Cloud Nine Limos Pty Limited v Workers Compensation Nominal Insurer (iCare)

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Cloud Nine Limos Pty Limited v Workers Compensation Nominal Insurer (iCare) & Ors [2023] NSWPIC 218
APPLICANT:	Cloud Nine Limos Pty Limited
first RESPONDENT:	Workers Compensation Nominal Insurer
SECOND RESPONDENT:	Peter Testar
PRINCIPAL Member:	Josephine Bamber
DATE OF DECISION:	12 May 2023
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; application pursuant to section 145 brought by the applicant, an uninsured employer, disputing the notice for reimbursement served on it by the Workers Compensation Nominal Insurer; issue in dispute was whether the worker was employed by the applicant and whether he sustained an injury in the course of his employment with the applicant; Held – on 11 June 2019 the respondent worker was a worker employed by the applicant employer; pursuant to section 4(a) the worker sustained an injury in the course of his employment with the applicant on 11 June 2019; at all relevant times the applicant not have a policy of workers compensation insurance; pursuant to section 145(4) the applicant is to reimburse the Workers Compensation Nominal Insurer the amount of $122,950.18.
determinations made:	i) On 11 June 2019 Peter Testar was a worker employed by Cloud Nine Limos Pty Limited. ii) Pursuant to s 4(a) of the Workers Compensation Act 1987 Peter Testar sustained an injury in the course of his employment with Cloud Nine Limos Pty Limited on 11 June 2019. iii) At all relevant times Cloud Nine Limos Pty Ltd did not have a policy of workers compensation insurance. iv) Pursuant to s 145 (4) of the Workers Compensation Act 1987 Cloud Nine Limos Pty Ltd are to reimburse the Workers Compensation Nominal Insurer the amount of $122,950.18.

STATEMENT OF REASONS

INTRODUCTION

On 4 April 2022 the Workers Compensation Nominal Insurer served on Cloud Nine Limos Pty Ltd (Cloud Nine) a notice under s 145 of the Workers Compensation Act 1987 (the 1987 Act) seeking reimbursement of compensation paid to or on behalf of Peter Testar for injury alleged to have been sustained by him in the course of his employment with Cloud Nine on 11 June 2019. The amount being sought in this notice is $122,950.18 comprised of weekly compensation payments and medical expenses less an overpayment set out in schedule B to the notice.
The weekly payments are set out in a list of payments, not in chronological order, but they roughly span the period 22 October 2019 to 4 April 2022.
Cloud Nine has brought these proceedings pursuant to s 145(3) of the 1987 Act to seek a determination from the Personal Injury Commission (the Commission) as to its liability in respect of the payments notified.
The Commission ordered that Peter Testar be joined as the second respondent to the proceedings.
Cloud Nine did not have a workers compensation policy at all relevant times. There is no evidence, nor was it asserted, that Cloud Nine is an exempt employer under s 155AA of the 1987 Act.
Mr Bassam El-Hassan is the director of Cloud Nine having started the business in 2009. He states it is in the business of limousine, bus and car hire and as part of the business it owns eight vehicles that are registered and used for business services.[1] He states Cloud Nine has an arrangement with Equity Transport Group Pty Ltd, known as Hughes whereby Cloud Nine provided vehicles as a subcontractor for Hughes’ limousine and bus transport business. He says there is no written contract between Cloud Nine and Hughes. Mr El-Hassam states Cloud Nine is responsible for the maintenance and insurance of the vehicles. He asserts all the drivers of the vehicles are sub-contractors. He states Cloud Nine also pays half the fuel costs with the drivers paying the other half.
[1] CB1,090
Pursuant to the arrangement with Hughes, Cloud Nine provides a service to pick up and drop off airline workers and passengers to and from Sydney Airport and locations across Sydney.[2]
[2] CB1,147 at [7].
Mr El-Hassan alleges Mr Testar was engaged as a sub-contractor driver in around October 2018 and he was engaged on this basis until October 2019.[3] There is no written contract between Cloud Nine and Mr Testar.
[3] CB1,090 at [7] and [9].
Mr Testar asserts he was an employee of Cloud Nine, not a sub-contractor. He alleges he sustained an injury on 11 June 2019.

PROCEDURE BEFORE THE COMMISSION

This matter has had a somewhat involved history before the Commission.
In other proceedings in the Commission in matter W4769/21, filed by Mr Testar suing Cloud Nine and, as it is uninsured, also suing the Workers Compensation Nominal Insurer, Mr Testar sought lump sum compensation. An order had been made by a Member of the Commission in those proceedings, with consent of all parties, to refer the lump sum claim to have the permanent impairment assessed by a Medical Assessor.
In the meantime, the subject proceedings were filed to challenge the s 145 notice, and after telephone conferences this matter was listed for conciliation arbitration hearing on 5 July 2022 solely to deal with whether there was an estoppel precluding Cloud Nine raising “liability” issues when they had consented to the referral to a medical assessor in matter W4769/21. This arbitration hearing did not proceed because the respondents agreed that as the lump sum proceedings had not been concluded no estoppel could arise.
The conciliation/ arbitration hearing was stood over for hearing on Monday 8 September 2022, but it did not proceed on that occasion because on Friday 5 September 2022 the Commission issued a Certificate of Determination making orders in relation to the payment of the lump sum compensation in matter W4769/21. So, the respondents argued that Cloud Nine was now estopped from raising the liability issues.
The matter was eventually listed for conciliation conference/ arbitration hearing before me on
22 February 2023. Mr Charles Thompson of counsel instructed by Ms Theo and Mr Radford, paralegals and later in the day Mr Dandachli, solicitor, appeared for Cloud Nine instructed by Mr Basim El Hassan, a director of that company. Mr Fraser Doak, counsel, instructed by Mr Glen Dolan, solicitor, and Mr Michael Butcher appeared for the Workers Compensation Nominal Insurer. Mr Bill Carney, counsel, instructed by Ms Linda Diamtaris, paralegal from Stacks Goudkamp, appeared for Mr Peter Testar, who was present. The hearing was conducted in person in Sydney.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

ISSUES IN DISPUTE

At the outset of the arbitration hearing issues in dispute were agreed as:
(a)    whether or not Cloud Nine is estopped from denying:
(i)that Mr Testar was an employee or deemed employee of it;
(ii)that Mr Testar was injured whilst in engaging in any relevant conduct with Cloud Nine;
(b)    If there is no estoppel,
(i)whether Mr Testar was an employee or deemed employee of Cloud Nine;
(ii)whether Mr Testar was injured in the course of employment with Cloud Nine;
(c)    what was the capacity for employment of Mr Testar in the relevant period for which he received weekly compensation, as it is asserted that he continued to work and derive income while declaring to the Nominal Insurer he was unfit, and
(d) the extent of any liability of Cloud Nine to repay the sum sought in the s 145 notice.
However, at the conclusion of its submissions in chief Cloud Nine confirmed that they did not challenge the quantum of the payments in the s 145 notice[4] and made no submissions in relation to the capacity for employment of Mr Testar.

EVIDENCE

[4] T49.

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Miscellaneous Application filed on 9 May 2022 and attached documents;
(b)    Nominal Insurer’s reply filed on 30 May 2022 and attached documents;
(c)    Application to Admit Late Documents (AALD-1) dated 14 June 2022 filed by Mr Testar attaching his reply;
(d)    Application to Admit Late Documents (AALD-2) dated 16 June 2022 filed by the Nominal Insurer attaching various documents;
(e)    Application to Admit Late Documents (AALD-3) dated 1July 2022 filed by Cloud Nine attaching the affidavit of Mr Khoder Dandachli sworn 1 July 2022 and annexed exhibits;
(f)    submissions prepared by Cloud Nine dated 5 July 2022;
(g)    Application to Admit Late Documents (AALD-4) dated 1 August 2022 filed by Cloud Nine attaching various documents (785 pages);
(h)    Application to Admit Late Documents (AALD-5) dated 18 August 2022 filed by the Nominal Insurer attaching various documents;
(i)    Application to Admit Late Documents (AALD-6) dated 22 August 2022 filed by Cloud Nine attaching an affidavit of Mr El Hassan of same date;
(j)    Application to Admit Late Documents (AALD-7) dated 16 December 2022 filed by Cloud Nine attaching affidavit of Mr Dandachli of same date;
(k)    submissions by the Nominal Insurer in relation to the estoppel issue dated 26 January 2023.
(l)    submissions by Mr Testar dated 9 February 2023, and
(m)     letter from Cloud Nine’ solicitors dated 17 February 2023 stating it did not wish to make any further submissions and it would respond orally.
Cloud Nine tendered a “court book” in hard copy that comprises three volumes and contains all of the aforementioned documents. They also filed a soft copy of this “court book” which is in the portal.

Oral evidence

There was no application to cross-examine. Oral submissions were made by the respective parties. A sound recording was made of the arbitration hearing, which is available to the parties. A written transcript (T) has been made from the sound recording.
In their submissions the parties when referring to page numbers did so by reference to the pagination in the court book (CB), I will do likewise in these reasons.

REASONS AND FINDINGS

Estoppel

On 5 September 2022 in matter W4769/21 Glenn Capel, Division Head, issued a Certificate of Determination[5] set out below, excluding some formal parts:
[5] CB1,400 and 1,405.

“PERSONAL INJURY COMMISSION

CERTIFICATE OF DETERMINATION
Matter No:   W4769/21
Applicant:   Peter Testar
1st Respondent:           Cloud Nine Limos Pty Ltd
2nd Respondent:          Workers Compensation Nominal Insurer (iCare)
Date of Determination: 5 September 2022
The Commission orders:
1. The second respondent pay the applicant, as lump sum compensation under section 66 of the Workers Compensation Act 1987, $73,550 in respect of 27% permanent impairment resulting from injury deemed to have happened on 11 June 2019.
Brief statement of reasons
2. This Certificate of Determination is issued in accordance with the Medical Assessment Certificate issued under Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998.
3.     The proceedings were commenced after 2 April 2013 and therefore no order is made as to costs.”

Written submissions have been filed by each party in relation to whether the above Certificate of Determination creates an estoppel such to preclude Cloud Nine in the current proceedings from disputing that Mr Testar was a worker or deemed worker injured in the course of his employment with Cloud Nine. Cloud Nine’s written submissions are dated 16 December 2022,[6] the Nominal Insurer’s submissions are dated 26 January 2023[7] and Mr Testar’s submissions are dated 10 February 2023.[8]
[6] CB1,582 to 1,594.
[7] CB 1,595 to 1,604.
[8] CB 1,605 to 1,606.
The parties have each made oral submissions.[9]
[9] T7-28.
It is common ground that the onus of proof is one the party asserting an estoppel defence, in this case both respondents.
However, for reasons that will become apparent below it is otiose to determine the estoppel argument because I have found, after hearing submissions about “worker”, “deemed worker” and “injury” that Cloud Nine was the relevant employer of Mr Testar at the time of injury.

Worker

As the arbitration hearing progressed the main submissions were directed to whether Mr Testar was a worker of Cloud Nine.

Legislative provisions

Section 9 of the 1987 Act provides:
“(1) A worker who has received an injury … shall receive compensation from the worker’s employer in accordance with this Act.
(2) Compensation is payable whether the injury was received by the worker at or away from the workers place of employment.”
Section 4 of the 1987 Act relevantly defines “injury” in sub-paragraph (a) as a personal injury arising out of or in the course of employment.
Section 4(1) of the 1998 Act relevantly defines “worker” as follows:
“(1) In this Act—
...
workermeans a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing).”

Cloud Nine submissions

Cloud Nine made oral submissions that Mr Testar was a subcontractor and not an employee of Cloud Nine and in the alternative, if Mr Testar was an employee or deemed employee of any company it was with Hughes.[10]
[10] T30.13.
Cloud Nine submitted that the legal principles to apply are those set out in Stevens v Brodribb Sawmilling Company Pty Ltd,[11] being a multifactorial approach which takes in the totality of the relationship between the parties. The following submissions were made:
[11] [1986] HCA1; (1986) CLR 16, Stevens.
(a) the control test is the surest guide to whether a person is contracting independently or serving as an employee;
(b) The relevant factors include:
(i)the mode of remuneration;
(ii)how he is paid;
(iii)provision and maintenance of equipment associated with work;
(iv)the obligation to work;
(v)the hours of work;
(vi)provision for holidays;
(vii)income tax;
(viii)superannuation issues;
(ix)the right of an employer to have a particular person do particular work;
(x)the right to the exclusive services of the person engaged;
(xi)a right to dictate other place of work;
(xii)the place of work, and
(xiii)the type of work.
It needs to be borne in mind that in many cases the determination as to whether someone is an employee or contractor is difficult as the indicia rarely are all one way, and I find that the subject matter is such a case.
It was submitted that Mr Bassem El-Hassan when he filed his Miscellaneous Application in 4799/20 did so by himself, was not legally represented, and that he is an unsophisticated business owner with English not being his first language. It was also submitted he has no legal training and for these reasons no weight should be given to his admissions in the Miscellaneous Application form.
In the Miscellaneous Application form there is space for brief details of the claim or dispute to be included. Mr El-Hassan states:
“I am disputing the fact that Peter got injured whilst he was completing a job for my company in June 2019.
I believe that he was injured whilst he was off the clock (not working for me), or this could be a pre-existing condition.
I was never ever advised of Peter’s injury.
However, Peter is claiming that this is a work-related injury, so that I would have to pay for his medical bills and or other expenses.
I do not believe that Peter is being honest about the cause or the timing of his injury”[12]
[12] CB 289.
While I do not accept that Mr El-Hassan was an unsophisticated businessman nor is there sufficient evidence about his ability to communicate in English, I find that no particular weight should be placed upon the above passage as there is no clear admission of employment. The words “completing a job for my company” could apply equally to a sub-contract or employment relationship.
It was submitted that the work in question is simple in terms of driving vehicles, picking up passengers and dropping them off. It is argued by Cloud Nine that this is work incidental to the work that Mr Testar himself regularly carries out in his professional capacity as a sole trader, as a driver. It was submitted that it is not in dispute that Mr Testar works independently as a driver, and counsel argued that the evidence shows that he had done so since he suffered the injury.
Cloud Nine relies on the evidence in four affidavits to establish in their view that Mr Testar is not a worker. They are the affidavits of Mr El-Hassan sworn 22 August 2021[13] and 15 January 2021[14], the affidavit of Mr John Khoury sworn 16 January 2021[15] and the affidavit of Ms Leila Akkaoui sworn 15 January 2021[16] (she is the wife of Mr El-Hassan).
[13] CB 1,091.
[14] CB 1,154.
[15] CB 1,162.
[16] CB 1,147.
Cloud Nine submits that it did not control Mr Testar’s work and it was the intention of the parties at all times that Mr Testar did work as a subcontractor. These facts are disputed by Mr Testar.
It was argued that Cloud Nine’s role was providing the vehicles that Mr Testar drove and passing on Mr Testar’s portion of the money earned from the work that he did. It was submitted that this is Cloud Nine’s business model and that Cloud Nine has no employees but it had a number of subcontractors who drive its vehicles. I consider the fact that Cloud Nine owned and provided vehicles to Mr Testar is a factor supporting an employee relationship. Also the fact that Cloud Nine was paid by Hughes and it was Cloud Nine who then paid Mr Testar, I find, tends to support an employee relationship with Cloud Nine. Especially given the way Mr Testar was paid, not by submitting invoices, but by Cloud Nine calculating payment from the vehicle report for the jobs completed sent to it by Hughes.[17] I reject the contention that this method of payment is indicative of Hughes being the employer. The document is headed “Equity Transport Group-Vehicle Report” and the contractor is listed as “Cloud Nine Limos Pty Ltd” and under that there is reference to “vehicle code:106 Peter Testar”. Hughes did not pay Mr Testar, Cloud Nine did. The fact that Mr El-Hassan states that Hughes put a tracking device in their vehicles to work the jobs completed and that Hughes put an app on Mr Testar’s phone to allocate jobs was part of their arrangement with Cloud Nine.
[17] CB 1,100.
Also the text messages in annexure D to the affidavit of Ms Akkaoui suggest an employee relationship because Mr Testar consistently refers to asking to take time off and he refers to his “pay”.[18] For instance, on 31 March 2019 he sent a text “brother this Tuesday if we are not busy can I take a day off my auntie she’s arriving from Canada because my cousin is in intensive care unit thank you”[19] and on 14 April 2019 he refers to the need to attend a funeral and he asks, “if I could take a day off tomorrow thanks bro”. The reply is “Ok have off tomorrow”.[20]
[18] CB 636 to CB 645.
[19] CB 641.
[20] CB 643.
Cloud Nine’s counsel did accept that this evidence shows that there were communications between Mr Testar and Mr El-Hassam and Ms Akkaoui relating to his availability, his preferred time to work and issues like that but he submitted that the question of when he worked and whether he worked was Mr Testar’s decision alone, which is consistent with someone engaged in their own enterprise. However, I find when one considers the text exchanges they are not mere notifications by Mr Testar when he can and cannot work, he actually asks for permission and the response from Cloud Nine is couched in language of granting permission. Therefore, I find such exchanges tend to support Mr Testar being an employee.

Cloud Nine’s counsel referred to Mr El-Hassan’s account of his initial conversation with Mr Testar and he alleges Mr Testar said, “I am looking for some subcontracting work as a driver.” Counsel adds that Mr El Hassan provided induction papers to Mr Testar related to Hughes who was, if anyone was, the employer. He also submitted that Cloud Nine was never provided with a tax file number.
The evidence of Ms Akkaoui was also relied upon wherein she states at [6] of her affidavit that Cloud Nine
“engages contractor drivers to drive its car, buses and limousines. Each driver when engaged is required to provide an Australian Business Number for Cloud Nine’s records; and drivers are also required by Cloud Nine to obtain their own insurances.”[21]
[21] CB 1,147.
Ms Akkaoui first started assisting Cloud Nine around May 2019 and she says she is responsible for all administrative tasks while Mr El-Hassan is on the road. This was well after Mr Testar commenced with Cloud Nine.
Counsel also referred to her evidence at [15] that when she first met Mr Testar on 11 June 2019 and she looked up his ABN. She also relates at [16] on 26 June 2019 she provided Mr Testar with a document from the Australian Tax office website about registering for GST.
However, [17] of Ms Akkaoui’s affidavit does seem at odds with the contention that Cloud Nine did not have employees. She relates the following conversation,
“LE: I have been checking Cloud Nine’s books and getting some things in order. I notice that you are not registered for GST. If you are not registered for GST, I will need to put you on the books as an employee. If we do that, you need to provide me with your tax file number, and I have to deduct PAYG tax and 9.5% for super. You will also be given a base salary.
PT: No, I don’t want you to deduct any tax or super. I’ll manage it with my accountant. I will get my accountant to register for me for GST. I want to get paid per job and not a base salary.
LE: Ok”
Why I have commented that this seems at odds with the assertions of Mr El-Hassan that Cloud Nine did not employ drivers, is because it seems odd that Ms Akkaoui would even suggest putting Mr Testar on the books as an employee, if they never used that business model. You would think a more logical approach would have been to say you cannot continue to drive for us as a contractor unless you provide the details of registration for GST. However, I have not regarded this as determinative. Also, this conversation took place on 26 June 2019, after Mr Testar alleges he was injured on 11 June 2019, which coincidentally was the date Ms Akkaoui says she first met Mr Testar.
Therefore, if Mr Testar was in fact injured on 11 June 2019 at that time he had not registered for GST.
However, Cloud Nine’s counsel submits this passage quoted above provides evidence that Mr Testar was not an employee but, in fact, a subcontractor. He added that Cloud Nine did not decide when, where or how Mr Testar would work, that was a decision for Mr Testar and, to the extent anyone made that decision, it was organised and made by Hughes.
Additionally it was submitted, that Cloud Nine never withheld tax for Mr Testar and he never provided a tax file number, instead he provided an ABN. Cloud Nine never paid superannuation. It was submitted that this is confirmed in Mr Testar’s statement. I accept that these are indicia that support him being a sub-contractor.
Cloud Nine also submitted that there was a non-exclusive arrangement because Mr Testar would often keep possession of Cloud Nine vehicles, perform private driving jobs. The arrangement was that he would pay Cloud Nine 50 per cent of the proceeds from these jobs.[22] It was submitted that this is consistent with him operating his own business but having to use Cloud Nine’s vehicles to do so. It was submitted by Cloud Nine that this was a profit-sharing arrangement between two separate entities and, as such, this is a factor not consistent again with Mr Testar being an employee of Cloud Nine. I accept that this is an indicia of a sub-contract relationship and not one of employer/employee.
[22] CB 1,092 at [29].
Furthermore, it was submitted that Mr El-Hassan’s evidence is there were no restrictions at any time on Mr Testar’s ability to do other work, either privately or for other companies.[23] Counsel also added that Mr Testar was free to come and go as he wished, he was free to take holidays as he wished, he was not controlled by Cloud Nine.
[23] CB 1,029 at [31].
It was submitted that even though Cloud Nine had communications with him about availability, that was because Cloud Nine wanted to be informed as to Mr Testar’s availability because of their relationship with Hughes. Counsel stated if Mr Testar was unavailable to drive a car Cloud Nine could not make any money from its car business so it would bring in another subcontractor to take Mr Testar’s car. It was submitted that this is not indicative of Cloud Nine telling Mr Testar when and how he worked, it is quite the opposite. It was submitted that this is an arrangement that allowed Mr Testar as a subcontracting driver to come and work as he wished. However, counsel has not considered the fact that Mr Testar could not arrange for a replacement driver is an indicia tending to an employee relationship.
Counsel for Cloud Nine accepted that Mr Testar was provided a Cloud Nine vehicle to conduct his work but he submits that was the nature of the business model and it was consistent with all the other subcontractors working for Cloud Nine. He adds that unlike an employer/employee situation, Mr Testar was responsible for the vehicle when it was in his possession and would have to personally pay for any damage caused to it, whereas an employee would not. An example of this arrangement was cited with the email chain on 28 and 30 October 2019[24] with Mr Testar agreeing for the repair cost to be taken out of the next week’s payment to him. I accept that paying for repairs to Cloud Nine’s vehicle if it was damaged by Mr Testar is an indicia not consistent with an employee/ employer relationship.
[24] CB 617 and CB618.
Counsel submitted that the arrangement was that Cloud Nine was responsible for maintenance, insurance and upkeep of the vehicles. It was Cloud Nine’s property, but consistent with a sub contractual arrangement Mr Testar was responsible paying half of the fuel costs associated with his use of the vehicle. I accept paying half the fuel costs is more consistent with a contractor relationship than that of an employee. However, Cloud Nine paying for maintenance, insurance and upkeep of the vehicles is more consistent with an employee/employer relationship.
It was submitted that Cloud Nine did not effectively or meaningfully control Mr Testar’s work. However, it did provide Mr Testar’s services to Hughes along with their vehicle and the fact that Hughes allocates the jobs does not diminish in my view that an employer/employee relationship existed between Cloud Nine and Mr Testar.
I do not regard as determinative that Mr Testar had to wear a Hughes tie and the car had a Hughes sticker on it because this was part of the arrangement between Hughes and Cloud Nine. Similarly, the fact that Hughes gave an induction to Mr Testar as set out in the affidavit of Mr Khoury and required Mr Testar to comply with their policies does not mean he was their employee.
In Mr Testar’s statement dated 4 December 2019 at [35] he says he did not set the fees charged, he says that was done by Mr El-Hassan or the company, referring to Cloud Nine.[25] He also states at [41] he never gave Cloud Nine an invoice each week. He was not aware of GST being taken out of his pay. These are facts which are consistent with Cloud Nine’s evidence and I find support a finding of an employee/employer relationship.
[25] CB 326.
The indicia that supports a finding that Mr Testar was a sub-contractor are as follows:
(a)    Mr Testar had an ABN;
(b)    there was evidence that Mr Testar could use Cloud Nine cars for work he obtained and paid a proportion to Cloud Nine;
(c)    Cloud Nine did not deduct income tax;
(d)    Cloud Nine did not pay superannuation, holiday or sick pay;
(e)    Mr Testar had to pay for any damage to the vehicle sustained when he was driving;
(f)    Mr Testar had to pay for 50% of the fuel costs, and
(g)    Mr Testar could declare himself available or unavailable for work.
The indicia that supports a finding that Mr Testar was an employee of Cloud Nine are as follows:
(a)    Mr Testar did not operate under a business name;
(b)    Mr Testar did not issue invoices for the work he performed for Cloud Nine;
(c)    Cloud Nine paid Mr Testar;
(d)    Mr Testar, up to the time of the injury, did not charge GST;
(e)    the vehicle was owned by Cloud Nine;
(f)    the vehicle was maintained by Cloud Nine;
(g)    Mr Testar did not employ anyone to drive for him if he was unavailable;
(h)    Mr Testar was expected to wear a tie with the Hughes logo in circumstances where Cloud Nine had a contract with Hughes to provide vehicles and drivers to undertake drop off and pick up work for Hughes’s customers;
(i)    that Mr Testar was expected to go through an induction process with Hughes, and as stated, Hughes was in a contractual relationship with Cloud Nine;
(j)    there is no evidence that Mr Testar could delegate work, and
(k)    Mr Testar did not set the fees that were charged from Hughes to Cloud Nine for his driving.
In the case of Malivanek v Ring Group Pty Ltd[26] Roche DP stated
[26] [2014] NSWWCCPD 4, Malivanek.
“[181] In view of the difficulty posed in cases of this kind I add, for completeness, McColl JA’s second observation in Langford, at [16]
‘The second observation concerns the distinction between an employee and an independent contractor. That distinction has been said to be ‘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’: Marshall v Whittaker’s Building Supply Co [1963] HCA 49; (1963) 109 CLR 210 at 217 per Windeyer J. Although this statement was criticised by Wilson and Dawson JJ in Stevens (at 34) as ‘posing the ultimate question in a different way rather than offering a definition which could be applied for the purpose of providing an answer’, it was referred to with approval by the majority in Hollis (at 38 – 39 [39] – [40] [Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 (Hollis)]).’
[182] Consistent with this approach, Buchanan J (Lander and Robertson JJ agreeing) observed in ACE Insurance Ltd v Trifunovski [2013] FCAFC 3 ([93]) that in Hollis ‘a real emphasis was authoritatively placed on the notion of working in the business of another, rather than in the business of the individual’. This statement attempts to overcome the broad, and often unhelpful and imprecise, ‘multi-factorial’ approach developed in Stevens v Brodribb.
[183] As Bromberg J explained in On Call Interpreters, while the majority in Hollis applied a multi-factorial approach, they provided a ‘focal point around which relevant indicia can be examined’. His Honour added, at [207]:
‘That focal point has been elsewhere expressed as the ‘ultimate question’ posed by the totality approach: Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34] (referred to with approval by Crispin P and Gray J in Yaraka Holdings Pty Ltd v Gilgevic [2006] ACTCA 6; (2006) 149 IR 339 at [303]); and see Sappideen C, O’Grady P and Warburton G, Macken’s Law of Employment, (6th ed, Lawbook Co., 2009), at [2.80]. As Wilson and Dawson J in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 observed at 35 ‘the ultimate question’ was posed by Windeyer J in Marshall v Whittaker’s Building Supply Co Ltd [1963] HCA 26; (1963) 109 CLR 210 at 217, in a passage which the majority in Hollis strongly endorsed at [40]. The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is ‘rooted fundamentally’ in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis [39], [40], [47], and [57] and see Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161 at [30]-[32]. The English courts have taken a similar approach. There the ‘entrepreneur test’ seems to be the dominating feature: Selwyn NM, Laws of Employment (2006) Oxford University Press at [2.34].’
[208] Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a ‘practical matter’:
(i) is the person performing the work an entrepreneur who owns and operates a business; and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.” (emphasis added in the original)
I have considered the abovementioned indicia and I find they point to Mr Testar being an employee of Cloud Nine. At [174] of Malivanek Roche DP stated:
“The power to delegate is an important factor in deciding whether a worker is a servant or independent contractor (Stevens v Brodribb at 26, citing Australian Mutual Provident Society v Chaplin [1978] UKPC 7; (1978) 52 ALJR 407).”
I find that the absence of the power to delegate is significant, particularly when considered with the other indicia discussed above. No one indicia is determinative but I find that Mr Testar was providing his personal services to Cloud Nine and it was Cloud Nine who in turn provided his driving services, together with their vehicle, to Hughes.
The evidence in this case is if Mr Testar could not work a shift Cloud Nine would get another driver to operate his vehicle.
In addition, I find that Mr Testar was not working as an entrepreneur who owned and operates a business. I find he was working for Cloud Nine, furthering their business contract with Hughes. I do not accept the submission in reply by Cloud Nine that there were three businesses operating being Hughes, Cloud Nine as the provider of vehicle and Mr Testar as the provider of driving services. The reason I do not accept this is because of the payment structure between Hughes and Cloud Nine discussed earlier. Also, as I have found Cloud Nine supplied another driver to perform the contract with Hughes if Mr Testar was unavailable. Mr Testar did not arrange another driver directly with Hughes.
Having found Mr Testar was an employee of Cloud Nine I do not need to deal with the submissions in relation to deemed worker.

Injury

Cloud Nine submits that a finding should be made that Mr Testar was not injured in the course of his employment with Cloud Nine because
(a)    he was not so employed;
(b)    Mr Testar did not report the injury to Cloud Nine until 22 of October 2019 even though he alleges he was injured on 11 June 2019;
(c)    Mr Testar did not seek any treatment or scans for his purported injury till September of 2019, again over three months after the injury purportedly occurred;
(d)    the delay in notifying the injury and obtaining treatment raise doubt whether the injury did in fact occur on 11 June 2019;
(e)    he has subsequently asserted he was prevented from working because of the injury, yet he continued to work for almost five months after his alleged injury, and
(f)    Mr Testar is not a credible witness as demonstrated by him denying he had a bank account whereas at CB 1,134 it is evident he did and he has since admitted that he was working for a rideshare company when he claimed to be incapacitated.
I have found Mr Testar was an employee of Cloud Nine, certainly on or around 11 June 2019 when he alleges he was injured. Mr Testar in his statement dated 4 December 2019 at [52] and onwards explains why he did not report his injury to Cloud Nine sooner. While I accept that Mr Testar’s evidence needs to be treated with caution given his subsequent employment when receiving weekly compensation, I find his account for the delay in reporting his injury and seeking medical advice is consistent with the details in the medical evidence and the histories he has given to the doctors. He says he kept working but the pain over time with the loading and unloading of luggage became worse and that is what led him to seek medical treatment.
I find that the description of the duties that Mr Testar performed for Cloud Nine were of a nature that could have caused injury to his right shoulder, neck and back when lifting baggage in and out of the van.[27] He estimates some bags weighed up to 30kg and on occasions he would have to lift them above his head to get them in or out of the van.[28]
[27] CB 327 at [50].
[28] CB 330 at [85].
Dr Popoff, orthopaedic specialist, in his report dated 26 November 2019 supports the causal connection with lifting luggage and injury to the right shoulder and neck on 11 June 2019.[29] The doctor refers to an ultrasound demonstrating a full thickness tear of the anterior supraspinatus.
[29] CB 333.
Dr Kuzmanovic in his clinical note for 23 October 2019 records details of the injury and that Mr Testar continued working and that the pain was becoming more severe and he went to see a doctor and an ultrasound was done on 5 September 2019 showing a tear of the right supraspinatus tendon and bursitis.[30] The ultrasound dated 5 September 2019 is addressed to Dr Alam.[31] The report shows the ultrasound was requested on 21 August 2019.[32]
[30] CB 352.
[31] CB 301.
[32] CB 113.
Dr Rowden, orthopaedic surgeon, qualified by the Nominal Insurer reported on 23 December 2020 that Mr Testar has symptoms in his right shoulder almost certainly related to lifting heavy bags over the last few months of 2019. He also found his cervical spine was aggravated by his work directly or indirectly and the left shoulder was aggravated due to sleeping on it because of the right shoulder injury.[33] Dr Bodel, orthopaedic surgeon, also support the causal connection of the alleged injuries to Mr Testar’s employment with Cloud Nine.[34]
[33] CB 195 and CB 196.
[34] CB 186.
As Cloud Nine did not make detailed submissions about the medical evidence I will not summarise it further. I find that the above mentioned evidence is supportive of the allegations of injury made by Mr Testar and of the mechanism of injury with the loading and unloading of luggage. In addition, I accept the submissions of the Nominal Insurer that the claim form contains a consistent account of the circumstances of the injury in terms of the nature of the work performed and the medical evidence is all one way supporting a finding of injury.
Accordingly, I find that Mr Testar did sustain injury on or about 11 June 2019 in the course of his employment with Cloud Nine.

Quantum

Cloud Nine did not challenge the quantum of the payments set out in the s 145 notice, advising that the overpayment to Mr Testar had been deducted.
Therefore, I find that Cloud Nine is liable to reimburse to the Workers Compensation Nominal Insurer the amount specified in the notice of $122,950.18.

[2023] NSWPIC 218

12 May 2023