Shaw v Bindaree Beef Pty Ltd [2007] HCATrans 705 (16 November 2007)

Last Updated: 3 December 2007

[2007] HCATrans 705

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S333 of 2007

B e t w e e n -

JASON RONALD SHAW

Applicant

and

BINDAREE BEEF PTY LTD

Respondent

Application for special leave to appeal

CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 NOVEMBER 2007, AT 2.31 PM

Copyright in the High Court of Australia

MR S.G. CAMPBELL, SC: May it please the Court, I appear with my learned friend, MR D.R.J. TOOMEY, for the applicant. (instructed by Lee Sames Egan)

MR L. KING, SC: May it please the Court, I appear with MR J.J. PRIESTLEY for the respondent. (instructed by McCabe Terrill Lawyers)

CRENNAN J: Yes, Mr Campbell.

MR CAMPBELL: Thank you, your Honour. Your Honours, the parties to a contract reduced it to writing, each of them signed it. It was lodged with a government department under a public Act of the State of New South Wales and approved pursuant to that Act, section 12 of which gave it the force of a deed. Thereafter, in the course of a performance of that contract, the applicant suffered an injury at work through the negligence of a party who was a stranger to that written contract. He sued that stranger, the respondent here, in the District Court of New South Wales. It pleaded it was in fact the employer, notwithstanding the terms of the written contract.

Your Honours will know that an order to maintain his action against someone who was in fact his legal employer, the applicant had to comply with certain substantive and procedural requirements of the workers compensation legislation in New South Wales. It is common ground that he had not complied with the necessary procedural steps. It is also common ground, your Honours, and always has been, that he did not cross the threshold in section 151H of the Workers Compensation Act 1987 of greater than 15 per cent whole person impairment.

It was his case and is his case that he was not suing his employer because his employer was the party named in the written contract, Yolarno Pty Limited, whose duly authorised officer had signed the contract on its behalf.

CRENNAN J: I think Justice Giles at application book 44, paragraph 59, and over the page on page 45, is raising the principle as to whether or not the reality of a purported contractual arrangement can be taken into account, including in circumstances like this where there is an identity issue.

MR CAMPBELL: Yes, your Honour. We lost in the Court of Appeal because of the application of Pitcher.

CRENNAN J: You are not challenging the principle?

MR CAMPBELL: No, we are not, your Honour, but we say the principle only operates in limited circumstances, as I have set out in the written submission, and that the judgment of in particular Justice Handley in Pitcher v Langford was subject to certain qualifications which we have set out. Your Honours, those qualifications can be found on pages 43 and 44 of the application book. The principle is stated on 43, your Honours, about line 37, the last sentence of that first paragraph from Justice Handley’s decision:

But independently of the sham principle the courts can consider what the parties to a contract have done, in order to see whether it has been ignored or abandoned.

We say the qualification, your Honours, is to be found on page 44 in the middle of the page at the paragraph starting at about line 25, “In my opinion” and at the end of that paragraph the trial judge said:

‘that nothing really changed’ and that ‘it was business as usual’. To these findings must be added the finding that the signing of the written contract by the owner was ‘a mere formality’.

We submit, your Honours, that that qualification, with respect, was not founded by the Court of Appeal in this case but more importantly we say if it was, it was tainted by, with respect, legal error because the majority in the Court of Appeal introduced a concept which we submit, with respect, is foreign to the common law in this area of discourse, the concept being the absence or lack of clear consciousness that one party rather than another was to be the employer. That error, with respect, your Honours, is found at 47. It is paragraph 62 of Justice Giles’ decision and it is about line 50.

CRENNAN J: Yes, we see that. On one reading of that the comments made en passant, it is not really a statement or a qualification of principle.

MR CAMPBELL: I understand the point that your Honour the presiding judge is making but his Honour repeats the same phrase, albeit in a slightly different context, at page 49. Although this is said, as I have said, in a slightly different context, this was rejecting ground 5 of our grounds of appeal. It is clear from what is said here that the Court of Appeal considered that the reason why the trial judge made the findings he did was insufficient in law and that the idea of absence of clear consciousness was the determinative or decisive factor in the case. If I could ask your Honours to look at about line 29, the end of that line, the sentence commencing:

Rather, in considering the reality of the purported contractual arrangement it is relevant to ask how it came about that Yolarno was given as the employer in the second Form.

This is the part which indicates that their Honours thought that the learned trial judge had erred:

The answer may not adequately be described as mistake, certainly not as clerical error –

but those are the reasons that the trial judge gave, your Honours. Justice Giles goes on –

it is rather absence of clear consciousness that Yolarno, as distinct from Bindaree, was to be the employer under the training contract. In the manner I have described, that contributes to the preferable finding.

I appreciate, as your Honour Justice Crennan has said and as my learned friends argue in their written submission that this might just have been a factual consideration, but when one looks at it in that context, we submit, it seems to be a decisive matter of principle that was applied contrary to the orthodox principle of complete objectivity in terms of the interpretation of contracts. Having said that, I am conscious that at 47 in paragraph 61 Justice Giles refers to the leading authorities and the very authorities indeed upon which we rely in advancing our argument in writing, but even though that has occurred, it is our respectful submission that one looks at paragraph 62 and then again paragraph 68 of the judgment that there has been this new notion, if I can put it that way, with respect, grafted on to that orthodox principle.

We submit that if one applies the prevailing orthodoxy to the facts of this case, then one comes up with the result that Justice Basten would have preferred and the gravamen of his reasoning is at page 58 of the application book and it is paragraphs 92 to l02 of his judgment. Your Honours will see at paragraph 94, having referred to the decision of this Court in Toll and also in Taylor v Johnson, his Honour went on to say:

That principle also applies in determining whether an intention to enter into a legally binding agreement is revealed . . . There is no reason not to apply the same approach to the identification of the parties - - -

CRENNAN J: There is certainly no disagreement about the cases in which the relevant principles are to be found.

MR CAMPBELL: No, your Honour, none whatsoever, it is just a question of what the majority, on the one hand, and Justice Basten, on the other hand, made of them and how you apply them in this case.

CRENNAN J: In relation to these facts?

MR CAMPBELL: In relation to these facts, that is so. May I say again, and I apologise for saying it for the third time, we submit that the reason for the difference in preferred result is because of the grafting onto the established principle of this foreign idea. Your Honours, this is a case where, as we have said, fundamental principle has either been embellished in an impermissible way or has been misapplied. It is an important case, we respectfully submit, because it involves the interaction of that fundamental principle in the statutory context that we have tried to develop in writing.

But also, your Honours, there is a question here of a substantial injustice given that Mr Shaw’s rights effectively, pursuant to a written contract which on the face of it said someone else was his employer, his rights, common law rights, have been, as it were, barred by the approach that has been taken to the interpretation of this contract in what we would respectfully submit is an erroneous fashion. May it please the Court.

CRENNAN J: We do not need to call on you, Mr King.

This application concerns the test to be applied in ascertaining the parties to a contract where there is no question of mistake, misrepresentation or fraud and no application to set aside the contract.

The Court of Appeal below, by majority, dismissed an appeal from the decision of the primary judge in the District Court of New South Wales. The division between the majority and the minority in the Court of Appeal appears to amount to a difference in relation to the application of settled principles to the facts. The applicant has elevated a question of fact to one of law.

Accordingly, the application does not give rise to a question suitable to a grant of special leave and the interests of justice do not require such a grant.

The application for special leave to appeal is refused, with costs.

MR CAMPBELL: May it please the Court.

AT 2.43 PM THE MATTER WAS CONCLUDED