Board of the Tasmanian Government Insurance Office v McLeod

[1991] TASSC 151

Serial No B37/1991
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:      Board of the Tasmanian Government Insurance Office v McLeod [1991] TASSC 151; B37/1991

PARTIES:  BOARD OF THE TASMANIA GOVERNMENT
  Insurance Office
  FRENCH'S BUILDING SERVICES PTY LTD
  v
  McLEOD, Guy Maxwell

FILE NO/S:  LCA 6/1991
DELIVERED ON:  8 July 1991
JUDGMENT OF:  Wright J

Judgment Number:  B37/1991
Number of paragraphs:  13

Serial No B37/1991
List "B"
File No LCA 6/1991

BOARD OF THE TASMANIAN GOVERNMENT INSURANCE OFFICE and FRENCH'S BUILDING SERVICES PTY LTD v GUY MAXWELL McLEOD

REASONS FOR JUDGMENT  WRIGHT J

8 July 1991

1. This is an appeal against a determination by a part time Workers' Compensation Commissioner.

1. By application dated 23 May 1990, the respondent applied, pursuant to s42 of the Workers' Compensation Act 1988, for determination of the question "whether I was a worker within the meaning of the Workers' Compensation Act 1988 on or about the 3rd December 1989". On the last mentioned date the respondent sustained multiple injuries when he fell whilst assisting the appellant company in the demolition of a sawmill at Wynyard. The learned Commissioner made no specific findings as to the particular task upon which the respondent was engaged when the accident occurred but there is little, if any, dispute as to this in the evidence of the respondent on the one hand and that of Mr Dexter French who appears to have been the managing director of the appellant company on the other. The evidence as to Mr French's status is vague and imprecise so I am unable to say with any certainty what offices he held within the company. At all events, the respondent dealt with Mr French on behalf of the appellant company on numerous occasions over several years prior to the occurrence of the accident. The learned Commissioner's findings as to the circumstances leading up to the respondent's injury were summarized in the following passage of his reasons:

"I find that a few days before the accident the respondent approached the claimant to help him on the following Sunday, to dismantle part of an old sawmill. There was no detailed discussion of what was to be done or how it was to be done, other than that the claimant understood he would need his oxy (protective) glasses and his gloves, that there would be a number of other people helping and the job would take a couple of hours. There is no evidence that the question of payment was discussed and I am therefore unable to make any finding that a specific agreement was entered into on this occasion. On the contrary I find that the terms of the engagement were implied on the same basis as previous engagements."

The learned Commissioner reviewed the relationship between the respondent and the appellant company at some length in his reasons for judgment. Regrettably, the views which he expressed as to the nature of their relationship appear somewhat confused, if not contradictory in some of the early passages of his reasons.

1. He observed at p3, "... the legal status of the claimant" (the present respondent) "vis–a–vis the respondent" (the present appellant) "on one occasion does not, in itself determine his status on another." In this observation he is undoubtedly correct, but as I have already mentioned, at p5 in the passage quoted above, he said, "... I find that the terms of the engagement were implied on the same basis as previous engagements."

1. He repeated this view at pp7–8 where he said:

"I am satisfied that the implicit arrangement between the claimant and the respondent was that he would be engaged on the same basis as his usual terms of engagement, there being no explicit arrangement.

…

I am quite sure that although the claimant said that he regarded everyone of his customers as 'the boss' that he was, at least in so far as they were concerned, an independent contractor. He was engaged to provide his own equipment, supply the necessary material, work unsupervised (generally at his own workshop) and to work the hours that he considered appropriate or necessary to finish the job in the required time. There is nothing about these casual tasks which would lead me to characterise the claimant as being the employee of his customer."

At p14 the learned Commissioner said:

"I am satisfied that the claimant was in so far as this respondent is concerned, a person who was engaged as a casual employee for specific tasks and that each period of employment ceased at the conclusion of each task."

1. The appellant submitted that whilst these passages in themselves did no more than illustrate the process of error which led the learned Commissioner to find that the respondent was a worker within the meaning of the Act and therefore entitled to compensation from the appellant as his employer at the relevant time, such a finding amounted to an error of law which is reviewable by this Court, pursuant to the power contained in s.63(1) of the Act. The respondent contends that the learned Commissioner did not err in law.

1. The scope of appeal under s.63 was examined by my learned brother Crawford J in Johns Perry Hayward Pty Ltd v Greaves, 72/1990. In that case his Honour reviewed two lines of authority but found it unnecessary to resolve apparent inconsistencies with those decisions. It seems to me that the more modern line of cases exemplified by Azzopardi v Tasman UEB Industries Ltd [1985] 4 NSWLR 139 are refinements of, rather than divergences from, the earlier cases and that the principle currently recognized by the High Court as well as the New South Wales Court of Appeal may be stated as follows. Where a right of appeal is limited to the right to challenge errors in point of law, the primary facts found by the tribunal of first instance cannot be impugned upon appeal, provided there is evidence upon which those facts may be found. If the tribunal of fact misdirects itself on matters of law which it is necessary to apply to the primary facts, such an error will support an appeal. If the tribunal does not misdirect itself as to the law it may nonetheless be found to have erred in law if an ultimate finding of fact upon which the case fails or succeeds can be demonstrated as being one which could not be reasonably entertained by the tribunal if it correctly applied the law to the primary facts in a judicial manner.

1. For the appellant to succeed it is not enough to show that different minds may reasonably have reached different conclusions on these ultimate facts. The appellant must show that the decision was wrong. This is, I think, an important factor to be borne in mind when considering a case such as the present where there is no simple or universal touchstone upon which a tribunal of first instance must rely when attempting to distinguish between a contract of service and a contract for services. Various tests have been propounded in the past but, as has been stressed in recent judgments, eg by Mason J (as he then was) in Stevens v Brodribb Sawmilling Co Pty Ltd (1985–1986) 160 CLR 16 at p29, "it is the totality of the relationship between the parties which must be considered".

1. On any view of the facts this was a borderline case, not so much because of the pre–existing relationship between the parties but rather because of the unusual task on which both the respondent and Mr French were involved on the day of the accident.

1. To determine whether or not the learned Commissioner was entitled to find that the relationship of worker and employer existed at the relevant time, it is necessary to review his findings of primary fact and the legal indicia of the relationship in question which he considered.

1. At pp6–7 of his reasons the learned Commissioner made the following findings:

"On the 3rd December 1989 the claimant was picked up from his home by the manager of the respondent and driven to the site of the demolition work.

This work had been the subject of an arrangement between the building owner and the respondent whereby, in return for carrying out the demolition work, the respondent would be entitled to salvage rights, rather than to be paid in cash.

One of the respondent's part time employees (although not necessarily an 'employee' in the legal sense), had been engaged at the site for 2 or 3 days per week, supervising the dismantling operation.

He reported to the manager towards the end of the preceeding [sic] week, that some help was needed to lower some steel columns.

The manager arranged for three people, including himself and the claimant, to attend on the Sunday to carry out this task. He says, and I believe him, that the claimant was the only person that he expected to pay in cash for this task, the others being rewarded in other ways.

I am unable to find that the work in which these parties engaged, was under the specific control of any one of them. Each was experienced in his particular field and whilst advice and encouragement might have been offered, I am satisfied that no one person was actually controlled [sic] the operation."

At pp8–9 he said:

"There is no principle of which I am aware, that prevents a person from being an employee and an independent contractor at the same time. By this I mean that the claimant may have been an independent contractor for some 70% of his time but that does not of itself prevent him from being capable of being an employee, at other times.

I therefore gain little assistance from the nature of the relationship that the claimant had with what I would call his casual clients.

From time to time the claimant carried out tasks for the respondent by virtue of an undefined, loose arrangement between them, in which the respondent would call on the claimant for assistance. If the claimant was able to do so he did, but if not the respondent would, I find, avail himself of another welder. There was no suggestion that there was any formal arrangement between them whereby, for example, the claimant would provide a minimum number of hours or that the respondent would provide him with a minimum or any hours at any time.

I find that the relationship between them started at the commencement of each task and concluded at its end, satisfactory service being the inducement by the claimant to be considered when next a welder was needed."

1. At pp11–14 the learned Commissioner reviewed the law as he understood it and then made his ultimate finding of fact as to the relationship between the parties in the following passage:

"A very useful and detailed exposition of the law, as it existed in 1980, is to be found in the decision of the late Everett J, in Fenton –v– Webster Hall Timbers Pty Ltd, unreported No 91/980 (Fenton v Webster Hall Timbers Pty Ltd [1981] Tas R1).

His Honour reviewed the leading authorities such that I see no purpose in repeating that exercise. In the same way as his Honour believed that a State Supreme Court judge should still regard himself as bound to apply decisions of the High Court of Australia, so do I to an even greater extent, regard myself as bound by such principles as can be discerned from Fenton's case.

His Honour cited the well known passage in the judgment of Latham CJ in Humberstone –v– Northern Timber Mills (1949) 79 CLR 398 at Page 396 as follows:

'(1)         The distinction between a servant and an independent contractor was explained in the case of Performing Right Society Ltd –v– Mitchell & Booker (Palais de Danse) Ltd [1924] 1 KB 762. If the work done by one person for another is done subject to the control and direction of the latter person as to the manner in which it is to be done the worker is a servant and not an independent contractor. If, however, the person doing the work agrees only to produce a given result but is not subject to control in the actual execution of the work he is an independent contractor. This principle was applied in this Court in the case of Queensland Stations Pty Ltd –v– Federal Commissioner of Taxation (1945) 70 CLR 539.'

After citing this passage his Honour said,

'Because I regard the right to control the manner of executing the work as important, but not in itself decisive, I propose, despite the virtual absence of conflict in significant evidentiary area, to examine the evidence in some detail so that the question of control will be highlighted.'

In this application, the question of control is far more difficult to decide. The claimant is the type of person who was engaged because of his expertise, somewhat like the circus acrobat in Zuijs –v– Wirth Brothers (1955) 93 CLR 561.

Both counsel, in this application, attempted to place reliance on the presence (or absence) of the right of the claimant to exercise his own judgment and discretion in carrying out his tasks for the respondent.

There is no one fact which I can discern, which clearly leads to any conclusion about the relationship between the two parties.

I take my guidance from the following passage in the last cited case, at pages 571 and 572, in which the Court said

'(3)         The duties to be performed may depend so much on special skill or knowledge or they may be so clearly identified or the necessity of the employee acting on his own responsibility may be so evident, that little room for direction or command in detail may exist. But that is not the point. What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters ...

Assuming that the terms of the engagement fixed the character of the act and that from its very nature an acrobatic performance must be executed upon the unhampered responsibility of the performers, that does not remove the relationship from the catergory [sic] of master and servant. There are countless examples of highly specialized functions in modern life that must as a matter of practical necessity and sometimes even as a matter of law be performed on the responsibility of persons who possess particular knowledge and skill and who are accordingly qualified. But those engaged to perform the functions may nevertheless work under a contract of service.'

In doing so, I remember and mind the warning, referred to by Everett J in Fenton's case (supra) at page 13, 'that the fact of control is no more than one of a number of indicia and that the case of Zuijs –v– Wirth Brothers Pty Ltd further illustrates the need to consider, in each instance, all available facts in determining the nature of an employer's relationship to those who perform work for him, rather than to rely exclusively upon any one criterion, such as the reservation of the right to control.'

I come now to apply the legal principles to the facts of this application. In doing so, I have in the forefront of my mind the question of control but like Everett J at page 15 of Fenton's case, 'Not ignoring the need to be perceptive of any countervailing facts or circumstances.'

By this, I understand that the question of control is one of the indicia, perhaps the singularly most important, but that it is not to be looked at to the exclusion of other facts or circumstances.

I am satisfied that on the day of the accident, either the respondent's manager or his agent had the right to control the operation. Either or both of them had the right to stop the dismantling, to direct the claimant as to what he was to do, although, because of his expertise and his nature, it is unlikely that they would have directed him how to do it and for how long he was to do it. Whilst before the accident no consideration had been given by the parties as to the nature of their relationship, I am satisfied that the claimant was in so far as this respondent is concerned, a person who was engaged as a casual employee for specific tasks and that each period of employment ceased at the conclusion of each task. It would be an artificial distinction I believe, to rely solely on whether he was engaged to work at his own premises or those of his client, as would it be unreasonable to rely solely on whose equipment was used.

I find that the relationship between them was master and servant at the time of the accident and therefore determine that the claimant is entitled to compensation."

1. In my opinion the learned Commissioner stated the relevant law applicable in the circumstances of this case in unexceptionable terms and, upon the evidence before him, his conclusions as to the true relationship between the parties on the day of the respondent's injury, were, I think, fully justified. The task being undertaken by the respondent was of a different character from the type of work which he usually undertook for the appellant. He was essentially a member of a demolition team. The members of that team, whilst not requiring or needing detailed direction as to their work, were under the general control of Mr French as co–ordinator and supervisor. The confusing views stated by the learned Commissioner in the earlier passages quoted from his reasons do not persuade me that when he came to examine the relationship which actually existed on the day of the injury he fell into error. The views which he expressed in the earlier part of his reasons played no determinative part in the conclusion which he finally reached. In reaching that conclusion he either ignored or overlooked his earlier remarks and, in my opinion formed his judgment bearing in mind the nature of the project being undertaken and the other factors which I have just mentioned. Accordingly, whether or not his earlier remarks were intended to convey a view that the general relationship of the appellant and respondent was one of employer and independent contractor and whether or not such an assessment was correct, the learned Commissioner's final analysis correctly identified the issues he was obliged to consider and the finding he made was in my view unimpeachable.

1. For these reasons I am of the view that the appeal should fail. Accordingly, it is dismissed with costs.