr Rose] is, nevertheless, a party to an ‘arrangement’, as that term is contemplated by s 105.”

 

49The Full Bench stated (at [33]) that the “ correct approach ” to the Claimants’ motions was to grant summary relief only if it was:

 

“plain that the invocation of the jurisdiction impugned [was] wholly misconceived or, upon analysis, lack[ed] an arguable legal foundation”

 

(quoting from Virtue v New South Wales Department of Education and Training (1999) 92 IR 428, at 447-448).

 

50The Full Bench noted (at [36]) “ for completeness ” that no threshold issue in relation to jurisdiction under s 106 of the IR Act had yet been raised in the proceedings.

 

51Their Honours considered (at [37]) it clear that the expression “ contract ” when used in s 108(a) of the IR Act bears the wider meaning given to that expression by s 105. Accordingly, the expression includes an “ arrangement “. This is not a term of art, but (at [39]):

 

“embraces transactions which do not give rise to contracts or obligations, that is to say, obligations enforceable at law … [It also] embraces a situation where there exist two or more separate contracts which, notwithstanding their separateness, are, given the facts, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a part.”

 

(quoting from Custom Credit Corporation v Goldsmiths [1976] AR (NSW) 98, at 131).

 

52The Full Bench continued (at [40]-[47]) as follows:

 

“40 It can be seen that the reasoning above supports the finding of the arrangement in the current matter. Under the terms of the relevant arrangement, it is apparent that [Mr Rose] was to personally perform the work of caretaker, and was also closely associated with the execution of the relevant contract as principal director and shareholder of the corporate entity known as Regis Towers.

 

41 As we have stated, there has been no substantive examination of the relevant contractual arrangements and [Mr Rose's] connection with those arrangements. The material upon which we are able to rely at this stage of the proceedings includes the originating summons filed by the appellant on 27 April 2005, which provides a summation of the relevant contractual arrangement between the parties …

 

42 Further, the parties had admitted into evidence copies of the relevant contracts for the purpose of the interlocutory proceedings before Marks J. …

 

43 Notably, there is no evidence provided in relation to [Mr Rose's] connection with either Cesscut Pty Ltd or Regis Towers. The only oral submissions provided in relation to the nature of the relevant arrangement are those previously referred to as being provided by [Mr Rose].

 

Conclusion – Standing under s 108

 

44 Applying the principles enunciated in the relevant authorities, it is clear that s 108 of the IR Act should not be construed so as to confine the meaning of ‘contract’ in the sense contended by [Owners Corporation], or as contemplated by Marks J in the decision under appeal, and to effectively deny the appellant standing as a ‘party to the contract’. It is sufficient to establish that there is an ‘arrangement’ for the purpose of compliance with the standing requirement contained in s 108(a). The relevant contracts outlined above are part of an arrangement which meets the requirements of ss 105 and 108(a). As a party to that arrangement there is no requirement that [Mr Rose] needs to be an actual party to the common law contract(s).

 

45 We consider that where an applicant for relief performs personal services or work in order to fulfil relevant contractual obligations under the terms of an arrangement (although not the same as the relevant contracting entity/individual(s)), and is instrumentally involved in the formulation of a relevant contractual arrangement as the appellant appears to have been, in the capacity of principal director and shareholder of the relevant corporate entity which is a contractual party to the arrangement, prima facie that applicant is a party to the relevant arrangement, and thus a ‘party to the contract’ for the purpose of obtaining standing pursuant to s 108(a) of the IR Act.

 

46 Accordingly, taking the evidence, as it presently exists, at its highest and having regard to the relevant authorities to which we have referred, we find that [Mr Rose] is party to an arrangement involving the appellant and both respondents that is within the definition of contract in s 105 of the IR Act. A conclusion that [Mr Rose] has standing under s 108(a) is open on the facts as they have been provided at this stage in the proceedings. It therefore follows that there is no reason to dismiss the proceedings for lack of standing.

 

47 We propose, therefore, to dismiss the motion filed on 2 March 2006 by Owners Corporation and the motions filed on 23 February 2006 by Meriton and Owners Corporation, with respect to the applications to have the proceedings struck out or stayed. We also propose to dismiss the motion filed on 27 August 2006 by [Mr Rose] seeking that the proceedings be amended.” (Emphasis added.)

 

 

Federal Court

 

53On 27 March 2008, the Claimants filed an application in the original jurisdiction of the Federal Court seeking a declaration that the proceedings in the Industrial Court were deemed to be stayed or abandoned by the operation of s 60 of the Bankruptcy Act. The Claimants also sought orders quashing the orders made by the Full Bench of the Industrial Court on the ground that s 27 of the Bankruptcy Act conferred exclusive jurisdiction “ in bankruptcy ” on the Federal Court and the Federal Magistrates Court. The Claimants’ application was heard by a Full Court of the Federal Court.

 

54In a judgment delivered on 13 October 2008, the Full Court held, by majority, that the Industrial Court proceedings had not been stayed or abandoned under s 60(2) and (3) of the Bankruptcy Act and that the proceedings were not an impermissible intrusion into the exclusive jurisdiction conferred on federal courts by s 27 of the Bankruptcy Act . Accordingly, the Court dismissed the Claimants’ application: Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172; 171 FCR 380 (Branson and Greenwood JJ; Perram J dissenting).

 

New South Wales Court of Appeal

 

55The “ next step in this saga ” (to use the words of Handley AJA) occurred when the Claimants filed a summons in this Court on 2 December 2008, seeking prerogative relief in the nature of prohibition in respect of the proceedings in the Industrial Court. Mr Rose, who had been discharged from bankruptcy in June 2008, filed a motion to strike out the Claimants’ summons. Mr Rose contended that the summons was an abuse of the Court’s process on the authority of Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589.

 

56An order was made that the issue of abuse of process be determined separately and the question be referred to this Court for determination. The separate question, as reformulated during the hearing in this Court, was as follows:

 

“Whether the issues, facts and outcomes of the Application to the Federal Court determined by the Full Court of the Federal Court including orders made on 13 October 2008 estop the [C]aimants from contending in this Court by the Summons filed on 2 December 2008 that the Full Bench of the Industrial Court of New South Wales erred in its summary application decision of the issue whether [Mr Rose] has standing to apply for relief raised before it arising under s. 108 of the Industrial Relations Act 1996 (NSW) for discretionary relief as framed in order (1) or alternatively whether it is an abuse of process.”

 

The Court answered the question “ No “: Meriton Apartments Pty Ltd v Industrial Court (NSW) [2009] NSWCA 434; 263 ALR 556.

 

High Court

 

57On 25 January 2010, Mr Rose applied for special leave to appeal to the High Court from the decision of this Court dismissing his motion. The High Court refused special leave on 28 May 2010.

 

The Amended Summons

 

58The last stage of the saga (so far) was formalised by the filing of the Claimants’ amended summons seeking the relief set out earlier ([10] above). The Claimants moved on the amended summons in this Court.

 

SUBMISSIONS

 

Claimants’ submissions

 

59The Claimants invoked the supervisory jurisdiction of the Supreme Court over decisions of the Full Bench of the Industrial Court, conferred by s 69 of the Supreme Court Act and preserved by s 179(4) of the IR Act. Mr Walker SC, who appeared with Mr Shields for the Claimants, submitted that this was a clear case of the Full Bench having exceeded the jurisdictional limits imposed by s 108 of the IR Act. It was therefore quintessentially a case in which this Court should grant orders in the nature of prerogative relief.

 

60Mr Walker accepted, without qualification, that the extended definition of “ contract ” in s 105 of the IR Act applies to s 106. He therefore accepted that the jurisdiction of the Industrial Court extends to declaring void or varying any contract or arrangement, or any related condition or collateral arrangement, whereby a person performs work in any industry, provided that the Industrial Court finds that any such contract, arrangement or condition is an “ unfair contract ” as defined in s 105. However, Mr Walker submitted that the language of s 108(a) of the IR Act was intractable, with the consequence that the Industrial Court could make an order under s 106 only on the application of a “ party to the contract “. He submitted that the Industrial Court has no jurisdiction to make an order on the application of someone who is not a party to the relevant contract or arrangements except in the circumstances specified in s 108(b) – (e), none of which applied to the present case.

 

61Mr Walker pointed out that Mr Rose’s amended summons in the Industrial Court sought relief in respect of the April Deed between Meriton and Regis Towers and in respect of a collateral arrangement alleged to be between Owners Corporation and Regis Towers. It had not been alleged that Mr Rose was a party either to the Caretaker Deeds or to the collateral arrangement identified in the amended summons. Nor did the summons allege any other arrangement to which Mr Rose was a party. It followed that the Full Bench was in error when it said (at [44]) that the contracts identified by it (at [42]) were “ part of an arrangement which meets the requirements of ss 105 and 108(a) “. No such arrangement had been identified or pleaded by Mr Rose.

 

 

62In his oral argument, Mr Walker accepted that it is not essential in all cases for the pleadings filed in the Industrial Court to identify precisely the contract or arrangement to which the applicant is said to be a party. He also accepted that if it appeared that the jurisdictional defect could be readily cured by an amendment to the pleadings or to the relief sought by the applicant, this Court might decide to withhold prerogative relief on discretionary grounds. However, Mr Walker submitted that the pleadings constituted the primary reference point on the jurisdictional question. Furthermore, Mr Rose had had ample opportunity to reformulate his claim so as to bring it within the jurisdiction of the Industrial Court, but had not done so.

 

63According to Mr Walker, there was nothing in either the April Deed or the Caretaker Agreement that obliged Mr Rose to perform any particular duties or even contemplated that the various duties would be performed by a particular person. Mr Walker also submitted that it was not to the point that Mr Rose was a director and shareholder of Regis Towers, nor that he had apparently caused the company to enter into the Caretaker Agreement. These circumstances did not establish that Mr Rose was a party to any contract or arrangement in respect of which the Industrial Court was asked to make an order. It followed that the jurisdictional requirement imposed by s 108(a) of the IR Act had not been satisfied.

 

Mr Rose’s submissions

 

64The oral submissions advanced on behalf of Mr Rose bore little relationship to the brief written submissions filed on his behalf. The written submissions argued that “ the true nature and substance of the contract ” relied on by Mr Rose was a contract of service to which he was “ clearly a party “. It was said that the express terms of the April Deed and the Caretaker Agreement did not prevent the Industrial Court finding, at a final hearing, that a contract was in place which warranted relief in the form sought by Mr Rose. The question of jurisdiction should be left until the Industrial Court had an opportunity to make findings in relation to the contract. In any event, any error made by the Full Bench of the Industrial Court was an error within jurisdiction and therefore could not provide the basis for prerogative relief.

 

65In his oral submissions Mr Street SC, who appeared with Ms Gleeson for Mr Rose, contended that the Claimants would succeed in their claim for prerogative relief only if there was no arguable basis on which the Industrial Court could exercise jurisdiction. This was said to follow from the Claimants’ summary dismissal motion in the Industrial Court which, on the authority of General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, could not succeed if Mr Rose’s case was arguable.

 

66Mr Street relied on evidence that Mr Rose had negotiated the Caretaker Deeds; signed the Deeds (albeit as a director of Regis Towers); been required to reside in a lot in the Complex; personally acquired lots from Meriton; and acquired the licence required by cl 2.3 of the April Deed. Mr Street also relied on conversations between Mr Rose and Mr Londy, a principal of a real estate agency, which took place in about February 1999. According to Mr Rose, Mr Londy encouraged him to purchase the caretaker-management rights for the Complex. Mr Londy advised Mr Rose to obtain a licence to conduct a real estate agency or to find a licensee who could carry out the property management elements of the contract that would be entered into with Meriton.

 

67According to Mr Street, when this evidence was taken at its highest, it was capable of supporting the Full Bench’s factual finding that there was an arrangement to which Mr Rose was a party. When pressed in oral argument to identify the nature of the arrangement that was supported by the evidence, Mr Street answered that the arrangement was that:

 

“there was going to be entered into, or provided, a caretaker management agreement under which Mr Rose was going [to] perform work in an industry and in order to do so had to acquire certain particular lots relating to the caretaker agreement and had to also reside in the premises and had to seek consent if the agreement was to be assigned in some way.”

 

68Mr Street submitted that, independently of s 108(a) of the IR Act, the Industrial Court has jurisdiction to deal with Mr Rose’s claim for relief because the proposed amended summons seeks orders making Mr Rose a party to each of the Caretaker Deeds. Such a claim, so Mr Street argued, satisfies s 108(b) of the IR Act because an application for an order that a person be made a party to an existing contract is an application made by a person “ who, but for the making of such an order, would be a party to the contract “. Mr Street said that the words in s 108(b) were intended to confer jurisdiction on the Industrial Court to make an order at the instance of a person who is not currently a party to a contract but who wishes to be added as a party.

 

69Next Mr Street submitted that Mr Rose could be regarded as a party to the Caretaker Deeds on the basis that both Deeds were intended for his benefit. He relied, without fully developing the submission, on principles of trust and agency whereby a person entitled to the benefit of a contractual promise is entitled, in certain circumstances, to enforce the promise against the promisor even though the person is not named as a party to the contract.

 

70If the Court rejected his principal submissions, Mr Street contended that the Court should nevertheless decline, in the exercise of its discretion, to make the orders sought by the Claimants. Mr Street relied on what he described as a delay of approximately 13 months between the finalisation of the Full Bench proceedings and the Claimants initiating proceedings in this Court seeking prerogative relief.

 

71It was put to Mr Street in the course of his oral submissions that it was very difficult to see how Mr Rose could obtain the relief sought in his Industrial Court summons in the absence of Regis Towers, a party to the Caretaker Agreement. Mr Street submitted in response that the absence of Regis Towers would not prevent the Industrial Court making an order declaring the Caretaker Agreement void or varying it, although he accepted that such an order would bind only the parties to the proceedings. If the absence of Regis Towers was a defect in the proceedings, it was not a jurisdictional error but merely a procedural matter which could be cured, if necessary, by an order joining Regis Towers.

 

REASONING

 

The Issues in this Court

 

72The Claimants seek orders in this Court pursuant to s 69 of the Supreme Court Act :

 

• in the nature of prohibition preventing the Industrial Court from taking any further steps to exercise its power under s 106 of the IR Act with respect to the contracts and arrangements described in Mr Rose’s summons in the Industrial Court ; and
• in the nature of certiorari quashing the judgment and orders of the Full Bench disposing of the Claimants’ motions. 

   

73It was common ground that the privative clause in s 179(1) of the IR Act is no barrier to the relief sought by the Claimants in this Court. It was accepted by the parties that the decision of the Full Bench was within s 179(4) of the IR Act: see Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; 239 CLR 531 (“ Kirk “), at 582 [103], per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.

 

74As I have noted, Mr Street submitted that the Claimants’ application for prerogative relief was to be determined by this Court on the same principles applied by the Full Bench in dismissing the Claimants’ motions seeking to strike out or summarily dismiss Mr Rose’s summons in the Industrial Court. On this basis, he contended that this Court, like the Full Bench, should take the evidence at its highest and only grant prerogative relief if it was plain that the invocation of the jurisdiction lacked an arguable legal foundation.

 

75The issue on the Claimants’ application for prerogative relief is whether they have shown that the Industrial Court does not have jurisdiction to exercise the powers conferred on it by Pt 9 of Ch 2 of the IR Act . More specifically, the issue is whether they have shown that the Industrial Court does not have jurisdiction to make the orders sought by Mr Rose in the summons he filed in that Court.

 

76In Batterham v QSR Ltd [2006] HCA 23; 225 CLR 237, the joint judgment pointed out that there is a “real and radical difference between deciding that a point is arguable and deciding the point “: at 249 [28], per Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ. In that case, the Industrial Court rejected a summary dismissal application on the ground that the proceedings had not been shown to be “ unarguably beyond jurisdiction “. The High Court held that an application to the Court of Appeal for prohibition had not “ called in question ” the decision of the Industrial Court for the purposes of s 179(1) of the IR Act (the privative clause). (Section 179(4) was not then in force.) The High Court so held because the application for prohibition required the Court of Appeal to make a final determination as to whether the Industrial Court had jurisdiction to grant the relief sought in that Court and not merely to decide whether there was an arguable case that the Court had jurisdiction: Batterham v QSR , at 249 [28]; QSR Ltd v Industrial Relations Commission of New South Wales [2004] NSWCA 199; 208 ALR 368 (“ QSR v IRC “), at 383 [85], per Handley JA (with whom Mason P agreed).

 

 

77It may be that in a particular case, an application for prerogative relief is premature. For example, this Court may take the view that the claimant in the Industrial Court should have the opportunity to adduce further evidence relevant to the jurisdictional question or to amend the summons to assert that undisputed facts have a particular legal effect: QSR v IRC , at 378 [44], per Spigelman CJ; at 379 [58], per Handley JA: Mayne Nickless Ltd v Industrial Relations Commission of New South Wales [2004] NSWCA 359; 141 IR 1, at 11 [61], per Mason P (with whom Hodgson and McColl JJA agreed). Nonetheless, assuming that it is not premature to address the jurisdictional question, the Court must decide the point. Contrary to Mr Street’s submission, the principles to be applied are not those that govern an application in the Industrial Court for summary dismissal of the proceedings.

 

Jurisdictional Error and s 108 of the IR Act

 

78In Kirk, the judgment of six members of the Court stated, among others, the following important propositions (at 566 [55]):

 

“(f) A defining characteristic of State Supreme Courts is the power to confine inferior courts and tribunals within the limits of their authority to decide by granting relief in the nature of prohibition and mandamus, and, as explained further in these reasons, also certiorari, directed to inferior courts and tribunals on grounds of jurisdictional error. (g) If a court has limited powers and authority to decide issues of an identified kind, a privative provision does not negate those limits on that court’s authority. (h) A privative provision in State legislation, which purports to strip the Supreme Court of the State of its authority to confine inferior courts within the limits of their jurisdiction by granting relief on the ground of jurisdictional error, is beyond the powers of the State legislature. It is beyond power because it purports to remove a defining characteristic of the Supreme Court of the State.”

 

79The judgment in Kirk rejected the notion that there is a “ rigid taxonomy of jurisdictional error ” (at 574 [73]). However, their Honours endorsed (at 573-574 [72]) the observations by the High Court in Craig v South Australia [1995] HCA 58; 184 CLR 163, at 177, that an inferior court (or tribunal) falls into error if it mistakenly asserts the existence of jurisdiction and that jurisdictional error:

 

“is at its most obvious where the inferior court [or tribunal] purports to act wholly or partly outside the general area of its jurisdiction in the sense of entertaining a matter or making a decision or order of a kind which wholly or partly lies outside the theoretical limits of its functions and powers.”

 

The joint judgment in Kirk explained (at 574 [72]) that the reference to “ theoretical limits ” should not distract from the need to focus on the limits of the body’s functions and powers. Such limits are to be identified by the relevant statute.

 

80If Mr Rose’s reliance on s 108(b) of the IR Act is put to one side for the moment, the effect of s 108(a) is that the Industrial Court can make an order on Mr Rose’s application declaring void or varying a “contract” if Mr Rose is a “ party to the contract ” and not otherwise. Section 108 is an unequivocal statement by Parliament that the Industrial Court cannot make an order under s 106 of the IR Act declaring a contract wholly or partially void, or varying its terms, otherwise than on application by a party to the contract.

 

81While there is no bright line separating jurisdictional errors from errors within jurisdiction, there are some cases which clearly fall on one side of the line or the other: Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82, at 141 [63], cited in Kirk , at 571 [66]. If the Industrial Court purports to make orders under s 106 of the IR Act in relation to a contract otherwise than on application by a party to the contract (assuming none of the other sub-paragraphs of s 108 is satisfied), it is doing something that it has no power to do. Accordingly, prerogative relief will ordinarily be available to a person adversely affected by the orders.

 

82In Batterham v QSR , the joint judgment applied (at 250 [28]) the principle stated in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100, at 118-119, that prohibition:

 

“is a writ which goes as of right when the prosecutor is directly affected by the course pursued by a tribunal to which the writ lies and the prosecutor shows satisfactorily that the tribunal is about to act to his detriment in excess of its authority.”

 

In Batterham v QSR , the majority concluded that since there was a “ real likelihood ” that the Industrial Commission would make orders in excess of its jurisdiction, the Court of Appeal had rightly granted prerogative relief.

 

83If the Claimants can show that there is a real likelihood that the Industrial Court will make orders under s 106 of the IR Act otherwise than on the application (relevantly) of “ any party to the contract ” as required by s 108(a) of the IR Act, they will be entitled to prohibition, subject to any discretionary considerations.

 

An Excess of Jurisdiction?

 

84Whether the Industrial Court has jurisdiction to grant the relief sought by Mr Rose does not necessarily depend solely on the terms of his summons. Nonetheless, it is the summons that sets out the relief sought by Mr Rose in the Industrial Court and, in compliance with r 18A of the Industrial Relations Commission Rules 1996 (now repealed by the Industrial Relations Commission Rules 2009), summarises the Matters of Fact and Law which form the basis of the application for relief. The summons is therefore the appropriate starting point.

 

85The declaration and orders sought by Mr Rose (see [6] above) identify the “ contract ” in respect of which relief is sought as consisting of the April Deed and:

 

“additionally … a contract or collateral arrangement between (Owners Corporation] and [Regis Towers] whereby [Mr Rose] performed work in an industry …”

 

Despite the reference to “ collateral arrangement “, there is nothing in the prayers for relief to indicate that the relevant contract or arrangement between Owners Corporation and Regis Towers consists of anything other than the Caretaker Agreement. That conclusion is reinforced by the Matters of Fact and Law, which refer only to the April Deed and the Caretaker Agreement.

 

86It was common ground that an applicant may seek relief under s 106 of the IR Act in respect not only of a contract in the strict legal sense, but also in respect of an “ arrangement, or any related condition or collateral arrangement “, as contemplated by the definition of “ contract ” in s 105. In Fish v Solution 6 Holdings Ltd [2006] HCA 22; 225 CLR 180, it was pointed out that it is the arrangements, both contractual and non-contractual, whereby a person performs work in an industry that the Industrial Court may avoid or vary: at 195 [41], per Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ. As their Honours observed, while the notion of avoiding an unenforceable arrangement may be “ awkward “, determining that some new arrangement will obtain for the future “ presents no such awkward juxtaposition of ideas “. Thus Mr Rose, if the facts supported his claim, could have sought relief in respect of an “arrangement “. He also could have alleged that he was party to the arrangement, even though he was not a party to either of the Caretaker Deeds. What is necessary to demonstrate that an applicant is a party to an informal or tacit arrangement or one that is non-contractual need not be explored.

 

87Mr Rose’s summons does not refer either in the prayers for relief or the Matters of Fact and Law, to any contracts or arrangements other than the Caretaker Deeds. There is no reference, for example, to any agreement or arrangement which may have predated the Caretaker Deeds and to which Mr Rose may have been a party. Paragraphs 4 and 5 of the Matters of Fact and Law assert that Mr Rose personally bought units in the Complex and that “ certain representations ” were made by Meriton to Mr Rose, but these events are not said to be elements in any relevant arrangement.

 

88Nor does the summons allege that Mr Rose was a party to the Caretaker Deeds or to any collateral arrangement. The Matters of Fact and Law allege, somewhat obliquely, that the Caretaker Agreement was executed by the “ hand of [Mr Rose] “. But the Caretaker Agreement on its face shows that Mr Rose signed in his capacity as a director of Regis Towers for the purpose of witnessing the affixation of the company’s seal. Mr Street did not suggest that Mr Rose’s signature in this capacity of itself made him a party to the Caretaker Agreement.

 

89In some circumstances, it might be possible to infer from the critical contractual documents the existence of facts which satisfy the jurisdictional requirements of Pt 9 of Ch 2 of the IR Act. For example, in Mayne Nickless v IRC , the terms of a deed under which a company agreed to provide pathology services made it clear that the services were in fact to be provided by a particular qualified pathologist (a director of the company). This was sufficient to demonstrate that the deed was a contract whereby a person performed work in an industry and thus to satisfy the jurisdictional requirement in s 106 of the IR Act (at 9-10 [49]-[50], per Mason P).

 

90As I have noted, Mr Rose’s summons does not identify any contract or arrangement to which Mr Rose is said to have been a party. Moreover, the Caretaker Deeds contain nothing to suggest that they were components of a broader agreement or arrangement to which Mr Rose was a party, whereby he performed work in an industry. The Caretaker Agreement imposed duties on Regis Towers, which it was to perform “ by its employees, contractors or agents ” (cl 2, Sch 2). The Agreement did not require Mr Rose to perform any of the duties personally, although no doubt it was open to him to do so as an agent of the company. The Caretaker Agreement contemplated that Regis Towers could conduct its business from three nominated lots in the Complex, two of which had been purchased by Regis Towers as recorded in the April Deed. Regis Towers was required to sell or cause the Caretaker’s Lots to be sold if Owners Corporation terminated the Caretaker Agreement (cl 9(1)). The Agreement said nothing about Mr Rose personally acquiring lots in the Complex.

 

91The only provision in the Caretaker’s Agreement which appears to have contemplated that Mr Rose might carry out some of the duties imposed on Regis Towers was cl 27.2. This provided that the persons used by Regis Towers to carry out its duties, if they were not the principal directors or shareholders of the company, required approval from Owners Corporation. Whatever significance cl 27.2 might have for the purpose of satisfying s 106 of the IR Act, it does not suggest any antecedent or broader agreement or arrangement to which Mr Rose was a party.

 

92Mr Street relied on evidence that was before the Industrial Court to support what he said was the Full Bench’s factual finding that there was an arrangement to which Mr Rose was a party (see [67]-[69] above). The Full Bench appears to have concluded that on the material before it it was arguable on the General Steel standard that there was an arrangement pursuant to which Mr Rose was to personally perform the work of a caretaker and was also to be “ closely associated ” as principal director and shareholder of Regis Towers with the execution of the Caretaker Agreement (at [40]).

 

93The Full Bench also appears to have concluded that it was arguable that Mr Rose was a party to the arrangement (at [32]). In this respect the Full Bench emphasised the uncontentious proposition that a “ contract “, for the purposes of s 108 of the IR Act, is not limited to a “ contractual agreement, in the conventional common law sense “. Later their Honours said (at [45]) that if an applicant for relief performs personal services “ in order to fulfil relevant contractual obligations ” and is instrumentally involved in the formulation of the contractual arrangements as a principal director, prima facie the applicant is a party to the arrangement.

 

94One difficulty with the Full Bench’s approach, even on the General Steel standard, is that Mr Rose’s summons does not identify any arrangement, other than the Caretaker Deeds, in respect of which he seeks relief or to which he was a party. Perhaps for this reason, the Full Bench did not make findings, on an arguable basis or otherwise, as to the parties to the arrangement, the terms of any arrangement (except to assert that there was a term that Mr Rose would personally perform work as a Caretaker) or the circumstances in which the arrangement was entered into.

 

95A second difficulty is that the Full Bench relied only on Mr Rose’s summons and the terms of the Caretaker Deeds to reach its conclusions (at [41]-[42]). For the reasons already given, this material cannot support a conclusion that Mr Rose was a party to an agreement or arrangement antecedent to or outside the Caretaker Deeds. Their Honours’ reasoning (at [45]) seems to assume that if a company engages a director to perform services the company is contractually obliged to provide to a third party, there is an arrangement between the director and the third party whereby the director is to perform the services. It is difficult to see why, at least in the absence of additional facts, that assumption is correct: see Production Spray Painting & Panel Beating Pty Ltd v Newnham(1991) 27 NSWLR 644, at 657, per Priestley and Handley JJA. Similarly it is difficult to see why the fact that the director has negotiated the terms of a contract between the company and a third party is capable of itself of creating an arrangement between the director and the third party.

 

96Mr Street attempted to overcome these difficulties by referring to various pieces of evidence that might support a claim by Mr Rose to be party to an agreement or arrangement whereby he performed work in an industry (that is, by discharging duties as a caretaker in the Complex). But not only is any such arrangement not identified in the summons, any claim by Mr Rose based on such an arrangement has never been formulated with any precision. Despite Mr Street’s attempt to do so in oral argument (at [69] above), the terms of the arrangement, the parties to it and the circumstances in which it came into existence remain unclear. In my opinion, it is not enough to establish a sound jurisdictional basis for relief under Pt 9 of Ch 2 of the IR Act to point to evidence that might be relied on to support an as yet unformulated claim different to the claim currently being pursued.

 

97In any event, much of the evidence referred to by Mr Street is, at best, equivocal. For example, the conversations which Mr Rose said he had with Mr Londy, a real estate agent, seem to be no more than the usual interchanges between an agent eager to secure a sale and a potential purchaser rather than evidence of an arrangement. Mr Rose’s own evidence as to the discharge of the duties specified in the Caretaker Agreement was that:

 

“[t]he day-to-day running of Regis Towers and the duties associated with the obligations under [Sch 2 of the Caretaker Agreement] are and have been carried out primarily by … my wife [who is] a shareholder in [Regis Towers].”

 

98Mr Rose also appeared to acknowledge that all the Caretaker’s Lots were owned by Regis Towers, although he said that he had personally provided moneys for the acquisition. Indeed, Mr Rose said that he had entered into contracts to acquire units in the Complex, presumably in his own name, before execution of the April Deed on 20 April 1999. He did not say that he had acquired the units pursuant to an arrangement which led to the execution of the Caretaker Deeds.

 

99For these reasons, subject to the other arguments advanced by Mr Street, I consider that unless prerogative relief is granted, there is a real likelihood that the Industrial Court will respond to Mr Rose’s summons by making an order in excess of its jurisdiction.

 

Section 108(b) of the IR Act

 

100Section 108(b) of the IR Act provides that an order may be made under s 106 on the application of “ any person who, but for the making of such an order ” would be a party to the contract. Mr Street’s submission was that Mr Rose’s application to file an amended summons seeking orders to be made a party to the Caretaker Deeds satisfied the terms of s 108(b).

 

101Mr Street’s submission cannot be reconciled with the language of s 108(b). The language of s 108(b) assumes that the applicant is or has been a party to the contract but will not be a party if the order sought in the proceedings is made. The language is not apt to include an application by a person who has never been party to a contract but seeks to be added as a party.

 

102It may be that s 108(b) does not add anything to s 108(a). One possibility is that it was included out of an abundance of caution to ensure that the Industrial Court has jurisdiction to make orders removing an applicant as a party to a contract. Another possibility is that it is intended to cover the case where an order has already been made removing the applicant as a party to the contract and the applicant wishes to bring fresh proceedings in relation to the contract. Whether or not s 108(b) has any operation beyond that of s 108(a), it cannot assist Mr Rose in the present case.

 

Benefit of the Caretaker Deeds

 

103Mr Street’s submission that Mr Rose could be regarded as a party to the Caretaker Deeds for the purposes of s 108(a) of the IR Act. was not developed in the oral argument and was not adverted to in the written submissions. The starting point for the submission seemed to be that the terms of the Caretaker Deeds could be characterised as being for the benefit of Mr Rose. The basis for this contention was not made clear. None of the provisions in the Caretaker Deeds is expressed to be for Mr Rose’s benefit and there is nothing to suggest that Mr Rose, as distinct from Regis Towers, was to be entitled to enforce any of the promises made by Meriton or Owners Corporation.

 

104Even if there was a basis for concluding that Mr Rose was the beneficiary of contractual promises and was entitled to sue the Claimants as promisors, that would not convert him into a party to either or both of the Caretaker Deeds: Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; 165 CLR 107, at 112-113, 115, 123, per Mason CJ and Wilson J; at 165-`166, 172, per Toohey J; cf at 174, 175, per Gaudron J. Similarly, if Mr Rose could establish that Regis Towers was trustee of a contractual promise for his benefit, he would not become a party to the contract: Trident v McNiece , at 121, per Mason CJ and Wilson J; at 148, per Deane J; at 135, per Brennan J; Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd [1985] HCA 13; 155 CLR 541, at 546, per curiam .

 

105A person may enter into a contract on behalf of an undisclosed principal. In such circumstances the undisclosed principal is a party to the contract although not named as such: see, for example, Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (the “New York Star “) (1980) 144 CLR 300; [1980] 3 All ER 257. But no basis has been shown in the present case for treating Regis Towers as an agent for Mr Rose as undisclosed principal.

 

Orders

 

106In my opinion, it follows from what has been said that the Industrial Court does not have jurisdiction to hear and determine Mr Rose’s claim for relief in its present form. That is because the application for relief in respect of the Caretaker Deeds has not been made by a person within any of the categories identified in s 108 of the IR Act. As I have noted, the orders made by the Full Bench create a real likelihood that, unless prohibition is granted, the Industrial Court will make orders in excess of its jurisdiction.

 

107In my opinion, there is no discretionary reason to withhold relief from the Claimants. The “ delay ” on which Mr Street relied is almost wholly explained by the time taken to resolve the proceedings instituted by the Claimants in the Federal Court. It is true that this case has all the hallmarks of well resourced parties utilising all available avenues to thwart Mr Rose’s application in the Industrial Court. Nonetheless, the Federal Court proceedings raised serious and difficult issues, as demonstrated by the differing views expressed by members of the Court. The Claimants acted promptly to commence their Federal Court proceedings and, once those proceedings failed, promptly instituted the present claim for prerogative relief. The circumstances do not warrant withholding relief that otherwise should be granted.

 

108The conclusions I have reached do not necessarily mean that Mr Rose’s Industrial Court proceedings are doomed to fail. It may be that Mr Rose can reformulate his claims so as to allege a contract or arrangement to which he is a party (thereby satisfying s 108(a)) and which is a contract or arrangement “ whereby a person performs work in an industry ” (thereby satisfying s 106).

 

109A qualification is, however, necessary. As pointed out in oral argument, Regis Towers is not a party to the Industrial Court proceedings notwithstanding that Mr Rose seeks orders varying the Caretaker Deeds to which Regis Towers was a party. The absence of Regis Towers deprives the Industrial Court of jurisdiction to entertain a claim by Mr Rose for relief under s 106(1) of the IR Act to declare wholly or partly void or vary the Caretaker Deeds: Yim v Industrial Relations Commission of NSW [2007] NSWCA 77; 162 IR 62, at 80 [100]-[103], per Handley AJA (with whom Mason P agreed).

 

110In view of the orders that I propose, it is neither necessary nor appropriate to express a view as to whether Mr Rose can amend his application to formulate a claim for relief that is within the jurisdiction of the Industrial Court.

 

111The relief that this Court grants should be moulded to fit the circumstances of the case. It is appropriate to grant prohibition quo usqueso as to prevent the Industrial Court making the substantive order sought in Mr Rose’s summons in its present form: R v Australian Stevedoring Industry Board , at 118; QSR v IRC , at 383-384 [88]-[89] (an order upheld by the High Court: Batterham v QSR , at 250 [28]-[29]). Orders should be made quashing the Full Bench’s orders that the Claimants’ strike out motions be dismissed. The Full Bench’s order that the proceedings be remitted to a Judge of the Industrial Court should stand, but the order that the proceedings “ be dealt with in accordance with this Judgment ” should be quashed.

 

112I propose the following orders:

 

1. Order that the Industrial Court be prohibited from making orders 1, 2 and 3 as sought in Summons No IRC 2131 of 2005, filed on 27 April 2005 in this Court.

2. Call up orders 5, 6 and 8 made by the Full Bench of the Industrial Court on 30 November 2007 and quash orders 5 and 6 and so much of order 8 as directs that the remitted proceedings “ to be dealt with in accordance with this judgment “.

3. Mr Rose pay the Claimants’ costs of the proceedings in this Court, but have a certificate under the Suitors’ Fund Act 1951 for the costs of the proceedings in this Court.