Cavallaro v Harness Racing Board

[2019] VMC 10

IN THE MAGISTRATES COURT OF VICTORIA  
AT MELBOURNE
WORKCOVER DIVISION OF COURT Revised
(Not) Restricted
Suitable for Publication

J12716868

TANYA CAVALLARO	Plaintiff
v
HARNESS RACING BOARD	Defendant

MAGISTRATE:

B. Wright

WHERE HELD:

Bendigo

DATE OF HEARING:

13 September 2019

DATE OF DECISION:

4 October 2019

CASE MAY BE CITED AS:

MEDIUM NEUTRAL CITATION:

Cavallaro v Harness Racing Board

[2019] VMC010

REASONS FOR DECISION

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CATCHWORDS - Workers Compensation – Rejection of Claim – “Worker” – Harness Race Driver - Whether the Plaintiff was an employee of the Defendant – Workplace Injury Rehabilitation and Compensation Act 2013 s.3 “worker”.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S. Carson	Frigerio Legal
For the Defendant	Mr. M. Fleming QC and	Hall & Wilcox
Mr. A. Middleton

HIS HONOUR: 

1Ms Cavallaro was driving a horse at a harness racing event outside Bendigo on 16 January 2018. The horse fell and she was catapulted to the track, sustaining major spinal and pelvic fractures (“the incident”). Her claim for compensation pursuant to the Workplace InjuryRehabilitation and Compensation Act 2013 (“the Act”) for those injuries was denied on the basis she was not a “worker” within the meaning of the Act.

2She specifically does not allege she was a “deemed worker” pursuant to Cl.17 of Sched. 1 of the Act. Thus, I must determine whether she was a “worker simpliciter“ or employee of Harness Racing Victoria (“HRV”) at the time of the incident.

3She does not allege she was an employee of the driver/trainer, who arranged for her to drive the horse, or the Bendigo Harness Racing Club (“BHRC”), which conducted the race meeting on 16 January 2018. 

4Ms Cavallaro gave evidence before me. Otherwise, two affidavits from two employees of HRV were tendered on its behalf.

5HRV concedes that she is not excluded from coverage under s.17(1) of the Act as a sporting contestant, and also that Cl. 17(2)(b) may be activated for coverage, in that she was engaged to drive at a regular meeting. 

6However, she still needs to prove that she was a “worker” within the meaning of the Act. Other possibilities as to an employer could be the owner/trainer, or maybe even the BHRC, if indeed she had an employer at all. HRV denies that it was her employer.

7In evidence Ms Cavallaro said she currently works as a personal assistant at the Bendigo City Council. She has been a harness driver for some time and was first licensed at 21 years old.  She is now 49 years old. Her licence was renewed yearly, subject to police and medical checks. HRV granted the relevant licence for which there was a fee payable.

8On the HRV website there is a list of available harness drivers to enable people, generally trainers, to contact drivers for a harness race.  She said she drove at race meetings on average about two to three times per week.  She would be told by the trainer the location and time of the race. Under HRV Rules she had to be there at least 30 minutes before a race, or she would be substituted by another driver by the race stewards of the relevant club. She would not be paid if replaced.

9The general fee for driving in a race was determined by HRV, apparently $65, as at the time of the incident. In addition, she would get about 5% of any winnings if her horse was in the placings. According to her, HRV and not the trainer, paid the driving fees and prize share directly into her bank account.  Superannuation guarantee amounts were also paid by HRV, and not the trainer or the owner.

10She was not required to, and did not, have an ABN. HRV requires drivers to dress appropriately, with the owner and/or trainer giving her the silks for the relevant horse and race. HRV specifies other clothing, which she owned herself, such as a helmet, safety vest and boots. She also wore gloves. She said she could be reprimanded for not having the specified clothing and safety equipment. 

11She could not arrange for another driver to substitute for her driving in a race.  Her driving was subject to the Rules of Racing determined by HRV. She could be disciplined by the stewards at the relevant club meeting.

12HRV supervises all harness racing meetings in Victoria. Any unlicensed drivers are not allowed to take part. She said HRV had a limited insurance policy for injured drivers, covering mainly loss of income, with a general cap of about $10,000.

13She said that HRV would rarely contact her to drive in a race, maybe for a ladies' race meeting or an invitational race meeting. She would be paid by HRV for driving at such a meeting. 

14In cross-examination she agreed that she was employed by Bendigo City Council as a PA as at 16 January 2018. She was off work after the incident until 1 May 2018 and worked on a limited basis until August 2018. She continues to work there.   

15She agreed that generally a trainer would arrange for her to drive a horse at a race.  She was known to trainers and her phone number was on the HRV website.  She had been telephoned for the drive on 16 January 2018 by the owner/trainer of the horse involved which was named “Sprockets”.  She was engaged by him for the drive at the BHRC meeting at Junortoun, where she had driven before. She agreed that HRV has rules specifying clothing and equipment, which she owned apart from the individual coloured silks for each horse. Where needed (e.g. if there was a clash in silks in a race), club colours would be supplied by the relevant club.

16The Rules of Racing were specified by HRV and applied by the stewards at each race meeting. She did not know whether the race fee and any winning fees were paid by HRV on behalf of the trainer but agreed that HRV assisted on behalf of the owner. She did not declare any driving fee or winnings as wages or earnings in any tax return at all as she believed that she was a “hobbyist” only as a driver. She said that she had spoken to an accountant about this. 

17She also said that driving horses was not her fulltime job. She agreed that she was never given an annual group certificate or statement of annual earnings by HRV, though she could have requested such a statement. She did not pay any GST regarding her driving fees or winnings.

18She agreed that some trainers may have employed staff, such as stable hands, who may have licences to drive in harness races. Also, most drivers are engaged separately by trainers.

19In re-examination she said that the trainer involved, William Cole, was a licenced driver as well though he was not driving at the time. 

20The defendant tendered by consent an affidavit from a Luke Spano, who said he was the General Finance Manager of HRV. He stated that HRV was established pursuant to the Racing Act 1958. Its function was to control the sport of harness racing in Victoria and to deal with all participants. It did not employ, contract or otherwise engage drivers to drive in harness races.

21There was a $65 racing fee in January 2018 payable to a driver in each race together with a share of any winnings.  This was payable by the trainer who engaged the driver. HRV facilitated the payment from the trainer to the driver by deducting those payments from the owner's stake money and any winnings. The money is paid fortnightly by HRV to each driver, with a tax invoice statement setting out individual amounts payable for each race in the relevant period.

22HRV keeps a record of all payments distributed to the drivers. It also makes payment of superannuation guarantee benefits to drivers on behalf of the owners.  It is required to do this pursuant to the ATO Super Guarantee Ruling SGR 2009/1. That ruling is headed “Superannuation Guarantee Payments Made to Sportspersons” and applies to all sportspersons and persons providing services in connection with sporting activities.

23Mr Spano stated that distribution of superannuation guarantee benefits to a driver on behalf of owners commenced on 1 July 2016. Benefits are payable if a driver is entitled to $450 per month or more for driving fees only. Since 1 July 2016, 9.5 per cent of the $65 racing fee, that is $6.18 per race, was distributed to all drivers in addition to the driving fee, whether by direct payment or to a nominated superannuation fund. On 19 January 2016, HRV distributed $160.68 in superannuation guarantee benefits to Ms Cavallaro's nominated super fund.

24The defendant also tendered by consent a further affidavit from a Gary Bennetts, who stated that he was a race programmer employed by HRV. He stated HRV had the power to, and did make, the Rules of Racing.  Inter alia, it licences trainers, drivers and clubs to participate in harness racing in Victoria.  The BHRC was licensed to conduct the relevant meeting at Junortoun.  It also licensed Ms Cavallaro as far back as 1991. She was a licensed driver on 16 January 2018. 

25He stated HRV did not employ, contract with or otherwise engage drivers to drive in harness races. In particular, it did not employ Ms Cavallaro on 16 January 2018 or indeed at any time.  HRV did not control whether or when Ms Cavallaro could drive in a harness race.  Subject to the Rules of Racing she could drive or not.  Also, the way she drove was a matter for her and the owner/trainer involved, subject to the Rules of Racing.

26Drivers are all directly engaged by owners and/or trainers, not HRV. The owner and/or trainer nominates the drivers on the HRV online portal at least two days prior to the relevant meeting. HRV did not direct her regarding which event to attend, what time to attend or which owner or horse she would be allocated to. 

27The only exceptions were “invitational races” held on a handful of occasions each year. HRV would randomly assign drivers to the nominated starters in each race for such meetings. The race on 16 January 2018 was not an invitational drivers’ race. 

28He also repeated the evidence as to HRV being only a facilitator acting in respect of payments to drivers by deducting such payments from the owner's stake money and any winnings. The meeting on 16 June 2018 was conducted by the BHRC and not HRV.  Ms Cavallaro had been nominated to drive in the relevant race on that date by Mr William Cole, the trainer, on 9 January 2018.

29That completes the evidence before me.

30In his submissions, counsel for Ms Cavallaro assumed the burden of proof that she was a “worker” employed by HRV pursuant to the Act. He submitted, and the defendant conceded, that she was not excluded from the provisions of the Act as a sporting contestant pursuant to s.17(2)(b) of the Act. However, she still must prove that she was a “worker” within the meaning of the Act.

31He referred to the Victorian Supreme Court of Appeal decision in Elazac PtyLtd v Shirreff [2011] VSCA 405, esp. at para. 38, which sets out various indicia to consider in determining the relationship between the engaging person and the engaged person.

32He submitted HRV paid her fee for each race directly into her bank account.  If late arriving at a course, she could be removed from driving that horse and another driver substituted by HRV. She could only apply her skills at HRV meetings.  There was no requirement for her to have an ABN. HRV exercised an important degree of control over her. The issue as to HRV paying superannuation was also important.

33Senior counsel for HRV stated that it was a creature of statute. That is, the Board of HRV can make rules for control of harness racing in Victoria, for example specifying clothing and safety equipment.  Its control solely related to its capacity as a statutory regulator, not as an employer especially of Ms Cavallaro.

34The meeting on 16 January 2018 was conducted by the BHRC, which had been licensed by the Minister and conducted in accordance with the Rules of Racing. Submissions as to Cl. 17 and Cl. 18 of Sched. 1 need not be considered as Ms Cavallaro conceded she was not a “deemed worker” pursuant to those provisions.  He referred to the affidavit stating that HRV denies engaging Ms Cavallaro as its employee or exercising any control over her, save and except pursuant to the Rules of Racing.  She could drive or not in any harness race and on any date.

35There was uncontested evidence that the race fees, any percentage winnings and the superannuation guarantee would be paid to her by HRV as a conduit only. These moneys were taken from owners or trainers by whom she was engaged and paid on to her by HRV. There was never any contact or agreement between HRV and Ms Cavallaro engaging her to drive at any harness race meeting, not even as a contractor, let alone as an employee.

36When nominated to drive at a race meeting, there was no binding agreement between her and HRV that she actually drive there.  HRV could not prevent her from driving at the last moment.  He referred to Hughes v WACA (1986) 19 FCR 10 at paras. 114 - 115, stating that:-

'… voluntary participation by a sportsperson, albeit paid appearance money, in a sporting event, tells against the inference of an employment contract'. 

37Any payments made to her by HRV were made on behalf of the owner and/or trainer, and not on account of any service or services given by her to the HRV.

38The evidence was the HRV did not treat those payments as wages for ATO purposes.  The payments did not have the character of wages. They were not paid by HRV by reference to hours of work or agreed tasks completed. There were no agreed periods where she was required to work at all. Certainly, there were no leave provisions.

39If the circumstances implied a contract between HRV and Ms Cavallaro for a specified occasion and HRV agreed she would be paid an appearance fee, which they refute anyway, then this could still not amount to an employment contract, having regard to a properly evaluated multifactorial approach seen in cases such as Stevens v Brodribb (1986) 160 CLR 16; Hollis v Vabu (2001) 207 CLR 21 at 47-57; and Elazac Pty Ltd v Shirreff, (supra).  Of course, all those cases are well known and are frequently, if not always, referred to in similar cases determining whether a person is a “worker” within the meaning of workers' compensation legislation.

40He also expanded upon the appearance fee argument that I set out above.  He said that persons participating in sporting events can, depending on the circumstances, be properly regarded as employees not contractors, for example AFL players or NRL players. He then went on to refer to a textbook, Sports Law 3rd edition 2018 edited by Thorpe, Buti, Davies and Jonson, at p.510, in the following terms: 

'Sportspeople who negotiate their own way into games who choose which matches they will or will not compete in and who receive variable payment depending on the outcome of matches are generally regarded as independent contractors.  Professional boxers and tennis players are examples of sportspeople falling within this category.  Beyond being subject to the rules of the game, tournament organisers do not exercise control over these athletes' play, they are simply expected to compete, and may be paid an appearance fee.' 

41Of course, AFL players would now appear to be excluded as workers under the Act anyway, pursuant to Cl. 17 of Sched. 1. He submitted that Cl. 17 s.1(b) may apply to an employee of a trainer, for example a stable hand, who is engaged by that trainer to drive in a harness race.

42That completed the submissions of both parties.

43Both parties referred to Elazac v Shirreff (supra) in support of their respective cases.  In that case, the Court of Appeal at para. 30 stated that control, or the right to exercise control, is now less determinative as a sole factor in considering whether the relationship is that of an employer/employee.  Modern authority is to the effect that the court must look to the totality of the relationship between the parties, taking a multifactorial approach.  Such an approach still is important, as can be seen as recently as 28 August 2019, in a decision handed down by Cavanough J of the Victorian Supreme Court in Eastern VanServices v VWA and Barca [2019] VSC 581 at para. 91.

44Before I go into my reasons, I should refer to the actual named defendant, Harness Racing Board, whereas senior counsel for the defendant referred to Harness Racing Victoria in his submissions. Section.39(1) of the Racing Act1958 states “There shall be a Board which shall be a body corporate in the name of Harness Racing Victoria”. Thus, Harness Racing Victoria should probably be the actual defendant. However, this makes no difference to this case, as the body corporate, whatever its name, is the same in this case.

45Whatever the correct name of the defendant, I determine that Ms Cavallaro was not its employee or a “worker” within the meaning of the Act on 16 January 2018 when she was injured in the incident. She was not engaged to drive or participate at the race meeting on 16 January 2018 by HRV but by Mr William Cole, the trainer, who engaged her on prior occasions.

46HRV played no role in that arrangement, save maybe for having her details on its website as a licensed driver.  HRV obtained her race fee from the owner's stake fee, and paid it into her bank account, without any deduction for its own services.  There was a similar arrangement in relation to percentage winnings and any super guarantee which was required by an ATO ruling. Simply, it paid her nothing out of its own funds for this meeting, or indeed almost all meetings. The only possible exception was the occasional invitational race meeting, which was not the situation in this case.

47Interestingly, Mr Bennetts, in his affidavit refers to a 'tax invoice or statement' being sent to Ms Cavallaro on a monthly basis.  The relevant exhibit, ‘GRB3’, is difficult to read. However, it does not appear to me to use the word “tax” in the heading, but rather has the words 'invoice statement', and then setting out details of relevant horse names and resulting payments.  Certainly, it could be used for tax purposes for either as an employee or a self-employed contractor and does not take the matter any further. 

48In any event, Ms Cavallaro saw herself as a “hobbyist” and did not include such payments in any of her tax returns as either an employee or contractor after discussing the matter with her accountant. HRV did not make any income tax deduction from her payments. HRV concedes a degree of control over Ms Cavallaro in harness racing in general, in that it specified requirements for clothing, safety equipment and other controls for harness racing in general. 

49However, it did not conduct the meeting on 16 January 2018, but rather it was conducted by the BHRC.  It, or rather its stewards, decided whether she was too late to drive and whether she would be reprimanded or disciplined for any breach of the Rules of Racing in any race there.

50Certainly, she provided her work and skill, which is generally indicative of contract of service. However, she provided this to the relevant owner or trainer and certainly not HRV. 

51The method of payment for an individual race fee could be indicative of either a contract of service or contract of services, but does not take the matter any further in this case. 

52She could ride when, where and how often for individual trainers without intervention or sanction by HRV, save for yearly renewal of her licence and that of the relevant trainer. 

53She was not entitled to any leave entitlements or similar payments from anyone and did not employ anyone. She could not and did not delegate anyone to substitute for her in any race. 

54Subject to the Rules of Racing she provided her own clothing and equipment such as a helmet, safety vest and gloves. The racing colour silks would be provided by the relevant trainer, or in rare cases by the individual club.  HRV did not provide her with any equipment and did not pay or reimburse her for such equipment.

55She was obviously a skilled and experienced harness driver, which is why she was engaged by the trainer and not HRV. It merely licensed her as a harness driver as having the appropriate qualifications to drive in Victoria at any of its licensed clubs who operated their own meetings. 

56I see no point in discussing in detail the other well-known cases referred to by senior counsel, that is Hollis vVabu (supra) and Stevens v Brodribb (supra),  in this matter. 

57On all the evidence, and upon considering the submissions of both counsel, I determine she was not in an employer/employee relationship with Harness Racing Victoria and was not a “worker” in relation to HRV within the meaning of the Act as at the time of the incident.

58These proceedings will be dismissed. 

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