Tasty Chicks Pty Limited & Ors v Chief Commissioner of State Revenue [2011] HCATrans 151 (10 June 2011)

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Tasty Chicks Pty Limited & Ors v Chief Commissioner of State Revenue [2011] HCATrans 151 (10 June 2011)

Last Updated: 14 June 2011

[2011] HCATrans 151

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S39 of 2011

B e t w e e n -

TASTY CHICKS PTY LIMITED

First Applicant

ANGELO TRANSPORT PTY LIMITED

Second Applicant

SOURIS HOLDINGS PTY LIMITED

Third Applicant

MINAS SOURIS

Fourth Applicant

JENNY SOURIS

Fifth Applicant

and

CHIEF COMMISSIONER OF STATE REVENUE

Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 JUNE 2011, AT 9.31 AM

Copyright in the High Court of Australia

____________________

MR C.J. BEVAN: May it please the Court, I appear with my learned friend, MS A. TSEKOURAS, for the applicants. (instructed by Legal Ease Lawyers)

MR G.C. LINDSAY, SC: May it please the Court, I appear with MR I.C. LATHAM for the respondent. (instructed by Crown Solicitor (NSW))

GUMMOW J: Mr Lindsay, at the moment we see some merit in the substantive grounds that Mr Bevan is arguing, but you have some point, I think, about futility and ultimate result, in any event?

MR LINDSAY: The submission we make - - -

GUMMOW J: If you could develop that, if you wish to do so.

MR LINDSAY: It can be developed shortly. The Court of Appeal considered the proceedings from the context of what it says was the law, namely, the law that embraced Avon Downs. Then when it went to consider the facts, it found that even on an alternative view of the world the judgment of the primary judge could not be sustained. An example of that appears in the application book at page 82 in paragraphs 96 and 97.

GUMMOW J: Yes.

MR LINDSAY: In relation to each of the determinations made in relation to the three periods, in essence, that is what the - - -

GUMMOW J: They are talking there about the first period.

MR LINDSAY: They are and then - - -

GUMMOW J: The second period, that is paragraph 112, is it not?

MR LINDSAY: Yes, it is.

GUMMOW J: The third period?

MR LINDSAY: The third period is 116 and 117. One can point to that, but elaboration is probably not terribly useful. So those are the submissions we would make in respect of the facts. If your Honours were minded to make a grant of special leave, we would draw attention to the form of the draft notice of appeal.

GUMMOW J: Yes. Where do we find that?

MR LINDSAY: At page 100, that is volume 1.

GUMMOW J: It is rather lengthy.

MR LINDSAY: It is. Your Honours will have noticed in our submissions we said that if there was a special leave question it was limited to one question which we have identified in volume 2 of the application book at page 426, paragraph 5. Without confining Mr Bevan, but trying to translate that into the lengthy grounds of appeal in the draft notice of appeal, I think that that one question finds reflection, at least in grounds 1 to 15, perhaps 1 to 19, but, in any event, the case we have to meet is not assisted by so many grounds.

GUMMOW J: Yes, Mr Bevan. It is unlikely there were 39 errors, is it not?

MR BEVAN: We tried to approach the matter in various alternative ways depending on whether the jurisdictional - - -

GUMMOW J: Anyhow, let me say to you, if we were to grant leave, it would be on terms that the draft notice as presently presented be revised to produce the substance in proper form of what is set out under point 5 on pages 426 and 427.

MR BEVAN: Yes. The only qualification we would make about 5 is that in answering the question, what is the nature of the appeal under section 97, we still have not dealt with the question of whether Avon Downs applies in the State context.

GUMMOW J: It is wrapped up in that, is it not?

MR BEVAN: If your Honour please.

GUMMOW J: Avon Downs was a case construing another statute.

MR BEVAN: It was. In respect of the merits, the principal complaints we have were that the Court of Appeal, and using the first period as an example, relied on the deeds of agreement to group and the Court of Appeal asked the correct question at application book 75 at 67 which answers the terms of the statute which is set out at application book 73, paragraph 61, that question being whether the deeds of agreement were in respect of employment or performance of duties by what we term the principal employer’s employees, that is Tasty Chicks’ employees.

Then when one goes over the page and looks at the clauses relied upon, in particular, if one goes to 78, which are the critical clauses that the Court of Appeal placed emphasis on, the conclusion appears at 82. The Court of Appeal relied, in paragraphs 79 and 80 on page 78 of the application book, on clauses which regulate the employment of employees of the business, but when you look at deeds of agreement, the business is the business of the client, not the business of the service provider, Tasty Chicks. Now, this point was made by Justice Gzell at first instance. He said the only control which the deeds - - -

GUMMOW J: Can you find that passage in Justice Gzell?

MR BEVAN: Yes. If your Honours go to page 26, his Honour asks the question at 108 and at 109 he makes the conclusion that only one factor applied to the employees of Tasty Chicks. That was the requirement that a significant part of its employees be located at adjoining premises to those of the clients because of the nature of the back office functions it was performing. His Honour concluded that having regard to that being the only requirement that answered the statutory test, that was not sufficient to satisfy the requirement for grouping. The problem is then the Court of Appeal. The Court of Appeal appears to have assumed that the business the subject of the restraints in the deeds was the business of the service provider rather than the business of the client.

We then move on to the de-grouping aspect of the application of the legislation by the Court of Appeal and the two problems there are, firstly, the Court of Appeal notes that, at application book 80, paragraph 87, having found at 86 that the Commissioner did not rely on ownership and control because plainly that favoured de-grouping, but he did rely on the nature of the businesses, and the problem there is that Justice Gzell found that the businesses were all quite different and that they did not answer the statutory test for refusal to de-group. That can be found at the bottom of application book page 23. His Honour sets out the statutory purpose and the grouping provisions.

At page 30 he then looks at the nature of the businesses for de-grouping purposes and he makes the finding that M & J Chickens, which the Court of Appeal re-termed “the firm”, processes chicken meat. Tasty Chicks, which is the service provider under the deeds of agreement, provides administrative services of what the Court of Appeal termed back office functions and Angelo Transport is a company that has a fleet of refrigerated transport vehicles. Now, when one goes to the actual analysis back at pages 80 and following of the application book, the nature of the businesses appears to have been ignored and the Court of Appeal focus on other issues and makes its ultimate conclusion at paragraph 82.

One can infer that these other factors which have been looked at are the other matters referred to in the relevant provision as 16H(1), which your Honours will find at application book 79, paragraph 83. One of our complaints is that on its proper interpretation the statutory criteria and, in particular, the “any other matters” must be interpreted ejusdem generis with the matters enunciated by Parliament rather than having the Commissioner simply select matters in his absolute discretion. The various factors which the Commissioner relied on, which are set out at application book pages 80, 81 and the top of 82, are factors which, in our submission, do not answer the statutory criteria for exercising this discretion to de-group. It was those factors that the Court of Appeal relied on in its ultimate conclusion to de-group for the first period at paragraph 96.

GUMMOW J: I do not think we need to hear you any more on this particular aspect, Mr Bevan. Looking at your draft grounds at page 102, paragraphs 16 and 17 - - -

MR BEVAN: Page 102?

GUMMOW J: Yes, paragraphs 16 and 17. It would seem that there is no direct implication of any constitutional question, I think. It would be an element in the argument about what Avon Downs stands for, I suppose.

MR BEVAN: Well, it does. As we explained in the - - -

GUMMOW J: All I am trying to alert you to is that at the moment it does not seem that you are faced with a 78B notice.

MR BEVAN: I see.

GUMMOW ACJ: If you succeeded in getting special leave. Do you accept that that is so?

MR BEVAN: We do. If we do not have to issue it, we will not, but because of the similarity in the legislation, we thought there may be a requirement to - - -

GUMMOW J: It seems to be so, Mr Lindsay, does it not?

MR LINDSAY: If there is any possibility that it is so, I suppose, conservatively, notices should be given.

GUMMOW J: No. Attorneys-General around this country have got other things to do with their time.

MR LINDSAY: We do not think the case raises any of those questions. It is just a matter of construction, from our perspective.

GUMMOW J: Just because someone mentions the word “Constitution”, it does not sort of flick some trigger that spews out a 78B notice. Yes.

MR LINDSAY: If your Honour please.

GUMMOW J: Yes, thank you, Mr Bevan. Mr Lindsay, what do you want to say on the matters of details?

MR LINDSAY: I do not wish to say anything more than what is in the written submissions.

GUMMOW J: Thank you. There will be a grant of special leave in this matter but limited to the substance of what is set out under point 5 on pages 426 and 427 of the respondent’s summary. This will be a one day case.

AT 9.48 AM THE MATTER WAS CONCLUDED