Guy Forsyth Trustee Endure Trust Trading as Alignity Consulting ABN 51 100 486 105 v Canberra Consulting Pty Ltd ACN 139 224 436 (Appeal)
[2020] ACAT 29
•4 May 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
GUY FORSYTH TRUSTEE ENDURE TRUST TRADING AS ALIGNITY CONSULTING ABN 51 100 486 105 v CANBERRA CONSULTING PTY LTD ACN 139 224 436 (Appeal) [2020] ACAT 29
AA 24/2019 (XD 317/2019)
Catchwords: APPEAL – civil dispute – agreement between appellant and labour hire company – appellant assigned to provide services to government department – company terminated assignment and agreement without notice and assigned no other work – appellant claimed breach of contract and breach of Australian Consumer Law – Original Tribunal dismissed claim – appeal conducted as review of original decision – appeal decided on the papers – before Original Tribunal he accepted that it was a contract for services and he was an independent contractor – whether appellant should be permitted to raise ground of appeal about nature of relationship – Original Tribunal awarded amount for termination of agreement without notice – whether quantum was sufficient – appeal dismissed – application by company for costs of appeal dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 48, 82
Cases cited:Bloemen v Commonwealth (1975) 49 ALJR 219
CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96
Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176
Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73
Park v Brothers (2005) 80 ALJR 317
Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231
Walker v Citigroup Markets Australia Pty Ltd (2006) FCAFC 101
Appeal Tribunal: President G Neate AM
Senior Member K Katavic
Date of Orders: 4 May 2020
Date of Reasons for Decision: 4 May 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL AA 24/2019
BETWEEN:
GUY FORSYTH TRUSTEE ENDURE TRUST t/as ALIGNITY CONSULTING ABN 51 100 486 105
Applicant
AND:
CANBERRA CONSULTING Pty Ltd ACN 139 224 436
Respondent
TRIBUNAL: President G Neate AM
Senior Member K Katavic
DATE:4 May 2020
ORDER
The Appeals Tribunal orders that:
1.The appeal is dismissed.
2.The application by Canberra Consulting Pty Ltd for costs of the appeal is dismissed.
………………………………..
President G Neate AM
Senior Member K Katavic
REASONS FOR DECISION
Introduction
3.This appeal concerns the nature of the relationship between Dr Guy Forsyth, the appellant, and Canberra Consulting Pty Ltd (Canberra Consulting), the respondent, in 2018 when Dr Forsyth was providing particular services to the Department of Foreign Affairs and Trade (DFAT) in accordance with an agreement between Canberra Consulting and him.
4.Canberra Consulting is a labour hire company. It had an agreement with DFAT to provide certain services. It was because of the agreement with DFAT that Canberra Consulting entered into a separate agreement with Dr Forsyth ATF Endure Trust trading as Alignity Consulting under which Dr Forsyth would provide the services required by DFAT (the Agreement).
5.In late 2018, DFAT advised Canberra Consulting that Dr Forsyth was performing at a sub-optimal standard and his assignment at DFAT was unsustainable. This prompted Canberra Consulting to take steps to end its relationship with Dr Forsyth, bringing his assignment at DFAT to an end.
6.The circumstances of Canberra Consulting’s termination of its agreement with Dr Forsyth caused him to commence proceedings in the ACT Civil and Administrative Tribunal (the Tribunal) seeking $25,000 in damages, plus interest, the filing fee and ASIC search fee.
7.Dr Forsyth brought those proceedings on multiple grounds but was only successful in respect of one. The Original Tribunal found that Canberra Consulting had breached the requirements under the Agreement regarding termination and awarded Dr Forsyth $5,000 in damages plus interest of $160.[1]
[1] Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73
8.Dr Forsyth appealed the Original Tribunal’s decision on two grounds. He maintained his claim for $25,000 plus interest, the ACAT filing fees and various other charges.
9.Both parties requested the Appeal Tribunal consider the appeal on the papers. Each party filed written submissions. On 13 September 2019, a direction was made that this appeal be heard as a review of the original decision.[2] This Appeal Tribunal will consider the appeal in the context of the role of an appeal Tribunal when dealing with an appeal as a review of the original decision,[3] and the way in which the appeal hearing was conducted.
Background
[2] See Direction 5 of the Directions dated 13 September 2019
[3] See ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) section 82(b)
10.The history of the relationship between the parties is set out in detail in the Original Tribunal’s reasons of 5 August 2019.[4] We do not need to repeat that history for the purposes of this appeal but note the following salient features.
[4] Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [1]-[16]
11.In the Agreement dated 17 September 2018 between Canberra Consulting and Guy Forsyth ATF Endure Trust trading as Alignity Consulting, Dr Forsyth, agreed to provide services to Canberra Consulting in accordance with the requirements set by DFAT from 3 September 2018 to 2 September 2019 with two 12 month options ‘per customer requirement.’ Under the Agreement, DFAT was the client and Canberra Consulting was the ‘Customer’. Dr Forsyth was identified as the ‘Provider’. Dr Forsyth had no contractual relationship with DFAT.
12.In terms of the services to be provided by Dr Forsyth, the relevant section of the Agreement stated[5]:
Description of duties includes but is not limited to:
1. Project Manager to deliver ICT Software Projects and manage defined projects or work streams to deliver outputs and products in accordance with budget and quality standards which contribute to the delivery of ICT solutions across the Department.
2. The Specified Personnel must:
a)adhere to the APS Values and Code of Conduct as defined in the Public Service Act 1999 (Cth), the DFAT Code of Conduct for Overseas Service and DFAT’s Security instructions and comply with all terms and conditions of the Deed in accordance with clause 11 of schedule 10.
b)facilitate transfer of skills and knowledge relevant to the Services to DFAT staff.
[5] Attachment A of the Agreement
13.Dr Forsyth was relevantly the Project Manager and Specified Personnel.
14.Under the Agreement, Canberra Consulting was to pay Dr Forsyth for his services at a rate of $125 per hour (ex GST) for a maximum of 40 hours per week. Any additional hours in a single week required approval from DFAT. A maximum of 1,920 hours were to be worked under the Agreement within a single year.
15.On 13 December 2018, employees of Canberra Consulting met with officers of DFAT to discuss DFAT’s concerns with Dr Forsyth’s performance. Based on those concerns, DFAT considered Dr Forsyth’s engagement was no longer sustainable and directed Canberra Consulting bring Dr Forsyth’s assignment to an end. Dr Forsyth was overseas at the time and was due to return in January 2019. It was agreed that Dr Forsyth would be notified of DFAT’s cessation of his services upon his return.
16.On 4 January 2019, Ms Stavreas of Canberra Consulting, telephoned Dr Forsyth and advised him that his assignment at DFAT would conclude at 9.00am, 7 January 2019 because of DFAT’s concerns about his performance. Canberra Consulting was not able to offer Dr Forsyth an assignment elsewhere as its ability to do so was dependent upon opportunities provided to it.
17.On 26 February 2019, Canberra Consulting gave Dr Forsyth written notice, by email, that from 4 January 2019 his services were no longer required. This was provided in response to a letter dated 25 February 2019 from Dr Forsyth.[6]
[6] Dr Forsyth’s letter dated 25 February 2019 was not in evidence before the Original Tribunal
18.Clause 7.1 of the Agreement dealt with termination. It stated:
7.1 This agreement shall terminate:
(a) in accordance with clause 2.2, or
(b) on a date agreed by the signatories to this Agreement, or
(c) on notice of termination of the assignment by the Customer.
(d) by the giving of 5 working days’ notice in writing by either party.
19.The Original Tribunal made certain findings in relation to the evidence given by the various witnesses in the proceedings. Having regard to Dr Forsyth’s grounds of appeal it is not necessary for this Appeal Tribunal to deal with those findings in relation to the evidence.
Grounds of appeal
20.The grounds of appeal are:
(a)The Presidential Member erred in finding the quantum of damages due to the nature of the commercial agreement between the parties. (Ground 1)
(b)The nature and subject matter of the agreement between the parties was employment in nature. The nature of the agreement has been contended by the respondent and affirmed through the decision of the Tribunal. (Ground 2).
21.In his written submissions, Dr Forsyth sought orders based on two scenarios. If construed as a contract of service (under which he would be an employee of Canberra Consulting), Dr Forsyth sought $39,902.85 plus interest comprising:
(a)$85,000 capped at the jurisdictional limit of $25,000 for damages for wrongful termination;
(b)$11,250 for income tax on the amount of damages;
(c)$2,375 for superannuation on the amount of damages;
(d)interest;
(e)costs including filing fees and other procedural fees.
22.In the alternative, he maintains his previous claim for $28,992.57 comprising, $25,000 plus interest, the ACAT filing fees and various other charges.
23.We consider it appropriate to deal with the grounds in reverse order.
Did the agreement between the parties constitute employment? (Ground 2)
24.There are two issues for the Appeal Tribunal in relation to Ground 2:
(a)Whether it is impermissible for Dr Forsyth to raise this ground on appeal.
(b)If the ground is properly raised, whether the Agreement created an employment relationship between Canberra Consulting and Dr Forsyth.
25.In relation to the first issue, Canberra Consulting contends that it is impermissible for Dr Forsyth to raise the nature of the Agreement on appeal because he accepted before the Original Tribunal that the Agreement was a contract for services and so he was not an ‘employee’ but an independent contractor.
26.A party is not ordinarily permitted to raise an argument or claim for the first time on appeal except in certain circumstances. A factor favouring permission is whether evidence related to that argument or claim was given at first instance enabling the point to be determined on appeal.[7] Where a party expressly concedes or abandons a point at first instance, this Appeal Tribunal would be reluctant to allow it to be raised in an appeal.[8] It should only be in the clearest case and for the most cogent reasons that a party who has conceded a matter at hearing should be allowed to make the validity of what has been conceded the basis for overturning the result of the hearing.[9]
[7] Park v Brothers (2005) 80 ALJR 317; Bloemen v Commonwealth (1975) 49 ALJR 219, Gibbs J at 220 (Barwick CJ, Stephen and Murphy JJ concurring); Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, the Court at 438
[8] Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231, per Barwick CJ at 241 (Mason and Jacobs JJ concurring at 271, Murphy J concurring at 283–284)
[9] Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231, per Barwick CJ at 241
27.Dr Forsyth’s position before the Original Tribunal is clear from his documents and oral submissions.
28.The initial Application[10] filed by Dr Forsyth as well as the Amended Application[11] both stated that the parties entered into a “contract for services” in respect of the provision of services to DFAT. In his written witness statement, Dr Forsyth also referred to the Agreement as a “contract for services”.[12] This is further confirmed in an email dated 13 August 2018 from Mr John Lavatt of Canberra Consulting to Dr Forsyth which references the ‘contract for your services’ and sets out various other details of the arrangement.[13] Nothing else in Dr Forsyth’s witness statement otherwise asserts or contends that the nature of the relationship was employment or a “contract of service”.[14]
[10] Civil Dispute Application dated 4 March 2019
[11] Civil Dispute Amended Application dated 13 May 2019
[12] Witness Statement of Guy Forsyth dated 3 July 2019 at paragraph 3 and 7
[13] Attachment D to the Witness Statement of Guy Forsyth dated 3 July 2019
[14] Witness Statement of Guy Forsyth dated 3 July 2019, particularly paragraphs 3 to 8
29.We have considered the transcript of the hearing before the Original Tribunal and note that the following exchanges occurred:
PRESIDENTIAL MEMBER MCCARTHY: All right. So you say it was unconscionable, assuming if I don’t know how the this will unfold, but your position is that it’s unconscionable for Canberra Consulting to not have acceded to the proposal of DFAT about the termination of your employment and when it should occur.
DR FORSYTH: Well, just a slight point, it’s it’s not employment. It was a contract for services.[15]
…
DR FORSYTH: And in fact in the original submissions by the applicant they were referring to this as ‘employment’, which I went to some pains to correct them. And I wanted to put into evidence that this is an independent contract, not an employment.
PRESIDENTIAL MEMBER MCCARTHY: You are not suggesting employment, are you?
MR MOFFETT: No, not at all.[16]
…
DR FORSYTH: In fact I believe that in the Fair Work Commission at the moment, if you take a wrongful termination action it’s a minimum of three months even though most employment contracts only contain a four-week termination clause. So you don’t get the opportunity to sort of go back to do it the right way.
PRESIDENTIAL MEMBER MCCARTHY: I’m aware enough to know that there are statutory minimum periods of notice you need to give employment contracts. It’s a while since I’ve looked at it, but this is not an employment contract. That’s a statutory right for employment.
DR FORSYTH: Correct, for employment. This is a commercial contract, a contract for services. I believe that the balance of the contract is the correct quantum of damages.[17]
[15] Transcript of proceedings 12 July 2019 at pages 36-37
[16] Transcript of proceedings on 12 July 2019 at page 75
[17] Transcript of proceedings on 12 July 2019 at page 145
30.Based only on those written and oral statements, we would accept Canberra Consulting’s contention and would not allow Dr Forsyth to argue or claim in this appeal that the nature of the Agreement was employment or that the Agreement was a ‘contract of service’.
31.Nonetheless, the Original Tribunal considered the nature of the Agreement[18] in the context of Dr Forsyth’s claim that clause 7.1(c) was invalid on grounds of ‘bad faith’ and also his claim of unconscionability. Consequently, and for that reason alone, we will also consider whether the Agreement created an employment relationship between the parties.
[18] Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [25] and [57]-[58]
32.Amongst other things, the Original Tribunal cited Fair Work Ombudsman v Ramsey Food Processing Pty Ltd[19] (Ramsey), in which the Court stated:
Utilisation in Australia of labour hire arrangements has increased significantly in past decades. There is no doubt that sometimes such arrangements reflect a desire by the proprietors or a business to avoid liability for employment related obligations. That is not illegal as an objective. It has been traditionally reflected in the ability of a business to let a contract “for services” (independent contracting) rather than making a contract “of service” (employment).
[19] [2011] FCA 1176 at [61]
33.The Original Tribunal accepted that the Agreement was a labour hire contract thus making Dr Forsyth an independent contractor. The Original Tribunal noted that:
A person seeking work can do so through a labour hire contract, or not, as they choose. I accept that for some people, and Dr Forsyth would seem to be one, their options for obtaining work are limited and work by means of a labour hire contract is better than no work at all…. I accept Dr Forsyth’s position that he felt he had no real option but to enter the agreement because he “needed the money”, but that too is unremarkable…[20]
[20] Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [58]
34.The nature of the Agreement is readily ascertained by reference to the terms of the Agreement itself. This is made clearer, having regard to the features of a contract ‘for services’ or independent contracting referred to in Ramsey. Ramsey specifically stated that such arrangements avoid liability for employment related obligations such as income tax and superannuation. The Original Tribunal made similar observations:
Persons who obtain work through a labour hire contract do not enjoy the job security and statutory protections that are held by employees, particularly public service employees…[21]
[21] Guy Forsyth as Trustee for Endure Trust trading as Alignity Consulting v Canberra Consulting Pty Ltd [2019] ACAT 73 at [57]
35.In the Agreement, Dr Forsyth was described as the Provider. Clause 8.1 of the Agreement states:
8.1 The Provider shall be solely responsible for any income tax, superannuation, workers compensation, accident and sickness liabilities which may arise. As required by legislation, Canberra Consulting Pty Ltd will deduct the legislated amount of payroll tax from the Provider’s Hourly Rate and remit that amount to the relevant state revenue office.
36.The effect of this clause is to deny Dr Forsyth of any claim that he was operating under a contract ‘of services’ or an employment arrangement. Under the Agreement, Canberra Consulting was not responsible for the usual statutory protections or employment-related obligations. These were the responsibility of Dr Forsyth. Further, the payment to Dr Forsyth was characterised as a ‘consulting fee’ for those services and subject to GST.[22] That was also inconsistent with an employment arrangement.
[22] Agreement clauses 3 and 4
37.Consequently, even if Dr Forsyth were permitted to raise Ground 2 in the appeal, it is not established and is without merit. The Original Tribunal correctly understood and correctly characterised the nature of the Agreement. The appeal on Ground 2 is dismissed.
Did the Original Tribunal correctly determine the amount of damages? (Ground 1)
38.Dr Forsyth submits that if this Appeal Tribunal does not find he was an employee, the Original Tribunal nonetheless erred in awarding $5,000 damages plus interest. He claims damages of $25,000 plus interest.
39.The Original Tribunal’s assessment of damages was based, correctly in our view, on the amount Dr Forsyth could have expected to receive if he had been given five working days’ notice of termination of the Agreement, in writing, as required by Clause 7.1 of the Agreement. His services were terminated without the requisite written notice. This was not in dispute.
40.We see no other basis upon which the Original Tribunal ought to have assessed any damages. Dr Forsyth relies upon Walker v Citigroup Markets Australia Pty Ltd[23] in support of his claim for damages. The Court held:
The objective of the award of damages for breach of contract is to place the innocent party in the position it would have been in if the contract had been performed, so far as money can.
[23] [2006] FCAFC 101 at 79
41.There is no doubt Canberra Consulting was entitled to terminate the Agreement. In fact, both parties were able to terminate the Agreement on a date to be agreed. Alternatively, the Agreement could be terminated if the Customer (i.e. Canberra Consulting) ended the assignment. The fact that DFAT was not satisfied with Dr Forsyth and asked Canberra Consulting to terminate his assignment gave Canberra Consulting grounds to terminate the assignment and the Agreement under Clause 7.1.
42.Based on the construction of Clause 7.1 adopted by the Original Tribunal, with which we agree, any basis for termination of the Agreement required the giving of five working days’ notice in writing. DFAT terminated the assignment. There is no contrary evidence. Canberra Consulting was therefore able to terminate the Agreement under clause 7.1(c). The defect on Canberra Consulting’s part was a failure to give five working days’ notice in writing. The Original Tribunal concluded that, had it done so, Dr Forsyth could have expected to receive an amount equivalent to five working days. On the Original Tribunal’s assessment, that was $5,000.
43.We note that Clause 7.3 of the Agreement provides:
In the event of termination in accordance with this clause, the Provider shall only be paid for work undertaken and time expended on tasks identified in Attachment A, up to an including the time the Agreement was terminated by the Provider in accordance with Attachment A.
44.While neither party addressed the relevance of Clause 7.3 before the Original Tribunal, it seems to us that, on one view, Dr Forsyth was not entitled to receive any payment upon termination as he had not undertaken any work or expended time on the specified tasks up to the termination because he had been on leave. We therefore consider that the award of $5,000 in damages reflects the amount attributable to Canberra Consulting’s failure to comply with the termination requirements, namely that Dr Forsyth be given five working days’ written notice. If Canberra Consulting had correctly given Dr Forsyth five working days’ written notice, Dr Forsyth may not have received any payment at all.
45.The appeal on Ground 1 is dismissed.
Canberra Consulting’s application for costs of the appeal
46.Canberra Consulting sought an order for costs of the appeal in accordance with section 48(1) of the ACT Civil and Administrative Tribunal Act 2008 (the ACATAct) on the basis:
(a)of the “absolutely hopeless nature” of Dr Forsyth’s grounds of appeal;
(b)that the appeal was “without merit whatsoever, and doomed to fail”, and aspects of the appeal were “completely nonsensical, and irrational, if not bordering on the line of being dishonest;” and
(c)that Canberra Consulting had again been put to significant costs and disbursements in attending to the appeal, including the cost of engaging counsel to prepare written submissions because the appeal was to be determined on the papers.
47.We make no comment about the way in which the submission was expressed. We note merely that Dr Forsyth’s appeal was dismissed and that the application for costs falls to be decided by reference to the terms of section 48 of the ACAT Act as interpreted by the ACT Supreme Court.
48.Section 48(1) provides:
Costs of proceedings
(1) The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders.
49.Subsections (2) and (3) of section 48 do not apply in the circumstances of this case, and the Tribunal’s discretionary power under subsection (1) is limited.
50.The scope and operation of section 48 of the ACAT Act was considered in detail by Penfold J in CIC Australia Ltd v Australian Capital Territory Planning and Land Authority.[24] Her Honour identified the four main elements of section 48 as:
(a) the default position is that the parties bear their own costs;
(b) the default position may be varied by provisions of the ACAT Act;
(c) the default position may be varied by an order of ACAT;
(d) in four specified circumstances, ACAT may make particular costs orders.[25]
[24] [2013] ACTSC 96
[25] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [37]
51.Her Honour concluded that section 48 “confers a narrow power on ACAT ... to make only the orders specified in section 48(2) and only in the circumstances specified in that provision.”[26]
[26] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [82]
52.Adopting that interpretation to the circumstances of this appeal, Canberra Capital’s application for costs must be dismissed.
Conclusion
53.The Appeal Tribunal has considered the parties’ submissions and the material before the Original Tribunal. While Dr Forsyth’s material is difficult to follow and raises various issues, we consider the matter can be determined by reference to the two grounds identified above. Consequently, it is not necessary to deal with each of the other matters raised in his submissions.
54.In relation to Ground 2, the Appeal Tribunal does not allow Dr Forsyth to raise an argument that he was an employee rather than an independent contractor thus attracting a different measure of damages. Not only was this point conceded at first instance, but on the evidence available it lacks any merit.
55.In relation to Ground 1, the measure of damages was correctly assessed having regard to the defect on Canberra Consulting’s part in the manner in which Dr Forsyth was notified of the termination of the Agreement. It reflects an amount consistent with the rate for five working days of work.
56.The appeal is dismissed.
57.For the reasons given earlier, Canberra Consulting’s application for costs of the appeal is dismissed.
………………………………..
President G Neate AM
Senior Member K Katavic
HEARING DETAILS
FILE NUMBER:
AA 24/2019
PARTIES, APPLICANT:
Guy Forsyth as trustee for Ensure Trust trading as Alignity Consulting ABN 51 100 486 105
PARTIES, RESPONDENT:
Canberra Consulting Pty Ltd ACN 139 224 436
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
Mr J Moffett
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
President G Neate AM, Senior Member K Katavic
DATES OF HEARING:
Heard on the papers
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