Bedelph v Protective Security Pty Ltd

[2004] TASSC 35

[2004] TASSC 35

CITATION:              Bedelph v Protective Security Pty Ltd [2004] TASSC 35

PARTIES:  BEDELPH, Kylie
  v
  PROTECTIVE SECURITY PTY LTD

(trading as TASMANIAN PROTECTIVE SERVICES)

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 122/2003
DELIVERED ON:  22 April 2004
DELIVERED AT:  Hobart
HEARING DATES:  22 March 2004
JUDGMENT OF:  Underwood J

CATCHWORDS:

Workers Compensation ‑ Entitlement to and liability for compensation ‑ Persons entitled to compensation ‑ Who is a worker ‑ Contract of service of independent contractor ‑ Generally ‑ Impact of written contract on employer/employee relationship.

Global Plant Ltd v Secretary of State for Social Services [1972] 1 QB 139; Ferguson v John Dawson & Partners(Contractors) Ltd [1976] 1 WLR 1213; Hollis v Vabu Pty Limited (2001) 207 CLR 21, considered.

Workers Rehabilitation and Compensation Act1988 (Tas), s3(1)(a).

Aust Dig Workers Compensation [87]

Workers Compensation ‑ Proceedings to obtain compensation ‑ Appeals and stated cases ‑ Question of law ‑ What constitutes ‑ Whether determination of Tribunal necessarily outside the definition of worker in statute.

Vetter v Lake Macquarie City Council (2001) 202 CLR 429, applied.
Marney v Industrial Registrar of New South Wales (1986) 8 NSWLR 1, followed.

Workers Rehabilitation and Compensation Act1988 (Tas), s63.

Aust Dig Workers Compensation [161]

REPRESENTATION:

Counsel:
             Appellant:  A I Gaggin
             Respondent:  I L Hallett
Solicitors:
             Appellant:  Murdoch Clarke
             Respondent:  Page Seager

Judgment Number:  [2004] TASSC 35
Number of Paragraphs:  57

Serial No 35/2004
File No LCA 122/2003

KYLIE BEDELPH v PROTECTIVE SECURITY PTY LTD
(trading as TASMANIAN PROTECTIVE SERVICES)

REASONS FOR JUDGMENT  UNDERWOOD J

22 April 2004

Introduction

1. On 1 March 2002, David Bedelph ("the deceased") died in a car crash.  His daughter, the appellant, was then only 14 years old.  She and the deceased had lived together ever since her mother died when she was 5 years old.  There was no doubt that at the date of the deceased's death the appellant was his dependant within the meaning of the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s3(1).

1. The appellant made a claim against the first respondent ("the respondent") on 18 November 2002. It was not made within the period of six months prescribed by the Act, s32(1)(b). The respondent did not accept the claim. By notice dated 19 December 2002, the appellant referred the following matters to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal"):

(a)whether she was entitled to relief pursuant to the Act, s38(1), from the failure to make a claim within the statutory period; and

(b)her entitlement to workers compensation.

1. The Tribunal heard the referral on 29 July 2003. The principal issue was whether the deceased was a worker within the meaning of the Act, s3(1) which relevantly defines a worker to mean:

"any person who has entered into, or works under, a contract of service … agreement with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is express or implied, or is oral or in writing;"

1. On 3 December 2003, the Tribunal held that the deceased was not a worker within the meaning of the Act, that it was therefore unnecessary to consider the other matter, and dismissed the referral. By notice dated 15 December 2003, the appellant appealed against that decision. The notice of appeal contains 11 grounds, one of which was abandoned, but all bar one, in one form or another, contend that error of law occurred in that no tribunal, acting reasonably and properly directed as to the law, could have found that the deceased was not a worker within the meaning of the Act.

The proceedings in the Tribunal

1. In the Tribunal, counsel for the appellant, who was also her counsel on the appeal, called evidence from her and two officers from the office of the Public Trustee, one of whom was a solicitor. The deceased died intestate. His sister consulted one of the officers. All of the evidence from these two officers was relevant only to the issue raised by the Act, s38(1). It is unnecessary to consider this evidence on the appeal, for counsel agreed that if the appeal was upheld, the referral should be remitted to the Tribunal for determination in accordance with law.

1. In the Tribunal, counsel for the appellant was in a difficult position.  The appellant was not able to give much evidence relevant to the issue of whether the deceased was a worker or not.  The nature of the work done by the deceased was such that what actually occurred and what he was required to do, was known only to the deceased and the managing director of the respondent, Mr Jason Clarke.  Accordingly, counsel for the appellant was forced to call Mr Clarke as a witness for the appellant.

The background evidence

1. The respondent carried on the business of providing security against theft and damage to property.  To do this, it engaged what Mr Clarke called agents or guards, whose job was to drive around and at irregular times during the night, inspect properties and businesses owned by people who had engaged the respondent to provide security.  The agents or guards, whom Mr Clarke claimed were subcontractors to the respondent, also attended premises in the event of an alarm being activated.  The number of guards working for the respondent varied according to the demand for the respondent's services.

1. The deceased started work as a guard for the respondent in mid January 2002 and died less than two months later.  The deceased was carrying out his guard duties when he died in the car accident.  It was common ground that if the deceased was a worker, his death arose out of and in the course of his employment with the respondent.

1. According to the unchallenged evidence of the appellant, she and her father lived a rather peripatetic life.  They frequently moved house, both from State to State and within Tasmania, often not stopping in one place for more than a few months.  The appellant said that her father obtained a "security licence", but when asked if he had worked much after the death of her mother, she said, "No, not really, only with a few security companies".  Records from Centrelink showed that from at least 1 July 1995 until his death, a period of nearly seven years, the deceased was in receipt of social security benefits.  At the date of his death, his estate comprised $1,853 owed to him by the respondent for work done, furniture valued at $2,000, a 1984 car valued at $800 and $82.10 in the bank. 

1. Mr Clarke said that the deceased came to see him at the respondent's office in Derwent Park in about mid January 2002.  Mr Clarke said that he had a standard form agreement that had been drawn up by a solicitor that he used for engaging the respondent's guards.  In his oral evidence, Mr Clarke said that he spoke to the deceased and, I infer, explained the nature of the work the respondent expected him to do.  Mr Clarke said that he may have given the deceased the standard form contract two or three days before he started work.  Mr Clarke said that the deceased "brought it back to sign"; "He came in and signed the contract after he took it away and read it and … I kept a copy and he took the original away because it wasn't witnessed".  The document was never returned with the deceased's signature duly witnessed.  The terms of this document are central to the Tribunal's decision and, as did the Tribunal, I annexe a copy of it to these reasons for judgment.

A discrete ground of appeal

1. It is convenient at this stage to raise ground 11 of the notice of appeal, as amended, because it raises a discrete matter.  Ground 11 complains that error occurred in that "The learned Chief Commissioner failed to consider and/or make any finding as to whether the agreement was in fact operative, given that it was never properly executed".

1. Counsel for the appellant submitted that the Tribunal erred in proceeding to judgment upon the basis that the parties had in fact entered into the agreement that is annexed to these reasons.  This submission does not quite align itself with the ground of appeal, which is a complaint that the Tribunal failed to consider a matter and/or failed to make any finding with respect to that matter.  However, there was no objection to counsel for the appellant addressing this ground on the stated basis, so I will deal with it accordingly.

1. There was some evidence to which the Tribunal did not refer.  It was adduced in the "cross-examination" of Mr Clarke by counsel for his company.  Tendered in evidence was a statement that Mr Clarke made to an insurance assessor three weeks after the accident.  The only possible conclusions that can be drawn from this exhibit and Mr Clarke's "cross-examination" with respect to it, are as follows:

(1)before the deceased started work as one of the respondent's guards, Mr Clarke and the deceased had a discussion in the respondent's office during the course of which the agreement was produced and referred to by Mr Clarke;

(2)thereupon the deceased signed it;

(3)Mr Clarke told the deceased he ought to take it away and study it in some detail before he "jump[ed] into anything";

(4)the deceased agreed to do this but before he left the office, Mr Clarke made and kept a photostat copy of the agreement that he had signed;

(5)the next day, or about then, the deceased either telephoned Mr Clarke and said he was ready to start work, or he actually started work, or both;

(6)the deceased did not subsequently bring back the agreement that he had taken from the office that day.

1. The submission that the Tribunal fell into error, either by not referring to this evidence, or by not making any finding about it, or by finding that the parties entered into the agreement, must be rejected.  The only conclusion that can be drawn from the evidentiary material just summarised is that:

·   when the deceased left the office with the signed contract, he had an offer of engagement in the terms of the document;

·   although signed by the deceased, he accepted Mr Clarke's suggestion that his acceptance of the offer be postponed until he had given the document further consideration;

·   by the deceased's subsequent advice to Mr Clarke that he was ready to start work, or by actually starting work, he accepted the offer contained in the written document.

1. There is no need to look further than the illustrious Carlill v Carbolic Smokeball Co [1893] 1 QB 256 as authority for this proposition.

The contract

1. The key provisions of the contract are as follows:

1The deceased, described in the agreement as the subcontractor, is to provide the services set out in Item 1 of the Schedule;

4The agreement persisted until "mutual termination".  This clause is in conflict with cl 5, which provides for either side to give the other one month's written notice of termination.

6This clause provides that a condition precedent is compliance with all of the requirements of Item 5 of the Schedule.  Item 5 of the Schedule sets out details of how the work is to be performed.  Clearly this is not, and could not be, a condition precedent.

7This clause is a restraint of trade clause on the deceased with respect to the respondent's clients for three years after termination of the agreement.

12Clause 12 is the critical clause and provides as follows:

"The sub-contractor hereby acknowledges that it [sic] is an independent contractor, and that nothing contained herein shall give rise to a relationship of master and servant or principal and agent, and any such relationship is expressly denied.  In order to give full effect to this clause the sub-contractor agrees that it [sic] shall comply with all Federal, State and local authority statutes, laws, rules and regulations pertaining to it [sic] as an employer including, but not exclusively, all taxation, superannuation and workers compensation legislation."

1. Clause 13 opens with the words:

"The sub-contractor acknowledges that it [sic] will supply the services in a prompt and professional manner, and will comply with all directions by the [respondent] as to the method by which the services are provided."

1. The Schedule, which follows cl 13, sets out in five "items" how the work is to be carried out.  It goes into considerable detail including such matters as: what is to be written in a report in the event of an alarm going off; what uniform is to be worn; and so on.  Item 3 of the Schedule provides that payment will be made by the respondent within 35 days of receipt of a tax invoice detailing the work done for the prior calendar month.  The rate of pay is expressed to be "as negotiated and agreed".  The evidence showed that in the case of the appellant, the agreed figure was $80 per shift.  Item 5 of the Schedule further provides that the sub-contractor shall provide details of all personnel employed by it and provide satisfactory evidence of public liability insurance for a sum not less than $10m.  There is a further provision that the sub-contractor shall supply the respondent with details of its Australian Business Number. 

How was the work actually done?

1. Depending upon the amount of work he had to do, the deceased worked from about 6pm until 6am the following morning.  He commenced work each day by going to the respondent's office.  There he collected a car owned by the respondent.  This car came with a card which was used to obtain petrol on the respondent's account.  The car had the respondent's name on the side of it.  The respondent gave the deceased detailed written instructions, in addition to those contained in the Schedule to the agreement.  As an indication of the degree of control Mr Clarke claimed to be able to exercise over the deceased and other "subcontractors", the instruction sheets contain such matters as:

·   "keys to be counted (number of dog clips on ring and signed)";

·   "patrol sheets/incident reports to be filed in correct area at end of shift";

·   "no person is to smoke, or eat in any company vehicle";

·   "vehicles are not to driven [sic] off formed roads, or over kerbs in any circumstances, with the exception of such places where a director [of the respondent] has specified in writing that they may be driven in certain areas around schools etc".

1. Mr Clarke said that the guards were required to wear uniforms.  He did not supply these uniforms, but did issue a company badge that could be put on them.  Although it was an obligation to wear a uniform, Mr Clarke curiously said it was up to them whether the "subcontractors" did so.  Mr Clarke said that wearing a uniform with the respondent's badge on it was "advertising".  He said that he wanted his guards to appear as part of the respondent company.  Mr Clarke agreed that he supplied all the equipment the deceased needed to do his work (except a torch) and that the deceased "was representing the company".

1. At the start of each shift, the deceased was given a list of addresses he had to patrol and the number of times he was required to inspect each.  The order in which the inspections were carried out was in the discretion of the deceased, but it was expected that the same premises would not be inspected at the same time every shift.  The respondent gave the deceased a mobile phone to use, but he was required to supply his own torch.  The respondent also gave the deceased sheets of paper that could be cut up into business cards showing the respondent's name and details.  The appellant said that she used to cut up these sheets.  The cards were stuck under the doors of premises that the deceased visited during the course of a shift.  Mr Clarke said that during the course of a shift, he might telephone the deceased on more than one occasion.  He said that he did this, "just to check on him, to see how he is going, and whether there are any problems, or did he need a hand to do any work".  With respect to the latter, Mr Clarke said that sometimes, if he was on his way home and it was convenient, he would do one of the jobs on the deceased's list of calls.

1. In addition to regular patrols, the deceased was expected to attend alarm calls, sometimes even after he had finished his shift.  What he was required to do on attending such calls is specified in detail in Item 5 of the Schedule to the agreement.  These instructions are in seven separate paragraphs and include, "detain any person found illegally on the premises".  There was no set roster to which the deceased worked.  He was told the night before if he was required to work the next night, and sometimes, telephoned in the morning and told that he was needed to work that evening.  From an invoice the deceased submitted for work done in February 2002, it appears that he worked for 22 days during that month.

1. Item 5 of the Schedule to the agreement is couched in terms that envisage a corporate subcontractor who is employing licensed security agents to perform the contract entered into between the subcontractor and the respondent.  Those terms do not reflect the reality of the situation.  The reality is that at the time the deceased signed the agreement and at the time he started work, Mr Clarke, as agent for the respondent, knew the deceased did not have any employees and was not likely to be employing anybody.  Items 5(a) and (b) of the Schedule expressly provide that the "subcontractor" cannot utilise the services of any employees without the express approval of the respondent.  Further, the fact that the respondent supplied the car and the equipment (other than a torch) to do the work and the written instructions Mr Clarke gave the deceased with respect to the use of the car, clearly show that neither he nor the deceased contemplated for a moment that any of the deceased's work would be done by anyone other than the deceased without Mr Clarke's express approval.  The deceased was not an employer and not likely to become one, so to agree, as is provided in the second sentence in cl 12 of the agreement, that he would comply with all the Federal and State laws applicable to employers was fanciful.  Item 5(g) of the Schedule requires the deceased to provide evidence of the possession of public liability insurance in the sum of $10m.  Not surprisingly, the deceased provided no such evidence.  It is difficult to see why he would have needed such insurance.  In these respects, the agreement simply does not reflect the reality of the situation. 

1. Item 5(h) requires the deceased to give the respondent details of (inter alia) his Australian Business Number.  To the knowledge of Mr Clarke, at the time of his death, the deceased did not have, and had not applied for, an Australian Business Number.  With respect to this, Mr Clarke said that he gave the deceased a "Tax Pack".  It is not entirely clear from the evidence what he meant by that, but he did accept that he understood that if there was no ABN, he was to deduct tax at the rate of 48 cents in the dollar.  He said that he made no such deduction from the money he paid in satisfaction of the deceased's invoice for work done in January.  These are further examples of the agreement not reflecting the reality of the relationship between the deceased and the respondent.

1. As counsel for the appellant submitted, there was evidence that the respondent held the deceased out as its representative and its employee.  Tendered in evidence was a proposal Mr Clarke submitted to GIO on 29 May 2001 to obtain fleet car insurance.  In it he declared that the regular drivers of an insured vehicle were all "employees".  On 15 December 2000, the respondent tendered for work for the Education Department.  In the tender document, Mr Clarke declared that the respondent had seven licensed security officers who were paid in accordance with the Security Industry Award.  With respect to this declaration, Mr Clarke was asked by counsel for the appellant what the position was at that time, being just over 12 months before the respondent engaged the deceased.  Mr Clarke said:

" … Well, at that time, you know – it was my intentions as the business evolved – you know – obviously from 2000 to 2003 the industry has evolved and I've decided to go a different way, utilising subcontractors because of the nature of the industry.

Okay, but you are saying there that you had staff currently employed? … No, I said seven –

That wasn't correct? … Seven security officers.  I engage from time to time seven people."

1. Mr Clarke acknowledged that he knew from the instructions to tenderers that if successful, as it was, his company was prohibited from sub-contracting the work without permission from the Education Department. On the night of his death, the deceased attended Education Department property. 

1. Commencing on 1 July 2002, the respondent entered into a contract with a Melbourne Security Company to provide security services on its behalf.  It was a term of that contract that the respondent was not to subcontract the work without the permission of the Melbourne company.  In the claim form to GIO for damage done to the respondent's vehicle which the deceased was driving on the night of his death, Mr Clarke has described the deceased as "worker".  In an affidavit made to a police officer sworn eight days after the death of the deceased, Mr Clarke described the deceased as "an employee" of the respondent.

The reasons for the Tribunal's decision

1. The Tribunal found that Mr Clarke was "not an impressive witness".  His evidence clearly supports that finding.  The Tribunal then said, at par27:

"Notwithstanding these observations I am not prepared to disregard his evidence as to the core issue of intent and understanding of the relationship between the Company/TCS and the deceased.  He was clearly somewhat loose in his terminology and possible ramifications at law in respect to certain comments, or actions.  I suspect that overall he may have sought 'the best of both worlds' in his staffing arrangement but this suspicion does not supplant the clear evidence of the arrangement with the deceased."

1. The Tribunal then pointed to the competing factors relevant to a determination of the legal relationship between the deceased and the respondent.  In addition to the matters I have already mentioned, the Tribunal referred to the facts that there was no annual leave, no sick leave, no payment of workers compensation premium for the guards, and no payment for superannuation.  Then follows this critical passage in the Tribunal's reasons, at par28:

"As indicated previously the Deed of Agreement between the parties of 13 January 2002 is the primary evidence of their relationship and ought only be disregarded if on the evidence as a whole it is seen as a sham or otherwise does not truly represent the arrangement and agreement between the parties."

The law

1. Was the Tribunal right that:

(1)the agreement is the primary evidence of the relationship between the deceased and the respondent; and

(2)ought to be disregarded only if it is a sham or "otherwise does not truly represent the arrangement and agreement between the parties?"

1. It is settled law that a consideration of whether a person is working under a contract of service or a contract for services requires the Tribunal of fact to take into account all the circumstances of the case.  See Queensland Stations Pty Ltd v Federal Commissioner of Taxation (1945) 70 CLR 539, at 552; Zuijs' Case; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 401; Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, at 218. In Stevens v Brodribb Sawmilling Co Pty Ltd (1985) 160 CLR 16, at 24, Mason J (as he then was) referred to the control test, but made it clear that this was but one of many matters to be taken into account, cited the cases to which I have just referred, and said:

"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."

1. In Ferguson v Dawson & Partners [1976] 1 WLR 1213, the Court of Appeal also made it clear that an express (oral) term was but one of the factors to be taken into account. In Global Plant Ltd v Secretary of State for Social Services [1972] 1 QB 139, Lord Widgery said, at 152:

"One must not overlook that the intention of the parties was that the relationship should be that of an independent contractor, and although the parties cannot by intention make a transaction into something which it is not, yet it is recognised that such intention is a factor for consideration in these cases."

1. This proposition was followed by Crawford J in Johns Perry Hayward Pty Ltd v Greaves A72/1990 at 17 and by myself in Thompson v Cooee Point Abattoirs Pty Ltd (2002) 10 Tas R 412 at par 28.

1. In Hollis v Vabu Pty Limited (2001) 207 CLR 21, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ said, at 33:

It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing 'the totality of the relationship' between the parties; it is this which is to be considered."  Per Stevens v Brodribb Sawmilling Co Pty Ltd (supra) at 29.

1. The authorities establish that where the parties have made express terms, either written or oral, those terms are not necessarily the primary evidence of the legal relationship.  They constitute but one of the many factors that have to be taken into account.  The weight to be given to the express terms depends on all the circumstances of the case.  This proposition was applied by Perry J in Roy Morgan Research Centre Pty Ltd v Commissioner for State Taxation [2003] SASC 342, a case in which there was an express written term that the putative employees were independent contractors. It was also applied by O'Keefe J in Rauk v Transtate Pty Ltd [2000] NSWSC 1020. That case concerned a fitter and turner. He commenced employment with the defendant in 1986, but in 1992 he entered into a written agreement with his employer that he would thereafter become an independent contractor through a company that the employee had formed. The agreement provided for the payment of an hourly rate in a sum greater than that which was paid to the plaintiff prior to him entering into the agreement. O'Keefe J referred to the need to have regard to the totality of the relationship and then said, at par21:

"Where two parties have solemnly and formally terminated the relationship of employer and employee and have genuinely sought to substitute a contractual relationship, as in the present case, it would need very unusual circumstances to infer, contrary to the intention and actions of the parties, that the relationship of employer and employee nonetheless continued. In the present case I do not think that it did. In 1992 there was a formal termination of the employment of the plaintiff by the defendant. Thereafter his services in the form of labour were provided to the defendant by Restile, which was paid by the defendant for those services in accordance with the contract which had been entered into between Restile and the defendant. There were mutual benefits arising out of such situation."

1. That case was akin to Thompson v Cooee Point Abattoirs Pty Ltd (supra) but not akin to the present case.  In Thompson, a long established employer/employee relationship came to an end when the employer explained to the employee that he could not afford to continue to employ him as a worker, but was prepared to give him work if he agreed to become an independent contractor. The appellant agreed to this and the parties made a written agreement which reflected this change in their relationship.  In this case there was no deliberate change to an existing relationship between the deceased and the respondent.  Such a change would have heightened the significance of the express agreement in the totality of the relationship.  The deceased signed an agreement at the time he saw Mr Clarke to try and obtain work, and although he took it away to consider in detail, it was never returned and was an agreement that did not reflect the reality of the relationship between him and the respondent.

1. In the course of its exposition on the law, the Tribunal referred, at par18, to Riverwear Commissioners v Adamson (1877) 2 AC 743 at 763, and cited the following passage from a judgment of mine in Fitzallen v Rosebery-Toorak Football Club [2003] TASSC 112 at par9:

"This is an objective inquiry. The question is, what would a reasonable person in the position of each of the parties to the contract have regarded the other party's intention from the words used? See Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989 at 996."

1. The Tribunal then proceeded, at par19:

"However it is open to the Tribunal to discount any express contractual intention if the remainder of the arrangement between the parties show that a different relationship exists in reality."  [Emphasis added.]

1. The Tribunal then referred to some of the cases to which I have referred, including Hollis v Vabu Pty Limited.  It may be that the Tribunal's reference to Fitzallen v Rosebery-Toorak Football Club led it to placing too much emphasis on the agreement at the expense of the other indicia that the Tribunal took into account.  Fitzallen concerned a written contract for the employment of a football coach. The issue in that case was not whether the appellant was employed under a contract of service or under a contract for services, but whether he was a worker by virtue of the Act, s7, which provides:

"7 ¾ A person is deemed not to be a worker within the meaning of this Act while he is, pursuant to a contract ¾

(a)  participating as a contestant in any sporting or athletic activity;

(b)  engaged in training or preparing himself with a view to his so participating; or

(c)  travelling in connection with his so participating or being so engaged ¾

if, under that contract, he is not entitled to any remuneration other than remuneration for the doing of those things."

1. The issue was whether by virtue of the terms of his contract the appellant was entitled to remuneration other than for doing the things enumerated in pars(a) – (c) in s7. Hence the reference to Reardon Smithline v Hansen-Tangen and the need to construe the terms of the contract from an objective standpoint.  No such question of construction was before the Tribunal in this case.

1. In Hollis v Vabu Pty Limited, at 38 – 39, the joint judgment referred to a passage in the judgment of Dixon J (as he then was) in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia (1931) 46 CLR 41 and said at 39:

"This statement merits close attention. It indicates that employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus, by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor. These notions later were expressed positively by Windeyer J in Marshall v Whittaker's Building Supply Co - (1963) 109 CLR 210 at 217. His Honour said that the distinction between an employee and an independent contractor is 'rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own'. In Northern Sandblasting (1997) 188 CLR 313 at 366, McHugh J said:

'The rationale for excluding liability for independent contractors is that the work which the contractor has agreed to do is not done as the representative of the employer'."

1. After referring to Canadian authority, the joint judgment proceeded, at par40:

"In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise."

1. Before turning to the facts before the High Court in that case, their Honours revisited the earlier authorities that discussed the so-called control test and noted that control was still a significant matter, even if:

"… changing social conditions [have shifted] the emphasis in the control test from the actual exercise of control to the right to exercise it, 'so far as there is scope for it', even if it be 'only in incidental or collateral matters': Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 at 571. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered." Per Mason J (as he then was) in Brodribb (supra) at 29.

1. With respect to the issue of how to approach the question of whether there is a contract of service or a contract for services, Gray J said, in Commissioner of Payroll Tax (Vic) v Mary Kay Cosmetics Pty Limited [1982] VR 871 at 878:

"As with most cases in this area of the law, there is a good deal which can be said on each side of the argument.  A court is usually faced with a large collection of relevant facts and circumstances, some pointing this way and some the other.  The resolution of the problem usually comes down to a very subjective matter of individual impression.  It all depends upon where the emphasis is laid."

1. Winneke P said in Roy Morgan Research Centre Pty Ltd v Commissioner for State Revenue (Victoria) (1997) 97 ATC 5070 at 5075:

"Where views might legitimately differ, it must necessarily be more difficult for an appellant who cannot identify specific error to establish that there was any error below; for the fact that an appellate court might have reached a different decision, had it been sitting at first instance, does not of itself or without more demonstrate error. It is too late in the day now to say that error need not be shown and that this court should move immediately to a consideration of the facts with a view to expressing its own opinion ..."

1. Ground 1 of the notice of appeal alleges error in that on the evidence, the Tribunal "should not and could not have been satisfied that the deceased was an independent contractor as opposed to a worker".  Grounds 2, 9 and 10, provide some particulars of ground 1.  Grounds 3, 4, 5, 7 and 8 each allege an erroneous finding of a factum probandum.  The question of law (the Act, s53) is whether the facta probantia necessarily establish the factum probandum, viz, that the deceased was not a worker within the meaning of the Act, s3(1). See Marney v Industrial Registrar of New South Wales (1986) 8 NSWLR 1 at 3; Hope v Bathurst City Council (1980) 144 CLR 1 at 7. Gleeson CJ, Gummow and Callinan JJ in Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 450 expressed approval of the following passage in the judgment of Jordan CJ in Australian Gaslight Co v Valuer-General (1940) 40 SR (NSW) 126 at 138:

"[I]f the facts inferred ... from the evidence ... are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law".

1. I direct myself accordingly.

Conclusion

1. It is apparent from a close study of the Tribunal's detailed reasons for judgment that it placed too much weight on the written agreement and not enough weight on the other matters.  After the passage in which the Tribunal referred to the written agreement as "the primary evidence of their relationship", that I have already set out, the Tribunal said, at par29:

"… there was little in the way of evidence adduced to support the inferences or interpretations the Tribunal was asked to make which are contrary to the written agreement.  There is no basis on the evidence to do otherwise than give the written agreement between the parties … its normal and proper meaning and intent."

1. The Tribunal then said, at par32:

"Once again the lack of action by the deceased to make the necessary arrangements could well be explained by the lack of time or endeavour applied by him and on the state of the evidence does not persuade me to disregard the nature of the relationship contemplated by the agreement." [My emphasis.]

1. Before concluding its reasons, the Tribunal correctly stated the test at par33, when it said, "the nature of the arrangement can only be determined by considering all of the factors relating to that relationship between the parties".  However, the totality of the reasons make it clear that the Tribunal started from the proposition that the written agreement was the primary evidence and the other indicia were to be measured against that primary evidence.  In so doing, the written agreement was given a prominence it did not deserve.

1. After careful consideration I have come to the conclusion that the Tribunal's decision reflected an error of law.  In arriving at this conclusion, I am acutely conscious that it is not for this Court to "balance again the arguments pro and con the decision which the [Tribunal] has reached, giving the separate factors the weight which I think they should or should not have," per Lord Widgery LJ in Global Plant Ltd v Secretary of State of Social Services (supra) at 155. The question for this Court is whether the Tribunal's conclusion was one that no Tribunal, acting judicially and properly instructed as to the relevant law, could have reached. To so state the matter is not to suggest, of course, that the Tribunal's decision is not to be accorded full consideration and respect. However, I venture to say that absent the agreement, the Tribunal would have immediately concluded that the deceased was a worker within the meaning of the Act, s3(1). The degree of actual control exercised by the respondent over the manner in which the deceased performed his duties was extensive. It even included a direction that he was not to eat in the respondent's car. The control was such that Mr Clarke made regular telephone contact with the deceased during the course of his shift to check on the work that he was doing.

1. The following passage is taken from the joint judgment in Hollis v Vabu Pty Limited (supra) at 41:

"Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant, and greater skill and training were required to operate it. The case does not deal with situations of that character."

1. The same observation could be made about the work of the deceased.  The capital investment by the deceased was confined to a torch, and no special training was required, although it was necessary for the deceased to hold the appropriate security licence and a driver's licence.

1. Following the above passage, the joint judgment referred to the fact that "the evidence shows that the couriers had little control over the manner of performing their work".  Again, the same observation could be made about the work of the deceased.  Although it was up to him to decide the order in which he visited the premises on his list for any particular shift, the requirement was that he not visit them at the same time every shift.  Apart from that small area of discretion, the manner in which the deceased carried out his work was, in every respect, under the direct and immediate control of the respondent.  The joint judgment proceeded, "the facts show that couriers were presented to the public and to those using the courier service as emanations of Vabu.  They were to wear the uniforms bearing Vabu's logo."  Yet again, the same could be said of the deceased.  Mr Clarke saw the requirement to wear the company badge as being a form of advertisement for the respondent.  No doubt the intention was to hold the deceased out as a representative of the respondent's business, not as an independent contractor.  This intention to hold the deceased out as a representative of the company is also reflected in the documentation that Mr Clarke completed and to which I have referred.

1. The respondent's written instruction to "All Staff" (note "staff") concerning vehicle usage provided that "all employees [note employees] shall have deducted from their wages [note wages] an amount of 5% of their nett pay [note pay] until the amount deducted reaches $400.00."  The instruction continues that this is to pay the excess in the event of the respondent being required to make an insurance claim for damage done to a vehicle being driven by an "employee" and caused by negligence or non-compliance with standing instructions.  Mr Clarke said that he arranged for the deceased to sign this written instruction.  See Vabu at 44.

1. It is true as the Tribunal pointed out, the respondent did not provide the deceased with any sick leave entitlement, workers compensation cover, superannuation payments and the like.  That is an indication that the deceased was an independent contractor.  However, the evidence clearly suggests that the respondent did not so regard it, for Mr Clarke ignored the obligations that, to his knowledge, were imposed by law upon a principal with respect to provision of an ABN or failing that, the deduction of 48 cents in the dollar. 

1. All of these facts lead inevitably to the only conclusion that the written contract, and the circumstances in which it was signed by the deceased, did not reflect the reality of the relationship between the deceased and the respondent, and in the totality of the relationship, was of very little significance.

1. The appeal is allowed and the order of the Tribunal dated 3 December 2003 is quashed.  Although it was agreed between counsel that in the event of that order being made, the matters referred should be remitted to the Tribunal for determination in accordance with law, I will hear counsel first because it seems to me that this Court should further order that the deceased was a worker of the respondent and that he died in the course of his employment with the respondent, before the order remitting the matters referred is made.

DEED OF AGREEMENT

Dated this 13^th day of January 2002

BETWEEN

Tasmanian Protective Services (Protective Security Pty Ltd)

Innovation Drive, Technopark.
Glenorchy. Tas 7010

AND

David Bedelph

Being the initial sub-contractor

WHEREAS

CLAUSE 1

Tasmanian Protective Services has entered into agreements with various clients to provide alarm monitoring and alarm response services and static guard services throughout the State of Tasmania. Tasmanian Protective Services and the sub-contractor have agreed to certain terms and conditions whereby Tasmanian Protective Services shall engage the services of the sub-contractor.

CLAUSE 2

The Contract provides that in the event that Tasmanian Protective Services sub-contracts any of its services then certain terms and conditions shall apply and must be met by those sub-contractors.

CLAUSE 3

Tasmanian Protective Services has advised the sub-contractor of the terms and conditions referred to in this contract and the sub-contractor, wishing to be engaged by Tasmanian Protective Services, has agreed to meet those [sic] all the conditions and terms stated herein.

NOW THIS DEED WITNESSES:

1. The sub-contractor shall provide the services described in Item 1 of the Schedule hereto ("the Schedule").

1. Tasmanian Protective Services shall pay to the sub-contractor the amounts described in Item 2 of the Schedule for the services provided by the sub-contractor.

1. Payment shall be made by Tasmanian Protective Services in the manner described in Item 3 of the Schedule.

1. This agreement shall endure for the period described in Item 4 of the Schedule, subject to paragraph 5 hereof.

1. This agreement may be terminated by either Tasmanian Protective Services or the sub-contractor by providing one month's written notice to the other at the address hereinbefore stated that the party elects to terminate this agreement in accordance with this clause. Such notice shall be deemed to have been received by the other if forwarded by regular post in the ordinary course of post, or immediately if personally delivered to any director of either party. Tasmanian Protective Services may terminate this Agreement immediately if, in the opinion of Tasmanian Protective Services, the sub-contractor has committed any act or omission which has or may place in jeopardy to any degree the position of Tasmanian Protective Services in relation to any Contract it has entered into.

1. The sub-contractor hereby acknowledges and agrees that it is a condition precedent that it will comply with all the requirements set out in Item 5 of the Schedule and will, upon the request of Tasmanian Protective Services, provide satisfactory evidence that it has so complied. The sub-contractor acknowledges that in the event it fails to comply within twenty four hours with any such request Tasmanian Protective Services may elect to immediately thereafter terminate this Agreement.

1. The sub-contractor hereby acknowledges and agrees that in the event that either party makes an election in accordance with clause 5 hereof the sub-contractor, its servants, officers or agents will not, for a period of three years from the date of such election, engage in any similar provision of services to any of Tasmanian Protective Services clients in the area encompassed by this Contract.

1. The parties hereto agree that this Contract shall be construed in accordance with the laws of the State of Tasmania.

1. The sub-contractor hereby agrees that in the event that there is any dispute arising out of any of the matters referred to in Items 2 and 3 of the Schedule, or in relation to the interpretation of any clause in this Agreement then the sub-contractor shall provide written notice of such dispute to Tasmanian Protective Services within fourteen days of the event giving rise to such dispute. In the event that the dispute is not resolved between the parties by the expiration of twenty eight days from the date of the notice of dispute Tasmanian Protective Services and the sub‑contractor shall then appoint an arbitrator to hear and determine the dispute. The parties agree to equally bear the costs of the arbitrator, and to abide by his decision. In the event that the parties cannot agree on the appointment of an arbitrator within seven days after the expiration of twenty eight days from the date of the notice of dispute then either party is at liberty to request the President of the Law Society of Tasmania to appoint an arbitrator, and the like conditions shall apply.

1. The sub-contractor hereby agrees and acknowledges that in the event that either party makes an election pursuant to clause 5 hereof the sub-contractor shall, on the date the termination takes effect, return to Tasmanian Protective Services or any agent authorised by Tasmanian Protective Services all keys demanded by Tasmanian Protective Services or its authorised agent. In the event that the sub-contractor fails to return the keys upon demand then the sub-contractor hereby agrees that it will remain liable for all costs and losses incurred by Tasmanian Protective Services occasioned thereby.

1. The sub-contractor acknowledges that all keys in its possession remain the property of the Tasmanian Protective Services client to which they apply, and are to be returned to that client upon demand by the client, or to Tasmanian Protective Services in accordance with clause 10 hereof. The sub-contractor shall maintain a register of all keys held by it, provide a copy to Tasmanian Protective Services and shall immediately notify, Tasmanian Protective Services of any change in keys. The sub-contractor shall be responsible for the security of all keys, and will immediately and at its own expense replace all keys lost. The sub-contractor further warrants that it will not enter into any arrangement with any client regarding the provision of any keys, or any other matter relating to this Agreement, and will request Tasmanian Protective Services to make all such arrangements.

1. The sub-contractor hereby acknowledges that it is an independent contractor, and that nothing contained herein shall give rise to a relationship of master and servant or principal and agent, and any such relationship is expressly denied. In order to give full effect to this clause the sub-contractor agrees that it shall comply with all Federal, State and local authority statutes, laws, rules and regulations pertaining to it as an employer including, but not exclusively, all taxation, superannuation and workers compensation legislation.

1. The sub-contractor acknowledges that it will supply the services in a prompt, professional manner, and will comply with all directions by Tasmanian Protective Services as to the method by which the services are provided. The sub-contractor further acknowledges that it is a fundamental term of this agreement that it will comply with all the requirements of this clause, and perform the services as defined in Item 1 of the Schedule. Any failure by the sub‑contractor to so comply or to provide the defined services is deemed to be a fundamental breach of this agreement giving rise to a right by Tasmanian Protective Services to immediately terminate this Agreement.

THE SCHEDULE

The Services

Item 1

Attend alarms, static guards and patrols and to report immediately to Tasmanian Protective Services the status of the alarm. The report shall include:

(a)       time of the event, a brief description of it, and action taken,

(b)       time of notification of the site Emergency Call-Out Officer, and the Officer's name,

(c)       time of notification of Police or other Emergency Services, if called,

(d)       time of arrival of the guard,

(e)       cause of alarm,

(f)       action taken by guard,

(g)       time at which premises are made secure,

(h)       other relevant information, including trespassers vehicle registration numbers.

Payment. for Services
Item 2

As negotiated and agreed when and if required by Tasmanian Protective Services which is then recorded on a tax invoices submitted for payment.

Method of Payment
Item 3

The sub-contractor shall forward a tax invoice to Tasmanian Protective Services, such invoice to cover the prior calendar month. The invoice shall be forwarded to Tasmanian Protective Services on or before the seventh day of each month, and Tasmanian Protective Services shall forward payment of that tax invoice within thirty-five days of receipt of that invoice.

Term of Agreement
Item 4

Ongoing - as and when required by Tasmanian Protective Services until mutual termination of this Agreement.

The Terms and conditions
Item 5

(a)       The sub-contractor and all relevant personnel shall have the necessary skill, knowledge, resources and experience in the provision of alarm response services and static guard or patrol services, and in no case will the sub-contractor utilise the services of any person who is not the current holder of a security agent or security guard's licence and who has been approved to be so utilised by Tasmanian Protective Services.

(b)       The sub-contractor shall not employ other personnel without Tasmanian Protective Services approval for work they requested to do and only then use personnel who are properly trained and competent in the provision of the services.

(c)       The sub-contractor and all relevant personnel shall hold all licences required by all relevant authorities.

(d)       The sub-contractor and all relevant personnel shall be familiar with all relevant security installations and the equipment installed therein.

(e)       The sub-contractor shall:

(i)Immediately attend all alarms as required (and in no case after the expiration of thirty minutes of notification of the alarm),

(ii)Establish the cause of the alarm, its location, rectify and/or notify police,

(iii)Detain any person found illegally on the premises,

(iv)Inspect the premises externally in detail, including all buildings,

(v)In the event of illegal entry shall completely search and inspect the premises internally and take appropriate action,

(vi)Co-operate with and render assistance to Police and other security or after hours personnel as required,

(vii)In the event of a breach of security requiring the attendance of afterhours, remain in attendance until the arrival of that officer.

(viii)when patrols and static guard work is requested be responsible to ensure they have obtained the correct instructions to perform the work required.

(ix)confidentiality of Tasmanian Protective Services clients in all areas which the sub‑contractor has access to information is not to be breached at any time before, during or after duration of this agreement and that this breach could lead to the sub‑contractor being charged in a court of law and liable to prosecution.

(f)       The sub-contractor and all relevant personnel shall be in uniform and equipped with two-way radio communications, both in vehicles and when on foot at the site, and for some work may be required to carry a pager to report to Control Room information to be recorded or received. Should plain clothes or any other necessary equipment pertaining to the work involved be required by a Tasmanian Protective Services clients a directive will be given by one of Tasmanian Protective Service's Directors

(g)       The sub-contractor shall give to Tasmanian Protective Services full details of all personnel employed by it, including all licences held by those personnel. The sub-contractor shall also provide satisfactory evidence of possession of current public liability insurance for a sum not less than Ten Million Dollars. Being the current amount prescribed as appropriate by the contractor.

(h)       The sub-contractor shall give to Tasmanian Protective Services full details of registered Business Name, Company, or Corporation including all relevant details pertaining to Shareholders, directors, date of registration, Australian Business Number, etc.

1. Should training for Tasmanian Protective Service's client's [sic] premises be necessary, the sub-contractor will at its/his/her own expense ensure the relevant training and knowledge to perform the necessary work is achieved as expediently as possible. Such training is agreed to so as to achieve efficiencies and competency as prescribed by the contractor and may be also at the direction of the said named contractor.

Property and asset clause 11

Finally the property of the contractor both fixed assets and mobile assets shall be maintained and kept in such order as prior to use and initialisation of the contract.

All vehicles, radio communication, uniforms and other security objects supplied by the contractor (Tasmanian Protective Service) shall if lost or not returned in an appropriate and acceptable manner or condition be replaced or returned at the sub-contractors expense.