Section 88F(1) applies broadly to any contract that leads directly to a person working in any industry, and is not limited to contracts subversive of industrial regulation; however, whether relief should be granted remains a matter for the Commission's discretion.
Later decisions that cite Stevenson v Barham
Decisions cited by Stevenson v Barham
STEVENSON v. BARHAM (1977) 136 CLR 190
Industrial Law (N.S.W.)
High Court of Australia
Barwick C.J.(1), Stephen(2), Mason(3), Jacobs(3) and Aickin(4) JJ.
CATCHWORDS
Industrial Law (N.S.W.) - Industrial Commission - Power to declare certain onerous contracts void - Contract or arrangement whereby a person performs work in any industry - Share-farming agreement - Industrial Arbitration Act, 1940 (N.S.W.), s.88F (1)*.
* Section 88F (1) of the Industrial Arbitration Act, 1940 (N.S.W.), as
amended, provides: "The commission may make an order or
award declaring void
in whole or in part or varying in whole or in part and either ab initio or
from some other time any contract
or arrangement or any condition or
collateral arrangement relating thereto whereby a person performs work in any
industry on the
grounds that the contract or arrangement or any condition or
collateral arrangement relating thereto - (a) is unfair, or (b) is
harsh or
unconscionable, or (c) is against the public interest. Without limiting the
generality of the words 'public interest'
regard shall be had in considering
the question of public interest to the effect such a contract or a series of
such contracts
has had or may have on any system of apprenticeship and other
methods of providing a sufficient and trained labour force, or (d)
provides or
has provided a total remuneration less than a person performing the work would
have received as an employee performing
such work, or (e) was designed to or
does avoid the provisions of an award or agreement."
HEARING
Sydney, 1976, October 26; 1977, February 1. 1:2:1977DECISION
1977, February 1.
2. Notwithstanding the wide language of s. 88F, I have found difficulty in
becoming convinced that it was within the contemplation
of the legislature
that agreements for business ventures, of which the present may be a specimen,
freely entered into by parties
in equal bargaining positions, should be so far
placed within the discretion of the Industrial Commission as to be liable to
be
declared void. However, I have come to the conclusion that the language of
s. 88F of the Act is intractable and must be given effect
according to its
width and generality. The legislature has apparently left it to the good sense
of the Industrial Commission not
to use its extensive discretion to interfere
with bargains freely made by a person who was under no constraint or
inequality, or
whose labour was not being oppressively exploited. (at p192)
3. Since forming this conclusion I have had the advantage of reading the
reasons for judgment prepared by my brothers Mason and
Jacobs. I agree with
their conclusion and with their expressed reasons for it. I also agree with
their comments upon the reasons
for judgment of the Chief Justice of New South
Wales. (at p192)
4. Accordingly, I agree that this appeal should be dismissed. (at p192)
STEPHEN J. The question in this appeal is whether the agreement between the
parties, referred to in argument as a share-farming
agreement, is one to which
s. 88F of the Industrial Arbitration Act, 1940 (N.S.W.) applies. (at p193)
2. That section appears in full in other judgments, it is concerned with "any
contract ... whereby a person performs work in any
industry". As a description
of any particular class of contract these words are at first sight far from
explicit but on further
examination, and with the aid of statutory definitions
and context, they may be seen to convey a quite precise meaning. (at p193)
3. The word "whereby" must, I think, here bear one of its ordinary meanings,
that of "in consequence of, as a result of, or owing
to which" (Shorter Oxford
English Dictionary); the contract must thus be one in consequence or as a
result of which a person performs
work. The section requires the work to which
it refers to be work in an "industry", a term defined, so far as presently
relevant,
as "craft, occupation or calling in which persons ... are employed
for hire or reward" (s. 5 (1) ). The contract is then one in
consequence of
which a person performs work in any occupation etc. in which persons are
employed for hire or reward. (at p193)
4. Standing on its own a reference to a person performing work might perhaps
describe no more than his physical actions; when
qualified by reference to it
being performed in an occupation etc., in turn described as one in which
persons are employed for
hire or reward, the sense it conveys is, I think,
that of work being performed for another. This is, moreover, consistent with
the work being performed in consequence of entry into a contract. (at p193)
5. Section 88F may then be seen to be concerned with any contract in
consequence of which a person performs work for another in
any occupation etc.
in which persons are employed for hire or reward. This meaning of "performs
work" receives quite emphatic confirmation
from the language of par. (d) of s.
88F (1), made applicable when the contract earlier mentioned "(d) provides or
has provided
a total remuneration less than a person performing the work would
have received as an employee performing such work". This paragraph
assumes
that the work earlier referred to in the opening words of s. 88F (1) is work
being performed for another, although not
as an employee. The terms in pars
(c) and (e) also lend further support to this interpretation of the phrase
"performs work". (at
p193)
6. That s. 88F should be concerned with contracts under which work is
performed by one person for another, although not as an
employee, is precisely
what, on first reading the section in its statutory context, one would
conclude to be its purpose. The Industrial
Arbitration Act consolidates "the
Acts relating to Industrial Arbitration" and confers upon the tribunals it
creates wide powers
in relation to the employer-employee relationship; s. 88F
then meets the case of those industrial relationships in which the parties
are
not in any master and servant relationship yet the one is performing work for
the other in consequence of a contract. (at p194)
7. If s. 88F, as so construed, is then sought to be applied to the present
agreement the question which immediately arises is
whether under it Barham,
the farmer, was to perform work for Stevenson, the owner. If not the section
will have no application.
(at p194)
8. In his reasons for judgment my brother Aickin has examined in detail the
terms of the agreement; I find it unnecessary to arrive
at any conclusion
whether or not the parties were partners. There are, of course, strong
indications pointing in that direction,
they were to share in the profits of
the business, itself prima facie (although only prima facie) evidence of
partnership - Partnership Act 1892 (N.S.W.) s. 2 (iii); property found to be
necessary for the running of the business was to be partnership property and
the agreement on one occasion
speaks of them as "partners"; the accounts
maintained over the years repeatedly speak of "the partners" when referring to
Stevenson
and Barham. Cases abound in which relationships such as that created
between these parties have had to be subjected to close analysis,
either in
order to determine specifically whether a partnership existed or for other
purposes in the pursuit of which courts have
passed upon the question of the
existence of any partnership; instances are provided by Cribb v. Korn (1911)
[1911] HCA 9; 12
CLR 205 , Barker
v. Law (1919) St R Qd 152 , McKenzie v. McKenzie (1921)
NZLR 319 and George Hall & Son v. Platt (1954)
35
Tax Cas 440 . A reading
of
them emphasizes the accuracy of the observation of O'Connor J. in Cribb v.
Korn (1911) 12 CLR, at
p
218 that such agreements
"vary infinitely in form
and in legal effect". No general rule, applicable to all such agreements as
are commonly described as
share-farming agreements, can be laid down
concerning the relationships they create. (at p194)
9. I do, however, regard it as clear that, whether or not there was here a
partnership, the present agreement is not one in consequence
of which Barham
was to perform work for Stevenson. In Cribb v. Korn [1911] HCA 9; (1911) 12 CLR 205 there
was held to be no partnership;
it
was a case of an agreement the effect of
which was that "in short respondent
Cribb supplied lands, tools, implements,
and live
stock, and respondent Rano labour, and they were each to take
one-half of the
proceeds of the produce grown when the same was realized
and
marketed" (1911) 12 CLR, at p 210 . The question was whether, for the
purposes
of a workers' compensation statute, Cribb was
liable to Rano's employee, Korn,
as he would be were Rano to be held to
be performing the work on the farm for
or on behalf of
Cribb. Griffith C.J. concluded that although Rano contracted
to execute
work he did not contract to do it on behalf of Cribb (1911)
12 CLR,
at p 210 ; Barton J. said that "what stands out in these circumstances
is that
Rano was working the land on his own account
and for his own benefit" (1911)
12 CLR, at p 215 ; O'Connor J. was of a like
view, he was unable to regard
Rano as executing the
work of the farm for Cribb or on Cribb's behalf, Rano
was "to cultivate the
land on his own behalf so as to produce proceeds for
himself" although bound to divide those proceeds, when received, with Cribb
(1911) 12 CLR, at p 220 . The case provides an illustration
of a contract, in
some respects very similar to the present, which
did not create any
partnership and in which the farmer who was
engaged in working the land was
held to be working it not for the
owner but for himself. If, in the present
case, there was a partnership
it might not then be accurate to describe Barham
as working
for himself but it would be no less inappropriate to describe him
as
performing his work on the farm for Stevenson in the sense
in which s. 88F
speaks; he might perhaps best be described, if a description
of this concept
be sought, as working in the interests
of the partnership, which comprised the
two of them. (at p195)
10. To date I have considered the matter without regard to such authorities
as exist regarding the meaning of s. 88F. The decision
of this Court in Brown
v. Rezitis [1970] HCA 56; (1970) 127 CLR 157 was directed to a quite different question and
I have not
found it to bear
upon the present problem. That case
and also
relevant decisions of courts in New South Wales are discussed in detail
in the
reasons
for judgment of my brother Aickin.
I agree with his analysis of the
cases, which discloses nothing which would lead
me to depart
from the view
which I have formed
concerning the present inapplicability of s. 88F. (at
p195)
11. I agree with the view expressed in the reasons for judgment of other
members of the Court that the scope of s. 88F is not
to be restricted to cases
of contracts which are in some way thought to be subversive of the scheme of
industrial regulation achieved
by or under the Act. I see no warrant for any
such a restriction. However to reject this restriction is not, in light of the
construction
which I place upon the words of the section, to conclude that it
confers any jurisdiction in the present case. (at p195)
12. In their joint reasons for judgment Mason and Jacobs JJ. deal with a
quite distinct matter which was argued on this appeal,
namely, the propriety
of permitting the defendant to take an objection as to jurisdiction without
being put to his election. I
agree with all that is there said on this topic.
(at p196)
13. Since I regard the present agreement as not being such a contract as is
described in s. 88F as that in respect of which jurisdiction
is conferred upon
the Commission it follows that I would allow this appeal, set aside the order
of the Court of Appeal and substitute
an order dismissing the application made
to that Court. (at p196)
MASON AND JACOBS JJ. On 12th December 1973 in the Industrial Commission of
New South Wales Kelleher J. heard an application by
the first respondent under
s. 88F of the Industrial Arbitration Act, 1940 (as amended) seeking relief in
respect of a share-farming
agreement made on 5th November 1968 between the
first respondent, who was the farmer, and the appellant, who was the owner.
The
relief sought was based on the grounds set forth in pars (a) to (d)
inclusive of s. 88F (1). The first respondent sought an order
that the
agreement be wholly void on and from a date six months from the date of the
order and an order that the appellant should
pay the sum of $20,000 to the
first respondent together with costs. At the conclusion of the case for the
first respondent the
appellant submitted that on the evidence it was not a
case in which the Commission had jurisdiction to grant relief. Kelleher J.
having permitted the appellant's counsel to develop the submission without
requiring him to elect not to call evidence, held that
there was no
jurisdiction and dismissed the application. (at p196)
2. On appeal the Court of Appeal ordered that the matter be returned to the
Commission (1975) 1 NSWLR 31 . Street C.J. held that
Kelleher J. erred in not
requiring the defendant to elect. Hope J.A. held that the defendant failed on
the substantive issue in
his objection to jurisdiction. Hutley J.A. dissented,
holding that there was no jurisdiction in the Industrial Commission. It is
from this order that the present appeal comes. (at p196)
3. The share-farming agreement related to some 350 acres of the appellant's
property. The summary of the principal provisions
which follows has been taken
from the judgment of Hope J.A. The first respondent agreed to provide all
dairy cattle necessary for
dairying operations on the property and to supply a
sufficient number of milking cows to maintain the existing quota attached to
the property, to provide certain farming vehicles and machinery (cl.1), and to
supply all labour necessary for the normal process
of dairying and farming
operations upon the property (cl.2). The appellant agreed to supply certain
milking machines and other
farm machinery (cl. 3), to be solely responsible
and liable for all major development work on the property including labour and
material for fencing and fencing repairs but excluding any labour that might
be supplied by the first respondent for that purpose
(cl. 6), and, at his own
expense, to supply all seed for pasture improvements (cl. 7). All other plant
and equipment necessary
for running the business was to be purchased by the
parties in equal shares and was to remain their joint property. On the
termination
of the agreement either party was to have the right to purchase
the interest of the other in the joint plant and equipment at an
agreed price,
and in the absence of agreement, the plant and equipment was to be sold and
the net proceeds equally divided between
the parties (cl. 5). In this clause
the parties were referred to as partners. (at p197)
4. The net profits from all dairying and farming operations on the property
were to be shared equally and all expenses were to
be borne equally between
the parties (cl. 8). Milk supplied from the property was to be delivered to
the Wyong Co-operative Dairy
Society in the joint names of the parties and the
proceeds were to be credited in the joint names and distributed within one
week
of receipt (cl. 9). The progeny of the first respondent's stock were to
remain his property, and he was given certain rights to
graze them on the
property (cl. 10). He was to be entitled to occupy the residence on the
property free of charge (cl. 11), and
was to be permitted a holiday period of
three weeks per annum, the expense of replacing all necessary labour for that
period to
be shared equally by the parties (cl. 12). The agreement was to be
deemed to have commenced on and from 26th June 1968 and was to
remain in force
for a period of five years from that date (cl. 13). (at p197)
5. The agreement was a share-farming agreement within the meaning of the
Agricultural Holdings Act, 1941 and when its five-year
term expired in June
1973 the first respondent apparently claimed to be entitled, under s. 24 of
that Act, to the continuance of
the agreement until terminated by a notice to
quit complying with the provisions of that section. (at p197)
6. Two issues emerge in this appeal: first, whether the Industrial Commission
on the evidence had jurisdiction to grant relief
under s. 88F, and secondly,
whether the appellant ought to have been put to his election. (at p197)
7. Section 88F of the Industrial Arbitration Act provides (so far as
material):
"(1) The commission may make an order or award
declaring void in whole or in part or varying in whole or in
part and either ab initio or from some other time any contract
or arrangement or any condition or collateral arrangement
relating thereto whereby a person performs work in any
industry on the grounds that the contract or arrangement or
any condition or collateral arrangement relating thereto -
(a) is unfair, or
(b) is harsh or unconscionable, or
(c) is against the public interest. Without limiting the
generality of the words 'public interest' regard shall be
had in considering the question of public interest to the
effect such a contract or a series of such contracts has
had or may have on any system of apprenticeship and
other methods of providing a sufficient and trained
labour force, or
(d) provides or has provided a total remuneration less than
a person performing the work would have received as
an employee performing such work, or
(e) was designed to or does avoid the provisions of an
award or agreement." (at p198)
8. The section appears in Pt VIII of the Act dealing with awards and was
introduced into the Act at the same time as s. 88E which
deems certain persons
who, but for the section, would be independent contractors, to be employees
and thereby brings them within
the operation of relevant industrial agreements
and awards. (at p198)
9. To come within s. 88F the agreement must be one "whereby a person performs
work in any industry". It is upon these apparently
innocuous words that the
objection to jurisdiction fastens. They have to be read in the light of the
statutory definition of the
word "industry" which is defined in s. 5 to mean
"craft, occupation, or calling in which persons of either sex are employed for
hire or reward, and unless otherwise indicated by the context of any
provisions of this Act any division of an industry or combination,
arrangement, or grouping of industries". (at p198)
10. It is not in doubt that the work which the first respondent was required
by the agreement to undertake was work in the dairying
or dairy farming
industry. Is the agreement one whereby he performs work in that industry? This
is the question and it is a question
which might readily be answered in the
affirmative but for certain limiting considerations which according to the
appellant, are
to be derived from the sub-section when it is viewed in its
entirety. The appellant says that these considerations require the conclusion
that a contract or arrangement to fall within s. 88F (1) must be subversive of
the scheme of industrial regulation achieved by
or under the Act. (at p198)
11. The first obstacle in the appellant's way is that the power conferred
upon the Commission by s. 88F is in the widest terms.
It enables the
Commission to make an order or award varying a contract or arrangement or a
condition or collateral arrangement
relating thereto, on the grounds stated.
The grounds so stated are wide-ranging and embrace many considerations. They
are not all
limited to considerations which are themselves industrial in
character - they include the grounds that a contract or arrangement
is (a)
unfair, (b) harsh or unconscionable, (c) contrary to the public interest. (at
p199)
12. The fact that grounds (a), (b) and (c) are included in sub-s. (1) in
addition to grounds (d) and (e), indicates that the Commission's
powers are
not confined in point of jurisdiction to contracts or arrangements designed to
avoid the industrial awards or agreements
or the rates of remuneration fixed
for the performance of work by employees, the matters stated in grounds (d)
and (e). According
to the language in which the first three grounds are
expressed the Court can grant relief if a contract or arrangement is unfair
or
harsh or unconscionable or is against the public interest, whether it tends to
subvert industrial awards and industrial agreements
or not. (at p199)
13. There is little force in the argument that because the power has been
entrusted to the Industrial Commission, and not to the
Supreme Court, it
should be circumscribed and confined to agreements which tend to subvert
orderly industrial regulation. There
were strong reasons for giving the power,
whether it be extensive or circumscribed, to the Industrial Commission rather
than to
the Supreme Court. The Supreme Court does not exercise jurisdiction in
industrial matters. The Industrial Commission does exercise
such a
jurisdiction; it was therefore an appropriate repository of a jurisdiction
which includes matters having an industrial character.
(at p199)
14. In the present case Kelleher J. said:
"In substance it (i.e. the agreement) was a business ventureIn concluding that these considerations operated to deprive him of jurisdiction his Honour relied on the decision of the Industrial Commission in In re Becker and Harry M. Miller Attractions Pty. Ltd. (No. 2) (1972) AR (NSW) 298, at p 307 where the Commission said: "We are satisfied that the limitation of the scope of s. 88F to transactions which have, in the words of Jacobs J.A., speaking for the Court of Appeal in the V.G. Haulage Case (1972) 2 NSWLR 81, at p 87 , an industrial colour or flavour arises as a matter of interpretation and therefore imposes a jurisdictional restriction." (at p200)
of a type traditionally carried on in the rural sector,
conducted on a partnership basis and involving the risks
attendant upon its operation. It was not, in my view, a
transaction necessarily in intention or effect subversive of
the scheme and purposes of industrial legislation, nor a case
in which work was performed under some form of contractual
arrangement with a person who could be an employer, nor
one where the respondent was in the position of an employer
or a contractor getting or purporting to get work done for
himself in some way."
15. This sentence, read in isolation, gives a misleading impression of what
was actually decided in the Becker Case (1972) AR
(NSW) 298 and all that was
said by Jacobs J.A. (with whom Mason J.A. and Hardie J.A. agreed) in Ex parte
V.G. Haulage Services
Pty. Ltd.; Re Industrial Commission (N.S.W.) (1972) 2
NSWLR 81 . The critical passage in the V.G. Haulage Case is (1972) 2 NSWLR
at
pp 87-88 :
"If the grounds upon which the powers under s. 88F might
be exercised were limited to (d) and (e) in s. 88F (1) there
might be much to be said for the restrictive view; but as
Barwick C.J. pointed out in Brown v. Rezitis
(1970) 127 CLR, at p 164 : 'The five
grounds on which the Commission may vary or avoid
contractual arrangements are not homogeneous', and as
Sheldon J. pointed out in Davies v. General Transport
Development Pty. Ltd. (1967) AR (NSW) 371, at p 373
: 'for it' (that means s. 88F) 'not
only proscribes transactions which directly undermine
awards see (d) and (e) or threaten general industrial
standards which, I think, is the most relevant "public
interest" referred to in (c), but it also, in (a) and (b), strikes
separately at those which are "unfair" or "harsh" or
"unconscionable". Presumably, this is because any
transaction, leading to work in an industry, which can be so
described is regarded as inimical to the purposes of the Act.'I
think this last sentence properly expresses the principle, in
that the transaction must directly lead to work in the
industry - that is what gives the industrial colour or
flavour - but there is no suggestion in the passage that there
must be throughout an identity between the person working
and the contracting party." (at p200)
16. When the last sentence in this passage is read in the light of the
comments which precede it, it becomes obvious that what
was being rejected was
the argument that the powers of the Commission are confined to transactions
which directly undermine awards
or threaten industrial standards and what was
being asserted was that so long as the transaction leads directly to work in
any
industry it has the necessary "industrial colour or flavour". (at p200)
17. That this was the effect of the V.G. Haulage Case seems to have been
recognized in a later passage in the judgment of the
Commission in the Becker
Case when it said (1972) AR (NSW), at p 308 :
"Returning to the primary question whether this contract isto
one 'whereby' the applicant 'performs work in any industry',
we find that it is a contract of this character. We think that
the word 'whereby' has its permitted dictionary meanings of
'by means of or by the agency of which'; 'in consequence of,
as a result of, or owing to which' (Shorter Oxford) and that
this accords with the statement of Jacobs J.A. in the V.G.
Haulage Case (1972) 2 NSWLR 81 that the transaction must 'directly lead
work in the industry'. Normally such a contract will be the
actual work contract." (at p201)
18. Consequently neither case properly understood provides support for the
jurisdictional limitation which the appellant seeks
to introduce and which
Kelleher J. enunciated. (at p201)
19. There is nothing in Brown v. Rezitis [1970] HCA 56; (1970) 127 CLR 157 which supports
the suggested limitation on jurisdiction.
Barwick
C.J. pointed out that of the
five grounds,
only two refer to the avoidance of an award or the underpayment
of a worker
in industry
(1970) 127 CLR, at p 164 . Menzies J. said
specifically, "Section 88F confers upon the Commission the power to make
orders which
cannot be comprehended within the description
of orders relating
to or appearing to relate to industrial matters"
(1970) 127 CLR,
at p 172 .
(at p201)
20. It follows, then, that if the contract is one which leads directly to a
person working in any industry it has the requisite
industrial character - it
is a contract "whereby a person performs work in any industry". This is the
relevant jurisdictional fact
which needs to be established. An error of law
whereby the Commission assumes or declines jurisdiction may be corrected by
the
Supreme Court; but once the jurisdiction is established the Industrial
Commission is the final arbiter both on matters of law and
on matters of fact.
Its decision cannot, except by way of appeal to the Commission in court
session pursuant to s. 14, be challenged,
appealed against, reviewed, quashed,
or called in question by any court on any account whatsoever (s. 84). The
plaintiff must,
as a condition of making out a case for relief, show the
existence of one of the five grounds set out in the sub-section. When such
a
ground has been established it is for the Commission in the exercise of its
discretion to determine whether relief will be granted.
Thus in exercising its
discretion the Commission may decide, as it appears to have done in a number
of cases, that relief will
only be granted if the agreement appears to be one
which is subversive of industrial regulation. By so deciding the Commission
might or might not be acting upon a correct legal principle governing the
exercise of the discretion given to it. Since s. 88F (1)
includes pars (a),
(b) and (c) as well as (d) and (e) it may well be that the Commission would
not be acting on a correct principle
if it were so to decide. But it must be
recognized that the principle so adopted is one which relates, not to
jurisdiction, but
to the exercise of the discretion conferred by the
sub-section. The various facts and circumstances relied upon by Kelleher J. as
reasons for holding that he had no jurisdiction may lead him to conclude that
no order ought to be made but that is a matter for
the Industrial Commission.
(at p202)
21. We would therefore reject the appellant's submission that the contract is
not one of the kind contemplated in the opening
words of s. 88F (1). The
share-farming agreement provided directly for the employment of the first
respondent in the dairy farming
or dairying industry and, in accordance with
the provisions of the agreement, he performed work in that industry. This, so
it seems
to us, is the end of the appellant's case in this Court. It was not
suggested, nor could it be suggested, that if the agreement
be held to fall
within the opening words of the sub-section, there was an excess of
jurisdiction on the part of the Commission
in proceeding to hear and determine
the respondent's claim for relief. (at p202)
22. Although this conclusion makes it unnecessary to deal with the ground on
which Street C.J. decided the case, we should not
wish to be taken as
acquiescing in the view expressed by his Honour. Under s. 33 of the Act it is
for the Commission to determine
its own rules of procedure, paying due
attention to the requirements of s. 83. We have been told that the Commission
follows the
practice of permitting questions of jurisdiction to be argued
without requiring a party to elect not to call evidence. There is
much to
commend this approach. As a general rule it is desirable that an objection to
jurisdiction be determined as early as circumstances
will conveniently admit
so that the tribunal does not embark on a hearing which it lacks authority to
conduct. (at p202)
23. We would not apply to objections to jurisdiction the general rule that a
defendant should be called upon to elect whether
or not he will call evidence
before he is permitted to submit that there is no case to answer. The
traditional practice whereby
a defendant is permitted to take a preliminary
objection to jurisdiction and to argue it without being put to his election is
quite
at odds with the suggestion that a defendant should be compelled to
elect before taking an objection to jurisdiction. Even the general
rule that a
defendant should be called upon to elect before submitting that there is no
case to answer must give way to particular
circumstances. The discretion of a
court to determine a case at an early stage, when appropriate, has been
repeatedly asserted
(see Young v. Rank (1950) 2 KB 510 ; Ramsden v. Ramsden
(1954) 1 WLR 1105, at p 1107; (1954) 2 All ER 623, at p 624 ; Union Bank
of
Australia Ltd. v. Puddy [1949] VicLawRp 46; (1949) VLR 242 ; Sampson v. Edwards [1949] VicLawRp 2; (1949) VLR 6 ).
(at p203)
24. In the result we would dismiss the appeal. (at p203)
AICKIN J. This matter comes before the Court pursuant to an order granting
special leave to appeal from a decision of the Court
of Appeal of New South
Wales. The matter before that Court was an application for an order requiring
the Industrial Commission
to exercise its jurisdiction in an application under
s. 88F of the Industrial Arbitration Act, 1940 by the respondent in this
appeal.
(at p203)
2. The terms of s. 88F have already been set out and I need not repeat them.
The respondent Barham had applied under that section
for an order that an
agreement between him and the appellant Stevenson should be declared wholly
void and for the payment by Stevenson
to him of the sum of $20,000 and for
such other relief as might be appropriate. The grounds relied upon were all of
those set out
in pars (a) to (e) inclusive in sub-s. (1). The terms of the
agreement in question are of importance and it is necessary to note
them in
some detail. The agreement was dated 5th November 1968 and was expressed to be
effective as from 26th June 1968 for a period
of five years. Barham's evidence
was that it had arisen out of an approach which he had made to Stevenson under
which Stevenson
should acquire a property suitable for development as a dairy
farm and that a milk quota should be obtained. Barham identified a
suitable
property and made appropriate arrangements with the Milk Board for a milk
quota. The written agreement is a professionally
drawn document said to be in
accordance with a form Barham had previously used. It uses the expression
"owner" to describe Stevenson
and the expression "farmer" to describe Barham.
It recites that Stevenson is the owner of approximately 700 acres of land
together
with necessary improvements thereon to enable dairying operations to
be carried on and that the parties have agreed to enter into
a share-farming
agreement for the purpose of carrying out farming and dairying operations on
an area of approximately 350 acres
which is designated as "north of a new
sub-division fence upon the said area of 700 acres". Clause 1 provided that
the farmer should
supply (a) all dairy cattle necessary for dairying
operations on the property and should at all times supply sufficient number of
milking cows to maintain the existing quota attached to the property, and (b)
certain specified farm machinery, equipment and vehicles.
Clause 2 provided
that the farmer should supply "all labour necessary for the normal process of
dairying and farming operations
upon the property". Clause 3 provided that the
owner should supply milking machines and appropriate engines and certain other
specified
farming plant and equipment. Clause 4 provided that notwithstanding
the supply of stock, plant and equipment by the farmer and the
owner as
referred to in cll. 1 and 3 the said stock, plant and equipment should remain
the separate property of each party. Clause
5 provided that all other plant
and equipment necessary for the running of the business should be purchased by
the parties in equal
shares and "shall remain the joint property of the
partners". Clause 6 provided that the owner should be "solely responsible and
liable for all major development work upon the subject property inclusive of
labour and material for fencing and fencing repairs
but excluding such labour
as may be supplied by the farmer for that purpose". Clause 7 provided that the
owner at his expense should
supply all seed for pasture improvements. Clause 8
provided that the net profits from dairying and farming on the subject
property
should be shared equally and all expenses, repairs and replacements
to plant either owned by the farmer or the owner should be borne
equally by
the parties. Clause 9 provided that the milk supplied from the property should
go to a specified Co-operative in the
joint names of the owner and the farmer
and the proceeds should be credited to the joint account. Clause 10 provided
that the progeny
of the stock provided by the farmer should remain his sole
and absolute property. He was to have the right to graze them on the
property
(but at his own expense in respect of special fodder) to the age of six
months. It was then provided that if the stock
should be placed for use in the
dairying operations they should remain on the property without charge to the
farmer, but if they
were sold or otherwise disposed of the farmer was to pay
to the owner $1.00 per head per month from the age of six months until
sold or
disposed of. Clause 11 provided that the farmer was to be entitled to occupy
the residence on the property free of charge.
Clause 12 provided that the
farmer was to be permitted a holiday period of three weeks per annum and the
expense of replacing all
necessary labour for such period was to be at the
expense of the parties. It was finally provided that the agreement should
operate
as from 26th June 1968. (at p204)
3. It was regarded as clear that this agreement was a share-farming agreement
within the meaning of the Agricultural Holdings
Act 1941, but I do not think
anything turns on this. In my opinion it is also clear that it is a
partnership agreement in the proper
sense of that term. The agreement is one
under which each partner is to provide certain capital assets for the purposes
of the
partnership as particularized in the agreement itself. Each is to
supply the requisite labour for certain specified partnership
activities. It
is I think also clear that the agreement does not require either partner to
perform personally the work involved
in that aspect of the partnership
activities for which he is to supply labour. However, I think it fair to say
that the agreement
contemplated that Barham would supply at least some of the
labour by his own individual work. (at p205)
4. At the hearing before Kelleher J. evidence was given on behalf of the
applicant Barham and at the end of his case Kelleher
J. permitted counsel for
the respondent Stevenson to make a submission with respect to jurisdiction
without requiring him to elect
whether or not he proposed to call evidence.
After hearing argument, Kelleher J. concluded that he had no jurisdiction
because
the agreement did not answer the description, in s. 88F, i.e., "any
contract or arrangement or any condition or collateral arrangement
relating
thereto whereby a person performs work in any industry". He said as follows:
"It is true that the contract or arrangement led to the
performance by the applicant of work in an industry but, as
appears from the decision in Becker's Case (1972) AR (NSW) 298 , not all
such cases are necessarily within the purview of s. 88F (1). In
substance it was a business venture of a type traditionally
carried on in the rural sector, conducted on a partnership
basis and involving the risks attendant upon its operation. It
was not, in my view, a transaction necessarily in intention or
effect subversive of the scheme and purposes of industrial
legislation, nor a case in which work was performed under
some form of contractual arrangement with a person who
could be an employer, nor one where the respondent was in
the position of an employer or a contractor getting or
purporting to get work done for himself in some way." (at p205)
5. In the Court of Appeal, Street C.J. was in favour of making the order that
Kelleher J. should duly hear and determine the matter
because he took the view
that Kelleher J. had been wrong in not requiring counsel for Stevenson to
elect before hearing his submissions
on want of jurisdiction. He made some
general observations concerning the nature of s. 88F and said that the
question of whether
an agreement fell within that section could only properly
be determined upon a consideration of the whole of the evidence that the
parties seek to put before it and that accordingly it was not open to a party
to contend at the end of an applicant's case that
there was no jurisdiction
unless he elects to call no evidence himself. Hope J.A. considered the terms
of the agreement and referred
to a number of decisions of the Industrial
Commission, to the decision of the Court of Appeal in Ex parte V.G. Haulage
Services
Pty. Ltd.; Re Industrial Commission of N.S.W. (1972) 2 NSWLR 81 and
to the decision of this Court in Brown v. Rezitis [1970] HCA
56; (1970) 127
CLR 157 . He said
that it was clear that the section was not limited to a contract for the
provision of services,
although that
was no doubt the commonest form of
agreement to which the section did apply. He said that it was not enough to
take
an agreement
outside the section that it was either a share-farming
agreement or a partnership agreement or both. He concluded that
the agreement
of 5th November 1968 had the "necessary industrial colour and flavour" and
said (1975) 1 NSWR, at p 45 :
"If the parties had so desired, the contract between themHe evidently regarded those conclusions as sufficient to bring the contract within s. 88F. With due respect I am unable to agree that, without substantial transformation, the contract could have been one of employer and employee. I do not think that, if it were avoided, there would be revealed a situation in which the appellant Stevenson could be regarded as a person standing in the position of an employer for whom the respondent Barham worked. If in fact the agreement were avoided, one would find Barham running and milking his own cows on someone else's property and dividing the net proceeds of that operation with the owner of the property. It is I think, a completely inadequate, and indeed misleading, description of that situation to say that it is one under which Barham performed work for Stevenson or that Stevenson stood in the position of an employer of Barham. It is not to be supposed however that an examination of what would be revealed if the contract were avoided is a test of whether it falls within the section and it is certainly not the test. It may in some cases be some indication of whether the contract, though not a sham, is the kind of subterfuge of which Barwick C.J. spoke in Brown v. Rezitis [1970] HCA 56; (1970) 127 CLR 157 . (at p207)
could have been one of employer and employee, and, if the
contract which was entered into were avoided by the
Commission the defendant could be regarded as a person
standing in the position of an employer for whom the
plaintiff performed work."
6. Hutley J.A. dissented upon the ground that there was material upon which
Kelleher J. could properly arrive at his conclusion,
notwithstanding that some
other judge might have arrived at a different decision. He relied upon the
authorities concerning a writ
of mandamus and in particular upon R. v. War
Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; (1933) 50 CLR 228
and the
passage
from the joint judgment of Rich, Dixon and McTiernan JJ. (1933) 50
CLR, at p 242 for the view
that the Court of
Appeal could not
interfere unless
Kelleher J. had either actually or constructively refused jurisdiction. Taking
the view that
he had not done so,
Hutley J.A. held that there was no basis for
the issue of an order in the nature of a mandamus.
In the appeal
before this
Court
this point was not raised, and the only point argued was whether the
agreement did answer the description
in
s. 88F (1). (at p207)
7. In the Industrial Commission various views have been expressed from time
to time as to the proper construction of s. 88F and
as to whether any and what
restrictions operate to confine the apparent scope of the very wide words
used. It is not necessary
for present purposes to review all those
authorities. Many of them are referred to in the decision of the Commission in
Court Session,
In re Becker and Harry M. Miller Attractions Pty. Ltd. (No.2)
(1972) AR (NSW) 298 , but before coming to that decision it is necessary
to
refer first to the decision of this Court in Brown v. Rezitis (1970) 127 CLR
157 . The actual decision in that case was that
a person may be a party to
proceedings under s. 88F though not a party to the contract or arrangement in
question, and that the
power of the Commission to make an order for the
payment of money under sub-s. (2) is not limited to the making of an order for
payment of money by one of the parties to the contract or arrangement but
extends to such orders as can reasonably be thought to
have a real connexion
with the making, variation or avoidance of the contract or arrangement.
Barwick C.J. said (1970) 127 CLR,
at p 164 :
"It must be borne in mind that one of the purposes of theHis judgment is primarily directed to the proper construction and scope of sub-s. (2), and the question whether there was any basis for making the order actually made by the Industrial Commission in that case, namely an order that a variety of persons having connexions both close and remote with transactions could be made jointly and severally liable for the whole of the amount decided upon as necessary to restore the applicant to his previous position. (at p208)
section is to deal with subterfuges, subterfuges which will
take the worker out of the relationship of master and servant
and therefore out of the operation of an industrial award
designed, amongst other things, for the protection of workers
in industry. There may be persons involved in the subterfuge
who are not parties to the contract or arrangement but who
are in reality the actors deriving benefit from the making or
the execution of the contract or arrangement.
Also the power given to the Commission includes a power
to declare the contractual arrangements void as from their
making, not merely void as between the parties, but
absolutely void. If there are other persons whose rights are
known to depend on the continuance of the contract as a
valid instrument according to its terms, then natural justice
may in the circumstances require the Commission to afford
such persons an opportunity to be heard. Again the
avoidance of the contract or arrangement may be a step in
uncovering the real transaction benefiting at the expense of
the worker parties other than those in whose name the
contract or arrangement was apparently made."
8. Menzies J. said (1970) 127 CLR, at p 169 :
"The section is clearly intended to confer a comprehensiveHis judgment is however confined to the kind of connexion necessary between a respondent and the contract or arrangement in order to justify the making of an order against such person to make payments to the applicant. (at p208)
power upon the Commission to go to the substance of an
arrangement made for a person to perform work in an
industry - and to do so in disregard of the legal dress in
which the arrangement has been clothed - in order to put
such a worker in no worse a position than if he had been
working under a contract of employment protected by award
conditions. The central power conferred is to avoid or vary
the contract or arrangement for work actually made, upon
proof of one of the grounds stated. These have in common the
element that advantage has been taken of a worker to obtain
cheap labour."
9. There was no occasion in that case for determining the meaning and scope
of sub-s. (1) and I do not consider that that case
provides any but the most
indirect assistance in the solution of the present problem. The next case is
the decision of the Court
of Appeal of New South Wales in Ex parte V.G.
Haulage Services Pty. Ltd. (1972) 2 NSWLR 81 , in which an order for
prohibition
was sought against the Commission in respect of certain orders
made under s. 88F. In that case two agreements had been entered into
in
writing by one Kish with V.G. Haulage Services Pty. Ltd. The first agreement
provided for him to buy a truck on terms over five
years and to enter into a
work agreement with that company and the second agreement provided for him to
pay to the company the
sum of $2,500 in consideration of it obtaining haulage
and freight contracts for him over the five year period. The latter agreement
was subject to and dependent upon Kish applying for and being allotted 1,000
fully paid redeemable preference shares and it was
a term of the agreement
that he would be at liberty to employ a driver for the truck. Kish was then
serving in the Royal Australian
Navy and he made an arrangement with one
Fenning that he should drive the truck until Kish obtained his discharge from
the Navy.
In fact while the agreement was operative Kish did not drive the
truck at all and all the driving was done by Fenning. It does not
appear
whether Fenning was employed by Kish at the award rate or otherwise, or
whether he received in effect what Kish would have
received from the cartage
business if he had been performing the actual work himself. It was held by the
Court of Appeal that the
Industrial Commission had jurisdiction to make a
declaration and orders under s. 88F in any case where the contract is for the
performance of work of an industrial character and where "the contract can be
regarded as inimical to the purposes of the Act".
It was also held that it is
not necessary that the contracting party should himself perform the work. For
this proposition reliance
was placed on Brown v. Rezitis [1970] HCA 56; (1970) 127 CLR 157 .
The judgment of Jacobs J.A., in which Mason J.A. and Hardie
A.J.A. agreed,
rejected the two principal arguments
advanced which were first that there was
no jurisdiction where the applicant
was not at all
times a person who was
working in the
industry, which was alternatively expressed as an argument that
there is no
jurisdiction
to declare contracts void in favour of
an employer of
labour. The second ground is not material in the present case.
Jacobs J.A.
said (1972) 2 NSWLR, at pp 86-87 :
"It is not necessary that the party making the contract orHe then quoted from Sheldon J. in Davies v. General Transport Development Pty. Ltd. (1967) AR (NSW) 371, at p 373 where he pointed out that s. 88F:
arrangement should actually have performed work in the
industry under the impugned contract or arrangement. It is
in my view certainly sufficient in such a contract as the
present one, dealing with the use of one truck sold with a
work agreement relating thereto, that the contract or
arrangement envisages that the party to the contract or
arrangement will during its currency perform work in the
industry. Once this factor is present, certainly the
Commission has jurisdiction, provided the contract and arrangement
has an industrial colour or flavour, if I may so describe it."
"... not only proscribes (sic) transactions which directlyJacobs J.A. went on to say (1972) 2 NSWLR, at p 88 :
undermine awards (see (d) and (e)) or threaten general
industrial standards (which, I think, is the most relevant
'public interest' referred to in (c)), but it also, in (a) and (b),
strikes separately at those which are 'unfair' or 'harsh' or
'unconscionable'. Presumably, this is because any
transaction, leading to work in an industry, which can be so
described is regarded as inimical to the purposes of the Act."
"I think this last sentence properly expresses the principle,The following paragraph appears to me with respect to be for present purposes the critical passage in his judgment (1972) 2 NSWLR, at p 88 :
in that the transaction must directly lead to work in the
industry - that is what gives the industrial colour or
flavour - but there is no suggestion in the passage that there
must be throughout an identity between the person working
and the contracting party."
"It seems to me that the legislature was concerned toAs I read that paragraph there are two essential features required: (1) that the impugned agreement or arrangement directly envisages the employment of a person or persons in an industry and has a recognizable impact upon the conditions of that employment, and (2) that it discloses a purpose that by the adoption of the arrangement the industrial objectives of the legislation will be more or less defeated. (at p210)
empower the industrial tribunals, more recently the
Commission alone, to examine contracts and arrangements which led
directly to the employment of persons and the performance of
work in any industry, not simply because the contract or
arrangement in a commercial sense involves the provision of
goods and services, with a consequent performance of work
in an industry, but rather because the impugned agreement
or arrangement itself directly envisages the employment of a
person or persons in industry and has a recognizable impact
upon the conditions of that employment, and, whether or not
it envisages that a contracting party will perform the work,
discloses a purpose that by the adoption of the arrangement
the industrial objectives of the legislation will be more or less
defeated."
10. This decision was considered by the Industrial Commission in Court
Session In re Becker and Harry M. Miller Attractions Pty.
Ltd. (No.2) (1972)
AR (NSW) 298 where that Commission considered an agreement between an artist
and a company which acted as an
artist's manager or theatrical agent. Under
the agreement the manager was to obtain and negotiate contracts under which
the artist
would be engaged or employed by other persons to perform on the
stage or in films, or on radio or television. It was held that the
agreement
was one "whereby a person performs work in an industry". The Commission
reviewed some of the authorities and referred
both to the Court of Appeal
decision and to the High Court decision referred to above. They said (1972) AR
(NSW), at p 305 :
"In our view, 'a person performs work in any industry'In argument before this Court counsel for the respondent accepted that construction of the words "performs work". The Commission said that "... the word 'whereby' has its permitted dictionary meanings of 'by means of or by the agency of which'; 'in consequence of, as a result of, or owing to which' ... and that this accords with the statement of Jacobs J.A. in the V.G. Haulage Case that the transaction must 'directly lead to work in the industry' (1972) AR (NSW), at p 308 ". (at p211)
within the meaning of s. 88F when he does so either as an
employee or (the more usual case arising under the section)
by some form of contractual arrangement with a person who
could be an employer. 'Performs work' really means 'performs
work for or through another'. This meaning, in our view,
provides the necessary industrial link."
11. At first sight the expression "performs work for or through another"
seems unusual, but it is I think made clear by the context
of the case with
which the Commission was dealing. Primarily, s. 88F is concerned with some
person who "performs work for another".
The addition of the words "or through"
extends the operation to fit the facts of the case in question, because the
point relied
upon had been that the artist did not perform work for the
theatrical agent but obtained employment by other persons either as an
employee properly so-called or perhaps as a contractor, introduced by or
otherwise obtained by the theatrical agent. The conclusion
therefore was that
the agency agreement was within s. 88F. Whether the actual decision depending
upon the extension effected by
the words "or through" is correct is not
material to the present case, but it is useful as emphasizing that the basic
concept is
of a contract whereby one person performs work in an industry for
another person. The requirement is illustrated by the decision
of the
Industrial Commission In re Player and Kacy (1971) AR (NSW) 125 where the
agreement in question was for the sale of his
share in a partnership business
and of his vehicle by one of four partners, the other three joining in the
agreement as consenting
parties. The partnership operated as general carriers
and under the partnership agreement each partner contributed his own vehicle,
which was not partnership property, and the partnership owned an additional
vehicle used when a partner's vehicle was off the road.
Sheppard J. said
(1971) AR (NSW), at p 129 :
"I do not think however that the Act was intended to apply
to such an arrangement. An essential figure is missing - the
man who stands in the place of an employer and who seeks to
get around or whose activities have the effect of getting
around the award system established by the Act. No question
of any award being transgressed or bypassed is involved; no
question of any person doing work for some other person
arises." (at p212)
12. In my opinion the present agreement does not fall within s. 88F. It is
not an agreement by which one person works for another.
It is an agreement by
which each party agrees to provide substantial capital assets to a partnership
business, each retaining ownership
of such assets, and to join with the other
in subsequent purchases where requisite of other capital equipment which will
become
partnership property, and to use all such assets in conducting the
partnership business of dairy farmers. Each is to be responsible
for certain
identified work in the business and to provide or supply the necessary labour
to carry out such work. There is no obligation
to perform the work personally,
though, as I have said above, the agreement contemplated that the respondent
Barham would perform
personally at least some of the work for which he was
responsible. Under such an agreement neither party performs work for the
other. Each performs or procures the performance of work for the partnership,
i.e. for himself and his partner. For that reason
this agreement does not meet
the statutory requirement of being one whereby a person performs work for
another. Nor can it be said
of this agreement that it "discloses a purpose
that by the adoption of the arrangement the industrial objectives of the
legislation
will be more or less defeated". I can see nothing in the Act
generally with which such a partnership agreement is inconsistent in
terms or
in policy. The Act is concerned with employment generally and by s. 88E and s.
88F is extended to include other situations
regarded as substantially
equivalent to, or as substitutes for, employment but the present agreement
does not come within the words
or the spirit of those extensions. This is not
to say that every agreement cast in the form of a partnership agreement or of
a
share-farming agreement is necessarily for that reason alone outside the
section, but the present agreement certainly is. (at p213)
13. For these reasons the appeal should be allowed with costs and the order
of the Court of Appeal set aside and in lieu thereof
there should be
substituted an order that the application be dismissed with costs. (at p213)
ORDER
Appeal dismissed with costs.