| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : FOSTER -v- CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF AGRICULTURE [2004] WADC 216 CORAM : O'SULLIVAN DCJ HEARD : 23 JULY 2004 DELIVERED : 5 NOVEMBER 2004 FILE NO/S : CIV 868 of 2003 BETWEEN : BRENDON FOSTER Plaintiff
AND
CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF AGRICULTURE
Defendant
Catchwords: Workers' compensation - Joint venture agreement - Provision of employee of one joint venturer to work on joint venture project - Trial of preliminary issues - Whether employee of one joint venturer an employee of all by reason of s 5 of the Workers' Compensation and Rehabilitation Act 1981 (WA) or a deemed employee under s 175
Legislation: Workers' Compensation and Rehabilitation Act 1981 (WA), s 5, s 175
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Result:
Question one answered in the affirmative
Question two answered in the negative Representation:
Counsel:
Plaintiff : Mr D M Bruns
Defendant : Mr D R Clyne
Solicitors:
Plaintiff : Separovic & Associates
Defendant : Downings Legal
Case(s) referred to in judgment(s):
Hewitt v Benale; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91
Hollis v Vabu Pty Ltd (2001) 75 ALJR 1356
Jones v Wesfarmers Ltd [2003] WASCA 225
Case(s) also cited:
Frauenfelder v Reid (1963) 109 CLR 42
Peckham v Moore [1975] 1 NSWLR 353
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1 O'SULLIVAN DCJ: This is a trial of preliminary issues involving two questions namely:
2 The plaintiff claims to have been injured in an accident at work on 30 June 2000. At that time he was directly employed by the University of Western Australia (UWA), but engaged in work on a project, the subject of a joint venture agreement ("the Agreement") between the defendant, UWA, and others. 3 Because he was so engaged, the defendant contends that the joint venturers, including it, were the plaintiff's employers under s 5 of the Workers Compensation and Rehabilitation Act 1981 as amended (the Act) or his deemed employers pursuant to s 175 of the Act. 4 If either of these propositions is correct the defendant will argue that the Plaintiff is not entitled to an award of damages under the Act. 5 The facts agreed between the parties are as follows: "(a) As of 30 June 2000 the plaintiff was employed (in the usual sense) by the University of Western Australia;
(b) On 30 June 2000 the plaintiff was injured in the course of his work ('the accident'); (c) Following the accident a workers compensation claim was made against the University of Western Australia and accepted by the University of Western Australia; (d) The relationship between the defendant, the University of Western Australia, and CLIMA is regulated by an Agreement made 1 June 1992 which will be tendered in evidence; (e) The accident occurred when the plaintiff was deployed to the CLIMA project and was helping two other workers,
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one employed by the defendant, the other employed by the University of Western Australia, to manoeuvre bags of seed. He was at that time on the defendant's premises; (f) The work in which the plaintiff was engaged was part of a research programme being conducted by CLIMA."
The Agreement 6 The parties to the Agreement are the defendant, UWA, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Murdoch University. It provides in part: 7 By cl 1 of the Agreement "Centre" is defined to mean "the Co-operative Research Centre referred to in Recital C" and "Centre Title" to mean "the name of the Centre specified in Recital C". 8 Clause 3.1 of the Agreement provides: "3.1 The parties hereby form and agree to constitute themselves in an unincorporated joint venture to be known by the Centre Title for the purpose of carrying out the Activities." 9 "Activities" in the above clause is defined by reference to another Agreement involving the Commonwealth of Australia. 10 Clause 3.2 of the Agreement provides as follows:
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(a) the rights, duties, obligations and liabilities of the parties shall in every case be several and not joint or joint and several; (b) the relationship between the Parties is one of joint venturers and is limited to carrying out the Activities so that, except for clause 15 (Centre Agent), nothing contained in this Agreement constitutes any of them as agent, partner or trustee of any other of them, or creates any agency, partnership or trust for any purpose whatsoever; (c) except as otherwise specifically provided in this Agreement, a party does not have any authority or power to act for, or to create or assume any responsibility or obligation on behalf of any other Party; and (d) except as otherwise specifically provided in this Agreement, liabilities of the Centre incurred by or on behalf of all the Parties for the purposes of the Activities shall be incurred severally and not jointly by each party in proportion to their Participating Shares." 11 Clause 5 of the Agreement is headed "Major Covenants" and provides in part: "5.1 Each Party covenants and agrees with each other Party: 12 "Contribution" is defined in the Agreement as follows:
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" 'Contribution', in relation to a Party, means all of the monies, Assets, Seconded Personnel, Facilities and services to be contributed by the Party to the Centre, as set out in the Budget Plan, but does not include any Intellectual Property, and 'Contribution' means the aggregate of the contribution of each of the Parties." 13 Clause 5.2 provides: "Each Party covenants with the other Parties that it will do all things necessary and procure that its Seconded Personnel do all things necessary to ensure that the Centre Resources are applied only towards establishing and operating the Centre for the purposes of the Objectives of the Centre and the performance of the Activities in accordance with this Agreement and the Commonwealth Agreement." 14 "Seconded Personnel" is defined in cl 1.1 of the Agreement in the following terms: "Seconded Personnel means the personnel of a Party to be seconded by it to the Centre as part of that Party's Contribution pursuant to clause 20 ('Seconded Personnel')." 15 Clause 20 provides: "20. Seconded Personnel 20.1 Each Party covenants and agrees with the other Parties to second to the Centre its Seconded Personnel for such time and such purposes as determined by the Policy Board. 20.2 Seconded Personnel of each party shall remain subject to the terms and conditions of employment of that party and shall be replaced if recommended by the Policy Board in compliance with the Commonwealth Agreement. 20.3 Each Party covenants and undertakes to procure that Centre Intellectual Property created by any of its Seconded Personnel shall be owned and dealt with according to the provisions of this Agreement.
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20.4 Should the Centre require the services of persons not presently employed by any of the Parties, such persons shall be retained pursuant to arrangements determined by the Policy Board.
Whether the defendant was the employer of the plaintiff pursuant to section 5 of the Act 16 It is convenient to deal with this issue first. 17 Section 5 of the Act provides: 18 In Hewitt v Benale; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91 Heenan J said at [110] that the definition of "employer" in the Act "continues the approach of the common law to the employment of workers who are lent or let on hire by their ordinary employers to another. As in the common law, the original primary employer continues as the employer liable under the Act." 19 In relation to questions concerning vicarious liability for the acts of an employee whose services are made available to a third party the general approach has been to regard the usual employer or the third party as responsible, but not both. As is stated in the passage taken from Fleming: "The Law of Torts" 9th ed at 419, quoted by his Honour at [106]: "According to received doctrine, responsibility is here also identified with control. Since in most cases control is divided
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between lender and borrower, the most obvious conclusion would perhaps have been to impose joint responsibility. Instead, the assumption prevails that control and liability must, as a rule, be allocated exclusively to one or the other. The test, we are told, is to ask 'Who exercised control not only over the task to be performed but also over the method of performing it?' " 20 As Heenan J points out in Hewitt v Benale (supra) at [107] and [108] there have been some indications from the High Court that this general rule may need to be re-examined but it presently continues to apply. Further, the "control test" remains as an important discrimen between employers and independent contractors although the meaning of "control" in this context is perhaps itself under review (see Hollis v Vabu Pty Ltd (2001) 75 ALJR 1356 at 1365 per Gaudron, Gummow, Kirby and Hayne JJ). 21 Counsel for the defendant pointed out that the definition of "employer" in s 5 of the Act "includes any body of persons corporate or unincorporated" and argued that there is no reason why the joint venturers cannot be so regarded. 22 That may be so but the question which still remains is whether a relationship of employment came into existence. That is a question to be resolved by the application of the principles expounded in the authorities, including but not confined to, the "control test". 23 In this case counsel did not address me on the question of control and did not point to any other particular aspect of the relationship between the plaintiff and the joint venturers to support the contention that it was one of employment. 24 In my view no basis for such a conclusion has been made out. 25 I would reject the submission of the defendant and answer the second question posed in the negative.
Whether the defendant was a deemed employer of the plaintiff under Section 175 of the Act 26 Section 175 of the Act provides relevantly as follows: "(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any
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work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor, if he were the sole employer would be liable to pay under this Act; …. (3) The principal is not liable under this section, unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part of a process in the trade or business of the principal; …. (7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply." 27 As Heenan J pointed out in Hewitt v Benale at [111]: "… [S]ection 175 has the effect of making the person who takes the worker on loan or hire an employer and so liable under the Act for compensation concurrently with the principal employer. This result is achieved by deeming the person who takes the employee on loan or hire to be an employer 'for the purposes of the Act'. This 'deemed employment' is additional to, and not in substitution for or exclusive of, the contractual employment by the original employer." 28 It is clear that s 175 can have effect notwithstanding a provision such as is found in cl 20.2 of the Agreement. The application of the section depends upon its terms and not upon the terms of any contract between the principal and the contractor. 29 The defendant's submission is that the joint venturers are to be regarded as the "principal" for the purposes of s 175 of the Act and UWA as the "contractor".
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30 It is then said that the Agreement, on its true construction, is one to which s 175(1) applies being a contract between the principal and the contractor "for the execution of work by or under the contractor" and that "in the execution of the work (the plaintiff was) employed by the contractor."
31 Counsel for the plaintiff submitted that the Agreement cannot be described as "a contract for the execution of work". However, I see no reason to take a restricted view of the meaning of those words. 32 I have already set out the definition of the term "Contribution" in the Agreement and I note that it includes "Seconded Personnel". 33 Clause 14.1 provides: "Each Party covenants and agrees with the other Parties to pay to the Centre Agent the cash component of its Annual Contribution and to apply to the Activities the in-kind component of its Annual Contribution in accordance with the Budget and in the manner determined by the Policy Board." 34 In my opinion the provision of the plaintiff by UWA to carry out work for the joint venturers was clearly part of its "Contribution" and was in effect the performance, by UWA, of a contractual obligation "for the execution of work". 35 Counsel for the plaintiff next submitted that the Agreement was not one for the execution of any work "by or under the contractor". 36 Again I see no reason to take a narrow view of the meaning of those words so as to deny their application to the agreed facts in this case. The plaintiff was clearly employed by UWA and his "deployment" to work on the joint venture project was a part of UWA's "Contribution" under the Agreement. The work the plaintiff was doing was work done "by or under the contractor". 37 It follows that I am satisfied that the provisions of s 175(1) apply in this case. 38 Counsel for the plaintiff did not argue that s 175(3) had no application. In any event see s 6 of the Act and Jones v Wesfarmers Ltd [2003] WASCA 225 per Parker J at [56] to [58]. 39 As for s 175(7), once it is accepted, as I do, that for purposes of the section the joint venturers and each of them are to be regarded as the
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"principal" there is no difficulty, so it seems to me, in regarding the premises of the defendant as premises "otherwise under his control or management". 40 In my opinion the first question posed should be answered in the affirmative.
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