Brejwo v Public Trustee

[2002] NSWCA 115

CITATION:	BREJWO v PUBLIC TRUSTEE [2002] NSWCA 115
FILE NUMBER(S):	CA 40349/01
HEARING DATE(S):	11 April 2002
JUDGMENT DATE:	2 May 2002
PARTIES :	ANN AGATHA BREJWO v PUBLIC TRUSTEE OF NEW SOUTH WALES As Trustee for Mary Brejwo
JUDGMENT OF:	Handley JA at 1; Stein JA at 23; Heydon JA at 24

LOWER COURT JURISDICTION :	Compensation Court
LOWER COURT FILE NUMBER(S) :	CC 14250/96
LOWER COURT JUDICIAL OFFICER :	Hughes CCJ

COUNSEL:	Appellant - B Rayment QC/T Edwards Respondent - J Poulos QC/E Wood/J Kirk
SOLICITORS:	Appellant - Burgess Foat Newcastle Respondent - Sparke Helmore Newcastle
CATCHWORDS:	WORKERS COMPENSATION ACT - worker - deemed worker - CONTRACT - commercial relationship - familial situation - Court order - EQUITY - direction by Court to Public Trustee for payments pursuant to Damages (Infants and Persons of Unsound Mind) Act - performance of conditions - equitable personal obligation
LEGISLATION CITED:	Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998
CASES CITED:	Zuijs v Wirth Bros Pty Limited (1955) 93 CLR 561 Griffiths v Kerkemeyer (1977) 139 CLR 161 Kars v Kars (1996) 187 CLR 354 Port Jackson Stevedoring Pty Limited v Salmond & Spraggon (Aust) Pty Limited (1978) 139 CLR 231 The Eurymedon [1975] AC 1 Gill v Gill (1921) 21 SR (NSW) 400 Muschinski v Dodds (1985) 160 CLR 583
DECISION:	Appeal dismissed with costs

40349/01
CC 14250/96
HANDLEY JA
STEIN JA
HEYDON JA


2 May 2002

ANN AGATHA BREJWO v PUBLIC TRUSTEE OF NEW SOUTH WALES

AS TRUSTEE FOR MARY BREJWO

WORKERS COMPENSATION ACT – worker – deemed worker

CONTRACT – commercial relationship – familial situation – Court order

EQUITY – direction by Court to Public Trustee for payments pursuant to Damages (Infants and Persons of Unsound Mind) Act – performance of conditions – equitable personal obligation

The appellant made a compensation claim following the death of her husband. At the time of his death the husband was the full time carer of his severely retarded daughter, Mary Brejwo. The daughter had received a settlement payment of $1,500,000 from a claim against a negligent driver after a motor vehicle accident. The money was held on trust by the Public Trustee subject to an order that the Public Trustee pay not less than $150 per week to the husband on condition that he reside with his daughter and materially assist in her daily care and management.

Under cl 2 of Schedule 1 of the Workers Compensation Act 1987 (NSW) a person who contracts to perform work exceeding $10 in value (not being work incidental to a trade or business carried on by the contractor in his own name) who neither sublets the contract or employs a worker, is deemed to be a worker employed by the other party to the contract. The appellant contended that the husband had made a contract with the Public Trustee to perform work exceeding $10 in value and was a deemed worker. She also relied upon Port Jackson Stevedoring Pty Limited v Salmond & Spraggon (Aust) Pty Limited (1978) 139 CLR 231 to establish that performance by the husband of the conditions in the order created a contract with the Public Trustee.

HELD : There was no evidence of a contract between the husband and the Public Trustee. The husband was neither a worker nor a deemed worker. The Public Trustee made the payments to the husband pursuant to the Court order. However performance by the husband of the conditions in the order created a personal equitable obligation on the Public Trustee to make the payments. Gill v Gill (1921) 21 SR 400 followed.

ORDERS

Appeal dismissed with costs.

40349/01
CC 14250/96
HANDLEY JA
STEIN JA
HEYDON JA


2 May 2002

ANN AGATHA BREJWO v PUBLIC TRUSTEE OF NEW SOUTH WALES

AS TRUSTEE FOR MARY BREJWO

Judgment

1 Handley JA: Ann Brejwo, the widow of the late Marian Brejwo (the husband), has appealed from the judgment of Hughes CCJ dismissing her claim for compensation following the death of the husband on 11 May 1992. She claimed that at the time of his death he was either a worker employed by the Public Trustee or a deemed worker for the purposes of the Workers Compensation Act 1987 (the Act).

2 The claim arises in unusual circumstances. On 10 October 1975 the appellant, who was then 21 weeks pregnant, was injured in a motor vehicle accident. She later gave birth to a child, Mary Brejwo, who was profoundly disabled with spasticity and severe mental retardation. Mary acting by a tutor brought an action in the Supreme Court against the negligent driver claiming damages for her personal injuries. On 14 October 1985 Slattery CJ at CL, acting pursuant to the Damages (Infants and Persons of Unsound Mind) Act (the Damages Act), approved the settlement of her claim for the sum of $1,500,000. He gave directions for some disbursements from the verdict and directed that the balance of the monies paid into court be paid out to the Public Trustee “to be held and applied by him for and on behalf of the infant pursuant to the Damages … Act”. His order continued (the order):

“I further order that so long as the mother, Ann Agatha Brejwo, shall continue to reside with and materially assist in the daily care and management of the plaintiff, the Public Trustee shall pay to her the sum of not less than $150 per week. I also order that so long as Marian Brejwo shall continue to reside with and materially assist in the daily care and management of the plaintiff, the Public Trustee shall pay to him the sum of not less than $150 per week”.

3 The husband had left his full time job in 1979 to care for Mary and received Commonwealth Social Security benefits on this basis. After Mary’s case was settled he continued to act as a full time carer for her, and satisfied the conditions in the order until his death.

4 There was no evidence of any express contract between the husband and the Public Trustee There was no evidence that any relevant exchange of correspondence occurred, or that there was any oral bargain between them. The widow relied upon the husband’s knowledge of the order as it applied to himself, his performance of the conditions in the order, and the payments made by the Public Trustee pursuant to the order. The Public Trustee immediately exercised its discretion to increase the weekly payments to $175, and in 1986 the payments were increased to $275 a week. The evidence shows that these increases occurred as the result of requests from the solicitors acting for the tutor, Mary’s mother (Blue AB 4-8).

5 Mr Rayment QC, who appeared for the widow but did not appear below, did not abandon the claim that the husband was a worker, but his principal submission was that he was a deemed worker. The provision relied upon in force at the date of death was cl 2 of Schedule 1 of the Act, which was repealed and replaced by cl 2 of Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 in the same terms. Clause 2 provides:

“Where a contract:
(1) (a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) to perform any work as an outworker,
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.

In this clause:

(2) ‘outworker’ means a person to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished or repaired, or adapted for sale:
(a) in the person’s own home, or
(b) in other premises not under the control or management of the person who gave out the articles or materials”.

6 The husband was not an outworker as defined, but it was contended that he had made a contract with the Public Trustee to perform work exceeding $10 in value.

7 It is not clear that cl 2(1) has any application to a contract for the performance of personal services of the kind relevant in this case. The clause refers to work, but does not refer to the price payable for that work, but only to its value. This suggests that the work referred to is work embodied in a tangible form or with obvious physical consequences that can be identified and valued after the event. This view may derive support from Zuijs v Wirth Bros Pty Limited (1955) 93 CLR 561, 574 where Dixon CJ, Williams, Webb and Taylor JJ said of s 6(3A) of the 1926 Act, the predecessor of cl 2(1), and with reference to a contract between a circus proprietor and a trapeze artist:

“… this provision is entirely inappropriate to the kind of contract in question in this case. That is shown by the opening words ‘where a contract to perform any work exceeding £5 in value’. You cannot satisfy this condition by a contract of indefinite duration for repeated performances of an act on a trapeze”.

8 The point was not taken on behalf of the respondent here or below and can therefore be put to one side. However the widow must establish that there was a contract, or more than one, which otherwise fell within cl 2(1).

9 The order, when made, did not create any such contract. Neither the husband nor the Public Trustee were parties to the proceedings before Slattery CJ at CL and there is no evidence that the Public Trustee was then aware of the proceedings, or knew anything of Mary or the husband. The order was made under s 5(1) of the Damages Act which provides:

“Any sum so paid to the Public Trustee shall, subject to any general or special direction of the Court … be held and applied by the Public Trustee in such manner as the Public Trustee shall think fit for the maintenance and education or otherwise for the benefit of the minor”.

10 The order was a direction to the Public Trustee to make the weekly payments if the stated conditions were satisfied.

11 Between 1979 and 1985 the husband looked after Mary on a voluntary basis and received Social Security benefits for doing so. His services could not be provided on any other basis. The daughter’s settlement figure no doubt included a substantial amount for his past domestic services in accordance with the principles in Griffiths v Kerkemeyer (1977) 139 CLR 161, but the damages recovered on this basis were not held in trust for the husband (Kars v Kars (1996) 187 CLR 354), and he had no right in restitution to recover the value of his services from his daughter or her trust fund.

12 The situation changed when the order was made but there is no evidence of any dealings between the husband and the Public Trustee after the order which could impose a legal liability on the latter, in contract or in restitution, to pay for services to be rendered by the former. The order was made, and the payments were made, but there is no evidence that anything else changed. As the trial Judge noted in his judgment, the widow said that she and the husband “would have looked after their daughter even if there had been no money from the Court case or … it had run out”.

13 The Public Trustee took out insurance cover to protect itself against its liability (if any) under the Act in respect of the husband, but the existence of these policies, without more, is not evidence of a contract of employment, or a contract which could be deemed to be a contract of employment, with the husband. There is also no evidence that the existence of these policies came to the knowledge of the husband or the wife in his lifetime. The Public Trustee adopted a prudent course in taking out and maintaining these policies, because there was the risk that the relationship with the husband might change at any time, and even if it did not, there was always the risk of litigation in the Compensation Court which the Public Trustee might lose, and even if it won, it would be left to bear its own costs.

14 There was nothing to stop the Public Trustee contracting with the husband for the provision of these services, but there is no evidence that the husband did or said anything to the knowledge of the Public Trustee which indicated that in future his services would be provided on a different basis. In particular, there is no evidence that the husband and the Public Trustee intended to enter into a contract or any other legal relationship. On the evidence, the husband continued to provide his services for his daughter within the family relationship because of his natural love and affection. $175 per week or even $275 per week could not have reflected the husband’s earning capacity on the open labour market for a 40 hour working week without making any allowance for work at night or at weekends, overtime, paid annual holidays and so forth.

15 When the Public Trustee made payments, it was complying with the order. There is no evidence that it intended to do anything else, or that the husband thought otherwise. In particular there is no evidence that the payments were intended to be, or were understood as, contractual offers capable of acceptance by the husband. Presumably the payments were made in arrears because the order required the Public Trustee to be satisfied that the husband had complied with the conditions.

16 The payments, when made, did not imply a contractual offer by the Public Trustee to pay for future services if the conditions in the order were satisfied. There was no offer of a promise for an act. The parties had no need to make any contract or other arrangement from which an obligation in restitution could flow because the order, without more, provided the necessary legal foundation for what was done.

17 Mr Rayment invoked the reasoning of Barwick CJ in Port Jackson Stevedoring Pty Limited v Salmond & Spraggon (Aust) Pty Limited (1978) 139 CLR 231 in support of his submission that performance of the conditions by the husband brought into existence a contract with the Public Trustee. He relied in particular upon the following passages at 244, 247:

“To agree with another that, in the event that the other acts in a particular way, that other shall be entitled to stated protective provisions only needs performance by the doing of the specified act or acts to become a binding contract … The performance of the act or acts at the one moment satisfied the need for consideration and attracted the agreed terms … As I see it, we have here an arrangement, a compact with agreed conditions to attend the performance of certain acts, which are not promised to be done. True enough that, until such performance, the consensus has nothing upon which to operate. But that is its essential characteristic, to provide an agreed consequence to future action should that action take place: to attach conditions to a relationship arising from conduct … (247) if contrary to my own opinion the result of the acceptance by the consignor of the bill of lading, containing the Himalaya clause, were properly analysed as the making of an offer by the consignor susceptible of acceptance by the doing of the work, I should be of opinion that … the appellant had accepted the offer. The knowledge by the stevedore of the terms of the bill, of the ship’s manifest and its usual employment in discharging and stevedoring the Blue Star Ships would, in my opinion, require the conclusion that the acts of the appellant were done in relation to the bill containing the Himalaya clause”.

18 In my judgment the critical distinction between the two cases is that the basic relationship in the former was commercial, and in the present it was domestic or familial. In the former the choice for the Court, so far as the relationship between the stevedore and the consignor was concerned, was between contract or nothing. In the present it is between contract and court order. The point was brought out by Lord Wilberforce, giving the judgment of the majority in The Eurymedon [1975] AC 154, 167:

“If the choice, and the antithesis, is between a gratuitous promise, and a promise for consideration, as it must be in the absence of a [third alternative] there can be little doubt which in commercial reality this is. The whole contract is of a commercial character, involving service on one side, rates of payment on the other, and qualifying stipulations as to both. The relations of all parties to each other are commercial relations entered into for business reasons of ultimate profit. To describe one set of promises, in this context, as gratuitous … seems paradoxical and is prima facie implausible”.

19 It cannot be said in the present case that: “The relations of all parties to each other are commercial relations entered into for business reasons of ultimate profit”. The situation here is the very reverse. There is nothing comparable with the terms of the bill of lading which enabled Barwick CJ to say: “To agree with another that, in the event that the other acts in a particular way … ”. (emphasis supplied)

20 In the present case, there is no agreement unless compliance by a trustee with a court order directing payments on conditions, compliance with those conditions by the intended payee and payment without more require the Court to find, as a matter of law, that a contract has been brought into existence. In my judgment there is no rule of law to that effect.

21 Mr Rayment argued that the husband had a right to recover these payments if he fulfilled the conditions and that must be so. The order was binding on the Public Trustee and in the event of a dispute the Court could have determined whether the conditions in the order had been fulfilled, and in that event would have compelled the Public Trustee to make the payments. However, as Heydon JA said during argument, the order and performance of the conditions created an equitable obligation enforceable at the suit of the husband in accordance with Gill v Gill (1921) 21 SR (NSW) 400, 406-7 which was approved in Muschinski v Dodds (1985) 160 CLR 583, 606-7 and 625.

22 In my judgment therefore there was no evidence of a contract of any kind between the husband and the Public Trustee for the performance by him of domestic services for the benefit of Mary. Accordingly, the husband was neither a worker nor a deemed worker. The judgment of Hughes CCJ, dismissing the widow’s application, must be affirmed, and the appeal dismissed with costs.

23 STEIN JA: I agree with Handley JA.

24 HEYDON JA: I agree with Handley JA.

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