Accident Compensation Commission v Odco Pty Ltd (trading as Troubleshooters Available)

[1989] HCATrans 285

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M35 of 1989

Between-

ACCIDENT COMPENSATI0N CCM1ISSION

Applicant

and

ODCO PTY LTD (tradinf as TROUBLESHOOTERS AVAI ABLE)

Respondent

Application for special
leave to appeal

MASON CJ DAWSON J

Accident

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 17 NOVEMBER 1989, AT 11.46 AM

Copyright in the High Court of Australia

M1T6/l/RB 1 17/11/89

MR J.G. LARK.INS, QC: If the Court pleases, I appear with my

learned friend, MR S.G. O'BRYAN, for the

applicant. (instructed by the Solicitor to the

Connnissioner of Pay-roll Tax)

MR M.E.J. BLACK, QC:  May it please the Court, I appear with

my learned friend, MR P.H. COSTELLO, for the

respondent. (instructed by Roth Warren & Menzies)

MASON CJ: Yes, Mr Larkins.

MR LARKINS:	If the Court pleases, the applicant seeks leave to appeal from the decision of the Full Court of the Supreme Court of Victoria reversing a decision
of Mr Justice Gray.

MASON CJ:  Yes. We have read the papers. We are familiar with

the history of the matter.	I cannot say that we
understand the legislation.

MR LARKINS:  I was going to start addressing the Court by

citing from Mr Justice Murphy in a previous decision

of His Honour's delivering the judgment of another
decision of the Full Court on the legislation
saying, in relation to the case which arose under

the Act, "It arises because much of the Act is

couched in degendered and obscure language, the

meaning of which is blurred to such an extent that
the draftsman's intention is almost impossible to

discern with any degree of satisfaction.

Consequently, the court's judgment itself must

often appear to be obscure. Such uncertainty should

not attach to legislation in the nature of a social

service provision for workers who suffer injury."

And with respect, we would urge upon this Court

that view.

MASON CJ:  I do not think we would have any reason to disagree

with that.	I am not sure that that is an argument
in favour of special leave or against granting

special leave.

MR LARKINS:  A lot of the problems, if we can put it this way,

with respect, seem to stem from an unwarranted, we

would say, attempt by the court to depart from the

language of the legislation. The easiest way in

which we thought to approach the matter of this

application is to identify for the Court what we

say is the underlying falacy of the reasoning of

the Full Court without necessarily being able to
express precisely what it is the Full Court is

attempting to say.

MASON CJ: I was going to say to you could we not short cut

this, Mr Larkins, by seeing if you could persuade

someone to amend the Act.

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Accident

MR LARKINS:  No, that is being attempted at the moment.

Unfortunately that has run on to a rock which
consists of a majority in the Upper House in
the State of Victoria of the National Party and

the Liberal Party who have announced so far that

they have been unwilling to consider amendments

which have been proposed indeed to the legislation.

So that the position at the moment, if the Court pleases, is that there has been a bill introduced into the Parliament of the State of Victoria but

we are not in a position to express any view about

the likelihood or otherwise of that legislation

passing through the ordinary legislative process.

The position is particularly important in three

ways, if the Court pleases. Firstly, in respect of

the definition of a worker; .that is to say as to

the entitlement of persons under this very important

piece of legislation, and secondly, and perhaps as

a correlative of that, that one needs to identify

employers as leviable remuneration for the funding

of the scheme, and thirdly and equally importantly
is that the same definitions find their place in
other legislation, both in the PAY-ROLL TAX ACT in

the State of Victoria and other corresponding

legislation in other States.

What we are attempting to do, with respect, is

to point out to the Court what we see as the underlying
but relatively simple difference between the

construction that we would have placed on the Act

and that which my learned friends would.

MASON CJ: Yes.

MR LARKINS:  Could we remind the Court that Troubleshooters

Available acts as an employment agent, and I will not trouble the Court with the details of the contracts

and so on.	Could the Court suppose the owner of
land who has a contract with a builder.	He wants a

house built or whatever. The builder has ordinarily

in his employ a carpenter but on this particular day

the carpenter falls ill or is otherwise unavailable

so that the builder who has established a relationship

with Troubleshooters Available and has an agreement
with Troubleshooters Available that if and when called

on, Troubleshooters Available will make carpenters

available at, say, $30 an hour. Troubleshooters

Available rings Mrs Patterson, let us say, one of

the instances in the present case. Mrs Patterson is

in partnership with her husband, Mr Patterson, who is

a carpenter who has~ signed an agreement with

Troubleshooters Available that if and when he,

husband that at the given time and place,

Mr Patterson, chooses to, he will respond to calls of with her

this kind. Troubleshooters Available rings up

M1T6/3/RB	3	17/11/89
Accident

the husband will produce himself with his hammer and

nails, hammer at least, to the building site.

Mr Patterson does so and as directed by the builder

hannners nails on site all day.

At that stage, if we can simplify it, the builder

has - or at some later stage - renders an invoice to

the owner of the land for payment, including the work

done by Mr Patterson. In due course, Troubleshooters

Available renders an invoice to the builder for

Mr Patterson's hours on site and that hourly rate may be

$30 as we suggest. The firm, Mr and Mrs Patterson,

renders an invoice to, or is paid by, Troubleshooters

Available, not $30 but the agreed rate which may be $25

an hour for Mr Patterson's time on site. The money is

received and in due course the partnership distributes

the profits to the partners, Mr and Mrs Patterson.

In those circumstances, it is our contention, if

the Court pleases, that the work on the building site

done by Mr Patterson when he hannners his nails is done

by him at the same time for the builder, who is taking
the benefit of the work; for the owner of the land

because he, of course, takes the benefit of the work; for

Troubleshooters Available because it will receive the

difference between $30 an hour and $25 an hour; for the

partnership which receives the money; and, of course,
for himself ultimately to get his share of the

partnership.

In our respectful submission, the Act in neither

section 8 nor section 9 requires that the performance of the work be characterized as being exclusively for another party. At the same time, we submit that work

can be for numbers of people. Now, when one looks at

the Act and tries to identify a relevant contract, the

same relevant contract may be established on particular

factual situations to exist between the tradesman and

one or more other persons and, in those circumstances,

the Act actually provides that remuneration is only

leviable once in respect of the same transaction.

We submit that if one looks at the judgments of

the two members of the Full Court which appear in the

application book - and I notice Mr Justice Murphy's

"I agree" does not find its way into the application

book - but if one looks there what one will see is

that there is a characterization of the performance of
the work in the instance we have been giving of

Mr Patterson as being for the builder rather than for

Troubleshooters Available, and that is the conceptual

difficulty which we urge upon the Court as being
exhibited by the reasoning of the members of the Full

Court. And that affects both the interpretation of

section 8 and of section 9.

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Accident

MASON CJ: If you look at section 8, can you say that there is

an agreement under or by which the contractor agrees

to perform work for the principal, in the illustration

you have given us?

MR LARKINS:  Yes, we can identify an agreement with

Troubleshooters Available.

MASON CJ:  But is it an agreement under or by which the

contractor agrees to perform any work?

MR LARKINS:  Once he has accepted the offer of work, the answer

is "Yes", with respect, because he then has an

obligation to report to the site to perform work on
the site to the satisfaction - indeed, he expressly

guarantees the quality of his work, and there would at

least be an implied term that he, when there, carrie:s

out work of an appropriate character for a carpenter

for the builder as directed by the builder on the site.

MASON CJ:  Can you illustrate that by reference to the contract

between Troubleshooters and the contractor?

MR LARKINS: I do not think there is any evidence in the judgments

of the court of the contract between the contractor and

Troubleshooters. There is no reference to it in the

book. The only evidence is, I think - - -

~.A.SON CJ: I use the word "tradesman".

MR LARKINS:  Yes, tradesman. What I am being directed to is

the TSAjTradesman Contract and I understood the Court

was asking about the TSA builder contract.

MASON CJ: If you look at the tradesman contract - - -

MR LARKINS: Paragraph 7, of course, of that contract:

It is agreed that I (the undersigned) must

carry out all work that I agree to do through

the Agency of TROUBLESHOOTERS AVAILABLE in a

workmanlike manner and is hereby guaranteed

against faulty workmanship. AllIDrk must be

made good. Further, I agree to cover the work -

for public liability insurance. The point that we would

make, with respect, is that - can I approach it in this

way and•give another example. The Full Court take

the case of a drainer, and say that if a drainer -

page 37 of the application book, right at the bottom,

line 33:

If A asks B, a drainer, to "lay some drains",

and B agrees to do so, the ordinary understanding

is that the work of laying drains is to be done

by B for A and not for someone else.

MlY6/5/RB	5	17/11/89
Accident

And we would respectfully agree with that.

If that were not so, it would be ordinarily

expected that reference be made in the contract

to the unusual circumstance that the work was

to be done for a third person, a circumstance

which would necessarily require further
negotiation, for example, as to payment, site

location and so on.

We, with respect, would say that if, for example, I

rang up my local neighbourhood plumber asking for some

drains to be laid, and instead of coming himself

personally he sent his employed plumber to my house

to lay the drains, then we would say, with respect, that

the man that I rang in the first place laid the drains,

notwithstanding that he did not lay a hand on the

shovel that excavated the hole in which the drains were

placed. The work itself was done by the plumber I

telephoned, notwithstanding the he achieved that result

by sending his lackey to do the work.

The problem of characterization, with respect,

is that the rejection by the Full Court of the notion

that Troubleshooters Available had taken the benefit

of the work done by the tradesman on site,

notwithstanding that it, TSA, was to receive a

remuneration which was quite unrelated to that which

was paid by it to the tradesman. It is not the

position, for example, of a barrister's clerk who is

remunerated by reference to a percentage of the

barrister's earnings and I suppose that a solicitor

who rang up a barrister's clerk, procured the services

of a particular barrister in court on such a day, could

hardly be said to be appearing in court. It is the

barrister who has appeared in court and does the work

in that instance. But that is quite different, with

respect, to the position as we would contend for the

agent Troubleshooters Available.

If one looks at the judgments of Mr Justice Marks

and Mr Justice Beach at page 40 of the application book,

for example, at the bottom of that page I am reported

as having submitted:

that by the contract between T.S.A. and the

workers, it was indeed agreed that there was
work to be performed by the workers for T.S.A.

The "work" was going to the building site,

taking tools and equipment, accepting or
rejecting the engagement and if accepting

being present on the s~te to do the work.

I hope that I had submitted, and I certainly intended

to submit and would now submit, that there is the

additional feature, of course, that the man as well as

being on site is actually performing work as directed

by the builder.

MlT6/6/RB	6	17/11/89
Accident

There is perhaps more than one answer to

this submission.

And one of the answers given, about the middle of the

following page, is that:

The only remuneration paid to a worker

who enters into the TSA/Tradesman Contract
is for the work done by him for the builder.

There is this constant theme of this judgment that the work is done by him for the builder which, in a general

sense as we have already submitted, is absolutely true.

It is done for the builder.

MASON CJ: What do you say about the next refinement that is

mentioned in the judgment, that even if it be done

for the builder it is not done "for 'the purposes' of

the trade or business" of the principal?

MR LARKINS:  We would say of course it is, with respect, because

the very trade or business is the production of

workers on site in return for remuneration. TSA's

business, in the relevant sense, is the procuring of carpenters and others to go to site to carry out the work for the builders. Troubleshooters Available is

performing work, with respect, but it is work which is

not the hammering of nails but the ca.using of persons

to go to site to hammer nails. It is the same, with

respect, as me ringing the local master plumber who

sends his lackey. It is just as much the laying of

drains or the performance of work on site.

Similarly, when the court refers to the passage

from the judgment of Chief Justice Latham in the

HUMBERSTONE case at page 37 of the book:

In the first place, there must be an agreement

by B (a contractor) to perform some work for

A (a principal).

It is a question of characterization of the nature of

that work. The characterization which the court

adopted was one which found its expression only in the

physical work of the hammering of the nails. For

example, in relation - - -

DAWSON J: Surely· there is a difference. Troubleshooters

agrees to provide a person with particular

qualifications. It does not agree to do the work,

does it?

MR LARKINS:  But its work, if I may say so with respect, in

relation to the hammering of the nails is the

provision of the man to do it. And what we say - - -

DAWSON J: Yes. You said there was a difference between that

MlT6/7/RB	7	17/11/89
Accident

situation and the situation of a barrister's clerk

but it is not immediately obvious to me. What is

the difference? The barrister's clerk operates as a

clearing house in this respect for making barristers

available; Troubleshooters operates as a clearing

house for making tradesmen available.

MR LARKINS:	No, it does not, with respect. Troubleshooters Available operates to make a profit from charging out
labour at an agreed rate to builders.
DAWSON J:	In a sense so does a barrister's clerk. He gets the

fee in and gives it to the barrister less - 4 per cent

is it now?

MR LARKINS: Five. But, with respect, there is no contract

between the barrister's clerk and the solicitor. The

quite distinct difference here is that there are two

separate contracts. There is no contract between the

tradesman and the builder at all. He simply reports

to the building site, accepts directions, because his

employer for the present purpose, TSA, has asked him

to report to that building site at that time and place

and accept directions from whoever, the foreman or

whoever may be in charge. It is quite different, as

a matter of analysis, with respect, Your Honour, ±rom the

position of the barrister who by medium of his clerk

enters into a contract with the solicitor. And it is
not correct to say, with respect, that the TSA operates

a business to provide work for such of those tradesmen

who indicate a willingness to accept that work.

TSA's work is procuring however many dollars an

hour from the physical work of third persons. The

same question really arises both in section 8 and

section 9 because if one looks at section 9(1)(a) the
contract to be a relevant contract has to be one

during the financial year in the course of a business

carried on by that person - Troubleshooters Available - - -

MASON CJ: The trouble is section 9 seems to be even more

incomprehensible than section 8.

MR LARKINS:  We do not necessarily accept that, Your Honour,

with the greatest respect, because when one comes to

look at particular cases, it only become incomprehensible

because of the various exceptions and one of the problems
the Full Court happily assumed is that if you identify,

say, the builder tradesman contract as the relevant

contract, that he would be covered as a worker.	The
reality is that most cases would fall within the
exception of section 9(1)(e)(v) because that just
simply does cover most cases.	So that the comfort

which the Full Court may have felt in saying, Well, it

does not really matter very much which relevant contract

you look at, nevertheless there is a relevant contract
here identified as being one between the builder and

the tradesman.

M1T6/8/RB	8	17/11/89
Accident

The majority of cases may well be found to

fall within one or more of the exceptions, and that is

a matter of our anxiety, that it is not enough that

you can identify a relevant contract here in the

generalized sense under the provisions of section 9(l)(a)

or (b).

MASON CJ:  Mr Larkins, let us assume that the Full Court is

arguably wrong in the interpretation that it has

placed on these two sections. None the less, is this

a case for special leave? After all, it appears to be

a peculiarly Victorian affair. It is legislation that,

I trust, has no counterpart elsewhere in these terms.

MR LARKINS: At least as to section 8 it does have counterparts

elsewhere, as Mr Killey in his affidavit refers to.

MASON CJ: In these precise terms?

MR LARKINS:  It is similar to clause 2 of schedule 1 of the

WORKERS COMPENSATION ACT of New South Wales. It is

also similar to section 3(2) of the WORKERS

COMPENSATION ACT in Queensland.

MASON CJ: The history of that provision in New South Wales

does not excite me into the grant of special leave,

I can assure you.

MR LARKINS:  There are also provisions in the Australian

Capital Territory under the PAY-ROLL TAX AMENDMENT ACT of that State which correspond to section 9. There

is the PAY-ROLL TAX provisions in Victoria. But could

we say, quite independently of that, even if one looked

at it independently of the fact of this other

legislation in other States and on the general basis

that governments can look after themselves if they

get an adverse decision, we put it as a matter of very

considerable importance for partly the funding of the

existing legislation and, secondly and more importantly

perhaps from a special leave point, is that the exact

obverse of the liability to levy is the entitlement of

a worker to benefit and under section 82, I think it is,

of this Act benefits are only available to workers

as defined, which of course includes persons who are

deemed to be workers.

In our respectful submission, the present

inability to have any amending legislation passed in
this State to remedy the problem, coupled with the

unknown number of person who might think that they are

deemed workers or assume that they are, or whether they

assume or not, having regard to the implication of

denying cover under this Act, and having regard to the

millions of dollars which would be the subject of levy,
in our respectful submission th1s is a matter of

significance and importance and that notwithstanding the

disinclination that the Court might feel to enter into

MlT6/9/RB	9	17/11/89
Accident

what could only be described as a Stygian gloom

of the legislation, in our respectful submission that

gloom has in fact been made even darker and more

difficult by the rather peculiar construction which has

been placed on the legislation in not only the present
decision, but the Court may have seen reference to

two other decisionswhich, in our respectful submission

and with the greatest respect to the Full Court, have

not assisted.

One of the problems in the case presently under appeal is that Mr Justice Murphy was the presiding

member of the Full Court in the decision which I

started by referring to and he did, in the course of

that decision, comment on the decision of

••	Mr Justice Gray which had been given but was not then
subject to appeal such that the court in the present
case really found itself in a position where its
presiding member had already adversely commented on the decision which was then under appeal before it and,
in our respectful submission, since we were not
parties to that earlier appeal and the court in finding
itself bound by a previous decision where we had not
participated and this particular decision had been
adversely commented on, Mr Justice Gray's decision had
been adversely commented on, in our respectful submission adds weight to our application.

Additionally is the fact that the court really

did not turn to consider at all the principal

argument which we advanced before it, namely that

this was a case where section 9(l)(b) had applciation.

Now, in justification it might be said, Your Honours,

that the court did deal with this question of the

performance of work and perhaps it thought it

unnecessary to proceed further because the same phrase

recurs in both 9(l)(a) and (l)(b) and if it is not

performance of work for the purpose of 9(l)(a) perhaps

it could be said it would not be performance of work

for the purpose of section 9(l)(b). In my respectful

submission, this is a case of importance and I have

had handed to me, if the Court pleases, copies of the

PAY-ROLL TAX ACT of New South Wales of 1971 where

section 3A reproduces section 9 of the Victorian Act.

MASON CJ: What, in exactly the same terms?

MR LARKINS:  I could not vouch for it word by word, but if one

looks at section 3A(l)"(~), for example - I could

read it through by reference to section 9:

A reference in this section to a relevant contract in relation to a financial year is

a reference to a contract under which a

person,(in this subsection referred to as.

the"designated person"), during that financial

year, in the course of a business carried

on by the person -

MlT6/10/RB	10	17/11/89
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(a) supplies to another person services for

or in relation to the performance of work;

(b) is supplied with the services of persons

for or in relation to the performance of

work; or

(c) gives out goods to natural persons for

work to be performed by those persons -

and so on.

MASON CJ: It seems very similar, if anything slightly more

complicated.

MR LARKINS:  We do not urge upon the Court as a reason for

giving special leave that even greater difficulties arise in New South Wales than in Victoria, although

I suspect that some people would not be too distressed

if that were the truth.

MASON CJ: No.

MR LARKINS: But in our respectful submission the matter is of

significance and importance and if the fact were that there was some prospect in the innnediate future, on a

realistic basis, of the amendment of the legislation,

of course we would have brought that to the attention

of the Court and it would be a matter which would weigh in the decision to grant leave. But in our

respectful submission there is this underlying and

perhaps not difficult point that the classification

of the work was, in our respectful submission, made

by the court in error - - -

MASON CJ:  I think we are possessed of the points you wish to

make, Mr Larkins.

MR LARKINS: That, if I may say so, is the best strongest,

clearest and simplest point. The rest really does

depend on matters of detail and, in our respectful

reference to the further obfuscation which can be	submission, if we have not got there thus far the
achieved by looking at the various exceptions would
not assist the Court. If the Court pleases.

MASON CJ:  Yes, thank you, Mr Larkins. What do you say about

this, Mr Black?

MR BLACK:	Your Honours, we say that the point is not one of general importance. It is peculiarly a Victorian -
our primary point is the Full Court was right and we can demonstrate that, given sufficient time. There
is a synnnetry about the result.

MASON CJ: You would need a little more than the time generally

allotted to a special leave application to demonstrate

the correctness of their decision.

M1T7/1/RB	11	17/11/89
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MR BLACK:  I understand that, Your Honour. There are some

short simple, we would say, even elegant answers.

The Full Court on three occasions now has been

required in the exercise of its duties to venture

into this maze. Each time it has come out; each

time it has found a consistent path and the community

in Victoria gratefully acts upon that, to a lesser
or greater degree of gratefulness, depending upon who
wins, but a body of doctrine, rational doctrine is

being established in Victoria. The government does

not seem to like it and has introduced a bill which

specifically covers this case and is retrospective to

the date of the Full Court's judgment. What the fate

of that bill will be, we do not know, but in our

submission it is a peculiarly Victorian affair,lacking

the elegance of the normal Victorian affair, it is

just a maze. Now, the maze has been chartered - - -

MASON CJ:  The epidemic seemsr:to have crossed the border. For

example, New South Wales seems to have almost identical

legislation now.

MR BLACK:  Your Honours, it has almost identical PAY-ROLL TAX

legislation to which difference principles could

apply. In any event, we would respectfully submit,

that if the New South Wales Court of Appeal did not
find the Victorian decision of assistance then it would

find its own way through the maze. Victoria has been

through it three times now with, we would submit,

rational results, and it is a Victorian matter.

Now, on the section 8 point - - -

DAWSON J: Does that not tell against your case, Mr Black? If

some doctrine is now emerging, that is an appropriate

time for this Court perhaps to look at it. I was

going to suggest previously to Mr Larkins that perhaps it would be better for this Court to sit back and wait

and see what happened for a while, in order to not

simply deal with a single instance, but your case is

that a doctrine has emerged.

MR BLACK: It is emerging, Your Honour. It is emerging on a

case by case basis and even in the ODCO case - I think

it was in the ODCO case - but the court does not

purport to have gone into every avenue or alley in

the maze. Now, in our submission, this is a Victorian

statute with one - - -

DAWSON J: It is the sort of statute in relation to the

interpretation of which this Court has granted special

leave on previous occasions, is it not? It is a

statute affecting a lot of people and involving a

lot of money.

MR BLACK:  Yes. On that occasion I think there was only ·one,

Your Honour. It concerned the entitlement of all

M1T7/2/RB	12	17/11/89
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workers in respect of overtime. Now, this is

basically a revenue matter and what is more, it is
a revenue matter put by the Accident Compensation

Connnission by way of a double dip because it was not

seriously contended that the relevant contracts that

we contended for did not exist; what it was sought to

do was to find another set of relevant contracts

applicable to the Tradesman/TSA Contract. So that one

could have, as it were, a second target for one's levy.

So that,in our submission, if the matter is to

arise in the context of an actual worker who has been

deprived compensation, so be it, but this arises in
the context of a revenue or levy situation and, in

our submission, that is a matter that can be fixed up

in Victoria and to the extent that the statute does
not meet the present will of Parliament, the

Parliament can say so.

There is worse to come because, if I may say so

with respect to the Court, there is worse to come

because the section 8 point would not be necessarily

determined as a point of principle. There was a

factual argument that the respondent to this appeal

has always been running, that the Full Court did not

think it necessary to deal with, and if special leave

were granted we would certainly seek to run that point

in answer - - -

I:1ASON CJ:	We could send it back to the Full Court for the determination of that question.
MR BLACK:	Yes, the Court could.
I:1ASON CJ:	So the terror is not as great as you were suggesting.
MR BALCK:	No, Your Honour, it is not in that respect. And the

final point that is made, in the affidavit in support

it is said that "untold millions"are involved in this

matter. In our submission they are not because the

way this Act works is if there:i..s a liability then

there is a levy; if there is no liability there is no

levy. So that really what this case is about is an

attempt by the Accident Compensation Connnission to

target a new group of persons which it is unnecessary

to target. The builders are liabile, given certain

circumstances, and in our submission, it is very much

a Victorian matter.

Now, Your Honours, I obviously if I do not resist

will be compelled to resist the temptation to seek to

demonstrate that the Full Court was right, but there is

a synnnetry in what the Full Court did and, in our

submission, the Full Court was right. It is not a

special leave case, in our submission.	May it -please
the Court.

MlT7/3/RB	13	17/11/89
Accident

:MASON CJ: Thank you, Mr Black.

We need not trouble you, Mr Larkins. There will

be a grant of special leave to appeal in this

matter.

MR LARKINS: If the Court pleases.

AT 12.24 PM THE MATTER WAS ADJOURNED SINE DIE

MlT7/4/RB	14	17/11/89
Accident