| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : JAKOTIC -v- CHARLO NOMINEES PTY LTD & ANOR [2005] WADC 146 CORAM : MARTINO DCJ HEARD : 21 JULY 2005 DELIVERED : 1 AUGUST 2005 FILE NO/S : CIV 1220 of 2003 BETWEEN : NADA JAKOTIC Plaintiff
AND
CHARLO NOMINEES PTY LTD
Defendant
THE GOVERNORS OF HALE SCHOOL
Third Party
Catchwords: Workers' compensation - Statutory interpretation - Deemed employer
Legislation: Workers Compensation and Injury Management Act 1981 s 175
Workers Compensation and Rehabilitation Act 1981 s 175
Hale School Act 1876
Education Act 1928 s 32A, s 32B
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Result:
Third party not deemed employer of plaintiff Representation:
Counsel:
Plaintiff : No appearance
Defendant : Mr N M Beech
Third Party : Mr D M McKenna
Solicitors:
Plaintiff : Not applicable
Defendant : Pynt & Partners
Third Party : Jarman McKenna
Case(s) referred to in judgment(s):
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Hewitt v Benale Pty Ltd (2002) 27 WAR 91
Royal v Alcoa of Australia Ltd [2004] WASCA 269
Case(s) also cited:
Bryce v Denclean (Contractor) & Telecom Australia (Principal), unreported; Conciliation and Review, WorkCover Western Australia, Application 55/95; 22 May 1995
Frauenfelder v Reid (1963) 109 CLR 42
Herbert v Coli Timber Merchants [1986] WAR 80
Jones v SNR (Australia) Pty Ltd & Anor [2002] WADC 207
Klein v Minister for Education [2004] WADC 153
Marsden v Unimin Australia Ltd [2004] WASCA 143
Moir v Schrader (1936) 56 CLR 310
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1 MARTINO DCJ: In July 1998 the defendant ("Charlo Nominees") provided cleaning services to Hale School. The plaintiff ("Ms Jakotic") was employed by Charlo Nominees. The third party ("the Governors of Hale School") is a statutory corporation created under the Hale School Act 1876 and is responsible for the management and control of Hale School.
2 In this action Ms Jakotic claimed from Charlo Nominees damages for personal injuries she alleged she suffered while working for that company at Hale School. Charlo Nominees claimed contribution or indemnity from the Governors of Hale School on the grounds that Ms Jakotic's injuries were caused or contributed to by the negligence and breach of statutory duty of the Governors of Hale School. 3 On 23 July 2003 consent judgment in Ms Jakotic's favour was entered against Charlo Nominees. The trial before me was of the following issue: Is the third party a deemed employer pursuant to s 175 of the Workers Compensation and Rehabilitation Act 1981. 4 The name of the Act is now the Workers Compensation and Injury Management Act 1981. Section 175 of the Act provides: "175. Principal contractor and sub-contractor deemed employers
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5 The trial was conducted on the following statement of agreed facts:
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(c) employed the plaintiff as an Area Cleaning Manager and required the plaintiff, in the course of her employment, to perform cleaning work at various times. 2. At all material times, the third party: Registration of non-government schools 3. As at 17 July 1998: (a) the relevant instruments governing the registration of private schools were the Education Act 1928 and the Department of Educational Services Office of Non-Government Education, "Guidelines for the Establishment and Registration of Non-Government Schools" ("1998 Guidelines"). A true copy of the 1998 Guidelines is attached; (b) all private schools were required to be registered in order to operate in Western Australia; (c) registration of private schools was administered by the Department on behalf of the Minister for Education; 4. The School was registered as a non-government school on a date prior to 17 July 1998. The 1998 Guidelines 5. The 1998 Guidelines: (a) would not have been utilised or applied when the School was originally registered by the Department;
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(b) were principally applied in assessing applications for registration by new schools. If the Department had cause to follow up the registration of an existing school for whatever reason, then the 1998 Guidelines would have been applied as the criteria for assessment. 6. One of the criteria for registration under the 1998 Guidelines that a proposed new school or a school renewing its registration needed to demonstrate in order to gain registration was it would protect the safety and welfare of students. 7. The 1998 Guidelines also prescribed that one of the reasons for supervision of all schools by the Department was to ensure reasonable education standards were observed and that conditions in schools were conducive to the achievement of those standards. 8. When inspecting a school under the 1998 Guidelines, a check would be made that the school buildings and facilities were hygienic and safe. 9. No check or inspection of the School was conducted between 1994 and 17 July 1998 with respect to the issue of registration or adherence by the School to the 1998 Guidelines. Re-registration of the School 10. The School was not subject to renewal of its registration until after the commencement of the Schools Education Act 1999 (the current applicable Act). At that time, the School was reassessed as follows:
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The contract 11. The third party engaged the defendant to provide cleaning services at the School in or around May 1995 ("Cleaning Contract"). 12. Prior to 17 July 1998: 13. The cleaning specifications applicable as at 17 July 1998 were in terms of the attached specifications. 14. Pursuant to the specifications, the vinyl floors of the Arts Centre were to be stripped and sealed twice a year, during vacation periods. 15. The School maintained the vinyl floors in this manner to keep them in good condition for longer and to provide a surface finish that was easier to keep clean. 16. The costs of the Cleaning Contract constituted expenses incurred in the operation of the School and were declared as such in the taxation return of the School for the relevant year. The accident 17. On 17 July 1998, the plaintiff: (a) was in the course of her employment with the defendant; (b) had used a polishing machine in the course of sealing and stripping vinyl floors in the Arts Centre; (c) sustained injuries whilst transporting the polishing machine from the Arts Centre to a cupboard in the nearby administration building where it was stored when not in use."
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6 In the course of submissions counsel for the Governors of Hale School informed me that the polishing machine referred to in the statement of agreed facts at par 17 was owned by Charlo Nominees. The solicitors for Charlo Nominees confirmed that fact was agreed in a facsimile to my Associate the following day. No witnesses were called to give evidence at the trial.
7 It was common ground in the submissions to me that for a principal to be a deemed employer the requirements of s 175(3) need to be satisfied. Counsel for the Governors of Hale School did not submit that if s 175(1) was satisfied but s 175(3) was not the principal was a deemed employer not liable to pay compensation. The position taken by the parties is implicit in Hewitt v Benale Pty Ltd (2002) 27 WAR 91 and expressed in Jones v Wesfarmers Ltd [2003]WASCA 225 at [71] and Royal v Alcoa of Australia Ltd [2004] WASCA 269 at [58].
Registration of Schools and the 1998 Guidelines 8 At the time of Ms Jakotic's accident the Education Act 1928 was still in force. Sections 32A and 32B of that Act were in the following terms: 32A. Certain schools to apply to be registered as efficient (1) The proprietor, headmaster or principal teacher of any school which provides instructions up to and including the final year of secondary education, shall apply to the Minister, within one month from the commencement of the Education Act Amendment Act 1952, or the establishment of the school, to have the school registered in the register of efficient schools kept in the department for the purpose. 32B. Inspection of schools applying to be found efficient (1) The Minister shall cause the school in respect of which application for registration under section 32A(1) has been made to be visited by a person authorized by the chief executive officer for the purpose of inspecting the school or the scholars attending the school, if upon inspection the school is found to be efficient as to the instruction given the Minister shall certify the school to be efficient for the purposes of this Act and shall
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9 The term "efficient schools" was defined in s 3(1) as meaning "schools certified by the Minister to be efficient for the purposes of this Act". I understand that par 4 of the statement of agreed facts means that Hale School was included on the register of efficient schools under s 32B of the Education Act 1928. 10 Clauses 3 and 5 of the 1998 Guidelines were as follows: "3. CRITERIA FOR REGISTRATION 3.1. To satisfy the requirements for registration, a proposed new school should, through its stated educational philosophy, policy, organisation and curriculum, demonstrate that it will: • ensure a comprehensive education is provided to prepare students for participation in contemporary Australian society; • refine and adapt the educational program in response to changing circumstances; • encourage all students to continue to participate in education; • include procedures to ensure parents will be fully informed of student progress;
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• protect the safety and welfare of students; • make appropriate provisions for students with disabilities; • include policies for managing student behaviour; and • include appropriate arrangements for the resolution of grievances and disputes. … 5. PERIOD OF REGISTRATION 5.1. Currently, non-government schools are registered for an indefinite period. The registration of non-government schools is only subject to review if and when there is a change to the name, ownership, location or levels of education offered, or if there is some reason to believe that the circumstances that applied at the time of the initial registration have changed. 5.2 However, following the promulgation of the School Education Act for 1999, non-government schools will be required to be registered for a period of between one and seven years, at the end of which it will be necessary for them to have their registration renewed." 11 Under s 32B(3) of the Education Act 1928 the Minister had power from time to time to cause a school included in the register of efficient schools to be inspected by a person authorised by the Chief Executive Officer and could remove from the register a school that at any time was found not to be efficient. However cl 5.1 of the 1998 Guidelines provided that the registration of non-government schools was only subject to a review if and when there was a change to the name, ownership, location or levels of the education offered, or if there was some reason to believe that the circumstances that applied at the time of initial registration had changed. 12 The date upon which Hale School was included in the register of efficient schools is not known. It is likely that the school was registered well before 1998. As I read cl 5.1 of the 1998 Guidelines the Department of Educational Services Office of Non-Government Education was not
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requiring already registered schools in 1998 to comply with the 1998 Guidelines. However I do not consider that to be of any significance in this case. 13 Under s 32B(3) of the Education Act 1928 a school could be removed from the register. If a school was found on inspection to fail to provide a safe and healthy place for its students then the school would be at risk of being removed from the register. 14 I conclude therefore that while the 1998 Guidelines did not expressly apply to Hale School at the time of Ms Jakotic's accident nevertheless to ensure that the school remained on the register of efficient schools the Governors of Hale School were required to keep the school clean to ensure that it provided a healthy and safe place for its students.
Execution of the work 15 It is clear from the agreed facts that there was a contract between the Governors of Hale School and Charlo Nominees for the execution of cleaning work by Charlo Nominees. Counsel for Charlo Nominees submitted that Ms Jakotic was not injured in the execution of that cleaning work but while transporting the polishing machine from the Arts Centre to a cupboard in a nearby administration building. In Royal v Alcoa of Australia Ltd McLure J said: "13 On a proper construction of s 175, in particular subs (1), (3) and (7), there must be a connection between the injury and the execution of the contractual works. As to the phrase 'in the execution of the work, a worker is employed by the contractor' in subs (1) of s 175, execution means the carrying out or performance of the work; work means work pursuant to the contract between the principal and contractor; and worker is employed means the contractor employs (uses) his worker in carrying out the work under the contract. 14 Although there is no express requirement in subs (1) of s 175 for a connection between the execution of the contract work by the worker and the injury (or disease) the subject of the claim, that requirement emerges when subs (1) is read in the context of subs (3) and (7) of s 175. By subs (3) and (7), in order for the principal to be liable, the work on which the worker is employed at
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the time of the occurrence of the disability must be directly a part or process in the trade or business of the principal and occur in respect of premises on which the principal has undertaken to execute the work or which is otherwise under its control or management. The word 'work' in subs (3) can only mean contractual work and, in context, the word 'disability' is a reference to (at least) the time at which the injury occurred. Thus, the phrase 'unless the work on which the worker is employed at the time of the occurrence of the disability' in subs (3) is a reference to the contractual work on which the worker is employed, which must coincide with the occurrence of the injury. 15 The nature and extent of the connection between the injury and the execution of the contractual work is a separate issue. It is apparent from the terms of subs (3) and (7) of s 175 that the nature and extent of the connection is not determined by the definition of 'disability'. The permitted connection between the injury (or disease) and employment in the definition of 'disability' is significantly wider than the specific limitations imposed in subs (3) and (7) of s 175. It is arguable that the definition of 'disability' applies except to the extent that it is inconsistent with the limitations in s 175." 16 Counsel for Charlo Nominees referred to that passage and submitted that for s 175 to apply the worker must be actually engaged in the execution of the work at the time that the worker suffered a disability. That is not how I read the section nor the judgment of McLure J. Section 175(1) requires that the worker be employed by the contractor in the execution of the work by or under the contractor. Where a worker who is so employed suffers a disability the principal is not deemed to be the worker's employer "unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal" (s 175(3)) and the disability occurs "in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management" (s 175(7)). The interpretation submitted by counsel for Charlo Nominees is inconsistent with the reasons of Jenkins J in Royal v Alcoa of Australia Ltd at [58] and [72] – [74].
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17 Even if it were a requirement of s 175 that at the time that the worker suffered the disability the worker was in the execution of the work, it is my view that that condition was satisfied in this case. The cleaning specification attached to the statement of agreed facts listed cleaning tasks to be carried out by Charlo Nominees. It contained nothing about the storing of cleaning equipment however in my view it was an implied term of the cleaning contract that Charlo Nominees remove or store safely cleaning equipment it used in the performance of the contract once it had completed a cleaning task.
18 In a contract to clean a school it seems to me that there would be an obvious hazard to the students at the school if cleaning equipment were not removed or safely stored, and a term requiring Charlo Nominees to do so needs to be implied to make the contract work and is so obvious as to go without saying: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266.
Directly a part or process in the trade or business of the Governors of Hale School 19 By its further and better particulars of its defence the Governors of Hale School plead that its trade or business "is the provision of education for boys within a Christian environment". Charlo Nominees did not submit that the Governors of Hale School was not engaged in a trade or business but that the task being performed by Ms Jakotic was not directly a part or process in that trade or business. The Governors of Hale School managed and controlled the school and the business of a school is the education of students. 20 In Jones v Wesfarmers Ltd Malcolm CJ said of this legislation: "46 In my opinion, the legislation is not susceptible of exact definition or of completely certain application for the reasons expressed by Dixon J in Moir v Schrader(supra) at 323 where his Honour said: 'It is based upon the view that from the course of the principal's trade or business and the manner in which he conducts it, he will be found to have assumed responsibility for the performance of a class of work, the fulfilment of given functions or the pursuit of a system of activities. What he has thus adopted as his proper operations, he may accomplish by means of direct employees,
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or by means of contracts which remove him from the relation of employer with the workmen who do the work. Whichever be his method, he is to be responsible for the workers' compensation payable to those injured in the course of the work for the performance of which he has assumed responsibility, the work which he has 'undertaken'. But when, although the work performed by the injured workman is necessary to enable the principal to carry out the operations the execution of which he has adopted as his trade or business, yet that work does not form a component part of the operations and only contributes or conduces to their performance or is preliminary and/or ancillary or incidental to them, then the workman must look to his direct employer for compensation.'" 21 Whether or not the work upon which a worker was engaged was directly a part or process in the trade or business of the principal is a question of fact and degree. Each case is different and in my view reference to the facts of other cases, particularly other cases under similar but different legislation is of little assistance. 22 While it was necessary for the Governors of Hale School to keep the school sufficiently clean to provide a healthy and safe place for students, it is my view that it could not be said that the cleaning of the school is directly a part or process in the business of educating students. There are many tasks that must be done at a school for it to continue to operate such as replacing broken windows and mowing any lawns on the grounds. 23 In my view like those tasks the cleaning of the school is not directly a part or process in the business of educating students. 24 I conclude that the Governors of Hale School was not a deemed employer of Ms Jakotic pursuant to s 175 of the Workers Compensation and Rehabilitation Act 1981 because the work on which Ms Jakotic was employed at the time of the occurrence of her disability was not directly a part or process in the trade or business of the Governors of Hale School.
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