B D Investments Pty Ltd (Trading as Mastercraft Upholstering Company) v Workers Rehabilitation and Compensation Corporation No. SCGRG 94/446 Judgment No. 4673 Number of Pages 16 Workers' Compensation Insurance..
[1994] SASC 4673
•15 July 1994
COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA BOLLEN J
CWDS
Workers' compensation - insurance or levy - "workers" or not. WorkersRehabilitation and Compensation Act (1986) s7,s66, s120a. Stevens and Gray v Brodribb Sawmilling Co. (1985-86) 160 CLR 16; Considine v Lemmer (1971) SASR
39; AMP Society v Chaplin (1978) 18 ALR 385 and FCT v Barrett and Ors (1973) 129 CLR 395, applied. Fraser Henlines P/L v Cody (1945) 70 CLR 100; Crawford Earthmovers v Fitssimmons (1972) 4 SASR 116 and Baddams v Thomas (1983) 34 SASR 420, distinguished.
HRNG ADELAIDE, 20 June 1994 #DATE 15:7:1994
Counsel for appellant: Mr G.D. Coppola
Solicitors for appellant: Kelly and Co
Counsel for respondent: Mr T.F. Forrest
Solicitors for respondent: Stratford and Co
ORDER
Dismiss the appeal of the respondent (ie as to Kiff), adjourn further consideration of the appeal of the appellant (ie as to Wagner) to a day to be fixed.
JUDGE1 BOLLEN J The respondent is a body incorporated pursuant to s7 of the WorkersRehabilitation and Compensation Act 1986 (as amended). As part of the scheme for compensation and rehabilitation for injured workers, employers must pay a levy to the respondent. Section 66(1) imposes the levy on employers save those who are exempt employers. Section 66(2) provides, in short, that the levy is calculated on a percentage of the aggregate remuneration paid to workers of the employer.
2. From time to time audits are conducted at random to see if an employer has paid the correct levy.
3. The appellant carries on business under the name of "Mastercraft Upholstery". Its business as revealed to the magistrate is that of recovering and repairing upholstery on domestic furniture.
4. The respondent caused a man in its employ called Beven to conduct an audit of the appellant. Beven was a "field auditor". He communicated with the appropriate person at the premises of the appellant. He conducted his audit without let or hindrance by the appellant. He thought that the levy paid was less than that required by the Act. He thought that two men who worked for the appellant were workers employed by the appellant within and for the purposes of the Act. The appellant thought not. The appellant had not included the remuneration paid to these two in the aggregate remuneration paid to its workers. It thought, and, asserted that these two men were independent contractors, or perhaps agents. The respondent, therefore, sued the appellant. I will come back to that.
5. The magistrate said in his reasons for judgment:-
"The facts of the matter are relatively straightforward.
The Workers Rehabilitation and Compensation Corporation
was established by virtue of s7 of the Act. Section 7
of the Act was one part of the Act which came into
operation on the 16th of April, 1987 (see Government
Gazette 16th of April 1987 page 1008) with the balance
of the Act coming into operation on the 30th of
September 1987 (see Government Gazette 17th of September
1987 page 886). By s66 of the Act an employer (not
being an exempt employer) became liable to pay a levy to
the corporation with that levy being calculated as a
percentage of the aggregate remuneration paid to the
employer's workers. In the context of this case, the
plaintiff alleges that the defendant employed two
workers namely, Mr M Wagner and Mr W Kiff both of whom
received remuneration from the defendant and
consequently the remuneration each received forms part
of the defendant's aggregate remuneration paid to the
defendant's workers and consequently after applying the
appropriate percentage to the aggregate remuneration
means that a higher levy was payable by the defendant
than was actually paid. The defendant denies that
Messrs Wagner and Kiff were in employment as workers
under a contract of service as those words and the
phrase are defined in the Act. In essence, the
defendant suggests that Messrs Wagner and Kiff were
agents of the defendant pursuant to contracts for
service. There is no dispute that Messrs Wagner and
Kiff did work for and on behalf of the defendant.
However, the critical issue is whether the work they did
was pursuant to a contract of service or a contract for
service. If the former, then any remuneration received
by them forms part of the defendant's aggregate
remuneration for the purpose of calculating the
appropriate levy. If the latter, then the remuneration
received by them falls outside of the bounds of the
defendant's aggregate remuneration for the purposes of
calculating the levy."
6. But I have jumped ahead. The respondent would have none of the assertions of the appellant. It issued proceedings out of the Magistrates Court in the civil jurisdiction. It claimed:-
"...for levies up to September 1992 for the sum of
$17,318.47 an audit penalty fee for $3,463.69 pursuant
to Part V of the Act".
7. The appellant denied liability. The matter was fought.
8. The evidence for the respondent (as plaintiff) consisted of (i) evidence from Mr Beven of things said to him by the Managing Director of the appellant (Brian Dawson) and things said by Mr Thompson, an employee of the appellant and (ii) a certificate under s120a(1) of the Act and (iii) some correspondence. Part of the evidence of Beven consisted of his asking questions of Thompson from a "checklist" and recording his (Beven's) understanding or interpretation of the answers. Generally speaking, the evidence of Beven was rather uncertain because he did not precisely record the answers given to pre-prepared questions. It is well to set out s120a in full. It is:-
"120a (1) In any legal proceedings, a certificate
apparently signed by an officer of the Corporation,
certifying -
(a) that a person was, on a day specified in the
certificate, an employer;
(b) that a person was, on a day specified in the
certificate, a worker, will, in the absence of proof to
the contrary, be proof of the matters stated in the
certificate.
(2) In any legal proceedings against a person for
failing to register with the Corporation as an employer,
a certificate apparently signed by an officer of the
Corporation, certifying that the person was not, on a
specified day, registered as an employer will, in the
absence of proof to the contrary, be proof of the
matters stated in the certificate.
(3) In any legal proceedings, a certificate apparently
signed by an officer of the Corporation, certifying that
an amount specified in the certificate is payable to the
Corporation, by way of levy or fine, by a person named
in the certificate, will, in the absence of proof to the
contrary, be proof of the liability.
(4) In any proceedings against a person for failing to
furnish a return under this Act, a certificate
apparently signed by an officer of the Corporation
certifying that the return was not received before the
expiration of the period within which it was required to
be furnished will, in the absence of evidence to the
contrary, be proof that the defendant failed duly to
furnish the return.
(5) In any proceedings, a certificate apparently under
the seal of the Corporation certifying that an officer
of the Corporation named in the certificate was, on a
day specified in the certificate, invested with
specified delegated powers or functions will, in the
absence of evidence to the contrary, be proof of the
matters stated in the certificate.
(6) In this section - 'officer of the Corporation'
includes a person who, although not an officer of the
Corporation, is acting under a delegation of the
Corporation."
9. The respondent wished to use the certificate to prove that the appellant was the "employer" of Kiff and Wagner at relevant times and that they were its workers or employees.
10. The Certificate is:-
"CERTIFICATE PURSUANT TO SECTION 120a OF THE WORKER'S
REHABILITATION AND COMPENSATION ACT 1986 AS AMENDED
('THE ACT')
I, ANDREW BEVEN of c/- 100 Waymouth Street, Adelaide
5000 in the State of South Australia, Field Levies
Auditor, being an officer, as defined in the Act, of the
Worker's Rehabilitation and Compensation Corporation, do
hereby certify pursuant to Section 120a of the Act:-
1. That on all of the days between 1 July 1988 and 30
September 1992, B D Investments Pty Ltd, ACN 007 747
186, trading as Mastercraft Upholstery, the registered
office of which is situated at 52 Days Road, Croydon
Park 5008 in the said State, was an employer as defined
in the Act.
2. That on all of the days between 1 July 1988 and 30
September 1992, Mr Max Wagner was a worker, as defined
in the Act, in the employ of B D Investments Pty Ltd,
ACN 008 747 186, trading as Mastercraft Upholstery.
3. That on all of the days between 1 July 1988 and 30
September 1992, Mr W J Kiff was a worker, as defined 5
in the Act, in the employ of B D Investments Pty Ltd,
ACN 007 747 186, trading as Mastercraft Upholstery.
DATED the 27th day of October 1993.
sgd. ANDREW BEVEN"
11. Kiff gave evidence. Wagner did not. The magistrate found that Kiff was not a worker for the purposes of the Act but that Wagner was. Each side has appealed. I have called the plaintiff "the respondent" and the defendant "the appellant".
12. Each is, of course, an appellant. Each says that the magistrate was wrong in one of his findings. The appellant says that the magistrate was wrong in his finding that Wagner was an employee and a worker. The respondent says that the magistrate was wrong about Kiff.
13. Mr Coppola submitted to the magistrate and to me that the certificate was of no effect. He objected that it should not have been received. He submitted that it was valueless without another certificate pursuant to s120a(5) of the Act establishing Beven's authority to issue the certificate. He elaborated on this submission. He pointed out the fact that s120a(4) had the effect of reversing the onus of proof. So it does. But that is what Parliament intends. It intends to facilitate proof in matters like this instituted at the suit of the defendant. The Certificate was, in my opinion, properly admitted and used to the extent that it required the magistrate to find Kiff or Wagner or both to have been workers unless either proved on the balance of probabilities that he was not. In the opinion of the magistrate Kiff did so prove but Wagner did not. The magistrate said:-
"I digress to mention that there was an objection to the
tendering of that certificate. In essence, the argument
put forward was that there must also be a certificate
pursuant to s120a(5) of the Act establishing Mr Beven's
authority to issue the certificate in question (Exhibit
P1). I rejected that argument. I gave ex tempore
reasons for so doing. Having reflected on that argument
I am still of the same view. Section 120a establishes
various aids to proof. Sections 120a(1) and 120a(5)
relate to different situations. The certificate
tendered pursuant to s120a(1) complies with the
requirements of that sub-section and in my view is
admissible. It does, however, have a dramatic effect.
Without going into detail, by virtue of the certificate
and s120a(1) it is for the defendant to prove in the
context of this case that Messrs Wagner and Kiff were
not workers in employment under a contract of service as
defined in the Act in the employ of the defendant."
14. I agree. There was no need for any certificate under s120a(5). The suggestion that there was such a need overlooks the words "apparently signed". That is all that is required of the certificate by way of authenticity. The situation then was that the appellant carried the onus of proving that the men were not workers.
15. But I hark back to the evidence of Beven. He gave evidence of conversations on the nature of interview to gain information with Thompson. Thompson was not called. Mr Coppola said that the evidence of the conversations and interview was inadmissible because Thompson was not shown to have authority to bind the plaintiff. The best inference from the evidence of Beven was that Thompson was the accountant of the appellant. If that were all Mr Coppola would be correct (see Fraser Henlines Pty Ltd v Cody (1945) 70 CLR
100). But there is more. The respondent requires companies to nominate a contact person. The appellant nominated its Managing Director, Brian Dawson. Beven made an appointment to see Dawson. When he turned up he was told up that Dawson was not available but Thompson would substitute for him. The appellant clearly proffered an authorised servant to talk to Beven. That was Thompson. The conversations were correctly received into evidence and were capable of being used in the case generally.
16. The appellant said that the magistrate should have found that the respondent was not entitled to rely on the certificate because it had called other evidence. This point or points has been debated in similar cases. I have been referred to them. I think the law is that a party who relies on "a certificate in aid of proof" is not precluded from doing so nor from relying on it and on other evidence which it calls. All such evidence, certificate and anything else which is relevant, can go into the scales for use as it might deserve. The proposition that other evidence prevents use of this type of certificate is not, I think, sound. I think that the most important authority on this point is Considine v Lemmer (1971) SASR 39. The Full Court was dealing with a statutory provision in aid of proof in the then s175(1) of the Road Traffic Act as it then was. The Full Court set aside the finding of Bray CJ on appeal from a magistrate. Bray CJ had reached his decision on two grounds summarised by Chamberlain J in the judgment of the Full Court. The second ground was:-
"Where evidence is given on both sides about the fact
covered by the allegation...the case should be decided
like any other case without regard to the statutory
presumption."
17. Bray CJ has expressed some doubt about this. After an examination of the authorities Chamberlain J at page 45 said:-
"The authorities I have already mentioned are sufficient
to dispose also of the learned Chief Justice's second
proposition, that once any evidence is given on the
subject matter of the statutory allegation on either
side of the case, the effect of that allegation
disappears."
18. Chamberlain J went on to speak of the case of Gabriel v Ah Mook (1924) 34 CLR 591. Chamberlain J said:-
"The only other authority to which I need refer is
Gabriel v Ah Mook. In that case, at p595, the Full High
Court stated that: 'if it appears that merely some of
the relevant facts are proved and that the prosecution
is unable for some reason to complete them so as to
enable the tribunal to come to a conclusion one way or
the other as to the averment', in effect, the averment
in the information could be relied on to supply the
necessary proof."
19. The statutory provision in that case certainly was that the matters in question "shall be deemed to be proved in the absence of proof to the contrary". But the case is still authority for the proposition that the prosecutor is not to be deemed to have waived an evidentiary provision merely by reason of his calling some evidence on the relevant topic. I refer also to the reasons of Bright J at p48 and Mitchell J at p53.
20. As I have said, I think that the case of Considine v Lemmer is authority and binding. Other cases do not weaken its authority nor really touch the same point. Certainly there are circumstances where the conduct of the case by a party otherwise entitled to the benefit of a statutory presumption may preclude it from relying on that presumption. The cases of Crawford Earthmovers v Fitzsimmons (1972) 4 SASR 116 and Baddams v Thomas (1983) 34 SASR 420 are cases of this type. See also Mancini v McMullen (1983) 33 SASR
582, generally. Mr Coppola sought to rely on Baddams v Thomas. But I agree with the submission of Mr Forest. In his Outline he wrote (and spoke to the point):-
"3.10 That then brings us to Baddams v Thomas. There is
no doctrine arising from this case as appears to be
contended for by the appellant. In Baddams, the Court
did no more than to apply the decision in Crawford
Earthmovers namely that the prosecution could not rely
on a statutory presumption on appeal when it had not
relied on same during the trial.
3.11 Accordingly, the respondent says there is no
doctrine or principle that prevents a prosecutor (or
plaintiff) from relying on the terms of a statutory
presumption in addition to other evidence called in
relation to the same fact."
21. I will now deal with the men Kiff and Wagner separately. The magistrate held that the appellant had discharged the onus of proving that Kiff was not a worker. I regret that I must lengthen these reasons with a long quotation from the reasons of the special magistrate:-
"As best I can determine on the evidence, the defendant
company which trades as Mastercraft Upholstery generally
speaking carries on the business of recovering and
repairing upholstery on domestic furniture such as
lounge suites and chairs. That is probably a simplistic
description of the defendant's business but that is the
extent of the detail provided to me. In or about 1980
or 1981 Mr Kiff, who at the time was working as a
commissioned agent for another company, commenced
working for the defendant. There is some significance
in how that came about. It appears that Mr Kiff and Mr
Brian Dawson, who on the evidence is the Managing
Director of the defendant, were both members of the same
golf club. Through that involvement they came to know
each other. On an unspecified occasion Mr Kiff while in
the company of Mr Dawson complained about his income
earning situation. Mr Dawson invited Mr Kiff to contact
him at the defendant's premises. Mr Kiff took up that
invitation with the consequence that he commenced doing
work for and on behalf of the defendant. The work Mr
Kiff did from the outset related to selling the
defendant's goods and services. The significance of
that is that at least on the evidence presented the
defendant had not advertised either at large or to a
limited field for a sales person. At the time Mr Kiff
commenced working for the defendant he spent some time
working with Mr Dawson. I gained the distinct
impression from Mr Kiff's evidence that his time spent
with Mr Dawson was tantamount to a familiarisation
period given that Mr Kiff had no prior experience of
upholstery work or the quoting for upholstery work. At
least during that period Mr Kiff continued his work as a
commissioned agent for the other company which he had
expressed dissatisfaction with. After that initial
period, however, Mr Kiff ceased working for that company
and concentrated on his work for the defendant. That
involved him in following up enquiries for upholstery
work which came directly to the defendant, but in
addition seeking out work for the defendant from his own
network of contacts. As I understand Mr Kiff his work
involved him in attending at potential customers' homes,
measuring up the item of furniture the potential
customer wanted recovered and/or repaired and providing
a quotation for the work to be done. It was essential
that Mr Kiff have available samples of material used to
recover furniture. Mr Kiff obtained samples of material
from the various material suppliers. He carried those
samples about with him when he visited potential
customers. Mr Kiff's day-to-day work was not regulated
in any direct manner. He worked as and when he pleased
subject to work being available and enquiries being
followed up. Generally, he made house calls between 6
pm and 9 pm at which times it was most probable that
both husband and wife would be present and he could
speak with both concerning the work required. He did
make some daylight hour calls mostly on elderly people
whom he said were often afraid to open their door after
dark and in addition, on occasions he called on
commercial customers who were only open during normal
trading hours. If an order was placed by a customer Mr
Kiff would complete the appropriate order form and
deliver it to the defendant's premises. The defendant
then attended to the work required. Mr Kiff played no
part in that. In essence, Mr Kiff's involvement was
completed once the order form was delivered to the
defendant. Mr Kiff was paid on a commission basis only.
It appears there were two levels of commission. If the
material selected was of a type commonly used by the
defendant Mr Kiff received 10% of the cost of the work.
If, however, the material was rarely used by the
defendant then Mr Kiff received 8% of the cost of the
work. Mr Kiff did not receive any sick pay, holiday pay
and no allowance was made for superannuation. He used
his own motor vehicle in attending at potential
customers' homes. The cost of that motor vehicle was
borne entirely by Mr Kiff. He was not instructed
concerning his manner of dress when attending on
potential customers although he did indicate that during
the initial stage of his work Mr Dawson made a comment
concerning the need to dress appropriately which Mr Kiff
says he was already aware of. Approximately each three
months but on occasions as far apart as six months, Mr
Dawson called in both Mr Kiff and Mr Wagner to discuss
their sales. I gained the distinct impression from Mr
Kiff that Mr Dawson was simply attempting to inspire
Messrs Kiff and Wagner to obtain more orders than they
did. Of some consequence Mr Kiff certainly and Mr
Wagner by implication played no part in determining the
cost of materials or the labour rates for the upholstery
work done. Mr Dawson did that. Mr Kiff says that in
the event that he underquoted a particular job and the
cost of doing that job to the defendant was greater than
the quoted amount, Mr Kiff had to forego his commission
on that particular job and indeed if the commission had
already been paid to repay that to the defendant. Mr
Kiff had experience of that 11 occurring. Mr Kiff said
that there were some weeks where he did not obtain any
orders and consequently he was not entitled to any
commission and hence he was not paid any remuneration.
He said that during some of those weeks he had to borrow
money from the defendant to pay for his day-to-day
living expenses. The defendant did deduct taxation
instalments from the amounts paid to Mr Kiff. Mr Kiff
says that was at his specific request. He explained
that if the defendant deducted the appropriate taxation
instalment he would not be able to spend that money
which he might otherwise have done. Mr Kiff was issued
with a group certificate each year. However, given that
income tax was being deducted from his remuneration
there was a need for a group certificate to be issued.
Generally speaking Mr Kiff was unable to delegate his
work to anyone else. He says, however, there were
occasions when he arranged for Mr Wagner to attend on a
potential customer and there were occasions when Mr
Wagner reciprocated that arrangement"
22. And -
"In lay terms the critical issue is to determine whether
the relationship between Messrs Wagner and Kiff and the
defendant was one of employer and employee or one of
principal and independent contractor. I have been
referred to a number of authorities most of which I have
read. To adapt the words of Lord Fraser in AMP Society
v Chaplin (1978) 18 ALR 385 most of the cases cited are
only useful as examples of facts which have been treated
by the Courts as indications for or against a contract
of service. The three cases most apt in my view are AMP
Society v Chaplin, The Commissioner of Taxation of the
Commonwealth of Australia v Barrett and others (1973)
129 CLR 395 and Stevens and Gray v Brodribb Sawmilling
Company Pty Ltd (1985-86) 160 CLR 16. In the Brodribb
Sawmilling case Mason J said at page 24: 'A prominent
factor in determining the nature of the relationship
between a person who engages another to perform work and
the person so engaged is the degree of control which the
former and exercise over the latter. It has been held,
however, that the importance of control lies not so much
in its actual exercise, although clearly that is
relevant, as in the right of the employer to exercise
it...but the existence of control, whilst significant,
is not the sole criteria by which to gauge whether a
relationship is one of employment. The approach of this
Court has been to regard it merely as one of a number of
indicia which must be considered in the determination of
the question...other relevant matters include, but are
not limited to, the mode of remuneration, the provision
and maintenance of equipment, the obligation to work,
the hours of work and provision for holidays, the
deduction of income tax and the delegation of work by
the putative employee.'
Later in that same judgment after discussing the various
other tests which have been formulated from time to time
his Honour said at page 29;
'...it is the totality of the relationship between the
parties which must be considered.'
Having indicated that I turn to consider the evidence of
the relationship between the defendant and at least Mr
Kiff. There is, as will become apparent later, some
consequence in that Mr Kiff was the only witness called
by the defendant. While there is an inference that Mr
Wagner worked on the same basis as did Mr Kiff bearing
in mind the reversal of the onus of proof created by
s120a of the Act inferential evidence is not sufficient
in my view to discharge that onus. The relationship
between Mr Kiff and the defendant came about through an
informal conversation. The relationship was placed on a
more formal basis as a consequence of Mr Kiff taking up
Mr Dawson's offer. At the beginning of that formal
relationship there was a period of training or
familiarisation. I do not consider that of any great
significance. I have mentioned that Mr Kiff had no
prior experience of the type of work done by the
defendant. While Mr Dawson did make comment about the
need for Mr Kiff to dress appropriately when visiting
potential customers, I am not inclined to elevate the
comment to status of a direction to dress in any
particular manner. There is no suggestion of the need
to wear for example, a uniform or an item of clothing
associating Mr Kiff with the defendant or to dress to a
particular standard such as wearing a suit. After that
initial period Mr Kiff's involvement with the defendant
was limited to delivering completed orders and
collecting the details of enquiries made of the
defendant. While on the evidence it is only an
inference, I think it is a fair inference that Mr Kiff
was expected to attend to those enquiries expeditiously.
However, there was no direction by the defendant as to
how or when those enquiries were to be followed up. Mr
Kiff regulated his own working hours. His attendance on
what I might describe as domestic customers in my
opinion was both sensible and reasonable. His
attendance on elderly potential domestic customers was
likewise sensible and reasonable. His attendance on
what I will describe as potential commercial customers
was regulated by the availability of those customers
during normal working hours. Mr Kiff also sought out
potential customers from his own contacts. If through
that means Mr Kiff obtained an order the defendant's
first knowledge of that customer and involvement came
about after the order was lodged with the defendant by
Mr Kiff. In attending to his work Mr Kiff used his own
motor vehicle at his own expense. There was apparently
no direction by the defendant as to 13 the type of or
standard of vehicle to be used by Mr Kiff. In the event
that Mr Kiff obtained an order from either a domestic or
a commercial customer then he was remunerated according
to a fixed commission. On the other hand if he was
unsuccessful in obtaining an order he was not paid
anything. All of those were factors discussed in
Barrett and Others which in that case were not
sufficient to take commissioned land agents outside of
the control test. There is, however, one critical
factor in the relationship between Mr Kiff and the
defendant which in my view clearly takes Mr Kiff outside
of the employer and employee relationship and into the
principal and independent contractor relationship. That
relates to Mr Kiff's evidence of the consequences of him
underquoting to a potential customer and the actual cost
to the defendant of doing the work for that customer
exceeding the amount of the quotation. Mr Kiff's
evidence is that on those occasions he forfeited any
right to commission and indeed in the event that he had
been paid commission had to repay it to the defendant.
That particular aspect is completely foreign to an
employer and employee relationship. With that
particular aspect uppermost in my mind but in
conjunction with the various other aspects of the
relationship between Mr Kiff and the defendant, I am
satisfied and so find that the defendant has discharged
the onus of proof required by s120a of the Act and
established that Mr Kiff at the least was not a worker
in employment under a contract of service with the
defendant. Accordingly, any remuneration received by Mr
Kiff does not form part of the defendant's aggregate
remuneration for the purpose of calculating the levy."
23. It is important to note that the "critical factor", "the particular aspect", was uppermost in the mind of the magistrate but was not the only matter which produced his decision. In effect the magistrate said that he had considered all relevant things. But he had given great weight to the "critical factor". He held that Kiff was not a worker under a contract of service.
24. The magistrate, therefore found that the appellant was not liable to pay the levy and audit fee claimed in relation to Kiff.
25. Of Wagner the magistrate said:-
"Having indicated that it befalls me to indicate what I
consider to be a totally unsatisfactory result. I have
mentioned earlier that Mr Kiff was the only witness
called by the defendant. I have not heard any evidence
from either Mr Wagner or from Mr Dawson both of whom
would have intimate knowledge of the detail of Mr
Wagner's relationship with the defendant. I have
mentioned earlier that any inferences arising from the
evidence of Mr Kiff as to Mr Wagner's relationship with
the defendant is not sufficient to discharge the onus of
proof on the defendant. In the absence of being so
satisfied and based on Exhibit P1, the Certificate
pursuant to s120a of the Act, I am satisfied and so find
that Mr Wagner was a worker in the employment of the
defendant pursuant to a contract of service. Hence any
remuneration received by Mr Wagner formed part of the
defendant's aggregate remuneration for the purpose of
calculating the levy."
26. There have been many cases turning on the question of worker or servant or employee (call it what one will) or no. I agree with the magistrate that the most useful cases (which he considered) are AMP v Chaplin (supra), FCT v Barrett (1973) 129 CLR 395 and Stevens and Gray v Brodribb Sawmilling Co Pty Ltd (supra). Mr Forest, for the respondent, referred me to these and claimed that the principles in them demonstrated a relationship of employer and employee between the appellant and Kiff and the appellant and Wagner. He addressed himself to both men.
27. An important question in deciding this issue is always - what was the extent and nature of control which the putative employer could exercise over the putative employee. It is not as Mason J (as he then was) said in the Brodribb Sawmilling Case (at p24) the only factor to be considered, "not the sole criteria by which to gauge whether a relationship is one of employment". But His Honour did call it a "prominent factor".
28. Other indicia which I think may be added are provision of sick leave, long service leave and travel allowance or allowance for "use of own car". In the same case Wilson and Dawson JJ said (at pp36-37):-
"In many, if not most, cases it is still appropriate to
apply the control test in the first instance because it
remains the surest guide to whether a person is
contracting independently or serving as an employee.
That is not now a sufficient or even an appropriate test
in its traditional form in all cases because in modern
conditions a person may exercise personal skills so as
to prevent control over the manner of doing his work and
yet nevertheless be a servant: Montreal v Montreal
Locomotive Works (1947) 1 DLR 161 at 169. This has led
to the observation that it is the right to control
rather than its actual exercise which is the important
thing (Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 at
571) but in some circumstances it may even be a mistake
to treat as decisive a reservation of control over the
manner in which work is performed for another. That was
made clear in Queensland Stations Pty Ltd v Federal
Commissioner of Taxation (1945) 70 CLR 539 at 552, a
case involving a droving contract in which Dixon J
observed that the reservation of a right to direct or
superintend the performance of the task cannot transform
into a contract of service what in essence is an
independent contract.
The other indicia of the nature of the relationship have
been variously stated and have been added to from time
to time. Those suggesting a contract of service rather
than a contract for services include the right to have a
particular person do the work, the right to suspend or
dismiss the person engaged, the right to the exclusive
services of the person engaged and the right to dictate
the place of work, hours of work and the like. Those
which indicate a contract for services include work
involving a profession, trade or distinct calling on the
part of the person engaged, the provision by him of his
own place of work or of his own equipment, the creation
by him of good will or saleable assets in the course of
his work, the payment by him from his remuneration of
business expenses of any significant proportion and the
payment to him of remuneration without deduction for
income tax. None of these leads to any necessary
inference, however, and the actual terms and terminology
of the contract will always be of considerable
importance.
Having said that, we should point out that any attempt
to list the relevant matters, however incompletely, may
mislead because they can be no more than a guide to the
existence of the relationship of master and servant.
The ultimate question will always be whether a person is
acting as the servant of another or on his own behalf
and the answer to that question may be indicated in ways
which are not always the same and which do not always
have the same significance. That is best illustrated by
turning to the circumstances of this case and in
particular to those circumstances which were suggested
as indicating that Gray was the servant of Brodribb."
29. In effect their Honours said that it is always a question of fact.
30. Of course, I must remember that in AMP v Chaplin (supra) the Privy Council did hold that power of a control was perhaps the most important indication of a contract of service.
31. It will be remembered that the magistrate thought that one critical factor in the relationship between Kiff and the appellant was the consequences of Kiff's underquoting. If that happened Kiff got no commission and was bound to repay anything paid for that job. The magistrate said that "is completely foreign to an employer and employee relationship". Mr Forest protested that was not correct. But I agree with the magistrate. Even if he put it rather too high by saying "completely foreign", I think it was a powerful indication of no contract of employment.
32. When we consider the evidence in the light of the authorities I think that the evidence clearly proves on the balance of probabilities that Kiff was not a worker. I will not refer further to the evidence. When everything is taken into account, when we make a mental list of the terms of engagement, I think that list cries aloud that Kiff was no worker, no employee, no servant. He was engaged as an independent contractor on commission. Some "commission agents" can be workers under a contract of service. It depends on the facts. It is not so in the case of Kiff. The decision of the magistrate thus far is correct.
33. What of Wagner? He gave and offered no evidence. I think that a person who has the onus by statute of proving something may so prove from evidence in the case not called by or for that person.
34. The magistrate held that "any inferences arising from the evidence of Kiff as to Wagner's relationship with the defendant is not sufficient to discharge the onus of proof on the defendant" (ie as to Wagner). That may be correct in a narrow sense but evidence of Kiff was available for use by the appellant in relation to Wagner. It was all one case. Two men were engaged in the same task. The evidence of work and the conditions under which it was done by one man is of some value in considering the terms of engagement of the other man. But it is true that may not be a decisive or significant factor.
35. I turn to the evidence which was given about Wagner's relationship with the appellant. The evidence was given by Beven. It was unsatisfactory because he did not record the answers to questions verbatim. But he did elicit information about the relationship between the appellant and Kiff and the appellant and Wagner. Beven later asked some questions of Dawson. When he cross-questioned Thompson he had a check list on which questions were typed in advance with space left for recording the answer. I think it will be well to attach the check list as completed to these reasons. I do so. It will be found attached to the rear.
36. Looking at the document we see that Thompson was speaking both of Wagner and Kiff. Amongst other things, he said that Wagner was paid commission only, used his vehicle, used his own telephone, the appellant would carry any loss caused by him to "maintain faith with customers", that he had no entitlement to payment for leave, holidays, sick pay or other leave, that he had the right to refuse a job (not at all, in my opinion, like an employee) that he could not delegate and that either party could terminate the engagement at any time. All this amongst other less important information. Of course, Thompson was speaking of Kiff, too. But I confine myself at the moment to his evidence as it touched the relationship between Wagner and the plaintiff. As to control, the answer to question 7 about "right to control" is that the appellant (Beven called it "employer") has "right to control neatness of dress, manners, etc". In elaborating on "control" Beven gave this evidence:-
"Q. The question seven, in what way did Mr Thompson
convey to you that the employer had the right to control
neatness of dress, manner etc.
A. Well firstly, what I have written down there isn't
exactly verbatim what he said. The discussion was about
Mr Dawson's high expectations of these people. I wanted
to again canvass this aspect of control. So we spoke
about, well you know, what control takes place and the
thing that impressed me during that discussion in his
answers was that there is quite a lot of control
apparently about the way they conduct themselves and the
neatness of dress is required and manner and so forth.
I thought that important enough to write down there.
Q. Did Mr Thompson give you any specific instance of
such control being exercised.
A. No, he didn't but I do recall discussing the point
that the control need not actually have been exercised
unless as long as there is a right to control the
neatness of dress and manner etc and that is why I
actually wrote down there right to control.
Q. How did Mr Thompson tell you the employer had the
right to control that what did he say.
A. He said by simply that Mr Dawson expects a high
standard in the way they conduct themselves at the
customers' premises, that they must not look like a
slob, they cannot arrive in jeans, they must dress
neatly and they must act professional. He expects them
to act in that manner. And the word reps was the word
that he was using constantly and that as representatives
of that company they expected to have a standard in
neatness of manner and dress and so forth."
37. This is a very limited area of control. It is clear from the evidence as an whole that Wagner could choose when and for how long he worked. He used his own car and his own telephone. He had no entitlement to any holiday, sick leave or such leave. He was paid commission only. He worked at potential customers' homes. He could give immediate notice of termination at any time. He could refuse any job. The only control was consistent with requirement for an employer or an independent contractor. There was no requirement to wear any uniform or any clothing with (say) a logo of the appellant on it. I think the evidence of Beven about what Thompson told him is evidence tendered by the respondent as plaintiff, which on the whole proves on the probabilities that Wagner was not a worker, not an employee under a contract of service.
38. Mr Forest submitted that the evidence of a relationship of an employer and employee existed between the appellant and Kiff and the appellant and Wagner. I do not agree.
39. The grounds of the appeal of the appellant do not include a ground that the evidence, contrary to the view of the magistrate, does prove that Wagner was, on the balance of probabilities, not a worker. Mr Coppola did not so argue. The magistrate, too, did not consider the point fully because of the view he took of the matter.
40. I dismiss the appeal of the respondent (ie as to Kiff). I adjourn further consideration of the appeal of the appellant (ie as to Wagner) to a day to be fixed to enable Mr Coppola to consider his position.
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