Fed Consulting Services Pty Ltd v Gelo
[2014] ACTSC 185
•18 August 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Fed Consulting Services Pty Ltd v Gelo |
Citation: | [2014] ACTSC 185 |
Hearing Date(s): | 3 June 2014 |
DecisionDate: | 18 August 2014 |
Before: | Mossop M |
Decision: | See [36] |
Category: | Principal Judgment |
Catchwords: | WORKERS COMPENSATION – determination of “State or Territory of connection” – definition of “usually works” – whether the regular filling of a truck with petrol in one State is sufficient to establish that the worker usually worked in that State |
Legislation Cited: | Workers Compensation Act 1951 (ACT) ss 36A, 36B, 197 |
Cases Cited: | Avon Products Pty Ltd v Magrit Falls (2010) 5 ACTLR 34; [2010] ACTCA 21 |
Parties: | Fed Consulting Services Pty Ltd ( Appellant) Ilija Gelo ( Respondent) |
Representation: | Counsel: Mr R Crowe SC ( Appellant) Mr A Muller ( Respondent) |
| Solicitors: Sparke Helmore ( Appellant) Slater & Gordon ( Respondent) | |
File Number(s): | SCA 20 of 2013 |
Decision under appeal: | Court/Tribunal: ACT Magistrates Court Before: Magistrate Morrison Date of Decision: 26 March 2013 Case Title: Fed Consulting Services Pty Ltd v Ilija Gelo Citation: [2012] ACTMC 3 |
Introduction
This is an appeal from the Magistrates Court conducting an arbitration under the Workers Compensation Act 1951 (ACT) (the Act). The appeal is brought pursuant to s 197 of the Act. The issue before the magistrate was which State or Territory was the relevant State or Territory of connection for the purposes of s 36B of the Act. The dates of the injuries alleged in the parties’ respective applications for arbitration were somewhat confused, however it appears that a frank injury occurred on 19 February 2011 and a nature and conditions injury was alleged to have arisen over the period January 2011 to February 2012.
Before his Honour, the issue came down to whether or not the regular filling of a truck with petrol at a service station in Queanbeyan at which the appellant (the Company) had an account was sufficient to warrant a finding that the respondent (Mr Gelo) usually worked in New South Wales. His Honour found that it did not and hence that Mr Gelo usually worked in a single State or Territory, namely the Australian Capital Territory and therefore the Australian Capital Territory was the Territory or State of connection for the purposes of s 36B of the Act. The employer has appealed against that decision.
The decision below
His Honour recorded that by agreement between the parties the question to be determined was limited to that of determining the Territory or State of connection for the purposes of s 36B of the Act.
His Honour identified the uncontroversial propositions that Mr Gelo was both a director and an employee of the appellant Company. He also recorded that Mr Gelo identified himself as the owner of the Company, holding one of the two ordinary shares which had been issued.
His Honour carefully and comprehensively reviewed the evidence that had been given and recorded the following findings of fact:
a. Mr Gelo resides in Queanbeyan in NSW. He usually works in the ACT.
b. The Company has been in operation for 31 years. I infer that its operations for most if not all of that time have been in the building industry. Mr Gelo and the Company each hold builders licences in both NSW and the ACT. It is apparent that it is not a large construction company. The Company did not have as an employee any licensed builder other than Mr Gelo. Its gross income in the 2012 year was reported as 1.26 million dollars. Its recent activities appear to involve taking on sequential building jobs. It is apparent that the Company does not maintain either in NSW or the ACT any commercial or industrial premises either as a store yard or from which administrative and organisational activities are conducted. In the 5 years before the date of Mr Gelo’s alleged injury equipment and materials were moved from job site to job site as required.
c. Mr Gelo’s work as an employee of the Company was that of a carpenter with additional duties by way of organising the work performed by others including subcontractors.
d. Mr Gelo’s wife has received some payment of salary from the Company at some stage. She would sometimes write company cheques which I infer were for the payment of the Company’s trading accounts. When she did that it was from their home in Queanbeyan. The Company has held accounts with both the Commonwealth and ANZ banks and in both cases those accounts have been held at a Queanbeyan branch of those establishments. Sometimes company cheques were written by Mrs Gelo, sometimes by the company accountant, sometimes by Mr Gelo’s son and sometimes by Mr Gelo himself. The evidence does not establish how frequently Mr Gelo wrote cheques for the Company.
e. Mr Gelo says that he was injured on 19 February 2011. The construction site at which Mr Gelo says he was injured is within the ACT. The Company’s job immediately before that one was also at a site within the ACT.
f. The Company and a Mr Ron Smith who is Mr Gelo’s son-in-law owned property at Ford Street in Queanbeyan.
g. Building work was carried out at that site by way of the renovation of an existing house and subsequently by way of the construction of 2 flats or units at the rear of the renovated house.
h. The renovated house was one intended for occupation by Mr Gelo’s daughter and son-in-law. The evidence does not establish what if any business arrangements existed for the carrying out of the renovation work. Mr Gelo did not charge for anything done in connection with the renovation (T 24). I infer from Mr Gelo’s evidence that the Company did not charge for anything done by Mr Gelo in connection with the renovation.
i. I infer that, whatever may have been the true nature of the arrangements for the renovation of the Ford street house to be occupied by the family members, the second phase of that work – the construction of the 2 units – was a formal building project carried on by the Company.
j. The renovation phase of the work at the Ford Street address did not require that any person hold a building licence. Mr Gelo visited the building site on 5 or 6 occasions to check on progress of the work (T13). The renovation work did not impose any formal supervision requirement on him or, I infer, the Company, as the holder of a building licence because that work did not require a licence (T22).
k. The evidence does not establish precisely when either phase of the construction work commenced or when or over what period any site visits by Mr Gelo took place.
l. I infer that work at Ford Street had commenced by April of 2010 (T 21). Mr Gelo did, at some unspecified time in 2010, made some unspecified organisation of materials for the Ford Street work (T22). The evidence does not establish what he did, when or how often by way of organisation of materials. The second phase of work – that is the 2 flats at the rear of the property had commenced by at least 15 August 2011 (T29) which is after the date of Mr Gelo’s alleged injury. Mr Gelo spent 5 hours on site on that day fixing mesh for footings.
m. At some unspecified time during 2011 the Company carried out building work at Jerrabomberra in NSW. Mr Gelo was required to supervise that work by virtue of being the holder of the relevant building licence. His attendance at that site was required on at least the occasions when “the government inspector” went to the site. I infer that to be a reference to the occasions when building inspections are required in accordance with the issued building approval or the Building Code. The evidence does not establish how often those inspections took place or whether any attendance at that site took place before the date of Mr Gelo’s alleged injury.
n. Mr Gelo spent 5 hours at that site on 3 November 2011 although not what he described as “physically working” for the whole of that period. He spent 1.5 hours at that site on 5 November 2011.
o. Either the Company or Mr Gelo personally owned a truck which Mr Gelo used in connection with the Company’s business. The truck was garaged at [the respondent’s] home in Queanbeyan and he drove it to and from work sites each day.
p. At some unspecified time in the past Mr Gelo was involved in going to a place in Queanbeyan to pick up supplies for a job (T18). What Mr Gelo described as his workers picked up scaffolding, concrete reinforcing and things like that from NSW.
q. The evidence does not establish how often Mr Gelo was involved in collecting any supplies or materials in Queanbeyan in the lead up to his alleged injury or whether there was any pattern to his involvement in any such activities.
r. In the period of 1 or 2 years leading up to the date of the alleged injury, the Company owned builders scaffolding was stored at the property of Mr Gelo’s father-in-law at Wickerslack Lane in NSW. Sometimes Mr Gelo went to that address for the purpose of collecting scaffolding. What Mr Gelo described again as “his workers” would load the scaffolding when Mr Gelo went, and on some of those occasions Mr Gelo drove the truck. The evidence does not establish how often scaffolding was collected, how often Mr Gelo was present on such occasions or how often Mr Gelo drove the truck when he was at the address.
s. Mr Gelo regularly fuels the truck at a Mobil outlet in Queanbeyan where the Company has an account, and has done so on what I infer to be a regular basis, for some years.
t. Mr Gelo’s son is presently building units at No 9 Bungendore Road in Queanbeyan. On 7 February 2013 Mr Gelo went to that site to deliver some piping.
u. At the time Mr Gelo gave his evidence the Company was expecting a project in Queanbeyan to start.”
His Honour then referred to the key authorities, namely, Avon Products Pty Ltd v Magrit Falls (2010) 5 ACTLR 34 and Hanns Greyhound Pioneer Australia Limited (2006) 196 FLR 361.
His Honour identified that it was apparent that Mr Gelo worked in the Australian Capital Territory. The question was whether he also usually worked in New South Wales. His Honour reviewed the evidence about particular building jobs and other building-related work done in New South Wales. He referred to what was described in evidence as the Ford Street job and evidence that sometime in the past Mr Gelo had been involved in collecting scaffolding from where it was stored at an address in New South Wales. He also referred to the evidence as to where the administration of the business took place describing it as “very vague”. His Honour agreed with the observations of Commissioner Herron in Tamboritha Consultants Pty Ltd v Knight (2008) 58 SR (WA) 291 that the requirement to have regard to what had happened over the past 12 months did not preclude him from having regard to a longer period of history. However, having regard to the fact that the Company had been operating for 31 years and Mr Gelo had been working for it during that period, a concession that something had happened at some unspecified time in the past was of little value and determining what was usual for present purposes.
In considering s 36B(6)(ii) and (iii), his Honour considered that the intentions of Mr Gelo or the Company added little to the proposition that Mr Gelo usually worked in New South Wales.
His Honour then found that, in relation to each of the activities to which he had just referred, namely, the Ford Street job, the collection of scaffolding, and the work related to the administration of the Company,
the evidence [did] not establish that any of them took place with the necessary quality of being habitual or customary so as to justify a conclusion that Mr Gelo usually worked in his employment in NSW.
10. His Honour then turned to what has become the central issue on the appeal, being the evidence that “Mr Gelo regularly refuelled his work truck at a petrol outlet in Queanbeyan in NSW where the Company maintains an account”.
11. His Honour referred to the additional submissions which he had requested and had been provided by the parties. His Honour annexed to his reasons this request and the written submissions in response. Those submissions were directed to the issue of whether any work-related activity, no matter how slight or remotely related to employment, would satisfy the test of “usually works”, provided that it was carried out habitually or customarily. It also addressed whether or not works in the expression “usually works” should be the same as the broad approach used to determine what is “… out of, or in the course of, the worker’s employment” for the purposes of s 31(1) of the Act. His Honour had posed the question whether a trades apprentice who was given the task of maintaining the smoko supplies and every fortnight bought a jar of instant coffee at his corner shop in Queanbeyan on his way to work in Canberra would be considered to be usually working in New South Wales for the purposes of the Act. His Honour rejected the Company’s submission that such a situation would involve the employee usually working in New South Wales. He said at [52]:
to reach such a conclusion is to give the expression [usually works] a wholly artificial meaning not mandated by the legislation nor required to meet its stated purposes.
12. His Honour found that “something more is required than that an activity be somehow employment-related and that it be habitual or customary.” His Honour’s conclusions were stated in paragraphs [57]-[60] as follows:
57The interpretation of section 36B pressed for by the Company would have the test in subsection 36B(3)(a) read as if it referred to the Territory or State where the worker usually did anything in the course of his or her employment. As I have said that gives the words “usually works in the employment” an interpretation not corresponding to their ordinary meaning.
58In the end result the conclusion I draw is that not everything done by a worker which might fall within the broad concept of being in the course of their employment will necessarily amount to “work in the employment” for the purposes of the employment connection test. Some things done by a worker may be so insubstantial or so merely incidental to their employment that, despite being customary or habitual, they cannot rationally support a conclusion that the worker usually works in his or her employment in that jurisdiction for the purposes of determining where the workers employment is connected.
59In the present case I regard the evidence about Mr Gelo’s regular refuelling of the work truck in that way. It is clear that it was something done by him habitually or customarily even though the frequency was not explored in evidence. I infer that it was a work related activity. I do not accept that it was something carried out by him acting in his capacity as a director. In the absence of other evidence there is no reason to conclude that his duties as a director went beyond what would be required of him by the Corporations Law. It was no doubt necessary for the vehicle to be regularly re-fuelled and convenient for Mr Gelo to do so where he did in NSW. But doing so was clearly something which did not require his skills or expertise and which was merely incidental to his role as a carpenter and trades supervisor for the Company. I conclude for the reasons given that Mr Gelo’s conduct in refuelling his vehicle where he did despite being customary or habitual cannot of itself rationally support a conclusion that he usually works in his or her employment in NSW for the purposes of determining where his employment is connected.
60I conclude therefore that the evidence before me identifies a single Territory or State in which Mr Gelo usually works in his employment – that being the ACT.
Grounds of appeal
13. The grounds of appeal are:
1. His Honour erred in finding at [59] of his reasons for decision that in performing the duties of refuelling the truck the respondent did not work in his employment.
2. His Honour erred in distinguishing at [59] between incidental work duties and those requiring skill or expertise.
14. The Company submitted that the magistrate misdirected himself in seeking to distinguish between duties requiring “skill and expertise” and those which did not. It submitted that the approach applied a gloss to the words of s 36B(3)(a), similar to that which was disapproved in Avon, and there was no warrant for distinguishing between important or essential duties and those which were not.
15. Mr Gelo submitted that the evidence in relation to truck fuelling fell short of demonstrating there was any habit or custom associated with the performance of the activity and that it would be unreasonable to conclude, just because Mr Gelo was the managing director of the Company, that he was at all times in the course of his employment. He relied upon the comment of Applegarth J in Ferguson v WorkCover Queensland [2013] QSC 78 at [33] that a “worker’s occasional presence in a State for work-related purposes may mean that he or she does not “usually work” in that State.”
Consideration
16. The relevant principles established by the authorities as to the phrase “usually works” are as follows:
(a)In determining for the purposes of s 36B: “where a worker usually works”, the word “usually” is given the meaning of habitual or customary or in a regular manner: Hanns at [26]; Ferguson at [34]; Martin v R J Hibbens Pty Ltd (2010) 8 DDCR 535 at 547; [2010] NSWWCCPD 83 at [60].
(b)It does not involve asking whether a worker works in a Territory or a State a majority of the time: Hanns at [25]; Ferguson at [32]; Martin at 547; [60]; Tamboritha Consultants at [76].
(c)There is no gloss which compels the court only to consider where a worker is “required” to work: Avon at [29].
17. His Honour drew the distinction between that which was insubstantial or incidental to employment and the concept of “work in the employment”. In s 36B(3)(a) the reference to “in the employment” is, in my view, designed to ensure that there is no doubt that the reference to “usually works” covers those activities done for the purposes of employment and does not include work that is outside the scope of employment for example, domestic work unrelated to employment or work done for a different employer.
18. His Honour appeared to exclude from the concept of “work in the employment”, activities “insubstantial or merely incidental” to that employment. In deciding what was merely incidental his Honour gave significance to the role of Mr Gelo as “a carpenter and trade supervisor” and the fact that refuelling the truck did not require his skills or expertise.
19. The issue confronting his Honour was whether the combined phrase, “usually works in the employment” involved more than that (a) the work be “usual” in the sense of habitual, regular or customary and (b) the work be “work in the employment”. Does the combined phrase incorporate some notion of the quantum or significance of the work and hence exclude insubstantial or incidental work done on a regular or customary basis? The decisions referred to at [16(b)] above reject the notion that the test incorporates consideration of where the worker spends the majority of his or her time. Hanns clearly rejects the implication of any quantitative test: Hanns at [22], [23]. Avon rejects the notion that the location of the work must be one where the worker is “required” to work. Having regard to those decisions, although they do not precisely address the situation that arises in this case, I do not think it is possible to interpret the phrase “usually works in the employment” as excluding the performance of an identified task that is “in the employment” on a regular basis even though it does not involve a particular skill that the worker has or that it may be characterised as “insubstantial or merely incidental”. In my view his Honour erred in so far as he reached the conclusion that the facts of this case were caught by an implied qualification on the phrase “usually works in the employment”. The combination phrase “usually works in the employment” does not exclude the performance of a defined task such as refuelling a company vehicle, notwithstanding that the task may not involve the worker’s particular skills and may only take a short period of time.
20. In reaching this conclusion I recognise that in theory there might be situations where some implied qualification would have to be read into the phrase “usually works in the employment” to accommodate situations where the connection with the State or Territory was so minor or transitory that to interpret the connection as leading to the worker “usually [working] in the employment” in that State or Territory would take the expression beyond its statutory meaning. However, in my view, this is not a case where the facts intersect with any such implied qualification.
21. The question becomes one of fact, namely, whether or not the fuelling of the truck was work done in Mr Gelo’s employment or not. If not done in his employment then the options appear to be that it was done outside his employment in his personal capacity, or in his capacity as a director but not employee of the Company.
22. In resolving these issues the case is more difficult than might otherwise have been because (a) it involves not a stereotypical employee of a building company but rather a small company whose only employee is a director and (b) because the issue was not one which was explored in great detail in the evidence.
23. There was no evidence of a written contract of employment for Mr Gelo or the precise scope of his duties. In the circumstances where Mr Gelo is the alter ego of the Company it would be artificial to ask, as one might do in a standard employment situation, whether or not he had been given a direction to fill the truck on a regular basis at the service station at which the Company had an account.
24. However, the finding of the magistrate was that Mr Gelo regularly fuelled the truck at a Mobil outlet in Queanbeyan where the Company had an account and had done so on a regular basis for some years. The evidence was probably more consistent with a finding that the account was held with Mobil rather than the specific service station. However, nothing turns on this in the light of the fact that Mr Gelo in fact regularly filled the truck at that service station.
25. The finding of His Honour as to who owned the truck was at paragraph (o) set out above. That was that either the Company or Mr Gelo owned the truck. The Company sought, and I will grant, leave to amend its notice of appeal, so as to challenge this finding. The Company submitted that the evidence indicated that the truck was in fact owned by the Company, pointing to the fact that no claim had been made in Mr Gelo’s personal tax returns for any expenses or depreciation associated with the ownership or operation of the truck. These were matters that were in evidence in the Court below but which appear not to have been specifically drawn to his Honour’s attention.
26. In evidence, Mr Gelo referred to the truck as “my truck”. The truck was a “brand-new” 3.5 tonne truck. In the financial years ending 2010 and 2011 Mr Gelo’s tax returns disclosed no deductions for work related car expenses or any other claim for deductions that could be related to the use of a personal vehicle for work. While the Company’s tax returns for the financial years up to the date of the injury in February 2011 were not in evidence, the Company’s tax return for the financial year ending 2012 was in evidence and identified that there were deductions claimed for motor vehicle expenses of some $8687. In my view the evidence establishes on the balance of probabilities that the truck was a company-owned vehicle. That is because it is improbable that a 3.5 tonne truck would be personally owned by Mr Gelo and no claim for deductions made for the operation of that vehicle in 2010 and 2011 yet claims were made in the 2012 Company tax return for deductions consistent with ownership of the vehicle by the Company.
27. It is significant that the appellant has, by confining the issues to be determined by his Honour, necessarily accepted that Mr Gelo is a “worker” within the meaning of the Act and is engaged in “employment” for the purposes of Part 4.2 A of the Act. That means that for present purposes of the fact that Mr Gelo was in fact an officer of the company, being a managing director, should not alter the analysis of his position as an “worker” under the Act.
28. Therefore the position is that a “worker”, who in fact was the only “worker” of the Company and controlled the operations of the Company, was travelling to and from his home in Queanbeyan to his various worksites in the Australian Capital Territory as well as occasionally to sites in New South Wales. He was driving a company-owned truck. That truck was necessarily required to be kept fuelled. The system in fact adopted for fuelling the truck was to purchase fuel at a particular service station at which the Company could purchase fuel on an account. That service station was located in New South Wales.
29. There was no evidence that the truck was used for personal purposes as opposed to being the regular vehicle used for the purposes of the business. Any personal use would have complicated the analysis of the situation and made it more open to contend that the refuelling was not work “in the employment”.
30. In the present circumstances, having regard to the finding of fact that Mr Gelo regularly fuelled the truck at the Mobil outlet in Queanbeyan, and had done so on a regular basis for some years (finding (s) set out above), the proper conclusion was that the refuelling of the vehicle at the service station in Queanbeyan was an activity which constituted work in Mr Gelo’s employment. It was not undertaken in a personal capacity and it could not be characterised as a function which was undertaken in a director’s role as opposed to his accepted role as a "worker".
31. If Mr Gelo was not a director of the Company then, on the facts found, the position would be clearer. If he was an employee in the usual sense and was required as part of his duties to:
(a)drive the truck on a daily basis to and from the ACT;
(b)return the truck to its garage address in Queanbeyan;
(c)maintain the truck in a fuelled state;
and in fact regularly, habitually or customarily refuel the truck at a Mobil service station in Queanbeyan where payment could be made on account, it would, in my view, be sufficient to establish that the employee would be considered to be usually working in New South Wales as well as the ACT. That is despite the fact that the employee’s particular trade skills were not being deployed during the driving and refuelling exercise and he was not “required” to refuel the vehicle at the Queanbeyan service station as opposed to a service station in the Australian Capital Territory where the Mobil account could be used. It is also despite the fact that the exercise may take up only a short period of time. The fact that Mr Gelo is a director and identifies himself as the owner of the Company does not prevent the same characterisation of his activities once it is accepted that he is in fact a “worker” for the purposes of the Act.
32. Even if (a) and (b) above are excluded from consideration then, in the absence of any issues about private use of the vehicle, the performance of the task of refuelling the company vehicle in New South Wales, undertaken on a regular, habitual or customary basis would be sufficient to establish that a worker usually worked in the employment in New South Wales.
33. Therefore, in my opinion, his Honour erred in concluding that Mr Gelo did not also usually work in New South Wales.
34. This meant that it was necessary to go to the next step in the cascading test set out in s 36B(3) of the Act. The evidence disclosed that the principal place of business of the Company was identified in ASIC records as at the residential address of Mr Gelo and his wife in Queanbeyan. That was where he started and finished work each day and where the truck was kept. There was no other base of operations. There was a container used as a storage facility on the building job site where Mr Gelo worked. There was no other yard or premises where its vehicles, equipment or materials were kept (although some scaffolding was stored at a property in New South Wales owned by Mr Gelo’s father-in-law). As a consequence I am satisfied that Mr Gelo was usually based in New South Wales for the purposes of his employment. That means that for the purposes of s 36B of the Act the Territory of State of connection was New South Wales.
35. If I am wrong about my conclusion that Mr Gelo was usually based for the purposes of the employment in New South Wales then s 36B(3) requires consideration of where the employer’s principal place of business in Australia is located. The ASIC records indicate that it is at the residential address of Mr Gelo and his wife in Queanbeyan. Those records also disclose that the registered office is in the Australian Capital Territory. However, I am satisfied that the principal place of business of the company is the residential address of Mr Gelo and his wife in Queanbeyan, where the directors and shareholders lived, where the books and records of the company are likely to have been kept and where the truck was garaged.
Orders
36. The orders of the Court therefore are:
1. The appellant is granted leave to file an amended notice of appeal and is directed to do so within 7 days.
2. Upon the amended notice of appeal being filed:
(a)the appeal is allowed; and
(b)the order made by the Magistrates Court on 26 March 2013 is set aside and substituted with an award determining that New South Wales was the State of connection in relation to Mr Gelo’s employment with the Fed Consulting Services Pty Ltd.
3. The respondent is to pay the appellant’s costs of the appeal.
4. The parties have liberty to apply within 7 days for any order in addition to or substitution for order 2 to give effect to this decision.
| I certify that the preceding thirty-six [36] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Master Mossop. Associate: Nikolas Willing Date: 18 August 2014 |
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