ACE Insurance Limited v Trifunovski; ACE Insurance Limited v Dicinoski & Anor; ACE Insurance Limited v Dicinoski; ACE Insurance Limited v Perez; ACE Insurance Limited v Peries

[2013] HCATrans 190

[2013] HCATrans 190

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S23 of 2013

B e t w e e n -

ACE INSURANCE LIMITED

Applicant

and

BLAGOJA TRIFUNOVSKI

Respondent

Office of the Registry
  Sydney  No S24 of 2013

B e t w e e n -

ACE INSURANCE LIMITED

Applicant

and

FETIE VICKI DICINOSKI

First Respondent

BLAGOJA TRIFUNOVSKI

Second Respondent

Office of the Registry
  Sydney  No S25 of 2013

B e t w e e n -

ACE INSURANCE LIMITED

Applicant

and

WILLIAM DICINOSKI

Respondent

Office of the Registry
  Sydney  No S26 of 2013

B e t w e e n -

ACE INSURANCE LIMITED

Applicant

and

SHANE PEREZ

Respondent

Office of the Registry
  Sydney  No S27 of 2013

B e t w e e n -

ACE INSURANCE LIMITED

Applicant

and

RIENZIE PERIES

Respondent

Applications for special leave to appeal

HAYNE J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 AUGUST 2013, AT 12.32 PM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friends, MR S.J. FREE and MR T. SAUNDERS, for the applicants in each matter.  (instructed by Clyde & Co Lawyers)

MR S. CRAWSHAW, SC:   May it please the Court, I appear with my learned friend, MR M.J. MOIR, in all matters for the respondent.  (instructed by K P O’Donnell & Associates)

HAYNE J:   Yes, Mr Walker.

MR WALKER:   Your Honours have seen that there are of course factual differences between the position of the several respondents, but that in order for there to be a fit case for special leave, it is a common factor to all of them that we urge.  However, we draw to attention that the first and last named, Trifunovski and Peries, have, as your Honours will have observed, one particular feature, namely – I am going to call it an “interposed company”, whether it be a service company or some other description, which is a feature to which I will turn, and I stress that applies only to those two cases.

Your Honours, at the heart of our submission that these are cases worthy of special leave is the question of the utility, of the invariably articulated resort to control in the different ways of which that may be understood for the purposes of ascertaining the existence of a relationship once called “master/servant” – now I will call it “employment” – often but not always for a quite different purpose, different from that which drove this case, namely ascertaining so‑called vicarious liability.

HAYNE J:   But did anybody argue at any point in this litigation that the question of employment for the purposes of entitlements of the kind now in issue was to be determined according to considerations that made, for example, the vicarious responsibility cases irrelevant?

MR WALKER:   I am sorry, made them irrelevant?

HAYNE J:   Yes.

MR WALKER:   No, your Honour.

HAYNE J:   Why then is this the vehicle in which to explore what may/may not be – I just do not know – a much deeper question of principle than one of how do you weight a large number of factors that we observe in a particular relationship?

MR WALKER:   May I first say, to approach that last point, we do not present as a question fit for special leave a complaint about the weighting relatively from what I will call the standard checklist, be it exhaustive or otherwise.

HAYNE J:   I know you do not present it in that way, Mr Walker.

MR WALKER:   We could not get that.

HAYNE J:   What I am asking you to address is whether, at its base, as this case has been argued, that is what it turned on?

MR WALKER:   Yes.  First of all, of course, at trial and on the appeal by way of rehearing, weighting was naturally at the heart of the argument.  That goes without saying.  Second, one does not need for special leave an argument that says - I will call them the “vicarious liability” cases are beside the point in order for there to be special leave, and for this reason.  Whatever is understood by the word “control” and cases, be they cases about wage entitlements, leave entitlements such as this or cases about vicarious liability have, in the way that Justice Buchanan very thoroughly set out, talked about the concept in differing ways over the years.  Whatever is understood by the concept, it is a concept that is resorted to in the analysis of the particular facts always peculiar to the case so as to produce that which is nonetheless a legal category.

HAYNE J:   Well, a legal category for the purposes of a particular industrial instrument, was it not, an award and the critical question which I think we might find an occasional glancing reference to is what does “employment” mean in this award?

MR WALKER:   Quite so, your Honour.

HAYNE J:   We wander off into bicycle courier cases.

MR WALKER:   We do not want to wander off into those cases.

HAYNE J:   I know you do not.

MR WALKER:   We said, and say, and would seek to tempt the Court to consider further upon a grant of special leave, that there is error needing correction involved in simply taking from those other contexts – I will call them a “common law” context – the references to “control” as if it provided some sufficient, not merely necessary to be considered, but some sufficient indication of employment for the purposes of these statutory categories.  The first thing to be said is the vicarious liability cases, and Hollis v Vabu is the paradigm here, are far from saying in any event once you find something that you can label “control” it is all over, rather that it is an extremely important part of the makeup of the litmus paper.  But it is not something that will give you a clear green light/red light, to mix my metaphors.

Your Honours, in this case, the statutory context was very important, and that is why we say there is a special leave point presented by what is plainly a resort by the judges to the jurisprudence from the common law.  Now, it would be unfair of me and I will not say that their Honours, as it were, ignored the differences.  The reasons below, and this is a reason for special leave, very carefully do set out (a) the facts which do not call for contest, and (b) the differing importance of these various factors in both the common law and earlier statutory contexts considered by decided cases.

However, the failure ultimately was to recognise that in this context of these cases, we had not merely the regulation that followed the attribution of the legal category “employment” – that is, certain wages, certain leave entitlements, et cetera – we also had, not incidentally but inherently by the nature of the award and the industry regulated, the heavy regulation of the sales forces of insurers.  When I say the heavy regulation, I mean that one immediately would put aside as irrelevant the notion that the service companies of the first and last of these respondents were thereby unable simply to get any Tom, Dick or Harry to do the selling work.  The regulation required, much as it does for medical practitioners and lawyers, the personal provision of service personally contracted for, either directly or through a company providing the relevant professional services.

One then comes to the findings of fact which dominate the concept of “control” as it determined the case in the Full Court.  All of that control had to do with obedience to, and the manner by which observance could be insured and tested, of that regulatory regime.  That, in our submission, has nothing to do with “control” as a word designed to describe one of the attributes of the master/servant subordination, that is, obedience to lawful direction.

In this case, in this industry, the so‑called “control” was of another species altogether, namely that if you were an insurer whose products were being sold, permitted only by the regulations in question, then certain both prudential and integrity requirements necessarily focusing upon the nature of the individuals doing the work and how they behaved themselves would necessarily bring in its train for independent contractors as for employees exactly the same level of knowledge, supervision and monitoring. 

Now, that knowledge, supervision and monitoring is what stands for control and, in our submission, has nothing in common with the master/servant analogy which is the one which has driven the outcome in this case.  It is for those reasons, in our submission, that the fact that there was not the bold position taken that all vicarious liability cases can and should be put to one side, but that rather they should not be regarded as producing some sufficient criterion of control to determine the statutory question, does not prevent this from being an appropriate case for special leave.

Your Honours, I said I would mention something about the two cases where there are interposed companies.  The way in which that was dealt with in the Full Court was simply, as it were, without any sham analysis at all – there was no suggestion of sham – simply to say that a device had been adopted in order that the revenue be received in the corporation rather than by a natural person.  Well, quite so.  It was a real legal form.

The odd position is therefore presented that we have, even before we come to the stipulations in the contracts themselves, the proposition that a person is an employee notwithstanding that he has taken pains for his own purposes – and I would say his own business purposes – of ensuring that the revenue from the putative employer comes not to him, but to a company.  We then go on and add, not because it can affect the interpretation of the contracts but because it provides a very plain understanding of how the parties saw it, one can see that at no stage did these parties conduct

themselves on the basis, for example, that a group tax should be deducted or that any of the other disadvantages from the point of view of the salespeople of an employment relation should be visited upon them.

Then we come to what, in our submission, was the weightiest factor below, namely the express stipulation of the parties as to the nature of their relationship.  We call it the weightiest because it could not be said that the facts were all one way, that this was a case where an express stipulation was a vain invocation of a category that could not possibly apply.  We submit that although, as we have made clear in our written submission, it must be so that express stipulations do not preclude a court examining the matter for itself where the other facts do not show either by preponderance or let alone clearly that there is only one category that is available, and is contrary to the stipulation, in such a case, then the stipulation simply should not be overlooked.  Furthermore, in an ordinary case, as these cases were in this regard, it ought to have prevailed.

In our submission, once one puts to one side the notion of sham, once one puts to one side the notion of any relevant inequality or oppression so that one does not have statutory fictions available, then it was a straightforward contractual question where the Full Court, in our submission, has simply failed to observe what should be pronounced to be the rule, namely the statute calls for determination of employment.  These factors show the absence of employment, and the degree of control is a kind of control driven by and emanating from the statutory regulation of this market which is indifferently applicable, whether there be independent contractors or employees.

The alternative – and this is the importance of the point – mode of reasoning says when there is close control of people whose individual discharge of work is required by statutory regulation for purposes either of competence or integrity, then that produces a relation with employment.  As I say, for learned professions, that is an absurd proposition and would fly in the face of common sense and experience of the world.  There is absolutely no reason why it should be any different from skilled sales forces, particularly when they are in a now increasingly technical area of the regulation to which the facts give such detail.

It is for those reasons, in our submission, your Honours, that on what I might call an industry‑wide basis, this is a case fit for special leave, of public importance, but on a legally doctrinal basis, the importance of scotching the notion that control produced by the observance of close regulation of a market is an indication that points in the direction of employment rather than indifferently is one as well of general public importance.  May it please the Court.

HAYNE J:   Thank you, Mr Walker.  We will not trouble you, Mr Crawshaw.

Having regard to the course taken in this litigation, this is not a proper case in which this Court should explore any question of general principle about how the expression “employee” should be understood in an industrial instrument obliging provision of annual or long service leave.  On the arguments advanced by the parties at trial, and on appeal to the Full Court of the Federal Court of Australia, the applicant would enjoy insufficient prospects of success in any of these matters to warrant a grant of special leave to appeal.  Each application for special leave is refused with costs.

MR WALKER:   Your Honours, in relation to costs ‑ ‑ ‑

HAYNE J:   Yes.

MR WALKER:   You will be familiar with the fact that there are special statutory provisions ‑ ‑ ‑

HAYNE J:   Yes, and ringing in my ears are the words of Justice Gaudron, I think, usually expressed pungently as “and how do they bind us, Mr Walker?”

MR WALKER:   Yes.  By being a factor that your Honours would, of course, consider as special and relevant to litigation of this kind.

HAYNE J:   Yes, what do you say, Mr Crawshaw?

MR CRAWSHAW:   Apart from the question of whether you would be bound by section 8(24), it does allow costs if the application is without reasonable cause.

HAYNE J:   That would be a very large proposition to make good, I think, Mr Crawshaw.

MR CRAWSHAW:   Well, we suggest it was especially given that the case could not raise the special leave question as to the difference with vicarious liability cases and the like.

HAYNE J:   Leave will be refused.  There will be no order as to costs.

MR WALKER:   May it please the Court.

AT 12.50 PM THE MATTERS WERE CONCLUDED