Henley Arch Pty Ltd v Kovacic

[2009] HCATrans 227

[2009] HCATrans 227

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M37 of 2009

B e t w e e n -

HENLEY ARCH PTY LTD

Applicant

and

PERO KOVACIC

Respondent

Application for special leave to appeal

HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO SYDNEY

ON FRIDAY, 4 SEPTEMBER 2009, AT 2.18 PM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR J.P. GORTON, for the applicant.  (instructed by Wisewould Mahony)

MR T.P. TOBIN, SC:   May it please the Court, I appear with my learned friend, MS K.A. GALPIN, for the respondent.  (instructed by Zaparas Lawyers)

HAYNE J:   Yes, Mr Walker.

MR WALKER:   Your Honours, at page 47 of the application book, paragraph 28, the formulation in the Court of Appeal of that which was regarded and held as sufficient to bring about a section 8 deeming of the respondent being a worker is found in this simple expression:

if there is a contract for the performance of work in pursuit of a contractor’s regularly carried on trade, the non‑incidental work will just present itself, and will be performed.

That was, in our submission, very avowedly expressed as a generalisation intended not only to provide the critical reasoning to the decision in the particular case, but standing as the law in Victoria on the meaning and application of the provisions in question.

HAYNE J:   Well, assume that to be so, why is there not a Suttor v Gundowda point?  I see from your reply at page 77 that you acknowledge that the requirement or not for a contractual obligation was not argued in terms below.

MR WALKER:   Yes.  The reason is, in a nutshell, that the party with the onus did nothing to point to any provision of any contract under which the respondent had agreed to perform what I will call the non‑incidental work.  Now, it is to be recalled that the way in which the issues between these parties were presented that there has been a shift, including by the abandonment of some contentions, between first instance and the Court of Appeal.  It was certainly not a matter of us failing to take a point upon which we bore an onus, it was rather that upon the notice of contention being raised in the Court of Appeal to the effect that mere performance of the work was not sufficient to bring about the section 8 deeming, that there had not been any assumption of, let alone discharge of, the burden placed upon the respondent then plaintiff to show that the non‑incidental work had been carried out under an agreement to perform it.

It is no doubt explained in the history by the fact that that was either at one or two removes a fallback position on the respondent’s behalf.  As your Honours will recall, the principle concern, the focus of the factual inquiry and the argument, judging from the reasons at first instance, were very plainly a section 5 contract of service.  That was but faintly, as it were, persisted in the Court of Appeal, whereas well the section 9 point which had been the subject of contentions below was effectively abandoned.  Section 8 swam into more prominence in the Court of Appeal.  It was not due to any deficiency on our part that the respondent had failed both as to the facts and argument at first instance, and in answer to the notice of contention in the Court of Appeal, to point to any aspect of the undoubted agreement for bricklaying services under which the respondent agreed to perform the heavy lintel lifting, the so‑called non‑incidental work.  It was, as we have put in our written reply ‑ ‑ ‑

HEYDON J:   Mr Walker, despite what you have just said, we are invited to decide this as a sort of abstract question.  We do not know whether there are a sufficient range of particular concrete, specific, raw or messy facts which would present the issue to us in a convenient fashion.  It is a sort of hypothetical moot point you are asking us to consider.

MR WALKER:   I hope not, though that would be a very good reason to refuse special leave if I cannot persuade your Honours to that position.  Your Honours appreciate that the remitter recorded at page 61 of the application book about line 45 is a remitter for hearing a determination of the factual question which I accept is necessary in order to supply in one sense the concrete matters to which Justice Heydon has just referred.

HEYDON J:   That is how the injury occurred.

MR WALKER:   Yes.

HEYDON J:   The concrete matters I am thinking about are, what were the terms of dealing and negotiation?  You want to raise a point about whether it is sufficient just to point to a contract or to particular terms in a contract.  In order to decide such a question, does it not help to have findings after contest as to what the terms of the contract actually are?

MR WALKER:   Yes, it does.  There were findings about the bricklaying contract.  They were used and plainly presented with a view particularly to deciding the section 5 point.  It also invited the question 9 point.  The second part of my answer to Justice Heydon’s first question is this.  We do not have things concrete about how or if, I should say, the lintel was lifted as alleged, a matter of fact without which, of course, the respondent could have no case at all and may still, even if there is no special leave, have no case at all.  I accept that position.

In relation to the content of the contract for the supplying of bricklaying services, it may be exiguous, but then most such contracts will be not very elaborate.  We have all of that, at least we have everything that emerged from the opportunity given to the respondent to prove the terms of the contract as well as the events which followed its making necessary for section 5, section 8 and section 9.

HEYDON J:   So what you are really saying is, though the point was not raised at trial and it was only raised by the Court of Appeal, there is no Suttor v Gundowda problem because all evidence that could have been called was called?

MR WALKER:   That is right.  It is not suggested and never has been suggested that there was any missing term, whether by oral variation or implication, that could possibly add to what was proved as the contract for services upon which all three variant claims, ways of putting the claim, depended.  That is particularly important bearing in mind this statutory notion of non‑incidental because, as we have put in our written submission, that casts rather an adverse light, for example, on any Moorcock‑style implication in fact of an agreement to perform such non‑incidental work.

It is not, with respect, entirely correct to say the matter was not raised in the Court of Appeal.  It is correct, however, as we have put in written reply, that the way in which the case has been decided against us emerges for the first time in the Court of Appeal’s reasons.  It had never been put ‑ ‑ ‑

HEYDON J:   Yes, with notice to the parties?

MR WALKER:   Your Honour, I am not ‑ ‑ ‑

HEYDON J:   I am not alleging ‑ ‑ ‑

MR WALKER:   It is not a procedural fairness point, no.

HEYDON J:   What about the respondent here?

MR WALKER:   Well, the respondent here, as I say, is the party with the burden to prove the terms of the contract upon which depended one and all of the variant statutory methods to becoming a worker.  It would certainly ‑ ‑ ‑

HEYDON J:   I am just trying to find out the procedural facts, and I am not making any assumptions against the Court of Appeal, but if it determined a point of law adversely to anyone without notice in the sense that the first time the loser on that point was aware of it was when that loser read the judgment, that is not a satisfactory state of affairs.

MR WALKER:   Your Honours will not have seen in our argument an outright complaint about lack of procedural fairness in that sense.  I am trying to turn against our friends what might at first sight, and certainly in their written submission, be turned against us.  The point they say is new.  Well, there are two answers.  The point is required by the plain words of section 8.  It was for the would‑be worker to prove what had to be proved about the contract.  Second, it is certainly a matter which fits within ground 1 of the notice of contention in the Court of Appeal and, third, we will never have had an opportunity to appeal this significant interpretation and application of these important provisions if special leave not be granted because, of course, at first instance this issue had never been presented by the respondent – and I stress, by the respondent.

Now, we therefore do have this which is concrete.  We have the terms of the bricklaying contract.  We observe that there are no terms in it that call for, that is under which the respondent agreed to perform the lintel lifting work.  Now, the significance of the decision, bearing in mind that it arose as the vestige, as it were, of a broader case as it was refined between first instance and the Court of Appeal, the significance of the decision is that their Honours in effect say – I stress, in effect say – you do not need to identify any term by which you can characterise the contract in question as one under which the respondent agreed to perform the work in question.

That, in our submission, is flying in the face so egregiously of the words of the statute itself that it recommends as a point of general importance and a need for correction.  If it is not corrected at this stage, it will never be corrected because of the limited remitter.  The limited remitter is simply to see whether the lintel lifting in fact occurred rather than to permit exploration or a second or third go for the respondent to adduce different evidence or prove different facts concerning a contract in different form.

It is for those reasons, in our submission, that there is absolutely nothing in the Suttor v Gundowda point.  It is a matter for the respondent and the way they conducted their case.  Section 8 was always plain in its terms.  Before the Court of Appeal there is the notice of contention saying that the fact of performance was not sufficient to render the appellant a deemed worker under section 8 and, we stress, there is now the important reasoning and holding of the Court of Appeal with the consequences to which we have referred in our written submission.  Of those we would single this out particularly; this is a most nebulous way by which an appreciation of who is a worker at any particular time or not can be assayed.  The application of the test with all the difficulties of the passive voice is of work just presenting itself and being performed. 

Your Honours appreciate that even on the simplest building site, but certainly on more complex ones with many trades involved along the lines of what the Court has recently considered in Leighton v Fox, the possibility of people volunteering or officiously performing work for which they are perhaps not trained and certainly so as to avoid what would otherwise have been arranged supervision – compare Stevens v Brodribb, for example – is sufficiently important as to require a distinction between that which you are required to do by your agreement, that which ad hoc you are requested to do quantum meruit style and that which nobody asked you to do and you should not have done at all because it was somebody else’s job to perform, such as, for example, lifting a heavy lintel by crane by tradesmen equipped to do so rather than a bricklayer doing so non‑incidentally.

It is for those reasons, in our submission, that there is the general public importance.  There is the clear presentation, at least at first sight, of serious error, serious in the sense that the words are not obscure in the statute but there is no attempt to apply them and, finally, as between the parties, the merits of the justice of the situation between the parties.  It emerges that there is nothing in what I will call a Suttor v Gundowda point.  Finally, in relation to the justice between the parties, I do have instructions to accede to the suggestion made in paragraph 9 of our learned friend’s written submission.  May it please the Court.

HAYNE J:   Just before you sit down, Mr Walker, is the legislation in issue in this litigation relevantly similar to any provisions in other jurisdictions?

MR WALKER:   Your Honours, I cannot say that that is true of the critical phrase, which is, of course, the phrase “under or by which the contractor agrees to perform any work”.  That is the position, your Honour.

HAYNE J:   Yes, thank you, Mr Walker.  Yes, Mr Tobin.

MR TOBIN:   If the Court pleases.  The issue that my learned friend raises in relation to whether this was work in accordance with the contract is put within the summary by the trial judge at page 14 in the summary of the defendant’s case – or the applicant’s case – where it said:

firstly, that no such accident or injury happened . . . if it did, the work he was performing at the time was, in fact, incidental to his trade as a bricklayer and, hence, he is not covered by the provisions of s.8 of the Act.

It was not contended before the trial judge that this work was not within the contract of the work, the contract for services, but that if it were done it was done as incidental to the trade.  Now, if it were at some stage contended at first instance, it would have been necessary at that time, we accept, for there to be the establishment of the contract which says this is part of the duties under that contract, but as can be seen from Judge Morrow’s judgment, it was never so contended that it was not part of the contract. 

Then in the reasons of Justice of Appeal Ashley in the Court of Appeal he considers the circumstance as to when there is a contract for services, is it possible that within that contract for services that there can be either within that or within a co‑existing contract for services work which is incidental to and work which is not incidental to and so as to effect the deeming under section 8?

Now, what his Honour has done in his reasons from paragraph 23 through to paragraph 29, has examined that concept of, is it permissible to have two co‑existing contracts or can it be one contract with this being part of the work under that contract and so there be a circumstance that this aspect of the work is work which is not incidental although the majority of the contract for services is work that is incidental?  It was never raised at first instance that this work being done, if it were done, was outside any contract that existed.

HAYNE J:   It is said against you, I think, Mr Tobin, that the case at trial was put in several ways, any one of which required a complete exploration of what was the contract between the plaintiff and the defendant.

MR TOBIN:   With respect, what was required was the establishing of the relationship as to methods of payment and methods of control and the like.  It was not necessary in the way in which it was conducted at trial to establish whether this activity was an activity which fell within the contract for services.  The only way in which this activity was examined as far as whether it was incidental to the trade or business, but it was never questioned and it was never put or argued by the applicant that this was a frolic on his own by the respondent.  It was said merely that if he did do it, he did it incidentally.

The incidental finding was found to be wrong and all that has happened by the judgment of the Court of Appeal in paragraph 28 is looking at the various ways in which non‑incidental work can be brought into a contract, sometimes by it being expressly brought into a contract, sometimes by there being co‑existing contracts, sometimes by just occurring in the course of the contract by implication.  The reasoning of paragraph 28 is not something which is said to be the foundation of this case, not something which is said to be the ratio of the court’s decision.  Paragraphs 23 to 29 just says non‑incidental work can occur in a range of ways, can be part of the contract for services in a range of ways.

It was never contended at any time, and in fact we say the opposite, it was accepted by the applicant here at first instance that this duty being done, this work being done by the respondent was work which was part of the contract for services.  They never contended downstairs that it was not.  In their argument they have never said it was not.  They contended as to whether or not it occurred, and that part has gone back, been remitted, of course, but they have never said, this is outside, they have never said it was a frolic or anything of that nature.

If that were to be in issue, it would have required evidence, we accept, as to whether work non‑incidental, including this work, was part of the contract for services and evidence of other non‑incidental work if that occurred at that time, but as can be seen, we say, from the summary of the applicant’s argument, that was never in issue.  So we say from that point of view what is being relied upon is not what is in fact the ratio of the court, it was never a matter in issue as to whether this was part of a contract.  It was whether this was incidental to the trade rather than whether it was part of a contract.  So in that aspect we say that there is no doubt in relation to the judgment.

The other matters in relation to the application we say are, firstly, that it has got no general significance in relation to – this is on a point when it is analysed as to whether there were facts upon which the work could be said to be done.  Further, we say it has got no general application to this.  The principle here is of a limited application and it really determines this man’s rights, whether they come pursuant to the Accident Compensation Act or pursuant to the Wrongs Act, he still has a cause of action in either way. 

It was necessary for him to bring this application for leave to bring proceedings because he was in receipt of weekly payments of compensation and therefore is a person who is or may be entitled to compensation under section 134AB and he had to bring the application otherwise he would have faced the defence if he brought it under the Wrongs Act.  We say for those reasons there is no doubt, no general importance and that the issue is one of fact which we say was never contested by the applicant but in fact accepted by the applicant.  We say that leave should not be granted.

HAYNE J:   Yes, thank you, Mr Tobin.  Yes, Mr Walker.

MR WALKER:   Your Honours, the question asked by Justice Hayne at the beginning of my friend’s submission could have been answered by reference to page 3 of the application book, paragraph 7.  In setting out the issues, as his Honour understood them at first instance, you will see that his Honour refers to sections 5, 8 and 9, the various ways in which the plaintiff could achieve what he was seeking to achieve.

In relation immediately to all of those his Honour noted that it was first necessary to examine the relationship between the plaintiff and the defendant and then there is a reference to “the comprehensive and well drawn affidavit of the plaintiff” from which the court had derived assistance.  That is a most unlikely description of a situation where the probanda of section 8 had somehow escaped the plaintiff as requiring proof or that the plaintiff had something more, as it were, to say about the matter.

When one turns to the findings plainly based on that evidence that one finds commencing on page 5 of the application book, the position is even clearer.  In paragraph 12 there is a reference to the bricklaying to the design specification, about line 25, the rectification obligation, line 30 and a rate of payment just above line 40.  In relation to the nature of the contract, on page 6 of the application book in paragraph 12, about line 20, one sees the degree of informality between a builder and a bricklayer with a team that one might expect.

It is in the nature of things, simply not an appropriate description of the forensic course, that there was some shortcoming on the part of the defendant in relation to the matters that needed to be proved in relation to the application of section 8.  It is for those reasons, in our submission, that there truly is nothing in the point that this is an unmeritoriously late point being raised.

The second issue upon which we wish to rely is the attempt to diminish the status of paragraph 28 in the Court of Appeal’s reasons, page 47 of the application book, as supplying ratio, but it must be ratio because how else can one explain the limited nature of the remitter?  The limited nature of the remitter bespeaks the Court of Appeal tailoring appellate remedy to produce an end to the dispute between the parties.  That could only be so if it was the only question upon which the application of section 8 would depend and yet it can be seen the only reasoning for the critical parts of section 8, namely, not only the non‑incidental character but also that it was agreed to be performed under a contract, can only be found in paragraph 28.

Now, it may be that it is concise, but all the more readily it can be seen that that is the only principle that anyone following this case can take from these proceedings and that principle is that it will suffice for the purpose of that language of agreement, accepting an obligation upon which one could be sued, that work simply present itself and is performed.  There is another explanation that combines the first two points I have made in reply for both the forensic course that was taken and for why this is an important matter likely to transcend the merits between these parties.

Your Honours appreciate that the way in which the question of non‑incidental character of the work was argued was precisely on the basis that heavy metals of this kind were not expected to be lifted by the plaintiff; see page 13, paragraph 31 about line 45.  That was the plaintiff’s forensic position.  Now, while it might not be logically impossible that it was nonetheless a task that he agreed to perform under a contract, bearing in mind what he had sworn in a comprehensive and detailed affidavit about that contract and its terms, it cannot genuinely be said that there was, as it were, a held back part of the case, an unexplored part of the case, concerning whether he had agreed to perform it.

His complaint, as recorded in paragraph 31, in the passage I have just drawn to attention, is that he could not be required to do it, someone else should have done it.  If he could not be required to do it, it cannot sensibly be said that he had agreed to perform it, there being no question here of vicarious performance, say, by specialised sub‑subcontractor.  So for those reasons, in our submission, there is nothing in the so‑called Suttor v Gundowda point.  The point does present as a very contained, focused and within the sphere of operations of an important scheme for the safeguarding of the rights of injured workers an important matter.

HAYNE J:   Yes, thank you, Mr Walker.  We will adjourn to consider the course we take in this matter.

AT 2.49 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.53 PM:

HAYNE J:   Upon condition that the applicant pay the costs of proceedings in this Court in any event, there will be a grant of leave in this matter.  Would counsel agree that the case is about a half day case?

MR WALKER:   Yes.

HAYNE J:   Mr Tobin?

MR TOBIN:   I think so, your Honour, yes.

HAYNE J:   Yes.  Well, there will be a grant of leave on that condition.

MR WALKER:   If it please the Court.

HAYNE J:   The Court will adjourn to 10.15 am on Tuesday, 22 September 2009 in Canberra.

AT 2.54 PM THE MATTER WAS CONCLUDED