Fox v Hinde
[2018] FCCA 3398
•21 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FOX v HINDE & ANOR | [2018] FCCA 3398 |
| Catchwords: INDUSTRIAL LAW – EMPLOYMENT LAW – Employment relationship – Ascertaining existence and nature of relationship – particular relationships – independent contractor. |
| Legislation: Fair Work Act 2009 (Cth), ss.11, 335, 357, 359, 570(2)(b) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s.164 |
| ACE Insurance Ltd v Trifunovski & Ors (2011) 84 ATR 561 Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537 |
| Applicant: | CHRISTINE GAI FOX |
| First Respondent: | LEON TRAVIS HINDE |
| Second Respondent: | GLOBAL EQUITY MANAGEMENT PTY LTD |
| File Number: | BRG 1020 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 11 June 2015 |
| Date of Last Submission: | 10 July 2015 |
| Delivered at: | Brisbane |
| Delivered on: | 21 November 2018 |
REPRESENTATION
| The applicant appeared on her own behalf |
| Counsel for the Respondents: | Mr Lam |
| Solicitors for the Respondents: | Hickey Lawyers |
ORDERS
The application filed on 19 November, 2014 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 1020 of 2014
| CHRISTINE GAI FOX |
Applicant
And
| LEON TRAVIS HINDE |
First Respondent
| GLOBAL EQUITY MANAGEMENT PTY LTD |
Second respondent
REASONS FOR JUDGMENT
By these proceedings the applicant alleges that in contravention of ss.357 and 359 of the Fair Work Act 2009 (Cth), the respondents misrepresented what she claims was an employment relationship between she and the first respondent, as a contract of services under which she would perform work as an independent contractor. She seeks orders for compensation and the imposition of pecuniary penalties upon the respondents for their contraventions of the Fair Work Act.
The respondents deny the claims and ask that the proceedings be dismissed.
For the reasons set out herein, I have concluded that:
a)the applicant is precluded from succeeding on this application because she has already prosecuted proceedings in another forum on a basis inconsistent with the present proceedings;
b)in any event, she was not an employee of either the first or the second respondent, but was an independent contractor; and
c)as a consequence neither respondent made any operative misrepresentation to the applicant in contravention of either ss.357 or 359 of the Fair Work Act.
The claims
The applicant argues that at all times she was an employee of the first respondent, or alternatively the second respondent and that she ought to have been paid as such. She claims compensation on the basis that she has been underpaid her minimum statutory entitlements.
Section 357 of the Fair Work Act provides:
357 Misrepresenting employment as independent contracting arrangement
A person (the employer) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor”.
To succeed, the applicant must establish that:
a)the first or second respondent employed or proposed to employ her; and
b)represented to her that the contract of employment or proposed contract of employment was a contract for services under which she performed, or would perform, work as an independent contractor.
Section 359 of the Act provides:
359 Misrepresentation to engage as independent contractor
A person (the employer) that employs, or has at any time employed, an individual to perform particular work must not make a statement that the employer knows is false in order to persuade or influence the individual to enter into a contract for services under which the individual will perform, as an independent contractor, the same, or substantially the same, work for the employer.
To succeed, the applicant must establish that:
a)the first or second respondent employed her; and
b)the first or second respondent made a statement that:
i)they knew was false; and
ii)was made in order to persuade or influence her to enter into a contract for services under which she would perform, as an independent contractor, the same, or substantially the same, work for the respondents.
The respondents argue that they did not contravene s.357 of the FW Act because:
a)no representation of the relevant kind was made;
b)if any relevant representation was made, at that time, Ms Fox was not performing work for the respondents under a contract of employment, but rather, she was (from the start of her relationship with the respondents until the end of it) a contractor performing work for the second respondent under a contract for services;
c)if a relevant representation was made, the respondents did not know and were not reckless that the contract was a contract of employment rather than a contract for services.
The facts
The following are the facts as I find them to be.
Ms Fox gave evidence that in July, 2004 she applied for a telephone sales position with MDSnews.com. She saw an advertisement in the Gold Coast Bulletin for that position.
On 15 July, 2004 she received a letter of appointment. On the same day she signed a contractor’s agreement and a code of conduct. At that time Mr Hinde was the chief executive officer of MDSNews. That company was listed on the public stock exchange in mid-2006 and Mr Hinde organised for there to be a share issue to staff. Ms Fox received shares in her own name. That does not seem surprising given that she was the person who contracted to work for MDSNews.
Ms Fox left MDSNews at some point but the evidence does not reveal when. As a consequence, Ms Fox and Mr Hinde lost contact.
On 10 August, 2010 she was contacted by Mr Hinde. Mr Hinde’s evidence was that he was interested in making contact with Ms Fox because he was advancing the marketing side of his business and wished to work on the design of his website so as to build his client base. He had already engaged one person – Geoff Denslow from Rockcrush Group on an ad-hoc basis in 2008, 2009 and 2010.
On 19 and 24 August, 2010 Ms Fox and Mr Hinde met – the first time at the Royal Pines Hotel for coffee and the second at Mr Hinde’s residence/office where he showed Ms Fox the second respondent’s website.
She claimed that the first respondent was seeking to commercialise the second respondent’s business “Investor Signals” and required “a sales person” to procure clients.
On 25 August, 2010 Ms Fox agreed to do work for Mr Hinde. There is an email from Mr Hinde to a person called Geoff Denslow of RockCrush Group that tends to confirm the applicant’s claim. It is in the following terms:
Hi Geoff,
Christine Fox will be helping to begin the commercialization of the Investor Signals service, I have asked that she contacts you tomorrow to explain some of the immediate tasks she is working on. Can you please take the time to see what we can do to assist in making her work easier. We have discussed various items, such as Campaign Monitor, the work you have done around excel spread sheets for the Investor Signals site etc.
It may be that you need to set her up as an administrator and explain how the admin site works. This is fine with me!
Please assist in whatever way you can.
Thanks and best regards,
The applicant says that “the respondents” did not offer any indication of wages or salary at this time. She says that Mr Hinde had no business premises and so she worked from home using her existing personal computer equipment. She had no access to any other business premises.
The applicant’s evidence is that from 25 August, 2010 “the respondents” (by which I think she means Mr Hinde) expected many additional duties that did not involve sales. Annexed to her trial affidavit filed on 29 January, 2015 is a table that sets out the tasks that Ms Fox says she was obliged to perform including the number of hours that took and the times between which she performed the work. It is not clear whether that document was constructed for the purposes of these proceedings and if so from what source material or whether, it was in the nature of a diary kept by Ms Fox from time to time.
Ms Fox’s evidence is that many of the duties she says she performed for the respondents she had not ever performed before in any previous positions in which she had worked. The new duties included establishing stock broking accounts for the respondents’ clients, transacting on the respondents’ client accounts, preparing complex calculations and analysis, calculating Exchange Traded Call Options, complex call option strategies, share splits, demergers and other complex calculations relating to the share market.
Ms Fox is self-taught in the use of computers. She has no formal training in preparing graphics or websites.
On 30 August, 2010 the respondents provided Ms Fox access details to what she describes as “the Servcorp Virtual Office”. She does not say what purpose was served by giving her access to that office.
On 1 September, 2010 the respondents communicated the business model for “Investor Signals” to Ms Fox. She does not say why that occurred or for what purpose that needed to be communicated to her. It is clear from the text of the email, however, that Mr Hinde was seeking to discuss with Ms Fox the options for the business model set out in the email. He was clearly looking for her input.
On 13 September, 2010 the respondents offered to pay for Ms Fox to attend a Social Media course. The advertising material associated with the course makes it clear that it was about using social media to promote business and business opportunities.
On 30 August, 2010 the respondents arranged access to software from the respondents’ Licensee. The body of the email authored by Mr Hinde provided:
I have attached Christine’s e-mail address above and would appreciate you arranging free access (20 min delayed) to the MA Pro. We are both working very hard on producing a new business model to help with the introduction of funded broking accounts into Trader Dealer with the potential to restart some level of MA sales activity as well.
On about 2 September 2010 the respondents provided access to the email address [email protected] and [email protected]. Ms Fox continued to use her personal email signature in most communications with the respondents.
On 13 September, 2010 the respondents arranged access to the WebIress execution platform from the respondents’ licensee in order to train her.
On or about 15 September, 2010 Mr Hinde asked how much Ms Fox required for the work she had performed since 25 August, 2010. She said to Mr Hinde words to the effect “I don’t know”. The respondent advised words to the effect “don’t worry, I’ll work it out”.
Ms Fox met Mr Hinde about 17 September, 2013 and he gave her a cheque for $1000.00 made out to her personally. The cheque was issued by the second respondent. Mr Hinde determined the amount. Ms Fox says that Mr Hinde requested a tax invoice for the payment. On the same day, Ms Fox gave to Mr Hinde a Tax Invoice/Receipt. A tax invoice was created by Ms Fox. It was headed “Christine Fox” and below it appeared “ABN 77 753 193 483” which is a reference to an Australian Business Number. It was uncontroversial that was Ms Fox’s ABN. The tax invoice was addressed to Global Equity Management. The description was in the following terms:
To cost of consultancy services $1000.00
GST free. $1000.00
Ms Fox says that on around 15 November, 2010 Mr Hinde advised her orally that he (or the second respondent is not clear) would pay her a $500.00 per week retainer plus 50% of any sales and brokerage commissions. The parties agree that Ms Fox was to be paid that amount irrespective of how many days she worked per week. In cross-examination she said that Mr Hinde said that he would pay “$1000 a fortnight regardless”. In cross-examination Mr Hinde agreed that he (or the second respondent) would pay a regular amount of $1000 per fortnight for the work that Ms Fox did. That was so even, it seems, that they did not know how much work might be required.
On 15 November, 2010 Mr Hinde provided another cheque for the amount of $1000.00 made out to Ms Fox. She gave the second respondent another tax invoice.
On 28 November, 2010 Ms Fox sent an invoice addressed to the second respondent. This time it was in a different form. It was headed:
Fox Family Trust ATF
Shirwood Pty Ltd
ACN 084008266ABN 43372382797
In her cross-examination, Ms Fox explained that the ACN related to Shirwood Pty Ltd and the ABN belonged to the Fox Family Trust. Despite the way the wording appears on the letterhead to that tax invoice, Ms Fox confirmed in her cross-examination that Shirwood Pty Ltd is the trustee of the Fox Family Trust.
The tax invoice was addressed to the second respondent and under the heading description the following appeared:
To: Cost of administration services
15 Nov – 29 Nov 2010 $1000
GST $100
Account: [banking account details]
Total $1100
In cross-examination Ms Fox agreed that the banking details contained in the tax invoice were those of a bank account for Shirwood Pty Ltd. Ms Fox said that she was neither a director or shareholder of Shirwood Pty Ltd. Her estranged husband Wayne Fox, who gave evidence in these proceedings, is the sole director. Ms Fox said that it was convenient for her to use the Shirwood bank account because I was not being used by that company.
Following the invoice was an email from Mr Hinde to Ms Fox dated 19 November 2010 asking for her to include out-of-pocket expenses in her next invoice.
On the same day, 28 November, 2010, Ms Fox issued an invoice in her own name (in the same format described above) to the second respondent for expenses totalling $125.85.
In around mid-November, 2010 Ms Fox says that she was given the title of Client Services Manager to use for communications with the respondents’ clients and associates.
Ms Fox says that Mr Hinde expected her to perform many duties that she was not skilled in and had not performed in any job previously. Attached to her trial affidavit are a number of documents (annexure CF18) which she suggests is evidence of this. Those documents, however, consist of emails from Ms Fox to Mr Hinde providing him with information and materials and statements by Ms Fox to the effect that she was not particularly good at what she was doing or she was new to it but that she was learning things as she was going along. Those emails and that material might be equally as consistent with Ms Fox trying to extend herself (not at the request of the respondents) as much as it is consistent with Mr Hinde asking Ms Fox to do things that were beyond her capacity.
Mr Hinde required Ms Fox to liaise with the stock broker “Trader Dealer” to establish new stock broking accounts for clients.
On 10 January, 2010 Ms Fox says that Mr Hinde instructed her to contact the first client of Investor Signals regarding the purchase of equities. There is no evidence that she was so instructed although the document she relies upon to support that allegation is an email from her using the second respondent’s email stationery asking a person to sign an attached form and return via email.
Ms Fox says that new clients were procured, presumably for the business she describes as Investor Signals. Her evidence is that on 21 March, 2011 “the respondents required I report the details of the clients equity holdings” but there is no evidence of that. There is an email from Ms Fox to Mr Hinde which contains a number of screenshots of other computer screens. In the email Ms Fox says “Hi Leon. Please let me know if this format is okay. Cheers”.
Again, Ms Fox says that she was instructed by the respondents (presumably she means Mr Hinde) “to confirm all transactions to the clients on the day transacted and also provide a monthly overview of the portfolio”. By this I take it that Ms Fox means that she was required to report to each client the share transactions that had been undertaken for them at the end of each day and provide a monthly overview of those share transactions in the clients portfolio on a monthly basis. However the document that she annexes to her affidavit to demonstrate this instruction (annexure CF22) does not confirm the instruction. Rather it seems to be an example of correspondence with a client.
Ms Fox says that in about June, 2011 the respondents instructed her to prepare a Business Plan identifying her as part of the management team. Annexed to her affidavit is an extract from a document that has a footer on it in these terms “Investor Signals Business Plan Phase 1”. Relevantly on page 8 of that document appears the following:
Management Team
Investor Signals is led by Leon Hinde, a Professional Money Manager with over 15 years experience in the Financial Markets. Assisting Leon Hinde is Christine Fox whom has the role of sales, marketing and customer relations.
On page 27 of what appears to be the same document is a hierarchy which describes Ms Fox as the Customer Service Manager. Ms Fox says that the business plan was updated six times from June, 2013 to about June, 2013.
On 30 April, 2011 Mr Hinde sent an email to Ms Fox in the following terms:
Hi Christine,
There are two elements to Mark’s contract as you are aware, 2% management and 20 performance. My goal is to have a structure in place that sees you earning $2,000 per week, however, I need to consider that in the context of the total expected annual sales over the next 12 months.
Current arrangement $28,600 p/a base salary
50% of TD commissions (we need to chat about how we grow this)
Mark Davidson 50% of management fee
Income to IS - 12 month forcast
TD commissions $3600 (need to check this number with you, seems low)
Mark $10k (50%)
Education $1200 (1 client)
Performance $0 - $40,000 (estimated return)
These numbers may not be 100% but it gives us an outline of the approximate numbers as they stand. Lets chat about this next week. In the meantime I am happy for you to invoice me for 50% of Mark’s management fee. Once the business is supporting your 100K position then I would not expect to be paying out 50% of all revenue. Over the next few weeks we should start to formalise how we see this working on a 1-3 year outlook.
Regards,
Leon Hinde - Managing Director
Ms Fox suggests that this email identifies her base salary and authorises her to “invoice for commissions”. By its terms, however, it says that Mr Hinde is happy for her to invoice him for 50% “of Mark’s management fee”.
After this email, Shirwood Pty Ltd commenced including in the invoices that it gave to the second respondent a component for what was described as “50% of brokerage commissions”.
Until June, 2011 Ms Fox continued to perform work for people other than the second respondent. She gave evidence that she performed sporadic work for a solar company and some sporadic work for a person who wanted some email newsletters distributed. She would perform that work from home using her own home equipment. Her evidence suggested that there was not a particularly large volume of that work.
From January, 2012 Skype text communication was used regularly between Ms Fox and Mr Hinde.
On 3 February, 2012 Mr Hinde authorised and paid an offshore programmer to help Ms Fox commence automation on an Excel spreadsheet that was used within the Investor Signals business. She says that Mr Hinde wanted to develop “a unique portfolio reporting programme”. Due to the time differences with the programmer Ms Fox was required to work late into the night “most nights”.
Apparently, in about early June 2012 Mr Hinde asked Ms Fox to consider undertaking a training course in derivatives to obtain a qualification that was necessary to allow her to undertake some of the Investor Signals work. The request is not in evidence, but Ms Fox’s response is. On 4 June, 2012 she sent an email to Mr Hinde which included the following:
Type of Activity
Apply for, acquire, vary or dispose of financial products on behalf of another
Basic deposit
Non Basic Deposit
Derivatives (only if sub-authorised representatives of the Representative are current accredited derivatives advisors)As previously advised I will not be doing this course. Therefore it will be necessary that an arrangement is made where we email Trader Dealer the transactions to be executed. I can do this on your behalf via [email protected] email address.
I am sorry if this disappoints you in my unwillingness to do so. I am 54 pushing 55 and have no desire to stress myself with this. I have no life and enough work for 2 people as it is now administrating and managing Investor Signals/clients/customer service/sales/complaints/research/accounting/new account applications/website designer & moderator/social media development & maintenance/promo emails/graphic designer/client & Gem account balancing/data base management and overall personal assistant .... along with stock broker/share and options calculator/client reporting and spreadsheet and website programming and development liaison and plenty of brain drain ...... to name a few roles ... !
I will chat with you re this further. Sorry if I sound angry ... but I am .... I know the decision by MDS is not yours.
On 6 January, 2012 Ms Fox sent to Mr Hinde an email in the following terms:
Hi Leon,
I would like to arrange a good time that suits you so I can have a break away from my PC to clear my head, go for a walk, or a bike ride, or just a breather. I don’t seem to get much change out of 9 to 12 hour days in the past 6-8 months and I have become virtually glued to my PC.
Whilst I don’t have a problem with long days, I need to commit myself to get away from being on my PC for at least a solid hour a day.
I now have a mobile with skype, email and the internet and just wonder if we could arrange a good time, when you know that I will not be on my PC, albeit, I will be on mobile/skype/email, so I can have a clear hour break without feeling the commitment and guilt of not being on my PC in case you call or need me.
I don’t feel overly comfortable being away from the market when orders are on, or potential orders are to be placed. Maybe after market from 3.30 to 4.30. Or 4-5pm?.
I will of course always finalise all daily tasks and anything else requested, regardless of what time.
Please let me know what may suit you and if this is also OK!
Cheers
Ms Fox characterises this request as a request for a one hour daily lunch break.
On 13 December, 2012 a large error occurred on a client account. That gave Ms Fox cause to pause and consider the implications for herself. She wrote an email to Mr Hinde which in essence sought clarification about responsibility for errors buying or selling shares or options for clients of Investor Signals. She expressed concern about the method by which instructions were relayed to her from Mr Hinde to make purchases of equities on behalf of clients. Her email closes with the following sentence:
In the absence of a written contract I would appreciate you confirm via email what is expected as a contractor to GEM when human error results in losses on client accounts.
On 21 December, 2012 Ms Fox expressed concern, frustration and anger because of the way in which she became aware about what she describes as “partial equity exercises”. She sent an email to Mr Hinde about that. In the same email, she attached:
December retainer and November commission invoices. I assume that TD has NOT paid yet as usual, nor sorted out the discrepancies still owing from September. Words cannot explain my frustration regarding this also!
In February, 2013 Ms Davina Tudor was engaged as a bookkeeper. There is an email from Ms Fox dealing with this which is illuminating because it contains information which was not otherwise apparent from her evidence. For that reason, it is appropriate to set out in full. It is as follows:
I will need a day to go to Brisbane to set up the PC/emails/software installation and do basic training in person probably the week of 25 Feb. Other training will be online via a Webinar now, or Davina is happy to come to me. I doubt this will be necessary
I will set up a .com.au email address for her and she will require another Cairo login from MDS. I hope that will be OK.
Initial training to cover client CMA’s/understanding Journal entries/transaction statements/using the main spread sheet to derive information/Davidson accounts and monthly/quarterly reporting/investment overviews/how to set up new account applications etc
Understanding Marks reporting requirements is first, then Graeme Kusabs will be the next account Davina can manage. Graeme is very happy with that, but I still need to have another chat with Graeme. What he doesn’t relate to is listening to the webinars and looking at his account that doesn’t match. Comment today is taking profit on SHL. He then reflects back to his transaction on SHL. Plus the bull run and that he isn’t going to be making more money on covered holdings. I feel like a broken down record with Graeme sometimes repeating the same thing over and over again. So need a bit more of an ongoing commitment from Graeme before we extend ourselves
Then will be learning how to prepare investment overview for early exercise and option expiry day, plus numerous tedious accounting duties updating various information
In time to come and pending how she is coping, I may look at training in quoting options/shares so you have a back-up if I am not available
I will be preparing some extra instruction manuals and templates for her reference and use, in addition to those previously prepared. I also need to revisit the policy and procedures manual when I get a chance also.
When my contract agreement is finalised, we probably need to look at adjusting it for Davina also.
I would like you to meet Davina and she would like to meet you. No rush on this, but professionally and as a matter of courtesy it is necessary eventually.
FYI Davina’s contact details are:
1 Alleena Street
CHERMSIDE QLD 4032
Ph: 07 3861 5841
Mob: 0409 068 367
Thanks and chat tomorrow. Cheers
Ms Tudor invoiced the second respondent for her services. Her invoice took the same general form as those issued by Ms Fox.
In November 2012 there was email communication between Ms Fox and Mr Hinde about a contractor’s agreement. On 26 November, 2012 Mr Hinde sent an email to Ms Fox and said quote as part of the preparation of the draft contractor’s agreement we will need to define some details under the following headings…”. The draft agreement spoken of in that email is not in evidence.
On 27 February, 2013 Ms Fox sent an email to Mr Hinde about the contractor’s agreement. In that email she talked about updates and amendments that she made to the agreement. Her email is instructive. It provides:
Hi Leon,
I have updated the schedules for you to review below. I am not quite sure how comprehensive you want Schedule 1. I have updated Schedule 2 for you to review. Both still require more thought/work. I also don’t really understand the insurance requirements and need to discuss this with you further.
As far as expenses are concerned I am happy to pay for my own equipment and upgrades, internet connection and telephone costs and also host the IS website UFN. I am happy to pay for anything else that I choose to pay for, but I am not happy to pay for something like travel expenses if requested to do so. IE fly to Melbourne to meet with MDS or a client based on your instructions.
I have also updated the Commissions Spread Sheet. My thought is to prepare invoices based on the retainer+ 50% commission and then round it down to the Cap. If there is no credit left, then it reverts to the retainer+ 50% .... Snap shot below however I need to explain the entire updated commissions SS when we are on the phone together. The snap shot below provides an example over the next couple of pay periods.
Chat tomorrow!
On 5 March, 2013 Ms Fox received a revised contractor’s agreement from Mr Hinde. There was some negotiation between the parties about its terms. The initial correspondence from Ms Fox on 6 March, 2013 said:
Hi Leon ... based on a brief overview of this information the contract your legal company have prepared is somewhat contradictory regarding quite a few aspects of the government definition of a “contractor” V “employee”
I know we are going from a Trust agreement to a Formal contract which is rather confronting and impersonal, however need to cross every T and dot every I before signing any contract, as you do also.
I will be obtaining my own legal advice upon receiving your final draft to ensure I do not sign any of my own rights or IP away also!
Chat with you later re this. Tks.
It was at this point that the parties’ relationship took a turn for the worse. On 7 March, 2013 Mr Hinde sent Ms Fox an email in which he set out at some length his view that all of the relevant IP involved in the Investors Signals business belong to him. The parties had a telephone conversation at 9:30am on 7 March, 2013 after Mr Hinde sent his email. Ms Fox made notes of the telephone conversation and then emailed those notes to herself. They form part of her affidavit material. Essentially, the telephone conversation was a discussion between Ms Fox and Mr Hinde about who was responsible for the creation of the Excel spreadsheet which, on the evidence seems centrally important to the way in which the Investors Signals business operated. The conversation lasted for about an hour although there were some interruptions according to Ms Fox’s notes.
The following day, Ms Fox received another draft of the contractor’s agreement with the second respondent. She made some alterations and sent it back to him. One of the issues in contention was insurance. She also made some other notes about various matters within the terms and conditions.
On 10 March, 2013 Ms Fox sent an email to Mr Hinde about their negotiations concerning the contractor’s agreement. In it she said:
Dear Leon,
In order to protect myself and prior to us moving forward it is essential I am paid for all previous work completed before undertaking any further administration/contractual work for Global Equity Management.
Please kindly find attached invoices to 8th March 2013 calculated as per our oral arrangement of $500.00 per week retainer (or $100.00 per day based on a 5 day week) plus 50% of net broking commissions from Trader Dealer/ MOS Financial Services + GST. The invoices attached supersede all unpaid invoices.
Upon payment of the attached invoices the original oral agreement can then be deemed as terminated. Negligible adjustments to the attached invoices (plus or minus) based on payments to Global Equity Management from MDS Financial Services from 1 February 2013 to 8 March 2013 will be adjusted accordingly on a future invoice when a mutually satisfactory Contractual Agreement and/or any other Legal Agreement is negotiated via independent legal counsellors representing yourself Leon Hinde Director of Global Equity Management Pty Ltd and myself Christine Fox and signed off by both parties accordingly and duties under the new Contractors Agreement commence.
When confirmation that payment has been made for the attached invoices, we can resume communication and I will give consideration to a daily fee to be paid weekly to ensure there is no loss of momentum with the Investor Signals business activities, client communications and services whilst a new Contractual Agreement is finalised. Until such time I will not be available via telephone or email to discuss any of the contents of the attached Contractors Agreement or any other Investor Signals business matters.
This communication is without prejudice and not intended or is being conveyed as any form of threat or coercion. It is purely a business decision on my part to protect my own interests going forward due to the commitment and dedication I have provided under the verbal contractual arrangement with yourself and Global Equity Management over the past 2 ½ years of which will continue to be provided once this matter is resolved.
Kind regards,
On 11 March, 2013 Mr Hinde responded. His response included the following:
Once again your method of communication is offensive, aggressive and not conducive to an amicable business relationship. You flaw me with your one-sided view of who has contributed what to the business. I am stunned that you fail to see the sacrifices of my time, knowledge, and knowhow that has lead to the employment opportunity you have had with Global Equity Management over the past 2.5 years. My intention of providing you with Contractual arrangement that secures mutual long term benefits for both parties, have obviously been interpreted in some other light by yourself, I would have thought a more professional approach would have been to communicate with me this morning and arrange to meet face to face to discuss and resolve.
I have worked harder than you obviously realize, in part to support building this business up so you can be earning $100 k per annum, you express your appreciation through threatening condescending communications like I have received below. Here are the facts, I have always paid you the retainer based on our oral agreement as and when invoiced, any commission payments have always been paid within 7 days of Global Equity Management being paid.
So, not only are you now making commercial threats that have damaged our working relationship, you are also attempting to change all prior arrangements to suit your one-sided, miss guided demands.
I will be calling you at 10.30am today to discuss work matters, I will pay you based on our oral agreement, I will pay commissions on the same basis I have always done, (as and when GEM is paid), whilst keeping in line with the$100k cap calculations, again as per our oral agreement.
Thereafter followed an exchange of emails, none of which were particularly helpful.
Ms Fox and Mr Hinde met on 13 March, 2013 at a café in Southport. Ms Fox said that Mr Hinde promised to have a proper agreement in place within the next four-six weeks and she believed him. She returned to the work that she had been doing for Mr Hinde and the second respondent.
It seems that the parties returned to the original arrangements between them because Ms Fox continued to undertake work for Mr Hinde and the second respondent in the way in which that had occurred prior to the contract negotiations.
On 17 March, 2013 Ms Fox invoiced the second respondent based on what she describes as “the revised cap arrangement”. The invoice identifies two days leave were taken “from my 20 day allocation”. This is curious, however, because there is no evidence that Ms Fox was allocated any annual leave at all.
On 10 April, 2013, Mr Hinde sent to Ms Fox an email which, in part, dealt with the contractor’s agreement. In that respect it made a note of the matters that required further review and discussion. There was no doubt about the matters that were concerning Ms Fox. The email said relevantly:
Contractor’s Agreement Discussion Points
The following points require further review, discussion and possible re- drafting:-
1. Public Indemnity and Worker’s Compensation Insurance;
2. Termination clauses and ensuring adequate protection for payment of outstanding funds;
3. Termination clauses and ensuring that termination reasons are fair and reasonable and should a breach occur, notification has to be provided and reasonable time allowed, to address the issue;
4. Review contractual obligations in the event of Investor Signals not being paid by the transaction provider, example. MDS; and
5. 20 days annual leave.
The negotiations about the contractor’s agreement continued. On 13 April, 2013 the parties met at Mr Hinde’s home office. Ms Fox was asked to and signed, a nondisclosure agreement. The parties discussed various aspects of the contractor’s agreement.
Mr Hinde sent a similar email to Ms Fox on 24 April, 2013 in which he set out the points requiring further review discussion and possible re-drafting. They were as follows:
Contractor’s Agreement Discussion Points
The following points require further review, discussion and possible re-drafting:-
1. Public Indemnity and Worker’s Compensation Insurance;
2. Termination clauses and ensuring adequate protection for payment of outstanding funds;
3. Termination clauses and ensuring that termination reasons are fair and reasonable and should a breach occur, notification has to be provided and reasonable time allowed, to address the issue;
4. Review contractual obligations in the event of Investor Signals not being paid by the transaction provider, example. MDS; and
5. 20 days annual leave.
6. What is a negligent act
7. Review indemnity clause
8. Review 15.6 where it states the Contractor shall be liable to Principle
9. Guarantee 18.3 and 18.4?
10. Schedule 2, wording employee versus wording used as Contractor
The discussions continued by email and there was another meeting on 14 May, 2013. A formal agenda was prepared and it is in evidence.
In the meantime, Ms Fox continued to perform the work that she usually performed for Mr Hinde and the second respondent. She continued to invoice the second respondent but her invoices were prepared on the basis of the remuneration provided for in the draft contract in respect of which the parties were negotiating. She claims that she was paid for annual leave, public holidays and “rostered days off”.
On 24 December, 2013 the parties fell into disagreement again. The issue which brought them into dispute is not important. There was another exchange of emails which included an email from Mr Hinde on 30 December, 2013 in which he said:
You are paid well for 9 days a fortnight, I never question you asking for time off. You have generated returns out of this business well beyond my income. It is only now after 4 years that I have a chance of actually seeing a return on the time I have dedicated. Even then, I have still indicated to you that I am happy to put in place a further arrangement in June that will see your income rise in step with the growth of the business.
Unfortunately, I have hit the limit so to speak, I cannot continue in a working environment where I am subject to your emotional outbursts whether they be verbal or in written communications. I am not sure what the real underlying issue is, you continue to suggest it is stress related and you have indicated that you are not willing to be subjected to such high levels of stress going forward. I am happy to explore a restructure of your role, reduced hours and employing someone else who is qualified to handle client orders and manage the client accounts, if that is what you require?
On 31 December, 2013 Ms Fox responded by email to Mr Hinde in which she said (emphasis in the original):
I don’t have the energy or desire to respond any further to your communication except to provide you with 30 days notice terminating all agreements with you. I will send through a more formal notification asap.
On 5 January, 2014 Ms Fox signed a letter on the letterhead of “Fox Family Trust ATF Shirwood Pty Ltd”. The letter, in part, said:
As per my email communication dated 31 st December 2013 I reconfirm all previous oral and/or written informal agreements are terminated and no further work will be performed under any previous arrangement as from 20th January 2014.
...
As a consequence of the pressure and extreme stress of performing the duties of your business along with your offensive emails I have become quite ill. A medical Certificate is attached, therefore 10 days of my owed capped annual contractor fee is sick leave and I expect to be reimbursed for the inability to have my allocated annual leave. I refer to our oral and written agreed payment structure of which commenced capped fee payments from the payment period 20th January 2013 and the spread sheet of which details 10 days sick leave and 20 days annual leave.
Pending the condition of my health and upon medical advice, I will afford you the respect and offer to train new personnel on a part time contracted hourly basis for a short period of time to ensure a smooth progression with as limited disruption as possible to your business.
My hourly contractor fee for training of new and existing personnel can be discussed in person on Monday 20th January in a formal environment if my health has recovered. I re-iterate I will not be performing any other duties from this date forward and no meeting will take place until all invoices are paid. Please email by Sunday 19th January the location and time to meet on Monday 20th.
If you do not desire to accept my offer to do the right thing by you, your business and your clients by training personnel with the innumerable processes I retain exclusive knowledge of, please pay all outstanding invoices immediately so we can both move forward without any further argument.
I have attached unpaid invoices, invoice for payment of 10 days unused annual leave during the period 20 January 13 to 20 January 2014 and the invoice for the cost of Davina Tudors computer and software of which Shirwood Ply Ltd paid for.
After Ms Fox terminated the engagement with the second respondent, two invoices remained outstanding. The respondent refused to pay. The invoices were for “work performed, annual leave, public holidays and sick leave due under the agreement”.
Ms Fox lodged a minor civil dispute – minor debt claim with Queensland Civil and Administrative Tribunal in February, 2014. The first applicant was “Mr Wayne J Fox, Director, Shirwood Pty Ltd ATF The Fox Family Trust”. The second applicant was “Christine Gai Fox (Applicant 2) Nominated Personnel of Shirwood Pty Ltd, ATF The Fox Family Trust”. Mr Hinde was the respondent. In the details of her claim, Ms Fox alleged that Shirwood Pty Ltd was owed money pursuant to a contract with Mr Hinde. The nature of her claim was that she performed work pursuant to an agreement between either she and Mr Hinde or Shirwood Pty Ltd and Mr Hinde. Nowhere in her proceeding did she suggest that she was an employee.
She pursued those proceedings in her name and that of Wayne Fox, either as a director or “nominated personnel” of Shirwood Pty Ltd. She sought outstanding payments from the respondents that included payments for annual leave, public holidays and sick leave.
The QCAT proceedings were heard over two days – 19 June, 2014 and 23 July, 2014. Ms Fox represented herself and Mr Hinde represented himself. The record of the hearings, including the QCAT decision is before me.
During the course of those proceedings, it became apparent that Ms Fox’s claim for annual leave, public holidays and sick leave could only succeed if she was an employee and it appeared to the QCAT Member that Ms Fox was a contractor and so, not entitled to those amounts. Indeed it was Ms Fox’s case that she was a contractor. Notwithstanding that, Ms Fox did not withdraw her claim and commence proceedings elsewhere. Rather, she pressed on in the Tribunal, seemingly accepting the Member’s ruling that she was a contractor. She did not appeal the Members determination about that. That is hardly surprising given that her position as revealed in the transcript of the two days of hearing was that she was a contractor.
On 11 February, 2014, a decision was given by QCAT whereby it was ordered that “the respondent pay the applicant the sum of $3142.70 within 14 days of 23 July, 2014”. It is clear from the reasons given by the Member that the amount for which judgment was given was calculated having regard to the Members determination about Ms Fox’s status as a contractor rather than an employee.
Ms Fox argues that nowhere did she unequivocally accept that she was a contractor or did she elect to proceed in the QCAT proceedings in a way that is inconsistent with the present proceedings. However, I reject her arguments about that.
First, her proceedings were instituted on the basis that she was a contractor. That was the rationale she used to explain why Wayne Fox was there on behalf of Shirwood Pty Ltd.
Second, despite that, on a number of occasions before the Member she voiced her concern that she was in fact an employee and entitled to annual leave, sick leave and the like. However, the Member pointed out to her that there had been a Workers’ Compensation ruling against her on that point. The Member pointed out that in her view Ms Fox was a contractor and not entitled to the usual entitlements that employees enjoy. The question of whether Ms Fox was an employee (and therefore entitled to advance her leave and other entitlements claims) or whether she was a sub-contractor (and not entitled to those things) was clearly a matter to be determined by the Tribunal because it went to how Ms Fox’s entitlements should be calculated. It was a matter integral to QCAT’s decision.
Third, the difficulty for Ms Fox’s claim was pointed out to her by the QCAT Member on the first day of the hearing (see first day’s transcript T21 – T22, T31-T32). It would have been patently clear from what transpired on the first day of the QCAT hearing that to the extent that there was an issue between the parties about whether Ms Fox was an employee or a contractor, the issue would be determined and the case decided on the basis that she was a contractor.
Fourth, notwithstanding those matters, Ms Fox persisted with her claim in QCAT until its determination. The determination resolved the issue that was plain on the transcript of the proceedings – namely whether Ms Fox was a contractor as Mr Hinde contended or whether she was an employee.
The QCAT proceedings
In their amended defence, the respondents pleaded that Ms Fox could not maintain her claim, or at least some of it, because the decision made by QCAT created a res judicata. In the course of making directions for the delivery of written submissions by the parties at the conclusion of the trial, I made some observations that suggested that perhaps there was no res judicata but that maybe there were questions of issue estoppel or election that needed to be addressed.
The respondents submit that three consequences for Ms Fox follow from the manner in which she conducted the QCAT proceedings and the ultimate outcome of her action. The consequences are:
a)she elected to be treated as if a contractor, and it is impermissible, in this Court, for her to take an ‘inconsistent position’; or
b)an issue estoppel arises, prohibiting her from taking an ‘inconsistent position’; or
c)at the least, Ms Fox made prior inconsistent statements that harm her credit.
In Commonwealth v Verwayen (1990) 170 CLR 394, 421, Toohey J adopted and adapted a passage from Mason J’s judgment in Sargent v ASL Developments Ltd (1974) 131 CLR 634, that explains the principle of election in this context. His Honour said:
In my view, waiver, by that name, has a role to play. And it is a role which involves no confusion with variation of contract or promissory estoppel. It may be seen as a form of election between inconsistent rights, in the former of the categories mentioned by Mason J in Sargent. Election implies that a choice must be made between two rights which are mutually exclusive. “Obviously there can be no election, choosing one course to the exclusion of the other, when in fact there is only one course to take, or where the two courses are such that the adoption of one of them does not necessarily indicate a final intention to abandon the other”: Spencer, Bower and Turner, p 342. But, in the second of those categories, “the legal grounds on which a person is precluded from raising a particular defence ... “, an election is involved, only in the sense that a defendant may choose to take a jurisdictional point, rely upon an irregularity in the proceedings, plead a particular defence, or take some other step in the adjudicative process, or he may choose not to do so. But he may not take up “two inconsistent positions”, the language used in Craine. It may be, therefore, that “election” is best reserved for the former of Mason J’s categories and “waiver” for the latter.
Here, I accept the respondents’ submissions that the evidence shows that Ms Fox is attempting to press and inconsistent position with that that was adopted by her in QCAT. In any event, even if that is wrong, in my view and issue estoppel operates so as to prevent Ms Fox from now asserting that there was anything other than a relationship of principal and contractor between she (or Shirwood Pty Ltd) and Mr Hinde or the second respondent.
In Ramsay v Pigram (1968) 118 CLR 271 at 276, Barwick CJ set out the following in respect of issue estoppel:
The question is whether the respondent is prevented by any of the findings in the former action from asserting in this action that the police officer drove the appellant’s car with lack of that care which the circumstances required. The principles applicable to the resolution of that question in Australian law are well settled. The relevant law is the common law and both English and Australian decisions as to it indicate a clear conclusion. In thus emphasizing the position in Australia, I mean to acknowledge that there has been divergent treatment of the question in some parts of the United States of America. In my opinion, apart from the obligation to respect binding precedent, I would not be prepared to accept the approach manifest in the American decisions on this question to which we were referred in argument.
Long standing authorities, in my opinion, warrant the statement that, as a mechanism in the process of accumulating material for the determination of issues in a proceeding between parties, an estoppel is available to prevent the assertion in those proceedings of a matter of fact or of law in a sense contrary to that in which that precise matter has already been necessarily and directly decided by a competent tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities, or between a privy of each, or between one of them and a privy of the other in each instance in the same interest or capacity. The issue thus determined, as distinct from the cause of action in relation to which it arose, must have been identical in each case. Of its nature such an estoppel must be available to and operative in respect of each party; or, as it is said, estoppels must be mutual.
The Queensland Civil and Administrative Tribunal is a court of record: s.164 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen (2013) 2 Qd R 170. QCAT is plainly a competent tribunal in the sense discussed by the Chief Justice in the passages set out above. That is so notwithstanding that the preceding that Ms Fox commenced in QCAT was a Minor Debt Claim: Owen v Menzies at [12] – [20].
One of the issues that arose in the QCAT proceedings was the nature of Ms Fox’s engagement with Mr Hinde. The resolution of that issue was critical to QCAT’s decision because it informed the amount for which Ms Fox received judgment. In the words of Dixon J in Blair v Curran (1939) 62CLR 464 at 532, the nature of Ms Fox’s engagement with Mr Hinde was a matter necessary to decide and which was actually decided as the ground work for the order that the QCAT member decided to make.
An identical issue to that determined by the QCAT member arises in this case. The issue arises between Ms Fox and Mr Hinde and the second respondent all of whom were parties to the QCAT proceedings. In so far as the issue of the nature of her engagement is concerned, there is a correspondence of parties. It is, in my view, of no moment that Shirwood Pty Ltd is not a party to the present proceedings because the principle applies as between parties and their privies (see the second paragraph of the passage extracted above from Ramsay v Pigram).
To the extent that she now argues that at the time she appeared before QCAT she did not understand the difference between an employee and a contractor, I reject her evidence because it is inconsistent with her own statement in her email of 6 March, 2013 to Mr Hinde that she had consulted “the government definition of ‘contractor’ V ‘employee’”. But that is by the by, because Ms Fox’s state of knowledge about the law does not impact upon the application of the principle.
The determination by QCAT that the relationship between Shirwood Pty Ltd or Ms Fox and either Mr Hinde or the second respondent was that of principal and contractor binds them. Ms Fox cannot now be heard to say in this Court that she was an employee of Mr Hinde or alternatively the second respondent because that issue is already the subject of a decision of a court of competent jurisdiction. No appeal was taken by Ms Fox against that judgment.
That finding is sufficient to dispose of this case because to succeed, Ms Fox must establish that the relationship between she and Mr Hinde or the second respondent was an employee/employer relationship. Without that, she cannot succeed on her misrepresentation claims. Nonetheless, on the facts as I have set them out above, I have concluded that Ms Fox, was not at any time an employee of either Mr Hinde or the second respondent.
The legal test
Ms Fox’s claim is based upon alleged contraventions of the Fair Work Act. The cases dealing with the identification of an employee as distinguished from an independent contractor under the common law are relevant. That is because the Fair Work Act imports into its application the common law understanding of employment: ss.11, 335 of the Act; ACE Insurance Ltd v Trifunovski& Ors (2011) 84 ATR 561, at [24] and [26].
If there can be said to be a single test for determining whether a person is an employee or an independent contractor, it is that each case must be considered on its own facts. In the present case, it is necessary to look at the totality of the relationship to determine whether Ms Fox served the respondents or either of them in the respondents’ business or whether Ms Fox carried on a trade or business of her own: Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 33, 39, 41 and 45.
Notwithstanding the very broad nature of the approach to the question in issue, a few matters are, however, clear. First, any attempt by the parties to label their relationship in one way or another is far from determinative: Sweeney v Boylan Nominees Pty Ltd (2006) 227 ALR 46 at 50. Second, there is no set list of factors used to determine the nature of the relationship: ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 per Buchanan J at 162-3. It would be fruitless and apt to mislead or to attempt to exhaustively list all of the possible indicia for consideration: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 per Wilson and Dawson JJ at 37; Mason J at 24. In fact, relevant matters are often variously stated and added to from time to time: Stevens at 36; Hollis at 46. In ACE Insurance Ltd v Trifunovski Perram J summarised the position thus (at [29]):
...first, the distinction between an employee and an independent contractor is ‘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’ (Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at 39 [40] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker’s Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at 217 per Windeyer J); secondly, the answers to that question are to be determined by reference to the ‘totality’ of the relationship (Hollis at 33 [24]); thirdly, a number of indicia have accreted over time in the authorities which are thought to throw light to varying degrees on the outcome without being determinative: the terms of the contract; the intention of the parties; whether tax is deducted; whether sub-contracting is permitted; whether uniforms are worn; whether tools are supplied; whether holidays are permitted; the extent of control of, or the right to control, the putative employee whether actual or de jure; whether wages are paid or instead whether there exists a commission structure; what is disclosed in the tax returns; whether one party ‘represents’ the other; for the benefit of whom does the goodwill in the business inure; how ‘business-like’ is the alleged business of the putative employee – are there systems, manuals and invoices; and so on – the list is neither exhaustive nor short: see Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24 per Mason J and 36-37 per Wilson and Dawson JJ, for application see Hollis at 42-45 [48]-[57] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Sweeney at 172-173 [30]-[33] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ...
Third, post-contract conduct is relevant in ascertaining the true nature of the relationship: ACE Insurance at 168-9; cf. Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385; Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597; Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537 at 539.
Fourth, in the words of Buchanan J in ACE Insurance Ltd v Trifunovski (at 151): “The two areas where the distinction [between a contract of service and a contract for services] is important concern the duties and obligations owed by the contracting parties to each other and the duties and obligations that one of them may owe to third parties.” Which of the relevant indicia ought to be applied in any given case will be heavily influenced by the nature of the claim and the focus of the specific dispute: Commissioner of Pay-roll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871 at 878-9). As Buchanan J put it in ACE Insurance (at 151):
[28] … The basic question remains the same in all types of case but when the question at stake concerns third persons outside the contractual relationship the focus of the examination may sometimes produce subtle influences on the outcome.
One of the factors often considered important is control by the putative employer over the putative employee. But it is not the exercise of that control which is important, but rather the existence of the right of control. “The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”: Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404.
It is important to note that the way in which control will manifest itself will differ from case to case: “[i]t may be found in a right of organisation and allocation of work, as much as in some theoretical right to say how actual work should be done”: ACE Insurance per Buchanan J at 432.
With those matters of principle in mind, I now turn to consider the significant aspects of the evidence.
I have set out above that when Mr Hinde first paid money to Ms Fox, he asked for a receipt or an invoice/receipt as the parties described it in their evidence. It does not seem to me to be significant that it was Mr Hinde who asked for the receipt or the invoice/receipt. The payment was clearly being made in the course of the second respondent’s business and some form of documentary acknowledgement was no doubt required for taxation purposes as Mr Hinde explained in his evidence.
What is more significant is the way in which Ms Fox chose to issue the invoices. In their submissions, the respondents place considerable emphasis on this. The emphasis is well-placed. Ms Fox took steps to ensure Shirwood Pty Ltd invoiced for her services and that the funds were paid into a bank account operated in Shirwood Pty Ltd’s name.
I accept the respondent’s submission that the mode of invoicing together with Ms Fox’s reporting of her assessable income to the taxation authorities demonstrates an intention on her part to split her income for taxation purposes.
Ms Fox worked from home. Her hours or days of work were not subject to scrutiny by Mr Hinde or the second respondent. His unchallenged evidence was that Ms Fox would tell him when she was able to work. That is consistent with the way in which the parties working relationship developed. Ms Fox’s evidence was that at the commencement of the parties’ relationship it was not a full-time position and she was able to perform work for others. Irrespective of the amount of work that she performed and the amount of time that it took to do it, the parties’ agreement was that she would be paid $1000 per fortnight plus expenses. That is, in my view, inconsistent with the notion that Ms Fox was an employee. The payment was, as was later described by the parties, a retainer to ensure that Ms Fox would be available to render services for Mr Hinde or the second respondent if needed.
The evidence demonstrates that over time the second respondent’s business increased and so too did the demands upon Ms Fox’s time. That, however, in my view did not change the nature of her engagement. Her contract remained one for the provision of services.
That Ms Fox chose to include in the invoices notations suggesting that she had taken recreational leave or sick leave does not assist a case. There is simply no evidence that there was any discussion between she and Mr Hinde about matters such as leave. Ms Fox’s email to Mr Hinde dated 6 January, 2012 which she characterises as a request for a one hour lunch break, is nothing of the sort. The terms of the email show that Ms Fox was indicating to Mr Hinde what arrangements she would like in place. The nature of the work undertaken by her for Mr Hinde was such that there plainly needed to be a considerable level of communication and understanding between the two about Ms Fox’s ability to undertake tasks on a timely basis in accordance with the parties’ agreement. The type of information provided by Ms Fox in that email and her requests of Mr Hinde show nothing more than a functional working relationship between the two individuals.
Ms Fox also worked from home. Mr Hinde had no way of determining whether the leave days identified in Shirwood’s invoices were accurate. I accept the respondents’ submissions that this lack of control and supervision suited Ms Fox particularly when the cap was reached because, assuming a reasonable level of work was done, she could, as she did (from about March, 2013 until termination in December, 2013), invoice for an essentially uniform amount fortnightly and take whatever days off suited her convenience.
Ms Fox argues that the control exercised over her work, and the provision of material to her to enable her to do her work, are strong matters which tend to show that she was an employee. I accept that some measure of control over the work that was to be done by Ms Fox was exercised by Mr Hinde but, it is significant to note that these parties operated geographically independently. Indeed the evidence demonstrates that they rarely met face-to-face. In my view, Ms Fox overstates the amount of control that she says was exerted over her work and, ultimately considering the matters to which I have already referred the question of control is of relatively minor significance.
Neither party kept any records about the amount of hours that Ms Fox spent during the period for which she claims undertaking work for the respondents. That is not surprising given the way in which both parties accept Ms Fox undertook the work that she was required to do and the arrangements in place for payment for that work.
It is significant that commencing with the invoice dated 28 November, 2010 (issued by Shirwood Pty Ltd) the invoiced amounts contained a GST component. Ms Fox’s evidence was that Shirwood Pty Ltd would complete its business activity statement obligations and remit the GST to the tax office.
There is nothing in the evidence to suggest that the nature of the parties’ engagement changed at any time. Both parties always considered that Ms Fox was a contractor. They sought to enter into a contractor’s agreement and they negotiated for a considerable period of time about that before reaching a conclusion that no agreement could be made and as such Ms Fox’s status as a contractor did not change. Invoices were consistently and without exception, issued by Shirwood Pty Ltd.
The difficulties encountered between the parties in December, 2012 as exemplified in their email correspondence make it clear that neither considered that Ms Fox was an employee. The email discussions about the ownership of the intellectual property that was being deployed in the Investor Signals business is consistent with that. Whilst the view each of the parties takes of the nature of their relationship is not determinative, it is nonetheless a matter to be taken into account.
In my view, having regard to all of the facts as I have found them to be at the commencement of these reasons the clear conclusion is that Ms Fox was always a contractor rather than an employee. That is to say her engagement with the second respondent was by way of a contract for services rather than a contract of service.
Accordingly, were I not to otherwise dismiss Ms Fox’s claim on the basis that an issue estoppel operates against her so as to prosecute a claim as an employee in these proceedings, I would nonetheless conclude that the respondents did not contravene s.357 of the Fair Work Act because at all relevant times, Ms Fox was an independent contractor rather than an employee and so neither respondent made any representation that engaged either s.357 or s.359 of the Act.
The respondents seek their costs of the proceedings. They argue that she took an inconsistent position from her clearly stated position on her status as a contractor before QCAT. That submission cannot be sustained in the face of the respondents’ submissions concerning the election and issue estoppel point. For that purpose, the respondents pointed out that the issue of whether Ms Fox was a contractor or an employee was “hotly contested”.
Having regard to the way in which Ms Fox chose to account to the Australian Taxation Office for her earnings and what the applicant contended was her very clear position before QCAT the respondents argue that Ms Fox acted unreasonably in prosecuting these proceedings. In those circumstances they suggest that s.570(2)(b) of the Fair Work Act is engaged such that there ought to be an order for costs.
However, in my view Ms Fox’s actions in prosecuting these proceedings whilst on their face difficult to understand in light of the proceedings in QCAT, nonetheless should not be considered as unreasonable having regard to what seemed to me to be a genuine belief formed by her after consulting the tools made available by the Australian Taxation Office that she was an employee. In my view, no order for costs is appropriate.
I certify that the preceding one hundred and twenty-four (124) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 21 November, 2018.
Date: 21 November 2018
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