Kula Systems Pty Ltd v Workers Compensation Nominal Insurer
[2018] NSWWCCPD 10
•16 March 2018
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| CITATION: | Kula Systems Pty Ltd v Workers Compensation Nominal Insurer [2018] NSWWCCPD 10 | |
| APPELLANT: | Kula Systems Pty Ltd | |
| RESPONDENT: | Workers Compensation Nominal Insurer | |
| INSURER: | Uninsured | |
| FILE NUMBER: | A1-6271/16 | |
| ARBITRATOR: | Mr T Wardell | |
| DATE OF ARBITRATOR’S DECISION: | 10 November 2017 | |
| DATE OF APPEAL DECISION: | 16 March 2018 | |
| SUBJECT MATTER OF DECISION: | Compulsory insurance for employers; exempt employers; s 155AA of the Workers Compensation Act 1987; meaning of the words “wages that will be payable”; meaning of the words “reasonable grounds”; application of George v Rockett [1990] 170 CLR 140; onus of proof | |
| PRESIDENTIAL MEMBER: | President Judge Keating | |
| HEARING: | On the papers | |
| REPRESENTATION: | Appellant: | Novakovic Lawyers |
| Respondent: | Sparke Helmore Lawyers | |
| ORDERS MADE ON APPEAL: | 1. The Arbitrator’s Certificate of Determination dated 10 November 2017 is confirmed. 2. The matter is remitted to the Arbitrator to determine the remaining issues. | |
INTRODUCTION
This appeal concerns the construction of s 155AA of the Workers Compensation Act 1987 (the 1987 Act). In particular, it concerns whether the appellant was an “exempt employer” within the meaning of s 155AA and therefore exempt from holding a workers compensation policy of insurance at the time the worker suffered an injury in the course of his employment with the appellant.
BACKGROUND
On 13 January 2011, Aleksandar Ognjenovic, the injured worker, commenced working for Kula Systems Pty Ltd, the appellant employer, as a gyprocker. He commenced work at a project in Carrington St, Sydney.
On 17 January 2011, the worker was working on a ladder removing ceiling tiles when he fell to the floor. He was told that the knife he was using to remove the ceiling tiles hit a live wire and that he was electrocuted and thrown off the ladder. He experienced severe pain immediately in his right shoulder and pain in his neck and lower back.
On 21 January 2011, the worker submitted an Uninsured Liabilities Claim Form, which he later signed on 27 January 2011. He later brought a claim for work injury damages against the appellant and the Workers Compensation Nominal Insurer (Nominal Insurer), because the appellant did not have a policy of insurance at the time of the injury.
In February 2011, the appellant, through its only director Mr Steven Cubric, finalised a workers compensation insurance policy for the period 7 February 2011 to 7 February 2012. Mr Cubric had previously completed a workers compensation insurance proposal on 10 January 2011.
On 27 March 2015, a Medical Assessment Certificate was issued certifying the worker to have been assessed with an 18% whole person impairment in respect of his cervical spine, lumbar spine and right upper extremity resulting from injury on 17 January 2011.
On 31 August 2016, the claim for work injury damages was resolved by a Deed of Release (the Deed), for $225,000. The appellant and Mr Cubric, in his capacity as director, and the Nominal Insurer were signatories to the Deed. The Nominal Insurer paid the worker $225,000 pursuant to the Deed.
On 21 September 2016, the Nominal Insurer served on Mr Cubric a notice pursuant to s 145(1) of the 1987 Act seeking reimbursement of the $225,000 which was paid pursuant to the Deed. Attached to that notice was a Certificate pursuant to s 145(5) of the 1987 Act certifying that the Nominal Insurer paid the worker an amount of $225,000 and that Mr Cubric was liable at the relevant time to pay that amount under the 1987 Act.
On 1 November 2016, the appellant filed a Miscellaneous Application (Form 20) (matter number 5583/16). It commenced proceedings pursuant to s 145(3) of the 1987 Act for a determination of its liability in respect of payment made in accordance with the Deed.
On 3 November 2016, the Nominal Insurer served on the appellant a notice pursuant to s 145(1) of the 1987 Act seeking reimbursement of the $225,000 which was paid pursuant to the Deed. Attached to that notice was a Certificate pursuant to s 145(5) of the 1987 Act certifying that the Nominal Insurer paid the worker an amount of $225,000 and that the appellant was liable at the relevant time to pay that amount under the 1987 Act.
On 2 December 2016, the appellant filed a further Miscellaneous Application (Form 20) (matter number 6271/16) (the Application) seeking a determination pursuant to s 145(3) of the 1987 Act of liability in respect of payment made in accordance with the Deed.
On 16 January 2017, by Order of the Commission, matter number 5583/16 was joined to matter number 6271/16.
On 2 February 2017, the Commission issued a Certificate of Determination – Consent Orders and Directions. The effect of the Certificate of Determination was to discontinue matter number 5583/16, which had previously been joined to the present proceedings (matter number 6271/16).
On 6 April 2017, the matter proceeded to a conciliation/arbitration hearing. The Arbitrator granted the appellant leave to raise the s 155AA issue, namely, that it was an “exempt employer” and therefore deemed to have obtained a policy of insurance.
On 10 November 2017, the Arbitrator issued a Certificate of Determination in favour of the Nominal Insurer. He found that the appellant was not an “exempt employer” within the meaning of s 155AA of the 1987 Act at 17 January 2011, when the worker suffered an injury in the course of his employment with the appellant. Therefore, the appellant was not deemed to have obtained a policy of insurance in compliance with s 155 of the 1987 Act and was not insured on 17 January 2011. Having made those findings, the Arbitrator ordered that a further telephone conference take place to determine the issue of liability. That telephone conference did not take place as the appellant appealed the Arbitrator’s decision.
ON THE PAPERS
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The parties have submitted that the matter can be determined ‘on the papers’. Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
THRESHOLD MATTERS
Time
The Nominal Insurer purports to raise an issue regarding whether the appeal was made within time pursuant to s 352(4) of the 1998 Act. The Nominal Insurer submits that the appellant’s purported appeal filed on 8 December 2017 was correctly rejected by the Registrar for failure to comply with Practice Direction No 6 – Appeal Against a Decision of the Commission Constituted by an Arbitrator (Practice Direction No 6). It was not a valid appeal.[1] The Nominal Insurer further submits that the “lack of due diligence on the part of a legal practitioner does not constituted ‘exceptional circumstances’”.
[1] Citing Karakurt v Vikson Australia Pty Ltd t/as South Coast Chicken Fillets & Smallgoods [2018] NSWWCCPD 3.
In reply to the Nominal Insurer’s submissions, the appellant submits that the appeal was filed within time but returned to rectify procedural deficiencies. The appellant then provides lengthy submissions on why an extension of time for the making of an appeal should be granted.
Section 352(4) of the 1998 Act provides:
“An appeal can only be made within 28 days after the making of the decision appealed against.”
An Arbitrator’s decision is made when the Commission issues a Certificate of Determination.[2] The Certificate of Determination in the present matter was issued on 10 November 2017. Time commences to run from 11 November 2017 and the 28 day was 8 December 2017. The Appeal Application was lodged and registered on 8 December 2017, within 28 days of the decision appealed.[3]
[2] Dennis v NSW Fire Brigades [2007] NSWWCCPD 165; Workers Compensation Commission Rules 2011 (2011 Rules), r 16.2(2), the 1998 Act, s 294(1).
[3] 2011 Rules, r 16.2(2); the 1998 Act, s 294(1).
On 14 December 2017, the Registrar issued a Direction directing the appellant to file an Amended Appeal Application to rectify procedural deficiencies. On 11 January 2018, the appellant filed an Amended Appeal Application in compliance with the Registrar’s Direction.
As the original Appeal Application was lodged and registered within time, it follows that the appeal was made in compliance with s 352(4) of the 1998 Act.[4]
[4] Ky v Blue Leaf Food Group Pty Ltd [2016] NSWWCCPD 55.
Interlocutory
The appellant submits that the Arbitrator’s determination is an interlocutory decision. It seeks leave pursuant to s 352(3A) of the 1998 Act for the appeal to proceed, notwithstanding its interlocutory nature.
Section 352(3A) of the 1988 Act provides:
“(3A) There is no appeal under this section against an interlocutory decision except with the leave of the Commission. The Commission is not to grant leave unless of the opinion that determining the appeal is necessary or desirable for the proper and effective determination of the dispute.”
The appellant submits that leave should be granted as the determination of the appeal is necessary or desirable for the proper and effective determination of the dispute for the following reasons:
“(a) the range and complexity of the issues and the fact that a determination for the section 155AA issue in the appellant’s favour would render it unnecessary to determine other issues.
(b) the resolution of the issues is of general importance for the conduct of the Commission’s business, and
(c) the determination of the issue might lead to the elimination of the issue arising in other cases arising out of section 145 of the 1987 Act.”
The Nominal Insurer made no submissions with respect to the appellant’s application for leave to proceed.
There were a number of issues raised in the proceedings before the Arbitrator. First, whether the appellant had any liability for the work injury damages paid by the respondent pursuant to the Deed. Second, whether the worker was out of time to commence proceedings for work injury damages. Third, the quantum of the damages recoverable, or at least the appellant’s proportionate liability for such damages. Fourth, whether the appellant was an “exempt employer” and therefore deemed to have obtained a policy of insurance (the s 155AA issue).
At a teleconference on 29 March 2017 the Arbitrator determined that it was desirable to have a separate and discreet hearing for the determination of the s 155AA issue before proceeding, should it become necessary, to hear the other issues later.
In the circumstances, it is clearly expedient to hear the appeal in respect of the s 155AA issue, notwithstanding it has been dealt with as an interlocutory issue. If the appeal is upheld that will finally dispose of all issues as the appellant will be deemed insured and consequently the claimed reimbursement pursuant to s 145 of the 1987 Act will be rendered nugatory. On the other hand, if leave to appeal is refused the matter will have to proceed to a final hearing on all issues before the Arbitrator’s determination of the s 155AA issue can be challenged. That may involve the unnecessary expenditure of a good deal of the resources of the Commission and the parties.
Therefore, I consider it desirable for the proper and effective determination of the dispute that leave be granted for the appeal to proceed. I so order.
THE EVIDENCE
Mr Stevan Cubric
In evidence are two statements by Mr Cubric dated 19 February 2011 and 31 January 2017, the first of which was prepared with the assistance of an interpreter.
In his first statement, Mr Cubric states that in 2000 he obtained his own business name, SLJC Gyprock. That business is still registered. On 10 January 2011, he set up his own company, the appellant. He claims that he does not have any employees.
Mr Cubric states:
“For the financial year 2009/10 my taxable income was $50,753, and I was the only person employed by SLJC Gyprock. For the financial year 2010/11 my only employee has been Aleksandar Ognjenovic who has been paid $600. I am unsure whether I will have any other employee to make payments to as nothing is sure in the building industry. I expect my own income this financial year will be about the same as for the 2009/10 financial year.
Since setting up [the appellant] I have not had any employees and Mr Aleksandar Ognjenovic has been the only person I have employed.”
Mr Cubric states he came into contact with the worker as a favour to his mother. He states:
“Then on or about 10th January I did call Aleksandar Ognjenovic and offered him some work as a labourer. I emphasised that there was only about ten days available, but afterwards if there was any other work available, then he may be able to get some additional work with me.
The work I had available was at an office building involving office renovations on level 10 of No. 60 Carrington St., Sydney. I had secured this work from Buildco Projects Pty Ltd [Buildco] through the company principal Mr. Danny Trifunovic. I have done work for this company on previous occasions.
There was no formal contract between me and Buildco – it was just a matter of personal agreement between me and Mr Trifunovic. My work was to install gyprock wall partitions and to install gyprock to ceilings. I worked on a verbal contract with them and I would get paid on the basis of the amount of work I complete. I do submit invoices for the work. My work here started on around the 10th January, 2011. I only expected to be on this particular job for two weeks as that was the extent of the work I had with Buildco on this particular project. I did have another Buildco job going at Beaconsfield Road Alexandria, and I was moving between both job sites, and Aleksandar also helped me at this other site. I did not have any one else helping me at the Alexandria site, and that particular job only lasted for about one month and has been completed.
Whilst there had not been any specific discussions between me and Mr. Trifunovic about Workers Compensation Insurance, he indicated to me that if anything happened at work then his insurance would cover everything - until such time as I set up my own company and got my insurance cover.”
On or about 10 January 2011, Mr Cubric arranged through his tax agent “to fix up all my insurance requirements.” Due to a delay occasioned by the holiday period a Workers Compensation Policy, number wc491845157, for the period 7/2/11 to 7/2/12, was not issued until a later date.
Mr Cubric states that the worker’s work with him was “only ever to be on a casual basis, and after the completion of the job in Carrington St there was no more work envisaged for him.” He had agreed to pay the worker $18 per hour plus any superannuation contributions and taxes. He states that he may have needed to hire labourers from time to time but was waiting to give that work, if any, to a friend of his from Serbia when he arrived in Australia.
On 24 February 2011, Mr Cubric completed a statutory declaration affirming his handwritten responses to questions in a document headed “Schedule A” to the Application. The document is titled “Particulars of the suspected employer claimed against and the suspected employer’s workers compensation insurance” and is singed by Mr Cubric dated 24 February 2011. It records the name of the employer as “S.LJC. Gyprock” and “Kula Systems P/L”. It also records the estimated wages of the employer for the current financial year to be $40,000 and for the previous financial year $50,753. It describes the worker to have been employed on a casual basis as a general labourer working 30 hours per week from 14 January 2011. It records that the worker’s gross earnings were $780. It also noted that the worker ceased work on 17 January 2011. In the comments section, it records “I strongly believe that this is a false claim”.
In his second statement, Mr Cubric refers to the above document, which he states was completed without the assistance of an interpreter on 24 February 2011 and sought to correct and clarify some of his responses. He states that the questions on the form were “confusing, vague and mislead me so my responses were unclear and conflicted with my written signed dated [of 19 February 2011]”. Amongst other things, Mr Cubric states that the estimated and actual wages referred to were in fact his own personal taxable income after deductible expenditure. He states that he “… did not receive wages from [the appellant]” and SLJC Gyprock. He further states that SLJC Gyprock “… paid no wages in the in the previous financial year”.
Mr Cubric states:
“For many years and up until the incorporation of the Company [the appellant] on 10 January 2011, the Business [SLJC Gyprock] provided gyprocking serves exclusively to Buildco Projects Pty Ltd (Buildco). In early 2011 Mr Dusan Trifunovic the principal of Buildco notified me that Buildco would be commencing a new job at Level 10, 60 Carrington Street, Sydney (the Premises) only contract gyprocking work to incorporated service providers.
I took advice from my accountants ... in respect of Buildco’s requirement and as a consequence from 10 January 2011 commenced operating under a new business structure where the Company would contract with Buildco to provide gyprocking services which who [sic] would then sub-contract the work to the Business.
There was a short crossover period in early 2011 when the Business and the Company provided gyprocking services concurrently however this was only for work that had already been contracted to the Business. In any event starting from when the Company commenced invoices rendered by the Business were credited to the Business’ credit union account and invoices rendered by the Company were credited to the Company’s account.
On 17 January 2011, the day of the Claim the Business was sub-contracted to the Company to carry out the gyprocking work at [Carrington St] …” (emphasis in original)
Mr Cubric states that his understanding of the incorporation of the appellant would “not change” how he carried out SLJC Gyprock, with “… me doing the physical exertion involved in gyprocking under a sub-contract to [the appellant].” He did not understand fully the legal implications of the new business structure but followed the instructions given by his accountant.
Mr Cubric states that the appellant was established with the intention to carry out gyprocking services “… in a personal capacity as a sole trader and not as an employee of [the appellant]”. His only activities for the appellant were acting as a director and controller of the company. The appellant was never intended to have any employees “… although at the time of registration … [it] was registered as a PAYG employer …” He adds that:
“At the time of the registration of [the appellant] did not take out workers compensation insurance because it was not intended for [it] to have any employees or that the Worker be employed.
However, when Workcover contacted me in late January 2011 and asked me whether [the appellant] had workers compensation which it didn’t steps were taken to follow up a policy.
…
As the director of [the appellant] I sub-contracted the work to [SLJC Gyprock]. [The appellant] served as no more than a means of securing work in accordance with Buildco’s requirement that sub-contractors be incorporated and invoices for future work to be rendered by a company.”
Mr Cubric states that there were discrepancies in his tax return for the financial year 2010/11 in respect of expenditure on wages paid to the worker and as a result instructed his accountant to lodge an amended tax return regularising any discrepancy.
Mr Cubric describes the worker’s engagement. He states that the purpose of the appellant was to “… receive the work from Buildco and no [sic, not] provide the services itself.” He adds:
“There was no business reason for employing anyone and I did not advertise or take any steps to obtain any assistance in doing the work.
The employment of [the worker] was ad hoc and came about as a gesture to please my mother and assist [Mr Ognjenovic] in getting some experience to get work with someone else. My mother had been approached by [the worker’s] father and asked whether asked [sic] I could assist [the worker] with some work as he had been unemployed for some years. He had never worked since arriving in Australia in 2003.”
The worker
On 21 January 2011, the worker completed an Uninsured Liabilities Claim Form in respect of the injury on 17 January 2011. He records he sustained an injury to his right arm and hand, back, neck and shoulder when removing ceiling tiles. He records that the injury was sustained at Carrington St and that the name of his employer was “Bildko” (sic). Under the heading “8. Contract work?” – “(a) Was your Employer a Sub-Contractor?” he circled “Don’t know”.
In evidence is a statement by the worker dated 18 February 2011. He states that some of his Croatian friends gave him Mr Cubric’s telephone number to call to obtain work. Sometime around the 2011 New Year he contacted Mr Cubric who said that he “had a big job coming up and once it started he would give me a call.” On 12 January 2011, he received a call from Mr Cubric advising that he had a gyprocking job for him and that he would pay $20 per hour and then later from $25 to $28 per hour.
The worker stated that he has a Tax File Number but does not have any workers compensation insurance, is not registered for GST and does not have an ABN number. The worker states that:
“Mr. Cubric did not indicate whether my working for him would be on a permanent basis, but only told me that this particular job we were going to work on would be a long one, lasting perhaps for about one year.”
That job involved renovating an existing set of offices in Carrington St, Sydney. It involved cutting sections of metal and using sheets to make office partitions, removing ceiling tiles and using sheets of gyprock.
He claims that the injury occurred at about 2.30 pm or 3.00 pm on 17 January 2011. Mr Cubric had instructed him to remove some ceiling tiles and use a knife to cut any tiles that were hard to dislodge. He was doing this on a ladder when he fell. He does not have any memory of what happened but states Mr Cubric told him he had come into contact with an electrical cable in the ceiling.
The worker states that Mr Cubric said his father went to collect his wages from Mr Cubric’s wife for the three days he worked. Those wages totalled $600 in cash.
Mr Danny Trifunovic
Mr Danny Trifunovic, the director of Buildco, made a statement dated 3 April 2011. He stated that Buildco engages the services of all companies and/or businesses on a sub-contractual basis. His company supplies all the materials for each project. He engaged Mr Cubric to assist with Buildco with labour for the Carrington St project. He received an invoice for that work (see below at [56]).
Mr Trifunovic stated that Mr Cubric was operating through the appellant rather than a business (SJLC Gyprock). He had not engaged Mr Cubric’s services on a sub-contractual basis prior to 17 January 2011.
Mr Trifunovic stated that he engaged Mr Cubric to build new gyprock walls and ceilings. His company commenced the renovations at Carrington St on 10 January 2011 and the renovations were completed at the end of the month.
Mr Trifunovic stated that the worker could not have received an electrical shock to sustain major injuries associated with electrical exposure as the switch would have turned off the cable in a millisecond. At most, he could have received a mild shock. The worker worked until the end of the day, between 5.00 pm and 6.00 pm. He did not observe the worker to be injured or hurt.
Other evidence
In evidence is a GIO insurance proposal form, in respect of the appellant’s construction activities. Under the heading 5(c) “Contract workers who are deemed to be your employees” the description of work performed is described as “INTERIOR DECORATION” and the total number of contract workers is recorded as “2”. This document is signed by Mr Cubric and dated 10 January 2011.
Also in evidence are two GIO Declaration of Actual Wages forms, in respect of the appellant’s construction work for the period 7 February 2011 to 7 February 2012 and the period 7 February 2012 to 7 February 2013 which are largely in identical terms. Under the heading “2 ACTUAL WAGES FOR THE PERIOD OF INSURANCE” “A. Direct workers” the work performed is described as construction work. The total number of workers is recorded as “0” and the total number of gross wages is recorded as “0”. However, under the heading “C. Contract workers who are deemed to be your employees” the description of the work performed is described as construction work and the total number of workers is recorded as “2”. These documents are signed by Mr Cubric and dated 30 January 2012.
Invoices
In evidence are several invoices to Buildco from the appellant.
Invoice No/Job
Date
Period
Price
Invoice No 1 – “Carrington St 60 Level 10 – fit out”
31 January 2011
21 December 2010 – 31 January 2011
$11, 860 + GST $1,186
Invoice No 2 – “Merrylands/Franklins”
15 March 2011
16 February 2011 – 26 February 2011
$4,000 + GST $400
Invoice No 3 – “Clarence St. Bicycl shop”
31 March 2011
25 February 2011 – 26 March 2011
$6,600 + GST $660
Invoice No 4 – “Walker St 141 Level 13”
31 March 2011
7 March 2011 – 24 March 2011
$9,000 + GST $900
Invoice No 5 – “Adelaida”
1 May 2011
12 April 2011 – 16 April 2011
$3,000 + GST $300
Also in evidence is an invoice to Buildco from SLJC Gyprock, attached to Mr Trifunovic’s statement dated 3 April 2011.
Invoice No/Job
Date
Period
Price
Invoice No 3 – Gastronomy
1 March 2011
3 December 2010 – 22 February 2011
$8,600 + GST $860
Deed of Release
In evidence is a copy of the Deed of Release dated 31 August 2016. The Deed records that the Nominal Insurer agrees to pay the releasor:
“(a) An amount of $225,000.00 clear of past weekly payments paid to the Releasor pursuant to the provisions of the Workers Compensation Act 1987, inclusive of Schedule 7 costs and disbursements;
(b) With such compensation and damages being in full and final satisfaction of the injury and/or injuries resulting from the alleged incident subject of these proceedings as set out in this Deed of Release.”
The signatories to the Deed were the worker, Mr Cubric on behalf of the appellant, and icare workers insurance on behalf of the Nominal Insurer.
THE ARBITRATOR’S REASONS
In the application before the Arbitrator, it was agreed that the appellant employed the worker at the time of his injury on 17 January 2011. It was also agreed that, as at the date of injury, the appellant had not obtained a current workers compensation policy of insurance.
The appellant argued before the Arbitrator that it was an “exempt employer” and was “deemed to have obtained from the Nominal Insurer… a policy of insurance in compliance with section 155”. It is agreed that the exemption limit referred to in s 155AA of the 1987 Act is $7,500. It was also agreed that if the appellant was an “exempt employer” it is deemed to be insured under s 155 of the 1987 Act at the relevant time and no liability to reimburse the respondent under s 145(1) of the 1987 Act could arise. Therefore, the application before the Arbitrator turned on whether the appellant was an “exempt employer”.
The Arbitrator accepted Mr Cubric’s evidence that he had previously contracted with Buildco to perform gyprocking work in his capacity as an independent contractor operating under the business name “SLJC Gyprock”. He accepted Mr Cubric’s evidence that he did not have any particular need for additional labour on the Carrington St project but had engaged the worker at the request of, and as a favour to, his parents. It was also accepted that, Mr Cubric had not guaranteed the worker employment beyond the completion of the Carrington St project which was expected to take a matter of weeks, although he had not excluded the possibility of further employment being offered if work were “available”.
However, the Arbitrator did not accept all of Mr Cubric’s evidence without reservation. In particular, he did not accept that Mr Cubric sought to obtain Workers Compensation Insurance only after he had been contacted by WorkCover following the worker’s injury. This, as the Arbitrator found, was contradicted by the fact that Mr Cubric had completed a workers compensation insurance proposal on 10 January 2011.
Overall, the Arbitrator formed the impression that Mr Cubric, suffered from a fundamental lack of understanding of his situation. He had attempted to comply as best he could with his obligations in relation to workers compensation insurance, as is evidenced by the fact that he took steps to obtain insurance for the appellant on 10 January 2011 (prior to the worker’s injury) and obtained a policy providing coverage from 7 February 2011.
The Arbitrator concluded that s 155AA does not require a determination of whether the wages paid by the appellant during the financial year in question were in fact less than “exemption limit” for the financial year. Rather, the Arbitrator held that the issue turns on whether the appellant had “reasonable grounds for believing” that the total wages payable by it during the financial year in question would not exceed that limit.[5]
[5] Kula Systems Pty Ltd v The Workers Compensation Nominal Insurer [2017] NSWCC 263 (Reasons), [65].
The Arbitrator held that the words “reasonable grounds for believing” requires an objective consideration of whether, having regard to the information known to the employer at the relevant time, a reasonable person in the employer’s position would have formed the necessary belief.
The Arbitrator held:
“What is perhaps less clear is whether it is necessary for the employer to have formed a positive and actual belief as to whether it was an ‘exempt employer’ or whether the question posed is more hypothetical in the sense that what must be considered is whether, had the employer formed a belief, such belief would have been held on reasonable grounds.
Neither party addressed on this issue. Certainly there is no evidence that the applicant, through Mr Cubric, was aware of it being unnecessary for an employer with wages less than $7,500 to obtain workers compensation insurance and, in that circumstance, I would not accept that he had formed any actual belief in that regard. I shall, however, proceed, in the absence of any submission to the contrary, on the basis that the issue is whether the applicant would have had reasonable grounds for forming such a belief, had it turned its mind to the question.”[6]
[6] Reasons, [67]-[68].
Both parties submitted that the other carried the legal burden of proof on the question of whether by operation of s 155AA the appellant was insured or deemed to be insured at the relevant time. However, after reviewing the relevant authorities, the Arbitrator concluded that the Nominal Insurer carried the legal onus of proof. The conclusion was based on the structure of Div 6 of Pt 4 of the 1987 Act and s 145 of the 1987 Act. Whilst the appellant commenced proceedings in the Commission seeking a determination of its liability, the Arbitrator found that that was simply a procedural mechanism by which a claim for reimbursement made by notice under s 145(1) of the 1987 Act can be challenged. He held that it was the issuing of the s 145(1) notice that initiates the claim by the Nominal Insurer against the uninsured employer. Further, by s 145(3) of the 1987 Act, the service is a precondition to the right to commence proceedings in the Commission seeking a “determination of the person’s liability”.
Therefore, the Arbitrator concluded, the Nominal Insurer is the initiating or asserting party, the relevant assertion being that it is entitled to reimbursement and monies paid to a worker, and the application brought in the Commission by the uninsured employer is, in effect, the prescribed means of raising or prosecuting a defence to that claim or assertion.
That conclusion was reinforced, so the Arbitrator held, by the s 145(5) notice which he noted “was evidenced of the matters stated in the certificate”.[7] The Arbitrator concluded:
“Thus, the effect of the certificate is to provide a means by which prima facie evidence of at least some of the matters required to be proved by the Nominal Insurer can be established, whereupon the evidentiary or tactical onus shifts to the employer to adduce evidence rebutting the evidence as set out in the certificate. The legal onus, however, remains unchanged.”[8]
[7] Reasons, [76].
[8] Reasons, [76].
The Arbitrator further concluded:
“Thus although an evidentiary onus may fall upon the applicant in the present case, that being to adduce evidence supporting the proposition that it is not liable to reimburse the Nominal Insurer as asserted, the legal burden of proof rests upon the respondent to establish on the balance of probabilities, meaning to a degree of actual persuasion or affirmative satisfaction, that the applicant was not insured at the time of the worker’s injury. This means, in the circumstances of the present case, that I must be satisfied that the applicant was not an ‘exempt employer’ within the meaning of s 155AA, this requiring me to be affirmatively satisfied that it did not have reasonable grounds for believing that its wages in the financial year ending 30 June 2011 would not exceed $7,500.”[9]
[9] Reasons, [80].
The statutory declaration made by Mr Cubric on 24 February 2011, the insurance proposal dated 10 January 2011, and the fact that Mr Cubric did in fact obtain insurance on 7 February 2011, establish unequivocally that not only did Mr Cubric have reasonable grounds for believing that the appellant’s wages would not be less than $7,500, in his capacity as a director he had formed an actual, and correct belief to the contrary.
The Arbitrator noted the Nominal Insurer’s submission that those documents ought to be given considerable weight as they are contemporaneous and brought into existence before the present issue was raised. In other words, it submitted that from the moment the appellant came into existence on 10 January 2011, Mr Cubric knew its wages for the financial year would be well in excess of $7,500.
Mr Cubric argued that the documents in fact reveal that his belief as indicated was derived from a fundamental misunderstanding or ignorance of the true nature of his financial and business arrangements. The Arbitrator noted that Mr Cubric’s submission is to a certain extent borne out by an examination of the documents referred to above as some of the matters attested to by Mr Cubric, could not in fact been correct.
On balance, the Arbitrator accepted Mr Cubric’s evidence noting that he had operated for many years as a sole trader and only incorporated the appellant at the arbitrary insistence of Buildco and in order to meet a requirement to undertake work that he would otherwise have done in his personal capacity.
The Arbitrator accepted that Mr Cubric suffered from a lack of understanding of the distinction between earnings in his personal capacity as a sole trader and as an employee of the appellant. There was no evidence that Mr Cubric was paid wages by the appellant. The Arbitrator concluded that he was satisfied that, the appellant had never formed an intention to create legal relations between Mr Cubric and the appellant whereby he would be employed by the appellant under a contract of service.[10] It followed that Mr Cubric had reasonable grounds for believing that no “wages” were payable to him by the appellant and his personal income was not to be taken into account for the purposes of determining whether the “wages” that would be paid by the appellant for the financial year ending 30 June 2011 would exceed the exemption limit.
[10] Reasons, [90].
The appellant did, however, admit that it employed the worker and it was therefore necessary to consider whether that employment precluded formation of a reasonable belief that the wages paid by the appellant in the relevant year would not exceed the exemption limit.
The Arbitrator considered the evidence in relation to Carrington St project. He concluded that for the week that the worker in fact worked he earned either $600 or $780. The Arbitrator concluded from the invoices produced by Mr Trifunovic dated 3 March 2011, that the work on the Carrington St project lasted until at least 22 February 2011. The Arbitrator was satisfied that the worker would have had employment with the appellant for at least 6 weeks and would have earned something within the vicinity of $4,500 during that period.
Mr Cubric’s evidence was that, following the completion of the Carrington St project, there may have been further work available to the worker had he not suffered the injuries sustained. This was consistent with the insurance proposal which referred to two “contract workers”. The Arbitrator assumed (on the basis of Mr Cubric’s evidence) that one of those contract workers was Mr Cubric and it was reasonable to infer that the second contract worker was a reference to the worker.
The Arbitrator considered it significant that there was no evidence that Mr Cubric, on behalf of the appellant, would not have offered the worker further employment, nor is there any evidence that the work contracted to the appellant by Buildco during the remainder of the financial year ended 30 June 2011 would not have been sufficient to justify extending the worker’s employment. The Arbitrator also considered it significant to note, that only a further five out of six weeks of work would have taken the worker’s wages, with the appellant, over $7,500 during the financial year.
The Arbitrator noted the importance of employers complying with their obligations to obtain proper workers compensation insurance to ensure the viability of the scheme. He referred to the second reading speech of the Legislative Council on 14 May 2008, noting the object of introducing s 155AA in the 1987 Act was stated to reduce costs and administrative burden on several hundred thousand small and domestic employers by removing the requirement to obtain a minimum premium or domestic workers compensation policy. The second reading speech made specific reference to “householders” who had previously been required to take out such a policy. Therefore, although s 155AA of the 1987 Act does not limit or define the types of employers that might enjoy the exemption it provides, its object was clearly not to relieve individuals or companies engaged in a business or commercial enterprises of the prima facie obligation to obtain insurance as required by s 155 of the 1987 Act.
In these circumstances, the Arbitrator concluded the belief required to be formed by an employer under s 155AA of the 1987 Act is a positive one, namely that the wages payable in the relevant year would not exceed $7,500.[11] It is not sufficient, so the Arbitrator found, that the employer had reasonable grounds for believing that the wages payable by it might not reach that threshold.
[11] Reasons, [103].
Therefore, because the appellant, through Mr Cubric, did not know the duration of the worker’s employment, or the full extent of wages that would be paid to him during the financial year ended 30 June 2011, it could not have had reasonable grounds for the formation of a positive belief that such wages would not exceed the “exemption limit”.
It followed that the Arbitrator was satisfied that the Nominal Insurer had discharged the legal onus of proof in that the evidence establishes, on the balance of probabilities, that the appellant did not have reasonable grounds for believing that the wages payable to the worker during the financial year ending 30 June 2011 would not exceed the “exemption limit”. Therefore, the Arbitrator concluded that the appellant was not an “exempt employer” within the meaning of s 155AA of the 1987 Act and consequently was not deemed to be insured by the operation of that section.
It being agreed that the appellant did not hold a policy of insurance in accordance with s 155 of the 1987 Act as at the date of the worker’s injury, the Arbitrator found that the appellant was not insured for the purposes of Div 6 of Pt 4 of the 1987 Act. Having made those findings, the Arbitrator ordered that a further telephone conference take place to determine the issue of liability.
GROUNDS OF APPEAL
The appellant alleges that the Arbitrator erred in:
(a) finding that the appellant was not an “exempt employer” as at 17 January 2011;
(b) construing the test involved in s 155AA of the 1987 Act as comprising both subjective and objective elements by construing the meaning of “total wages” in s 155AA (as that term is defined in s 174) as referring to future or contingent liabilities, rather than known and ascertainable legal obligations to work as employed at the relevant time. This led to the Arbitrator’s error in:
(i)failing to consider the appellant’s known and ascertainable wages, and
(ii)taking irrelevant matters in to account, namely, unknown and/or unascertainable contingent liabilities in the form of possible wages.
(c) determining an issue not in dispute between the parties and failing to afford the parties an opportunity to address on that issue being the proper construction of s 155AA of the 1987 Act, and
(d) “… [i]n reversing the onus of proof so as to require the appellant to adduce evidence of the existence of facts sufficient to induce the state of mind or belief that objectively an employer would believe that the wages payable would exceed the exemption limit in circumstances of the respondent not having made out a prima facie case.”
LEGISLATION
The relevant statutory provisions are extracted below.
Section 140 of the 1987 Act provides:
“140 Persons eligible to make claims (cf former s 18C (2)-(6))
(1) A claim under this Division may be made against the Nominal Insurer by any person who considers he or she has a claim against an employer for compensation under this Act or work injury damages in respect of an injury to a worker, if:
(a) the employer is uninsured, or
(b) the person claiming the compensation has been unable, after due search and inquiry, to identify the relevant employer.
(2) An employer is considered to be ‘uninsured’ if the employer:
(a) had not obtained, or was not maintaining in force, a policy of insurance for the full amount of the employer's liability under this Act in respect of the injured worker at the relevant time, or
(b)having been a self-insurer at the relevant time, has ceased to undertake liability to pay compensation to the employer's own workers (but only if the claim cannot be paid under section 216 from any money deposited with the Authority or under any arrangement relating to the refund of any such deposit).
(2A) A claim may not be made under this Division in respect of a claim for work injury damages against a person who is an employer as a result of being a principal within the meaning of section 20 who is liable to pay compensation to the worker.
(2B) The regulations may prescribe the searches and inquiries necessary to constitute due search and inquiry to identify an employer for the purposes of this section.
(3) If a payment is made by the Nominal Insurer in respect of a claim under this Division and the employer is subsequently identified, the Nominal Insurer may recover the amount paid from the employer or the employer's insurer in the manner provided by this Division.
(4) A claim shall not be made under this Division if the person claiming the compensation is entitled under section 20 to claim compensation against a principal within the meaning of section 20.
(5) If a person is entitled to claim compensation against a principal within the meaning of section 20 and the principal was not maintaining in force a policy of insurance for the full amount of the principal's liability under this Act at the relevant time:
(a) the person may make to the Nominal Insurer a claim for compensation under this Division, and
(b) the Nominal Insurer may deal with any such claim as it thinks fit.
(6) The Nominal Insurer is to notify the Authority of any claim made under subsection (5).”
Section 145 of the 1987 Act provides:
“145 Employer or insurer to reimburse Insurance Fund (cf former s 18C (21)-(26))
(1) The Nominal Insurer may serve on a person who, in the opinion of the Nominal Insurer, was:
(a)in respect of an injured worker to or in respect of whom a payment has been made by the Nominal Insurer in respect of a claim under this Division, an employer at the relevant time, or
(b) an insurer under this Act of such an employer,
a notice requiring that person, within a period specified in the notice, to reimburse the Insurance Fund an amount (not being an amount exceeding the amount of the payment made) specified in the notice.
(2) The Nominal Insurer may, by instrument in writing, waive the liability of an employer under subsection (1) to reimburse the Insurance Fund an amount, if the Nominal Insurer, in respect of the amount, is satisfied that:
(a)the amount is beyond the capacity of the employer to pay,
(b) the employer could not reasonably have been expected to regard himself or herself as an employer at the relevant time,
(c) the employer, not being a corporation, is bankrupt and the liability under this section is not provable in the bankruptcy,
(d) the employer, being a corporation, is being wound up and the liability under this section is not provable in the winding up,
(e) the employer, being a corporation, has been dissolved, or
(f)it would not be commercially feasible for the Nominal Insurer to attempt to recover the amount.
(3) A person on whom a notice has been served under subsection (1) in respect of an injured worker may, within the period specified in the notice, apply to the Commission for a determination as to the person's liability in respect of the payment concerned.
(4) The Commission may hear any such application and may:
(a)make such determination in relation to the application, and
(b)make such awards or orders as to the payment of compensation under this Act to or in respect of the injured worker concerned,
as the Commission thinks fit.
(4A) The Commission is not authorised to make a determination that waives the liability of an employer under subsection (1) to reimburse the Insurance Fund or that limits or otherwise affects any function of the Nominal Insurer to decide whether or not any such liability should be waived.
(5) In any proceedings under subsection (4), a certificate executed by the Nominal Insurer and certifying that:
(a) the payments specified in the certificate were paid to or in respect of an injured worker named in the certificate, and
(b) a person named in the certificate was, in the opinion of the Nominal Insurer, liable at the relevant time to pay to or in respect of the injured worker compensation under this Act or work injury damages,
is (without proof of its execution by the Nominal Insurer) admissible in evidence in any proceedings and is evidence of the matters stated in the certificate.
(6) The Nominal Insurer may recover an amount specified in a notice served under subsection (1) (being a notice in respect of which an application has not been made under subsection (3)) from the person to whom the notice was given as a debt in a court of competent jurisdiction.
(7) An order by the Commission that the Nominal Insurer is to be reimbursed by a person named in the determination concerned may be enforced under section 362 of the 1998 Act.”
Section 155AA of the 1987 Act provides:
“155AA Exempt employers not required to obtain policy of insurance
(1) An employer is an ‘exempt employer’ during a financial year while the employer has reasonable grounds for believing that the total amount of wages that will be payable by the employer during the financial year to workers employed by the employer will be not more than the exemption limit for that financial year.
(2) An employer is not an exempt employer whenever the employer:
(a) is a member of a group constituted under Division 2A, or
(b)employs a person under a training contract (within the meaning of the Apprenticeship and Traineeship Act2001 ).
Note. A ‘training contract’ is a contract entered into for the purpose of establishing an apprenticeship or traineeship.
(3) An employer who is an exempt employer for the whole or any part of a financial year is deemed to have obtained from the Nominal Insurer (and the Nominal Insurer is deemed to have issued) a policy of insurance in compliance with section 155 (an ‘exempt employer policy’) for any period for which the employer is an exempt employer during the financial year. No premium is payable for an exempt employer policy.
(4) An exempt employer policy covers the employer for any period for which the employer is an exempt employer but does not cover the employer for any period for which the employer has actually obtained a policy of insurance under section 155.
(5) An administration fee of an amount prescribed by the regulations is payable to the Nominal Insurer by an employer in respect of each claim made against the employer in respect of an injury to a worker received during any period for which an exempt employer policy covers the employer.
(6) The regulations may make provision for or with respect to the payment of an administration fee, including provision for or with respect to any of the following:
(a)the period within which an administration fee must be paid,
(b) the payment of a late payment fee if an administration fee is not paid within the required period,
(c)the full or partial waiver or refund of an administration fee or late payment fee.
(7) The Nominal Insurer is entitled to recover as a debt in a court of competent jurisdiction an administration fee payable by an employer together with any late payment fee payable.
(8) In this section:
‘exemption limit’ for a financial year means $7,500 or such other amount as may be fixed by the Workers Compensation Market Practice and Premiums Guidelines as the exemption limit for that financial year.
‘financial year’ means a period of 12 months commencing on 1 July in any year.
‘wages’ means wages as defined in section 174 and includes any distribution to a worker as a beneficiary under a trust that would (under section 174AA) constitute wages for the purposes of section 174.”Former cl 147 of the Workers Compensation Regulation 2010 (2010 Regulation), which was in force at the relevant time, (current cl 138 of the Workers Compensation Regulation 2016) provides:
“147 Employer to supply insurer with return relating to wages--standard policies
(1) An employer must, as soon as practicable (but not later than 2 months) after:
(a) making an application to an insurer for the issue of a policy, or
(b)the renewal of a policy,
supply the insurer concerned with a notice in the approved form, duly completed, which contains a reasonable estimate of the wages that will be payable by the employer during the relevant period of insurance to workers employed by the employer.
(1A) Subclause (1) (b) does not apply to a small employer.
(3) An employer must, not later than 4 months after the end of the relevant period of insurance relating to a policy, supply the insurer who issued or renewed the policy with a notice in the approved form, duly completed, which contains a full and correct declaration by the employer of the wages that were actually paid by the employer during that period of insurance to workers employed by the employer.
(3A) However, subclause (3) applies in relation to a policy of insurance issued to an employer (other than a small employer) before 4 pm on 30 June 2014 as if the reference in that subclause to 4 months were a reference to 2 months.
(4) In this clause, ‘small employer’, in relation to a policy of insurance, has the same meaning as in the Workers Compensation Market Practice and Premiums Guidelines that apply to that policy.
(5) This clause does not apply in relation to a retro-paid loss premium policy.”
APPELLANT’S SUBMISSIONS
The appellant submits that the Arbitrator found that the use of “reasonable grounds for believing” in s 155AA of the 1987 Act contained a subjective and objective element, both of which must be satisfied. It submits that the Arbitrator found that the appellant failed to satisfy the subjective element of the test “… in that the employer did not hold an actual or positive belief at the ‘relevant time wages’ would not exceed $7,500 during the financial year.” On this construction, so it is submitted, an employer must have an actual or positive belief as to whether known wages at the “relevant time” will exceed the exemption limit and whether that belief, measured objectively, is reasonable.
The appellant submits that the Arbitrator’s construction is inconsistent with the context in which s 155AA of the 1987 Act was introduced and does not give effect to the purpose and object of the section as referred to in the second reading speech, in the Legislative Council on 14 May 2008, namely:
“to reduce the costs and administrative burden on several hundred thousand small and domestic employers by removing the requirement to obtain insurance as required by s 155.”
Whenever the known wages do not exceed the exemption limit of $7,500 the employer will have the “reasonable grounds for believing” that it is an “exempt employer” under s 155AA of the 1987 Act.
The test under s 155AA of the 1987 Act is an objective test, without any subjective element. The appellant submits:
“… it is sufficient in answer to the test to show that an employer in the position of the employer would have reasonable grounds for a belief that at the ‘relevant time’ [sic] the financial year the legal obligation of an employer to pay ‘wages’ as defined under s 174 that had accrued would not exceed the exemption limit under s 155AA.” (emphasis in original)
The ultimate purpose of s 155AA of the 1987 Act is remedial and beneficial. It is not advanced by incorporation of a “reverse onus on an employer to establish an actual or positive belief” in respect of total wages paid.
It is submitted that the Arbitrator’s construction brings about uncertainty and is “at odds with the administration of the scheme and directives given to scheme agents under the Small Employer Policy Exemption operating guidelines”.
The Arbitrator’s consideration of objective and subjective elements of actual wages paid and prospective wages, produces anomalous results. The appellant submits:
“As a consequence of the arbitrator’s finding the employer does not take the benefit of notional insurance notwithstanding objectively wages did not exceed the exemption and is liable for prosecution under the absolute liability imposed under s 155. This is to be contrasted with an employer who has objectively exceeded the exemption limit but is accepted as having an actual or positive belief that wages would not exceed the exemption limit takes the benefit of notional insurance and escapes criminal liability under s 155.”
The appellant submits that the anomaly is avoid by adopting its construction of s 155AA of the 1987 Act because:
“…an employer with known wages that fell below the exemption would prima facie satisfy the test without further enquiry… and where wages exceeded the exemption limit the reasonable grounds for belief given are assessed objectively.”
This construction, so it is submitted, is consistent with WorkCover’s submissions in Workers Compensation Nominal Insurer v Earl.[12]
[12] [2012] NSWWCCPD 61 (Earl).
The parties proceeded on an assumption that there was “… an implied contract of service …” between Mr Cubric and the appellant and that any remuneration paid to Mr Cubric by the company was greater than $7,500.
The Arbitrator proceeded on the basis that if the evidence did not support a finding that the appellant paid wages in excess of $7,500 then the appellant would not be uninsured for the purpose of s 140 of the 1987 Act.
The Nominal Insurer carried the onus to prove non-insurance, on the balance of probabilities.[13]
[13] Citing WorkCover Authority of New South Wales (on behalf of the Workers Compensation Nominal Insurer) v Sadler [2009] NSWWCCPD 127.
The Arbitrator misdirected himself by construing the test for the appellant’s reasonable grounds for belief as having a subjective element requiring consideration of its actual belief as to future payments. It is submitted that this was a “non-issue” between the parties reflected by the fact that the Arbitrator noted that neither party addressed on the issue.[14]
[14] Citing Reasons, [68].
As the Arbitrator framed the argument, and as agreed by the parties, the issue for determination involved a factual dispute as to whether the employer had in fact paid wages in excess of the exemption limit through working director payments or payments to the worker in the sum of $600. That factual issue was decided in its favour. It submits that the appellant’s subjective belief with respect to future wages in addition to those paid was not an issue in the party’s contemplation at the hearing. Therefore, it was an error to deal with and decide that issue.[15] Had that issue been identified the appellant would have made submissions addressing that point.
[15] Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89.
The proper construction of s 155AA of the 1987 Act turns on the use of the expression “wages that will be payable” which determines the content of the belief. Wages are defined in s 174 of the 1987 Act and include a number of categories. For there to be “wages” there must be an underlying existing contract of service, legal arrangement or statutory entitlement which creates in the employer a legal obligation. A full-time employee is to be contrasted with an employee who is engaged on an ad hoc casual basis where the legal obligation to pay wages is not ongoing and intermediate in terms of the future obligation. Pursuant to s 174(1) of the 1987 Act, it is submitted that records are required to be kept in respect of wages and that those records relate to accrued legal obligations and not future or contingent liabilities that may or may not eventuate.
On this construction, the status of an employer as exempt or otherwise is objectively ascertainable by reference to and adopting the expression “known” wages. This construction is fortified having regard to the ordinary meaning of the terms “will” and “payable” in the Macquarie Online Dictionary. It is submitted that the word “will” in s 155AA of the 1987 Act denotes a future likelihood or inevitability about the payment which in respect of the “wages payable that likelihood will be determined by the legal obligation to make the payments.”
The term “payable” means something “that must be paid”.[16] It is further submitted that, for the purposes of s 155AA in determining “total wages”, consideration is to be given to the likelihood of the payments during the financial year which are to be assessed by reference to known legal obligations arising from verifiable legal obligations under existing contracts arrangements and other statutory entitlements.[17]
[16] Citing Sumpter v Hedges [1898] 1 QB 673.
[17] LexisNexis Butterworths, Mills Workers Compensation New South Wales, Service 144 at [WCA 174.1].
Therefore, so it is submitted, “total wages” does not require a consideration of “imponderable contingencies” or possible future employment of a casual employee engaged on an ad hoc basis where the likelihood of future obligations cannot be ascertainable by reference to any ongoing legal obligation.
The Arbitrator drew the inference having considered all of the available evidence. There was ample evidence to support the Arbitrator’s inference, including the following evidence from Mr Cubric that he:
(a) conceded he employed the worker;
(b) would continue to employ the worker for the duration of the Carrington St job;
(c) employed the worker to work at another site in addition to Carrington St;
(d) conceded it was likely that he would employ additional labour from time to time;
(e) paid wages to the worker;
(f) had not ruled out employment with the worker extending beyond the Carrington St project;
(g) expected his Serbian friend would also become an employee of the company at some point during the course of the financial year;
(h) completed an insurance proposal on 10 January 2011, and
(i) obtained workers compensation insurance on 7 February 2011
It is not sufficient, as the appellant submits, to demonstrate that the respondent failed to establish a prima facie case of non-insurance merely by reason of the fact that the payment of wages by the employer did not exceed $7,500. The submission conveniently ignores the evidence with respect to the worker’s intentions and Mr Cubric’s intentions in relation to the engagement of workers throughout the financial year.[61]
[61] See Reasons, at [30].
I also reject the submission that the evidence did not support the Arbitrator’s determination that future work would be available for the worker or others with the employer. Mr Cubric’s own evidence supported that finding.
For these reasons, I am not satisfied that an error of the kind described in Whiteley Muir has occurred. Nor do I accept that this is a case of conflicting inferences of equal degrees of probability. The established facts, referred to above, strongly favour the Arbitrator’s findings. For the same reasons, I reject the submission that the Arbitrator’s findings were “predicated on surmise and conjecture”.
CONCLUSION
The Arbitrator correctly found that the Nominal Insurer established, on the balance of probabilities, that the appellant did not have reasonable grounds for believing that the total amount of wages payable to workers during the financial year would not exceed the “exemption limit”.
It follows that the appellant was not an “exempt employer” within the meaning of s 155AA of the 1987 Act. Consequently, it was uninsured at the time of the worker’s injury.
DECISION
The Arbitrator’s Certificate of Determination dated 10 November 2017 is confirmed.
The matter is remitted to the Arbitrator to determine the remaining issues.
Judge Keating
President
16 March 2018
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