Quickenden v Commissioner O'Connor of the AIRC & Ors P13/2001 [2002] HCATrans 270 (31 May 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P13 of 2001

B e t w e e n -

TERENCE IVAN QUICKENDEN

Applicant

and

COMMISSIONER O'CONNOR OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

First Respondent

THE NATIONAL TERTIARY EDUCATION INDUSTRY UNION

Second Respondent

THE UNIVERSITY OF WESTERN AUSTRALIA

Third Respondent

Application for special leave to appeal

GUMMOW J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 31 MAY 2002, AT 1.33 PM

Copyright in the High Court of Australia

_____________

MR S. OWEN-CONWAY, QC: May it please your Honours, with MR P.J. GETHIN and MS N. OWEN-CONWAY, I appear for the applicant. (instructed by Gethin & Gethin)

MR P.W. JOHNSTON: May it please the Court, I appear with MR W.J. FORD for the second respondent. (instructed by Dwyer Durack)

MR R.L. LE MIERE, QC: May it please the Court, I appear with MR D.F. PARKER for the third respondent. (instructed by Blake Dawson Waldron)

GUMMOW J: Thank you.

MR OWEN-CONWAY: Your Honours, dealing - - -

GUMMOW J: Just a minute. I should indicate that the Court holds a certificate from the Deputy Registrar that she has been informed by the Australian Government Solicitor, the solicitor for the first respondent, that the first respondent will abide by any order of the Court save as to costs. Yes, Mr Owen-Conway.

MR OWEN-CONWAY: Thank you, your Honour. Dealing with the first two grounds of appeal which concern the corporations power, the issue is whether the Full Court was in error in holding that the provision Part VIB, Division 2 of the Workplace Relations Act, which is entitled, "Making agreements with constitutional corporations or the Commonwealth", namely - - -

GUMMOW J: Now, just before you get into that, what is the substance of your client's prejudice in all of this?

MR OWEN-CONWAY: Substance of prejudice - - -

GUMMOW J: Why I am mentioning it to you is that if special leave is granted and the appeal is heard, but fails, your client is exposed to an enormous cost burden. So what, apart from having a point vindicated - no doubt, a point on which he feels strongly - but what otherwise is in it for your client?

MR OWEN-CONWAY: Well, what is in it is this, if I can put it shortly. Dr Quickenden was appointed as a lecturer in 1983 and then a senior lecturer in 1985, he having been initially engaged as a senior demonstrator at the University of Western Australia in 1970. At the time of his appointment as a lecturer in 1983, he was subject to conditions of appointment and regulations governing tenure which placed him in a position wherein, short of gross misconduct or wilful dereliction of duty, he had a lifetime-tenured position, so that he was a permanent appointee, not subject to review. It would be a most extraordinary set of circumstances which could see his dismissal or suspension, other than gross dereliction of duty, or the like.

In 1988, there were amendments made to the tenure regulations which, if they applied to his appointment - and it is our submission that they did not and do not and that they were not and are not ambulatory in nature - but if, contrary to that submission, they were, then they have the potentiality to significantly reduce the benefits which he enjoyed under the terms of his actual appointment. Now, for an academic, as I am sure your Honours - - -

GUMMOW J: Just a minute. Reduce in what way?

MR OWEN-CONWAY: The detriment that was identified by counsel below and referred to by his Honour Justice Carr at page 81 of the papers was threefold: the imposition upon him of performance review requirements; the extinguishment of his contractual rights and the substitution of the terms of the agreement for his common law contractual rights; and exposure for the first time to such matters as lockouts by his employer under the protected action provisions of the Act.

GUMMOW J: Yes, but has that happened yet?

MR OWEN-CONWAY: It has not happened yet, no.

GUMMOW J: He has not been locked out, surely.

MR OWEN-CONWAY: I beg your Honour's pardon?

GUMMOW J: He has not been locked out yet, surely.

MR OWEN-CONWAY: No, he has not, but we say, with respect, so what? The fact of the matter is that - - -

GUMMOW J: Well, I will tell you so what. It may be moot. It may be premature - as the Americans say, "unripe". Now, I know this point was not taken - - -

MR OWEN-CONWAY: Well, the fact of the matter is - - -

GUMMOW J: Just a minute. It is a good idea to listen, Mr Owen-Conway. This point, I realise, was not taken against you below, but it is a question that must intrude here, when it is before us and we have to decide whether there is special leave.

MR OWEN-CONWAY: Yes. In endeavouring to answer your Honour's question, I make the point that this is no small matter of academic notion for a person in Dr Quickenden's position. Indeed, all of those - or many of those academic staff who were appointed under - - -

GUMMOW J: Is he yet in any active disputation as to the enforcement against him of any of this new set of what he regards as unacceptable obligations and rights?

MR OWEN-CONWAY: He is not.

GUMMOW J: Well, that is the problem.

MR OWEN-CONWAY: But he could be.

GUMMOW J: No doubt.

MR OWEN-CONWAY: He could be.

GUMMOW J: No doubt. That is true of a lot of people. It does not all mean they engage the High Court of Australia in some constitutional argument.

MR OWEN-CONWAY: No, it does not. I accept that. But what it does mean - if I can just illustrate this. As a very experienced senior academic, if it be right that the regulations in their amended form apply to him, the basis upon which he took his job, the basis upon which he acted, in accepting the terms and conditions, the basis upon which he has carried out his employment, up to and including 1988, has changed and changed significantly. He is now subject to performance reviews which, in practical terms, may have the effect of resulting in a suspension down the tracks. It may have that effect. He now has to justify his academic existence to a supervisor, who would ordinarily be the Head of Department.

Now, this is no small matter in academia. It has the potentiality to strike at the heart of academic freedom because, as your Honours would know, there could be many matters which might affect performance review, some of them academic, some of them perhaps not. But, in any event, he says, "I was appointed under the terms of the contract, which gave me tenure, which meant something to me, which meant that I could not be dismissed short of wilful misconduct or gross misconduct. And now, I am subject to performance reviews, mentoring, and the like, as a consequence of an agreement which has been certified by a union of which I am not a member, and that that agreement has nothing whatever to do with me."

Now, I accept, your Honour, that it is a matter of principle. He tells me that that is his interest, and clearly it is. It does raise important, with respect, constitutional points, both with respect to the corporations power and, in particular, the reach of the corporations power, and specifically - - -

GUMMOW J: Well, you had better tell us - yes, go on. The corporations power and the acquisition on unjust terms. Now, why do you say the Full Court was wrong in its treatment of the corporations power?

MR OWEN-CONWAY: We say this, that the question really is - - -

GUMMOW J: It may be a matter, on the part of some people, of regret that universities are engaging in trading activities on a considerable scale and are, indeed, under all sorts of incentives and requirements to do so, but so be it. One looks at the corporation not just from its constituent document but from what it, in fact, does when one is applying the corporations power.

MR OWEN-CONWAY: Yes. Well, there are a number of questions that we say arise of real importance. The first is whether 51(xx) can authorise laws which regulate the internal affairs and operations of constitutional corporations in so far as they relate to the relationship of a corporation to its employees, such that the contract of employment can be regulated through the corporations power. Is the Commonwealth's corporations power attracted simply by a law that expressly and directly deals with trading or financial corporations, whatever the regulated activity?

Now, the Full Court, to answer your Honour's question, seemed inclined to adopt that rather, with respect, uncomplicated view, as the court found the provisions in the Act were provisions dealing specifically with the classes of corporations in the corporations power and their workplace agreements, as though that discrimination of itself gave validity to the workplace agreements provisions.

At first instance, Justice Lee, for validity of the corporations power, adverted to the "cause of fact" test in Rowe v Transport Workers Union, that is, the statutory certification of the University's agreement - in short, its effectiveness - and this corporate effect supplied a sufficient connection between the law and a section 51(xx) corporation. But the query raised here is whether once a corporate effect is attained, is it necessary to look further to some sufficient connection, or vice versa?

The extent to which the corporations power authorises the Commonwealth to make laws regulating matters internal to a corporation's management, including, in particular, employee contracts, has not yet been determined by this honourable Court. The power which section 51 of the Constitution confers, of course, is a power to legislate with respect to the matters enumerated in the paragraphs of section 51, and it has been said that the words "with respect to" require relevance to, or a connection with, the subject assigned to the Commonwealth Parliament. The connection, it has been said, must be substantial and not merely tenuous.

Now, it is our submission that even if the power is a plenary power - which is, with respect, not yet settled law - it does not follow that section 51(xx) authorises any law that operates on conduct, that relates to activities, functions, relationships or business of trading of trading, financial or foreign corporations. There are consequences which are wide-reaching if it be the case that such a wide power is conferred, because if that is right, then it is highly arguable, if not likely, that the Commonwealth could regulate directly all aspects of the employment relationship between an employee and a constitutional corporation, including such bread and butter issues as wages, hours, leave, safety, superannuation, dismissal, job security, promotion and workers' compensation, without resorting to the dispute machinery provided by the arbitration system.

GUMMOW J: Well, we would wait until there was an act purporting to do that, surely.

MR OWEN-CONWAY: It is the case that on many occasions, the High Court has said, when it has considered the reach of the corporations power, and considered whether to consider the reach of the corporations power, that it should address that issue, preferably on an ad hoc basis. That is what we invite your Honours to consider in this case, specifically in relation to the contract of employment, because it is rather like looking down a black hole. The power of gravity to grow without limit is due to its universally attractive nature, so that if more and more is added to an object, its gravity will continue to rise without limit, so that an object falling into a black hole cannot re-emerge. A similar fate may await the federal balance of power, in our respectful submission - - -

GUMMOW J: Can we just get down to tintacks a bit more. Look at page 109, please, paragraph 16:

the agreement in question has now been superseded by a subsequent agreement - - -

MR OWEN-CONWAY: Yes. Well, with respect - - -

GUMMOW J: The agreement which was the subject of the Federal Court proceedings is no longer of any effect.

MR OWEN-CONWAY: Yes, but the subsequent agreement will and does contain provisions which, if the Full Federal Court decision is right, impact directly upon, and derogate from, common law rights that Dr Quickenden says he is entitled to pursuant to the terms and conditions of his contract of employment. So it does not really matter that there has been a new agreement introduced. The conditions which relate to performance requirements, mentoring, suspension and dismissal all - - -

GUMMOW J: No. What you would be seeking from us is an order for certiorari - - -

MR OWEN-CONWAY: Yes.

GUMMOW J: - - - to quash something that has gone already. That is what the case was. It was an application for certiorari, was it not?

MR OWEN-CONWAY: Yes. Well, that is how the case was brought on initially. It was brought in original jurisdiction and remitted back to the Federal Court, in relation to a prerogative writ application. Perhaps it should not have been brought in that way. But the point I make is that, with respect, it would be most unsatisfactory to leave Dr Quickenden in a position - and others in similar positions in academic life, at least within the University of Western Australia - who contend that they have a right to be treated according to the terms and conditions of their contract of employment as it applied to them and that any subsequent amendments to the terms and conditions of employment governing subsequent appointees and any changes to the regulations applicable thereto are matters which do not affect them, particularly in relation to registered industrial awards, where such persons in the same position as Dr Quickenden is not a member of the union, is a stranger to that award - is an outsider to it, I think, as Justice Lee put it.

Your Honour, if I could just get back to the point I was making about the consequences of taking a wide view of the section 51(xx) power, my submission is that if the corporations power does have this potential in the field of industrial law, it could lead to the indirect, almost coercive, method of regulation which could be adopted under 51(xx) and a significant undesirable feature would be that any legislation passed in reliance on the corporations power would be restricted in its operation to certain types of corporate employers, leaving other employers beyond the reach of the federal laws enacted in pursuance of the corporations power. In our submission, these are significant objections to an extension of Commonwealth power into the field of industrial law. That is what this case, on this issue, is all about.

In Huddart's Case, both Justices Isaacs and O'Connor held that the Commonwealth did not have the power to control the internal management of a corporation. Justice Higgins, at pages 409 to 410 in Huddart's Case, sounded his now-famous warning - his lists of horribles, as it has become known - against an overly broad interpretation of the power. Justice Isaacs said:

whether any given provision is part of the federal power or not must, as I view it, depend on whether it includes or is necessarily incidental to the control of the conduct of the corporations in relation to outside persons.

His Honour went on to hold that a schedule of wages and hours was a matter of:

purely internal management and equipment, and in no way directly affects the exercise of their capacities of trading or their financial operations or other public capacities, nor is it incidental to the control of their activities.

Now, no clear majority has yet emerged in favour of the view that the Commonwealth may regulate all of the activities of constitutional corporations, and while many judgments have labelled the power as a plenary one, they often continue to impose a limit on the power conferred by section 51(xx). While it might be said that a majority view in Dingjan may have been sympathetic to the view that the scope of the power is wide, the majority of judicial opinion expressed some limitation being placed on the power in section 51(xx). If the broad view of the scope of 51(xx) is clearly endorsed in the future, in our submission, it might mean, logically, that the examples postulated by Justice Higgins in Huddart Parker v Moorehead would become a reality. Without restriction on this power, he then warned, and we then submit, that the other powers conferred upon the Commonwealth would become superfluous.

If I can briefly close by addressing the issue of acquisition without just terms. These are our submissions in a nutshell. The reordering of contractual rights did result in an adjustment of property amounting to an acquisition. There was a specific detriment incurred by the applicant. The rights possessed by the applicant before the certification of the agreement were considerably more ample than what he was left with afterwards. As Justice French and Chief Justice Black observed, the information derived from the performance review could inform the carrying out of procedures already in place for advancement, promotion, dismissal or suspension of a staff member.

Finally, your Honours, there is a strand of authority holding that a law which is not directed towards the acquisition of property as such but which involves the adjustment of competing claims is unlikely to be a law with respect to the acquisition of property. Now, of that strand of authority, Justice Callinan, in Smith v ANL, said that that was to pose a test quite different from that mandated by the Constitution. His Honour said:

whether a law is "directed towards the acquisition of property as such", and not, as the Constitution requires, whether it is a law with respect to the acquisition of property on just terms -

are quite different concepts. His Honour noted, at 178 to 181 in Smith v ANL:

The operation of the Constitution may not be subverted because an activity might only produce a proscribed consequence incidentally, or because it occurs as a result of an enforcement process undertaken under some other purported head of power.

We point out that this particular legislation under challenge, Division 2 of Part VIB, is not a law of general application but one specifically directed to the subject matter of the power, being agreements involving constitutional corporations as defined in section 4 of the Act. The strand of authority referred to above has been considered in circumstances of laws of general application and not in the context of laws of specific application. Justice Callinan, in Smith's Case, said that the strand of authority sits:

uncomfortably with, and indeed, cannot, in my opinion be reconciled with the language of s 51(xxxi) itself, and the strong statements of earlier Justices of the Court about the strength and nature of the constitutional guarantee to which s 51(xxxi) gives effect -

Your Honours, those are my submissions.

GUMMOW J: Yes, thank you, Mr Owen-Conway. We have no need to hear you, Mr Johnston and Mr Le Miere.

The applicant for special leave instituted proceedings seeking relief by way of orders for certiorari and prohibition directed to the validity of an agreement which has now been superseded and is not shown to have any relevant continuing operation. Therefore, there would be no practical utility in granting special leave to appeal. Special leave to appeal is refused with costs.

We will adjourn to reconstitute.

AT 1.55 PM THE MATTER WAS CONCLUDED