Davis trading as Woodview Transport v Toll North Pty Ltd [2001] QIRC 135 (2001) 168 QGIG 30

30 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 14 September, 2001 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 276 – power to amend or void contracts Jeff Davis trading as Woodview Transport AND Toll North Pty Ltd (No. B575 of 2001) COMMISSIONER SWAN 31 August 2001 Application to amend or void contract – Preliminary issue raised by respondent – Definition of “unfair contract” – Unfair conduct – Significant body of case law to be applied – Preliminary issue rejected. DECISION Application B575 of 2001 has been lodged with the Commission by Mr Jeff Davis, partner in Woodview Transport, seeking an Order amending or voiding the contract for service between Woodview Transport and Toll North Pty Ltd pursuant to s. 276 of the Industrial Relations Act 1999 (the Act). The applicant’s claim generally is that around March 1997, he entered into a contract for services, trading as Woodview Transport, with the respondent. Around January 1999 the applicant was advised by the respondent to purchase a new vehicle. To assist the applicant in obtaining finance, the respondent advised the financier that the applicant would be in receipt of approximately $4,500 per week for driving two return trips between Sydney and Brisbane. Between January 1999 and February 2001, the applicant says that he received substantially less return trips than he had been promised. He states that he earned considerably less than the amount promised and that he had lost approximately 162 trips during that period. A preliminary issue was raised by the respondent and it is around that point that this decision relates. -- 1 of 3 -- 32 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 14 September, 2001 The essence of the respondent’s claim is as follows:– “1. There must be an unfair contract • The Commission’s jurisdiction under S. 276 is enlivened by the existence of an ‘unfair contract’ (s. 276(1)(b)). • Although subsection (4) refers to the conduct of the parties, such conduct is only relevant if, as result of that conduct, the contract between the parties ‘became an unfair contract’. • The term ‘unfair contract’ is now specifically defined in subsection (7) to include a contract that – (a) is harsh, unconscionable or unfair; or (b) is against the public interest (the other paragraphs of the definition are not considered relevant to this case). • The definition of ‘unfair contract’ does not include a contract that is fair on its terms. • The definition of ‘unfair contract’ does not include a contract that is otherwise fair but is rendered unfair simply as a result of the non- performance of a party i.e. breach of the contract.”. The respondent states that the applicant does not explain how the contract between the parties became “unfair” because the “conduct of the respondent alone cannot constitute an unfair contract.”. It is claimed that none of the particulars detailed by the applicant represents unfairness in terms of the “alleged arrangement” between the parties. The respondent states that the Commission should adopt the minority decision in Reich –v- Client Server Professionals of Australia Pty Ltd (Administrator Appointed) [2000] NSWIRC 143. In the alternative, the respondent states that if the majority decision in Reich is accepted and it “is held that unfair conduct that is inconsistent with the contract may render a contract to be an unfair contract, then it is submitted that to enliven the Commission’s jurisdiction, the contract must be capable of some amendment which would have prevented the unfair contract.” It is further stated that other decisions which have involved conduct “apparently inconsistent with the contract are able to be distinguished on their facts. In particular, cases such as Reich, Gleeson –v- Gold Coast Bakeries (Qld) Pty Ltd (QGIG 22 March 2001) and BD & HA Steel Pty Ltd –v- Austcover Pty Ltd (QGIG 3 November 2000) all involved contracts which were capable of amendment to remove some ambiguity in relation to the unfair conduct thereby ensuring that such conduct would have been inconsistent with their terms (ie to render them fair).”. The respondent further submits that the powers contained within s. 276(1) of the Act were never intended to duplicate the powers within the civil courts to provide appropriate relief for a common law breach of contract. The contract between the parties is ongoing. The respondent states that there is no way that the Commission could amend or void the alleged contract to make it fair and to void the contract ab initio would be to deprive the applicant of the continued benefits of the arrangement. Against these submissions, the applicant states that, pursuant to s. 276(4) of the Act, it is clearly contemplated by the Legislation that one may consider the conduct of the parties in determining whether a contract fits within the definitions of s. 276 (7). Section 276 (4) reads as follows:– “Power to amend or void contracts 276. (4) The commission may consider a contract to be an unfair contract if it considers the contract – (a) was an unfair contract when it was entered into; or (b) became an unfair contract after it was entered into because of the conduct of the parties, or a variation to the contract or for any other reason it considers sufficient. The applicant then proceeds to cite a number of cases which affirm the point being made. Without restating all of those decisions, a sample of those decisions are as follows:– In the majority decision of the Full Bench in Reich, it is stated:– “…It seems to us, in finding a contract to be unfair, that may be supported because it became an unfair contract due to the conduct of a party at the time of the termination of the contract which enabled a finding that a contract which could or did so operate was relevantly unfair. It would be open to declare the contract void or make an order varying its terms in an appropriate way…”. In Behan v Bush Boake Allen [1999] 47 NSWLR 648 @ 685 the Full Bench stated:– “What emerges from the above authorities, we think, is the now settled view that s 176 (as with the previous s 88F of the 1940 Act and s 275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing the attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract.”. Other cases cited, in similar vein, included the majority decision in Rothmans Distribution Limited v Full Court of Industrial Court of New South Wales Priestly JA [1994] 53 IR 157 @ 160, Incitec v Industrial Court of New South Wales Kirby J [1992] 29 NSWLR 83 @ 133, BD and HA Steel Pty Ltd v Austcover Pty Ltd (B1154/2000) and Gleeson v Gold Coast Bakeries (Qld) Pty Ltd (B1669/2000), In light of the range of decisions cited (many of which have been adopted within this jurisdiction), I am not swayed to move away from the general breadth of those decisions which envisage action of the type alleged in this application. -- 2 of 3 -- 14 September, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 33 On the question of alternative remedies existing within other jurisdictions, Walker v Industrial Court of New South Wales [1994] 53 IR 121 at pages 134- 135, Kirby P (as he then was) stated:– “It is by no means unusual in our legal system for the one set of circumstances to give rise to a number of remedies which the person affected may pursue, sometimes in the one court, sometimes in differing courts, to the full extent of that person’s entitlement. The commonest example is the entitlement of an injured worker to bring proceedings for benefit under the Workers Compensation Act, and to maintain a claim for damages at common law. The ingredients of the various entitlements may be different, but the existence of alternatives had never excluded a person from pursuing rights expressly conferred by statute. Unless those rights are expressly, or by necessary implication, excluded by the alternative claim, or controlled by an obligation to elect or by time limits, the beneficiary of the statutory right can pursue any, or no entitlements.”. I adopt that view as I can see no mention in the Legislation relating to s. 276 matters where this jurisdiction is limited in the manner so described by the respondent. The applicant is correct when it states that in many of the decided cases, the Commission has granted relief pursuant to s. 276 when promises relied upon by applicants were broken by the respondents during the course of a contract and when such action may have been generally described as a breach of contract. On the decided authorities (which have been cited in this decision) I determine that there is no justification for the matter not proceeding to a full hearing before the Commission. On the question of relief which may be awarded, that will be determined (if the applicant is successful in his claim) after a full ventilation of the facts of the case. The applicant has stated in his application the relief he is seeking if successful. Whether that relief is awarded in the manner so sought, is a matter for determination at the time of the making of the decision. I reject the respondent’s claim that the matter should not proceed through to a hearing. This matter will be set down for a preliminary hearing before the Commission on a date to be notified by the Registrar. I order accordingly. D. A. SWAN, Commissioner. Appearances :– Released: 31 August 2001 Mr J. C. Dwyer, of Reidy and Tonkin for the applicant. Mr S. Bennett, of Deacons Lawyers for the respondent. -- 3 of 3 --