State of Victoria & Anor v Ausn Liquor Hospitality & Miscellaneous Workers Union & Ors M48/1995 [1996] HCATrans 51 (5 February 1996)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M48 of 1995

B e t w e e n -

THE STATE OF VICTORIA and THE MINISTER FOR HEALTH FOR THE STATE OF VICTORIA

Applicants

and

THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and THE HONOURABLE JOSEPH MARTIN RIORDAN, formerly a Senior Deputy President of the Australian Industrial Relations Commission

First Respondents

and

AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION

Second Respondent

Office of the Registry

Brisbane No B22 of 1995

B e t w e e n -

ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND

Applicant

and

THE HONOURABLE SENIOR DEPUTY PRESIDENT RIORDAN

First Respondent

AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION

Second Respondent

ST JOHN AMBULANCE AUSTRALIA

Third Respondent

AMBULANCE OFFICER TRAINING CENTRE VICTORIA

Applications for leave to appeal

BRENNAN CJ

DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON MONDAY, 5 FEBRUARY 1996, AT 11.55 AM

Copyright in the High Court of Australia

MR A.G. UREN, QC: If the Court pleases, I appear with my learned friend, MR L. KAUFMAN, for the applicant in the first matter. (instructed by R.C. Beazley, Victorian Government Solicitor)

MR J.S. DOUGLAS, QC: If the Court pleases, I appear with my learned friend, MR R.S. JONES, for the applicant in the second matter. (instructed by K.M. O'Shea, Crown Solicitor for the State of Queensland)

MR J. NOLAN: May it please the Court, I appear for the second respondent, the Australian Liquor Hospitality and Miscellaneous Workers Union, in both matters. (instructed by Steve Masselos & Company)

BRENNAN CJ: The Deputy Registrar certifies that she has been informed by A.J. Smetana, Solicitor for Director Operations, Chamber of Commerce and Industry of Western Australia, solicitors for the third respondent in the matter B22 of 1995, that the third respondent does not wish to make submissions at the hearing of the application for leave to appeal. She further certifies that she has been informed by the Australian Government Solicitor, solicitors for the first respondent in matter B22 of 1995, that the first respondent does not wish to be represented at the hearing of the application for leave to appeal and will submit to any order of the Court save as to costs. She further certifies that she has been informed by the Australian Government Solicitor, solicitors for the first respondent in matter M48 of 1995, that the first respondent does not wish to be represented at the hearing of the application for leave to appeal and will submit to any order of the Court save as to costs. Yes, Mr Uren?

MR UREN: If the Court pleases. Despite what some of the papers in this case say the matter is, in fact, an application for leave under section 432(2) of the Industrial Relations Act and not an application for special leave.

BRENNAN CJ: Yes.

MR UREN: We have taken it, and we hope we are correct, that for the purposes of an application for leave it is necessary to show that there is a sufficiently arguable case for a sufficient prima facie case and not to go on to the other issues which one would normally go and do in a special leave application. So, our argument is based on that proposition. However, I must say we have got four points to argue or to put to the Court and it is, perhaps, a little difficult to do each of them justice in the five minutes which each of them would have, so I will identify them and do my best to cover them all in the relevant period.

DAWSON J: In a sense, it may be easier to establish entitlement to leave than special leave so the time should be shorter but - - -

MR UREN: We thought it would be easier to show that the point is interesting than to show that it is likely to be right. But, generally speaking, although not in our case, of course.

BRENNAN CJ: It seems that you have another supporter on your side of the record in this matter, Mr Uren, so do the best you can with twenty minutes.

MR UREN: Your Honour, I was trying to establish an excuse for being quick and inadequate on each point.

BRENNAN CJ: Yes.

MR UREN: At any rate, we will do the best we can. If the Court pleases, the four points that we raise are, in fact, set out in paragraph 1(a), (b), (c) and (d) of our summary of arguments and so they are just set out on the first page of that document. The Court will recall that the application in this case concerns two logs of claims and two Unions. There is what is called the April log which after the SPSF Case, which the Court will recall, was superseded in one sense by a December log and in respect of each log each of the relevant Unions were parties. In other words, the logs were joint with the two Unions being the demandors in respect of each.

BRENNAN CJ: This is prohibition against the ultimate decision of the Full Bench of the Commission, is it not?

MR UREN: Or the Deputy President, I think, but I think the Full Bench refused to hear an appeal and left the matter with the dispute finding of the Deputy President so the prohibition is against the Commission proceeding or against there being any proceeding in respect of the dispute finding which had been originally found in respect of each log.

BRENNAN CJ: What was remitted to the Industrial Court?

MR UREN: What was remitted was an order nisi to this Court, an application for an order nisi rather, which appears, I think at page 84 of the book. Omitting formal parts starting at page 86 - - -

BRENNAN CJ: And proceeding further.

MR UREN: Yes, and it is directed, in fact, to the learned Senior Deputy President and, it seems, also to the members of the Full Bench. I am reminded - I have no particular recollection of it myself - by Mr Kaufman, that the order nisi was amended, I think, to exclude the Court of Appeal members and leave the order nisi, one which was sought only against the Senior Deputy President. In any event, the order nisi which was sought and which was remitted to the Industrial Relations Court appears at pages 85 to 87. If the Court pleases, the first and the most substantially interesting point perhaps is the one relating to the question of genuineness or fancifulness or whether each of the logs of claims are capable of creating an industrial dispute.

The arguments which were put in that regard were, firstly, ones which relate to comparing the claims themselves with current industrial standards. If the Court has had an opportunity of seeing the additional material which was filed for the purposes of argument here it contains under tabs 4 and 5 a description of the current standards of conditions of service together with an analysis of those which are in the April log and those which are in the December log.

TOOHEY J: Once you descend to that detail, Mr Uren, are you not really - are you are saying much more than that the Industrial Relations Court misapplied the decisions in SPSF and Ludeke?

MR UREN: That would be sufficient for our purposes if we only said that. To show that they misapplied it would give rise to a question which would certainly present an arguable case of error but, in our submission, they did not really understand the reason why Ludeke is not relevant nor the reason why the SPSF Case is. It seems that the Court and the Commission have, in our respectful submission, reduced the SPSF Case to a one-off, as it were, and not to a case which ought to be applied in accordance with its terms and the misunderstood - the ambit doctrine as expounded in Ludeke's Case.

DAWSON J: What do you say the SPSF Case relevantly says?

MR UREN: It arguably relevantly says that there is an objective consideration of fancifulness. In other words, a claim, let us say, that wages be 100 per cent of net profits could scarcely, in current terms, be said to give rise to a demand because it would be so ridiculous. So there is a question of an objective standard of fancifulness. There is also the question of whether in the circumstances of the case the Court ought to take the view that the demand which was made is not that which is really sought, but that some other matter is sought which does not fall within the description of an industrial dispute as the Constitution would define it.

DAWSON J: That is always the case, is it not?

MR UREN: Yes, it is, I agree with your Honour there.

DAWSON J: That is why I find great difficulty in this area. They are serious about ambit and that is what the figure is, to establish ambit. There is another dispute which is not mentioned but, which, nevertheless exists, which is a dispute about increased pay or different conditions. But the service with the bit of paper, with the ambit on it, apparently gives rise to the dispute which is not to be found in the piece of paper, the real dispute.

MR UREN: I suppose the traditional answer is to be found within the bit of paper because the bit of paper asks for a lot more than you are likely to get, and that seems to be the way things are looked at.

DAWSON J: There seems to be a lot of sophistry about all of this.

MR UREN: Well, your Honour, we do not dispute that at all but, nonetheless, within what one might respectfully describe as a sophistry, this case is one which does not, in our respectful submission, on the best view of ambit, fall within the ambit or an ambit rule.

DAWSON J: Why is that? Is it because you put ambit too far out and then it is fanciful, but if you bring it in even if you do not mean it, it is not fanciful and, therefore, it gives rise to a dispute?

MR UREN: Your Honour, the difficulty is that ambit is now the dog wagging the tail of everything else, it seems to us, whereas, really, on a true view of ambit, ambit is a rule which merely ensures that the award which, if ultimately made, if any is, falls within the terms of the dispute which the Commission has found. Ambit is really an ancillary doctrine to make sure that the Commission does not go beyond its particular jurisdiction. And there are various reasons which, in Ludeke's Case, it is said that the doctrine of ambit is for. It is to do things like making sure, for instance, that the award which is ultimately found is reasonably incidental to the dispute, things of that sort.

DAWSON J: I thought the real ratio, the ratio of SPSF, was that, there, the demand was not really asking for anything at all except that the Commission fix suitable wages?

MR UREN: Yes.

DAWSON J: And that is not something within the jurisdiction of the Commission. I thought that was the real ratio.

MR UREN: Your Honour, that view can be taken of any claim which makes extravagant conditions and also of any claim - - -

DAWSON J: Well, it depends on the circumstances. After all, a paper dispute is only a prima facie dispute - prima facie evidence of a dispute.

MR UREN: Yes, your Honour, but it is sometimes forgotten, I think, in this area that one has to show things on the balance of probabilities, not beyond reasonable doubt. This is, after all, only a civil case. If a person makes an extraordinary demand then, on the assumption that the person is rational, one might well take the view that the person is not really seeking what is demanded. Now, that goes to the issue of - - -

DAWSON J: If I could interrupt you just once again to ask this question. You are not disputing the doctrine of the paper dispute, are you?

MR UREN: No, we are not.

DAWSON J: Not seeking to?

MR UREN: No. In fact, we are hoping to nail our learned friend to the doctrine of the paper dispute because, in our submission, it is the paper and nothing more which sets out the description of the dispute within which the award should ultimately be, or the dispute upon which the question of its genuineness ought to be ascertained. Now, in this case, to leave your Honour Mr Justice Dawson's point and go to another one and come back but come back in a moment, this is a case in which the paper dispute says that the demand which the witnesses have said in terms- or at least one of them did, the most important one, the Victorian one said, in terms they did not expect to be granted, not only forthwith, but within the next 10 or 15 years, and a piece of paper which itself demanded that its terms be met within seven days.

It demanded that within seven days there be an agreement, for instance, that wages by increased by some tenfold or more and other conditions be given, that that be agreed to within seven days, whereas those who drafted the very document did not so intend but intended that the document - it sounds a bit like the 30 years war - lasted for 10 to 20 years in order that they would not have to go around serving another one. That means in terms, in our submission, the witnesses have said that the purpose of the document is to give the Commission jurisdiction for the next 10 to 20 years so that terms and conditions can be laid down by the Commission within the scope of the demand made for that period of time.

BRENNAN CJ: Now, Mr Uren, just taking it step by step. First of all, the April log so far as its terms are concerned can be neglected in favour of the December log which now constitutes the particular terms of the dispute as found?

MR UREN: Yes, subject to the abandonment point, yes. There has, in fact, been a dispute finding in respect of the April log but I take your Honour's point there.

BRENNAN CJ: Well, let us assume that we are speaking now about the December log. The question is whether or not there was a demand genuinely made at the time that that log was served for those conditions. If there was, and was not acceded to, there was within the doctrine a dispute?

MR UREN: Yes, your Honour is quite correct there. Yes, with respect, yes.

BRENNAN CJ: Well, then, your proposition has to be that there was no genuine demand for those conditions at the time that it was made. It is not sufficient to say that there was no expectation that they were to be given, but there was no genuine demand for them?

MR UREN: Yes, we understand that perfectly.

BRENNAN CJ: Now, where is there anything to indicate that the court misapplied any principle in addressing that question.

MR UREN: Firstly, it is not really necessary for us to show a misapplication of principle. It is only necessary for us to show an arguable case to the contrary of the decision which was ultimately made. But, in any event, it seems to us, with respect, that what the court has done is to recite a number of, what I might call, respectfully, without intending any disrespect, mantras which are often.....logs of claims, without actually making an analysis of the evidence, for the purposes of ascertaining whether the complaint which is made about the claims was properly founded in terms of either the evidence or principle. Now, one of the things we said was the claims are so large that no rational person could have regarded them as being intended to be met within a relevant period of time. Now, as Mr Justice McHugh said in the SPSF Case logs of claims should relate to a period in the foreseeable future.

Now, in actual fact not only is that a proposition which is well capable of being put on the figures of this case and well capable of being accepted but, nonetheless, there is also the evidence of the witnesses themselves who said in evidence given before the Commission that the logs of claims were drawn so that they would remain in existence for the next 10 to 20 years and give jurisdiction to the Commission to make orders within that period of time so that no further log need be served within that period.

BRENNAN CJ: But that evidence is capable of being understood as meaning, "These are the conditions we want for our members. It will be a long slow hard struggle. Over 20 years we hope to get them". I mean, you can call it a mantra if you wish, but so far as this Court is concerned, we are not going to look into the genuineness of the expression of opinion by the court below.

MR UREN: Your Honour, that was not the evidence of the witnesses. The evidence of the witnesses was, "So it'll save us the time and trouble of having to serve further logs." Now, of course, it is possible to say that at the end of a period of 20 years one might have large rates of inflation which will do unforeseeable things to wage rates and various other things in the meantime but, in our submission, the question of industrial dispute being dealt with by the Commission must be one of a present dispute. There must be a - - -

DAWSON J: Why have the doctrine of paper disputes if you do not? You are not seeking to contest it, and one of the things that is implicit in that document is that the demand that is made in the paper is not the one that is really being made at the moment if the refusal takes place.

MR UREN: If that is the case then we should succeed. In other words, at least we should be given leave. If the conclusion is come to that the demand which is made of paper is not the demand which was made or, at least, which is really sought, which is, in fact, our proposition, you could, in fact, draft a piece of paper which sets out what you really want. You could do so even allowing for the purposes of the doctrine of ambit which Ludeke's Case set out and come nowhere near anything like the document which has been put here. This document is one which the witnesses have said is intended to last for 10 to 20 years "to save us the trouble of having to serve another one in the future". Now, in our respectful submission, that is not a document which sets out a demand made in the context of the present dispute.

BRENNAN CJ: Mr Uren, could you show us the best part of the evidence or the most attackable portion of the judgment which, in your submission, reveals a prima facie case of error?

MR UREN: If we could show the Court the best part of the evidence which I think, if memory serves me correct, the Full Bench did not refer to. If the Court goes to the additional material at page 61 in the evidence of Mr Christodoulou, who I think is the Miscellaneous Workers Union representative, he said - this is under tab 3, the first part of the evidentiary material - - -

BRENNAN CJ: The part that is marked on the side?

MR UREN: Yes. He was asked whether it was realistic. He says:

It's realistic insofar as it is a claim that we have served upon employers.

Yes?...It's our expectations that we won't be serving a log of claims for quite some time after this, and given the nature of claims such as this, we would expect that over time it would be realistic to meet some these claims.

And when asked about some, he then said at the top of the next page:

Well, all of these claims.

Just below line 15, he said:

it's a claim based on longer term objectives.

This is on page 62.

BRENNAN CJ: Mr Uren, that is all expressed in terms of when they will be met. It is not whether they are sought.

MR UREN: If the Court pleases, yes, but I am going on to the rest of the evidence. Then, at page 107, in the evidence of Ms Forbath. She said, again at the marked passage, about line 20:

For what period of time have you allowed in the drafting of this award, Ms Forbath? Well, there's no specific period of time that we have determined, but we would be certainly looking for a significant period of time for this log to remain.

What, essentially?

Then she says:

Oh, 10, 15, 20 years, perhaps.

So she is looking for the log to remain in existence for 10, 15 to 20 years. Now, bearing in mind this is a joint log, and putting both of those pieces of evidence together, and also at page 81 Mr Christodoulou saying:

it really minimises the future servings of logs of claims on the industry whilst ever there is ambit within the log.

Firstly, it is a confession that the demand is not really sought to be met within seven days and, of course, it could never rationally ever have been thought to have been met within seven days and it is the concession, in our submission, that the log was intended to give the Commission jurisdiction for a period of time which is well beyond the foreseeable future.

TOOHEY J: How would it do that, Mr Uren? I mean, once the log is crystallised, assuming it has given rise to an industrial dispute and it is crystallised in an award, what is the role of the log thereafter?

MR UREN: Well, there is still a dispute.

TOOHEY J: Yes.

MR UREN: There is still a dispute. I will go back a square. The log would be regarded as a partial settlement of the dispute and not a dispute in accordance with the way I understand these things usually work. It would not be regarded as a settlement of the dispute but a partial settlement and, therefore, the parties could come back at any time they sought up to the next, let us say, depending on the rate of inflation, 20 years, for the purposes of having the award updated or having other things claimed within the ambit of the claims which are made in the log. In our respectful submission, that is basically a naked confession upon which a court ought to come to the conclusion not only on the balance of probabilities but because people have said it, that the purposes of the log of claims is to give a jurisdiction in the court some considerable period of time in the future and well beyond the presently foreseeable situation.

Now, to propose a little test, these demands which are so large have been demanded to be met within seven days. Now, what, one might rhetorically ask, are the employers to say yes to if they wish to avoid an industrial dispute? Are they to say, "Yes, we agree within seven days that all of these claims will be met." Now, that, in our respectful submission, would be not only ridiculous to say but also ridiculous for the Union to contemplate and, of course, they do not say that. But, presumably, the purposes of the jurisdiction is to avoid disputes if possible but how could the employer avoid a dispute. The employer is not told what the employee wants.

DAWSON J: This is of the nature of paper disputes.

MR UREN: It is not necessarily of the nature of paper disputes, your Honour. There is no reason why you cannot say on paper, "We want our people to get certain terms and conditions."

DAWSON J: But you cannot do that and preserve ambit and the decisions say you can preserve ambit.

MR UREN: You can do that and preserve ambit if whatever there is in excess in the log is related to the purposes for which the doctrine of ambit is designed which is set out in Ludeke. The purposes for which the doctrine of ambit is designed is not so that you can go back to the Commission whenever you like for the next 10 or 15 or 20 years. The purposes of ambit so far as they are laid down in Ludeke is of a restricted nature and does not justify the making of a claim which is intended to give the Commission jurisdiction for 20-odd years.

BRENNAN CJ: But it does extend to whatever is genuinely sought.

MR UREN: To whatever is genuinely sought, but whatever is genuinely sought has got a time component as well as a money component.

BRENNAN CJ: It does not have any time component, does it?

MR UREN: Your Honour, in this case once you accept that they do not want what they want now but over some period of time, if they want the employers to agree they have to propose something that they can agree to.

BRENNAN CJ: The problem is not what they want the employers to agree to. They question is what they want. If they want it now but know that the employers will not agree to it now but may agree to it over 20 years, is that not sufficient?

MR UREN: No, I misstated myself. The employers have to know what they are wanted to agree to. For the purposes of there being a genuine dispute, in our submission - I mean there is a case which says, for instance, demands have to be within a sufficient degree of certainty, for instance, and not be confusing, and things like that. The employers have to know what they can say yes or no to. If you confront the employers with a blanket demand and expect it to be met within seven days, and, sorry, would demand it to be met within seven days but which your real intention is that those are not your real intentions but you are not putting them forward to be met within that period because that, of course, would be ludicrous and fanciful, but you are putting them forward to be met within some other period then surely the period must be stated.

BRENNAN CJ: I do not understand why you say it has anything to do with period when the question is, is it genuinely sought? The question of whether or not there is a response expected is an entirely different question.

MR UREN: I understand that, your Honour, but something must be put forward to which the answer, yes, is intended. And it was not in this case intended that these demands be met within the time frame which was given.

BRENNAN CJ: Why do you say it must be, yes, intended?

MR UREN: Because once it is accepted that the demand was not put forward for the purposes of having it met within seven days, then it was for the purposes of having it met within some longer period. Now, if you then have to say, "What is that longer period?", and you do not find it in the document. Now, if a paper dispute is a dispute which is defined by the terms of the document in its refusal there is in this case a matter of particular importance which the document does not contain, that is to say, when those who are putting it forward intend - that is to say, when they want it be met. It is clear, in our respectful submission, they do not want it to be met instanter, and they have said that and, indeed, they could not rationally want that because of the extent of its nature. But, if they want it to be met in some future time, what is the future time? The document does not say.

TOOHEY J: Well, you would have no complaint, I take it, about a demand which contains some formula adjustable over a period of years?

MR UREN: One would have to see the document. One could not necessarily complain about that. Some of them contain a CPI clause, for instance, things of that sort. Now, to take your Honour Mr Justice Dawson's point about paper disputes, there is no reason why, on the assumption it is better to have a paper dispute than an actual one, the paper dispute cannot say what you actually want.

TOOHEY J: You have always got to have an actual dispute. The paper is only evidence.

MR UREN: When I said "actual" I meant real in the sense of people hitting each other over the head. If it is thought to be more desirable that you exchange pieces of paper than sticks then, presumably, the piece of paper has to be at least as efficacious as a stick and with a stick you usually say what you want. With the piece of paper it seems now, the way things add up, you do not have to say what you want at all. But, why cannot you say what you want? In any other document people say what they want, and our submission is that the Union here on its own confession has not said what it actually wants. What it has now said it wanted was not that the document be met within seven days, but that it remain for a significant period of time to save them the trouble of serving another one in 10 to 20 years so that - we would infer, not unreasonably so - they could go back to the Commission and have further awards made at any time without having to serve another document.

Now, what the employers to say yes to if, within the terms of the actual intentions of the Unions, the answer is it is clear they are not intended to say yes to all these things within seven days, but what are they to say yes to? How are you to avoid a dispute? You cannot if the party who does not want what he is demanding within seven days does not tell you when he wants it. And the ambit, as it were, of our argument, is that the paper dispute doctrine, if it is looked at from a sensible point of view, ought to be tidied up, made more sensible of operation, brought more in line with reality, and require people to say what they actually want, even allowing for some ambit. Ambit has got nothing to do with case because what is sought goes well beyond any of the purposes for which the doctrine of ambit is designed. All we are saying is this: if people want what they want they should say it, and if they do not want it they should say that, too.

In this case the Unions did not want what they demanded within the period they demanded it, they wanted it within a much longer period of time. Now, we are either right or wrong on that. But, if we are wrong on it, and they wanted it within seven days, then, of course, it is clearly fanciful because on current industrial standards it is absolutely impossible that any rational person could have so sought or that such an irrationality could have, in all seriousness, given rise to jurisdiction in a commission under the terms of the Constitution. So, that is, sort of, basically, what our proposition is. The time is very important because the employer has go to see what is demanded so that he can agree to something or not. But, he is given a seven day demand, but that is not what is wanted.

Now, we are either right or wrong on the evidentiary feature there. If we are, then, in our submission, the case both in the court and in the Commission has clearly miscarried, so far as we are concerned. So far as our other arguments are concerned, they are really all set out in the summary and perhaps we need not take you to those any further.

BRENNAN CJ: Thank you, Mr Uren. Yes, Mr Douglas?

MR DOUGLAS: If the Court pleases, we support what has been said by Mr Uren. In our submission, there is something fundamentally wrong with an arbitration system that appears to expect its participants to make patently extravagant claims. That then proceeds to pay pious lip service to the demands while the Commission uses its best endeavours to somehow deal with what lies behind the demands on which are the real disputes between the parties.

Now, the court, in our submission, has tried to put paid to some of these more transparent fictions of this system in the two decisions of Re PKIU; Ex parte Vista Paper Products and Re SPSF which preceded the second log of claims in this matter. Those decisions were handed down in June 1993 between the first log of claims and the December log of claims that my learned friend, Mr Uren, has referred you to.

It became apparent, on a reading of Justice Gaudron's reasons which were agreed in by the majority of the Court in the Vista Paper Products Case, that the court laid out how this misconceived notion of the doctrine of ambit was being used unnecessarily and wrongly by participants in the system. So, by the time the second log of claims was served one assumes - and it is obviously apparent that it was served consequent upon at least the decision in Re SPSF - that the Union should have been aware that it was not necessary to ground jurisdiction and to create ambit to make outrageously extravagant or fanciful claims of the nature made in these proceedings.

Nevertheless, they did and a conclusion one draws from that is that they did not genuinely want those claims. They wanted something else because no sensible person, looking at the wage claims and conditions claims made here, could believe that they were advanced seriously. So, one says, "What did they want?" and the conclusion one draws is the same conclusion as one drew in Re SPSF that what they did want was some form of general regulation, at least to some of the terms and conditions of employment set out in the log.

The way the Commission sought to deal with this and the way the court sought to deal with it was to say that the Re SPSF reasoning, in effect, did not apply where you had extravagant claims of this nature, coupled with others that were not so extravagant or which may have been reasonable or able to be dealt with within a normal concept of ambit. They, in effect, said that if you have a coupling of reasonable claims with wild or extravagant or fanciful claims, jurisdiction could exist.

BRENNAN CJ: Where does that appear, Mr Douglas?

MR DOUGLAS: It appears originally in the reasoning of Senior Deputy President Riordan and - - -

BRENNAN CJ: In so far as the Industrial Court is concerned, where does it appear?

MR DOUGLAS: Page 124 to 125 in particular, your Honour. They made the point that the log of claims in Re SPSF was one that focused simply on wage rates at an unrealistic level and did not seek other terms and conditions of employment. At the foot of page 124 their Honours go on to say:

We accept the submissions of the respondent's counsel on this issue. The wages and conditions sought in the two logs of claim may fairly be described as optimistic, even extravagant. It is unlikely, to say the least, that those who framed the demands believed they were attainable in the short term. But we think they can fairly be described as providing a framework for negotiation.

Then their Honours go on to say:

In determining whether or not a log of claims should be regarded as fanciful, it is not helpful to calculate the cumulative cost of acceding to each separate demand and to compare the result to the costs currently borne by an employer. Nobody would expect every demand to be granted in full.

And then their Honours went on to, in effect, say that they had not found any other decision like Re SPSF and, in effect, thought that it should be confined to the facts there where there was a simple claim for wages not accompanied by other claims for other terms and conditions of employment.

If your Honours will recall in the SPSF Case your Honour Justice Toohey referred to the Elcon log of claims which was a more general log of claims and was happy to conclude. On my recollection there was no argument about it contrary to your Honour's conclusion that that gave rise to a dispute and you drew the distinction between the Elcon log of claims as being more general than the SPSF log of claims and you will remember that the Solicitor-General for New South Wales did not argue that point in that case.

It seems to have lain at the basis of the reasoning of the Commission that you could therefore draw a distinction between the SPSF approach and an approach where there is a more normal log of claims by reference to this sort of argument. There is something there that is not outrageous, therefore, even where you have core claims that are outrageous or extravagant or fantastic, nevertheless, you can proceed to found a dispute.

DAWSON J: Well, the SPSF Case was a case in which there was an entirely different structure to the log. There was just one figure, was it not for everyone?

MR DOUGLAS: I think there was one figure for wages and another figure for allowances. I think there were four clauses in the log. It was very bare. This log of claims is not so bare and that is what we say really is the interesting issue here which should encourage - - -

DAWSON J: But the point is that merely to ask too much is not to prevent an industrial dispute from arising when the demand is not met.

MR DOUGLAS: I am sorry, your Honour?

DAWSON J: Merely to ask too much is not sufficient to prevent a refusal of the log from giving rise to a dispute.

MR DOUGLAS: No.

DAWSON J: That is what is implicit in ambit and what I am saying is in SPSF there are additional factors there which meant that the log was not a genuine log.

MR DOUGLAS: There certainly were and at least from the point of view of some members of the Court they seem to have seized upon the amount of the claim as being so outrageous that nobody could even contemplate it being within the ambit log. I think your Honour Justice Toohey adopted such an approach and Justice McHugh adopted an approach, to some extent, similar to that. What we say here is that, similarly, the wage claims and some of the conditions claims are extravagant and it should not be a touchstone of validity that they are somehow also grafted on to other claims that may not be so extravagant.

BRENNAN CJ: What do you say about the passage at 125, line 9 to line 16, where they say you have got to put in the maximum that you want under the several headings so as to allow for either the aggregate amount, without subheadings, as it were, or for a minor amount - - -

MR DOUGLAS: I can see there is some validity to that, your Honour, but even in this case, when you look at the amounts simply claimed for wages without extra allowances, they are still far in excess of what any reasonable person could expect would be met or could be within the ball park. They are still fanciful or extravagant.

TOOHEY J: There is an interesting sentence at line 5 on the same page to which the Chief Justice has referred.

MR DOUGLAS:

Nobody would expect every demand to be granted in full.

TOOHEY J: No, it is really the next line:

The notion of ambit requires a Union framing its log of claims to exceed its most optimistic expectations in relation to each item in the log.

MR DOUGLAS: With respect, that is where, in our submission, the Court really seems to have ignored the effect of what Justice Gaudron said in the Vista Paper Products decision. May I remind your Honour, it is on our list in [1993] HCA 81; (1993) 67 ALJR 604. The relevant passage is at pages 612 to 613 and that passage is referred to in our written submissions. Her Honour there tries to deal with some of the issues raised by your Honour Justice Dawson:

Emphasis on the "paper dispute" has two unfortunate consequences. The first is the nature and extent of the claims sometimes made, particularly wage claims which are often for amounts intended to ensure that the Commission has power to vary rates so as to maintain their purchasing power in periods of inflation. The seeming extravagance of these claims sometimes invites speculation as to whether the claimant organisations could seriously entertain any intention of pursuing them. In my view and save in the case where the claim apparently allows for the effects of inflation, a wage claim should ordinarily be understood as including a claim for the maintenance of the purchasing power of the wages claimed. And, in my view, claims with respect to matters in which national standards have been set by the Commission.....should be understood as comprehending a claim for not less than the national standard as set from time to time. Were claims to be thus understood, there would be less scope for claims which have only a tenuous connection with the immediate industrial interests of the organisation concerned and which, on that account, are sometimes thought to lack "genuineness".

This log of claims was framed after that. It should have been framed by having reference to it. The wage claims could have been framed in the knowledge that this was the attitude of the Court. They were not framed in that fashion. They are framed in an outrageous fashion and in a form which meant that they were not seriously the real claims of the parties on any fair inference from the facts.

BRENNAN CJ: You are speaking of the second log of claims?

MR DOUGLAS: Yes. It is, in total, a claim for less than the first but still very, very high and still fairly described as extravagant in respect of many of the claims made in it. So, in our submission, one concludes from that that the claim was one for regulation rather than for settlement of a dispute; regulation within a general area that was so huge as to be meaningless that was a fanciful claim, and the fact that the log of claims may have had other claims in it which were not properly described, does not rid the whole claim of invalidity.

In our submission, it is wrong to say that an employer should look at a claim like this and dissect out those which are rational and those which are irrational and think he has to only deal with the rational. He has to deal with it as a whole and if as a whole it is fanciful or extravagant, it cannot give rise - - -

DAWSON J: Really, what you are saying is it is evidence of nothing.

MR DOUGLAS: Yes.

DAWSON J: It is only evidence, it is prima facie evidence, and when you look at it and say what is the dispute about that this is evidence of, you cannot say.

MR DOUGLAS: Yes.

DAWSON J: All you know is that there is an ambit claim.

MR DOUGLAS: That is right.

DAWSON J: Well, then that is right at the heart of the doctrine of paper disputes, is it not? Are you seeking to - - -

MR DOUGLAS: No, in the sense that a paper dispute can quite readily give rise to a real dispute and I join with my learned friend Mr Uren there. The Union could sell say, "What we want is so many dollars, a reasonable amount, adjusted for inflation over a period of 20 years," if they like, "starting with so much from the end of seven days from now".

DAWSON J: Then you cut out ambit because you have to create a situation which the refusal has of the demand defines the limits of the dispute, otherwise they cannot say what the dispute is.

MR DOUGLAS: I would not submit that you would cut out ambit by that, your Honour.

DAWSON J: You are not disputing about that and if you have an ambit claim, you do not know what the real claim is but this is the doctrine of paper dispute.

MR DOUGLAS: Perhaps we are debating more about the ambit doctrine rather than the doctrine of - - -

DAWSON J: But the ambit doctrine is the very heart of the thing.

MR DOUGLAS: I suppose the point I am trying to make, your Honour, is that it is possible to formulate our claim on paper. That can give rise to a dispute.

DAWSON J: Yes, saying what you actually demand and then a refusal of that demand will give rise to a dispute and you know what the dispute is but if you have an ambit claim and the cases say you can, then refusal of that is never the real dispute, except in the sense that there is a dispute about increased wages and improved conditions.

MR DOUGLAS: Which brings me back to my main point - - -

DAWSON J: Yes, I know what you are saying.

MR DOUGLAS: - - - which is whether the extravagance of these particular claims can be cured by linking them with other claims.

DAWSON J: It is not a matter of extravagance, really, in the end, it is a matter of whether the refusal of that demand is evidence of any dispute and if so, what dispute?

MR DOUGLAS: Yes, that is the issue and because, we say, of the apparent misunderstanding of the decision in Re SPSF and the continued misapplication of the ambit doctrine, it is a good case where leave should be given and the Full Court should hear it. They are our submissions unless there is anything else I could say.

BRENNAN CJ: Thank you, Mr Douglas. Yes, Mr Nolan?

MR NOLAN: May it please the Court, the respondent Union takes the view that what the Court is invited to do in this leave application is effectively to revisit the decision in Re Ludeke. What is sought to be achieved by the appellants here, unsuccessfully before the Full Court for a good reason, we say, is to extend what was said in Re SPSF to cover circumstances arising in logs of claims that are served that are clearly covered by the decision of this Court - I think it was the unanimous decision - in Re Ludeke.

BRENNAN CJ: In Re Ludeke the sentence appears and it is reproduced at page 123 of the judgment:

The desire to give the Commission jurisdiction so that it can make an award must be a reflection of the organization's desire to obtain the conditions.

MR NOLAN: Yes, that is right.

BRENNAN CJ: That is the proposition, is it not?

MR NOLAN: And it is not inconsistent with the proposition that the desire to obtain those conditions may well be a desire or an expectation that they cannot be obtained immediately but, rather, obtained over time.

BRENNAN CJ: That is quite true. How do you reconcile that with the sentence on page 125:

The notion of ambit requires a Union framing its log of claims to exceed its most optimistic expectations in relation to each item in the log.

MR NOLAN: To this extent perhaps, your Honour, and that is that if the Union makes some assessment about what might be achieved in a particular area, perhaps again over time, it would be prudent for the Union to phrase its demand in that way so that it may be then that there are co-existing optimistic claims, if you like, but on the contingency or against the contingency that it may well be that a fashion for conditions of employment of a particular kind emerges and, therefore, one can take advantage and pursue, say, higher rates of overtime as distinct from other allowances.

DAWSON J: All you are saying is you can make an ambit claim. What would you say of a log which said, "We want more wages and better conditions"?

MR NOLAN: I think that would probably offend against the principle in Heagney's Case where it was said that - - -

DAWSON J: Yes. What more is a log of claims which says, "We want these amounts but we do not really want them, they are merely ambit, and really, the claim is nothing more than that but we do want improved wages and improved conditions"?

MR NOLAN: Such claims are, one would have thought, consistent with what has been permitted by this Court in Ludeke's Case which, of course, postdated Heagney's Case and Heagney's Case itself said so long as those claims were in themselves intelligible claims that were pursued in - - -

DAWSON J: How are they intelligible in any other way than the way I put it to you?

MR NOLAN: They are intelligible on their face because the claims - - -

DAWSON J: You are not demanding the ambit amounts or conditions because they are ambit and can you read anything more into a log of claims of that sort than "We want improved wages and conditions"?

MR NOLAN: Addressing the issue from the perspective of Heagney's Case, first of all - - -

DAWSON J: Let us forget about the cases, just answer the question.

MR NOLAN: Yes.

DAWSON J: Does it mean anything more and, if so, what?

MR NOLAN: It means more in this sense that it means that an elaborate raft of conditions is to be attended to in the process of settlement of the dispute and because the claims have been expressed in an optimistic fashion that does not mean for a moment that the range or smorgasbord of conditions that are sought are not very seriously advanced and when one looks at the - - -

DAWSON J: That is not an answer, surely. That is merely saying that you are very serious about only wanting improved wages and conditions.

MR NOLAN: Yes, but in certain highly specific respects. If one looks at this log - - -

DAWSON J: Taking wages, the only way you can be specific about those is to say how much.

MR NOLAN: Indeed, but there is more than it to that, one would have thought and if one looks at the log which commences at page 43 of the application book one sees - and this is one of the reasons, I might interpolate, why the second log was perhaps served because it was more elaborate in respect of wages than the first log - that it sets out a distinct set of classifications and in this regard it resembles the ETU log that was referred to by his Honour Justice Toohey in the SPSF Case. It sets out a range of classifications commencing with an employee who is a training employee:

undertaking duties not requiring formal qualifications -

and then advancing up a scale. So, it cannot just be said, I would have thought looking at the actual log, that the log makes some inchoate or, I think, to use the SPSF characterisation, "post-modernist" the field to extra wages in an irrational and sort of generalised way. It is particular in what it advances. It says there ought to be a structure; there ought to be - - -

DAWSON J: It classifies the claims which it does not actually make in an elaborate way.

MR NOLAN: I am not so sure that it can be said - - -

DAWSON J: Other than in the sense that, "We want more money".

MR NOLAN: I am not certain, your Honour, that it does not make the claims because it does make, on its face, the claims in clause 2.

DAWSON J: But those figures are ambit figures.

MR NOLAN: That is certainly right but there is nothing, I would have thought, inconsistent between that in principle and what, for example, Mr Uren, as I understood it, suggested was the perhaps alternative approach.

DAWSON J: I do not want to carry this too far but just to take an example. What is actually being claimed, looking at the log, for:

An employee employed to undertake duties requiring a higher level of skill and knowledge to an employee described in sub-clause 1-4 above.

What is actually being claimed?

MR NOLAN: What is actually being claimed in the log is a rate of pay - - -

DAWSON J: But that is the ambit claim.

MR NOLAN: That is right. We do not know what the - - -

DAWSON J: That is what I am putting to you, that what is actually being claimed is more money, but you are not told how much.

MR NOLAN: Yes, but the Union is in no position, with respect, to know exactly, at the end of the day, how that money amount will wash out. It may say in the course of negotiations, "Well, it has been put to us that we ought to rationalise our penalty payments", for example. That will necessarily mean that the up-front amount may be loaded to reflect that.

DAWSON J: It may be that the Union is not in a position, but we are just trying to analyse where we are.

MR NOLAN: I say where we are is exactly where the Court left the position in Re Ludeke and that is exactly where we are and that is the compass point by which the Union has, I think, reasonably taken its bearings.

DAWSON J: You are probably right and, as I understand the argument on the other side, no one is attempting to question Re Ludeke.

MR NOLAN: Exactly.

TOOHEY J: Could I just ask you as a matter of principle in relation to that sentence on page 125 beginning the notion of ambit. There are really two things, I think, arise out of it. One is that the notion of ambit in the view of the Court not only appears to permit claims exceeding the most optimistic expectations of the organisation but, in some sense, to demand it. I am not sure what is meant by that. The second is that, although I think you answered an earlier question in terms of long term expectations of the Union, that sentence does not really seem to be addressing that question so much as rather requiring more than optimistic expectations in relation to what is currently being demanded.

MR NOLAN: I must say, having looked at that again in a different light, perhaps it does say this - - -

TOOHEY J: Mr Nolan, the Chief Justice has just suggested that perhaps that answer could be made at 2 o'clock. You are not ungrateful for that, are you?

MR NOLAN: I do not know. I suppose it is always preferable to get the agony over with.

BRENNAN CJ: The agony will not be got over with unless you are finishing within the next couple of minutes, which I should not imagine you are, are you?

MR NOLAN: I would have thought that I could finish in the next couple of minutes, with respect because, really, the central issue is the extent to which Ludeke ought to be departed from or some gloss put on it and we say that is really what our friends are inviting the Court to do; to pick up Re Ludeke which is settled law, which has been applied as you will see in our summary of argument by the Commission in a very regular and predictable and, we would say, satisfactory way and it has been applied equally by the Full Court in a way that makes sense of reconciling the decision in Re SPSF and the decision in Re Ludeke by reference to the substantive content, the claims, the detail of the claims and the doctrines of Re Ludeke, as we understand them, as applied to the claim.

So, we would say that accession to the application for leave would really leave, if the Court were to revisit Re Ludeke, one stuck in the morass of questions of degree. In other words, each of the members of the Bench would have to bring their arbitral slide rule to a particular case and determine whether, on the one hand, perhaps Justice Dawson might think that the claim in relation to overtime was a little extravagant whereas Justice Toohey might think it was altogether reasonable in the circumstances.

TOOHEY J: Not necessarily, not against a background of the Court saying, as it appears to be saying, that a dispute is created by the presentation of claims exceeding the most optimistic expectations of the organisation.

MR NOLAN: Perhaps to get back to that remark, I was going to say that perhaps that needs to be read somewhat differently. When I looked at that sentence first of all I had a particular view about it. Looking at it again, perhaps all it says is this, that if the Union's real expectation is that say, time and a half will be the most that will be granted, it ought to make well and truly sure that it builds that into its claim because if the Commission grants it and it is not contained within the claim there is a real argument about the extent to which the Commission may move to do that because of the outer limits established by the doctrine of ambit. So, I think that is the way that sentence is to be read, on reflection. I think it says no more than that. I do not think it says anything new or extravagant about what is contained in the notion of ambit at all.

DAWSON J: It is very hard to explain rationally the doctrine of ambit in the context of whether there is a dispute or not, is it not?

MR NOLAN: That is perhaps so.

DAWSON J: But the cases are there.

MR NOLAN: Yes, we come to the issue.

DAWSON J: We do not get any intellectual satisfaction out of it but there it is. The cases are there and - - -

MR NOLAN: That is right, but perhaps there is an intellectual rationale for it in the very old cases where it was said, to pick up Mr Uren's metaphor, that it was far preferable to have a dispute about issues in dispute, as it were, rather than have the jurisdiction of the Commission to depend in each and every case upon their getting out of the big sticks and that is really the reason and rationale, I think, for the emergence of the doctrine of paper disputes.

One looks at the very old cases additionally because, of course, industrial action as such was absolutely prohibited under the early Act so it became rather an exercise in perversity that the jurisdiction of the old Arbitration Court depended, for its foundation, upon an illegal act. In other words, the workers concerned having to go on strike in breach of the Act to invoke the jurisdiction of the Commission and I think therein lies the origin of the paper dispute but because of perhaps subsequent changes in the Act that may have tempered that illegality, that is not to say that the rationale and the need for the paper dispute is not, when one thinks about it, one that will be albeit superficially irrational contain some measure of common sense because it allows the parties to progress their claims in an orderly way by submitting them to the arbitral tribunal.

We say then in conclusion, your Honours, that we rely on the written summaries and we address these issues of authorisation and so on in the written summaries, we think, are satisfactory. We think there is no additional point because of the reasons that we advance that would persuade the Court to give leave on that account and we say finally that the application for leave should be dismissed because to do otherwise would really be to invite the relitigation of the decision in Re Ludeke which is a serviceable and settled document applied, we would say, sensibly and appropriately by the Full Court. May it please the Court.

BRENNAN CJ: The Court will adjourn until 2 pm.

AT 12.55 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.09 PM:

BRENNAN CJ: Mr Douglas, there is one question which I should like your assistance on. If your argument were to prevail in the sense of your being granted leave, what would be the relationship between the formation of a log of claims answering what, in your submission, is the appropriate limit and the jurisdiction of the Commission in relation to the setting of national wages?

MR DOUGLAS: As a sort of safety net award?

BRENNAN CJ: Well, however. Would there be any jurisdiction to entertain it?

MR DOUGLAS: The Commission would have jurisdiction to set a wage that could be used as a benchmark nationally if it arose out of a dispute in an industry legitimately before the Commission. I do not know that it could set a national wage outside that sort of context. It cannot create general rules.

BRENNAN CJ: Yes, thank you. Leave will be granted in this case.

AT 2.09 PM THE MATTER WAS CONCLUDED