Lawrence-Plant v J & S Plant Pty Ltd t/as Bluey's Hire (now de-registered)
[2009] NSWWCCPD 64
•10 June 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Lawrence-Plant v J & S Plant Pty Ltd t/as Bluey’s Hire (now de-registered) [2009] NSWWCCPD 64 | |||||
| APPELLANT: | James David Lawrence-Plant | |||||
| RESPONDENT: | J & S Plant Pty Ltd t/as Bluey’s Hire (now de-registered) | |||||
| INSURER: | Allianz Australia Workers Compensation (NSW) Ltd | |||||
| FILE NUMBER: | A1-8102/08 | |||||
| DATE OF ARBITRATOR’S DECISION: | 6 January 2009 | |||||
| DATE OF APPEAL DECISION: | 10 June 2009 | |||||
| SUBJECT MATTER OF DECISION: | Leave to appeal; whether a director of the Respondent company was a ‘worker’; whether the injury arose out of or in the course of employment; section 4 of the Workplace Injury Management and Workers Compensation Act 1998. | |||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Higgins & Higgins | ||||
| Respondent: | Ellison Tillyard Callanan | |||||
| ORDERS MADE ON APPEAL: | 1. Leave to appeal is refused. | |||||
| 2. No order as to costs of the appeal. | ||||||
BACKGROUND TO THE APPEAL
On 12 February 2009 James David Lawrence-Plant (‘the Appellant / Mr Lawrence-Plant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 6 January 2009.
The Respondent to the Appeal is J & S Plant Pty Ltd t/as Bluey’s Hire (now de-registered) (‘the Respondent / Employer’).
The Appellant came to Australia from the United Kingdom in 1990. He commenced in the industrial hire business in 1991 when he and his wife purchased a business known as “Links Mid Mountain Hire”. They established the Respondent company on 8 April 1993, and at that time changed the business name to “Bluey’s Mountain Hire.” In about 1997 they registered the business name of “Bluey’s Party Hire.” In September 2004 that latter business, which had been operating in partnership with Mr and Mrs Delfsma since July 2001, was sold to them and the Respondent company had no further interest in it.
The Appellant was a director of the Respondent. He claimed that from 8 August 1993 he was employed by the Respondent as a manager. His duties involved the day-to-day running of the business including the hiring out and maintenance of general hire equipment. He remained in that position until the Respondent’s de-registration on 27 August 2006.
The Appellant claimed that he suffered a work-related psychological injury with symptoms of stress, anxiety and depression as a result of the nature and conditions of his employment between 1 January 2001 and 31 August 2004. The principal cause of this condition was alleged to be the mismanagement of the company’s financial affairs by his accountant.
On 10 October 2008 the Appellant filed his fifth ‘Application to Resolve a Dispute’(‘the Application’) in the Commission seeking weekly benefits from 31 August 2004, medical expenses and lump sum compensation. Four earlier Applications filed by the Appellant in 2007 and 2008 had been discontinued.
Following a Teleconference on 13 November 2008, the parties agreed that the matter could be determined without a conference or formal hearing.
On 6 January 2009 a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ (‘Reasons’) was issued. The Arbitrator found in favour of the Respondent, principally on the basis that the Appellant was not a ‘worker’ within the meaning of section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). She also determined that even if the Appellant had been able to demonstrate that he was a ‘worker’, the evidence was that his psychiatric condition arose as a consequence of his role as a director and owner of the Respondent company, not as a ‘worker’.
It is from this decision that the Appellant seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 6 January 2009 records the Arbitrator’s orders as follows:
“1. There is to be an award for the Respondent in relation to all claims.
2.Pursuant to Clause 9(2)(b) of Schedule 6 of the Workers Compensation Regulation 2003 the resolutions in this and the prior proceedings are to be treated as separate resolutions.
3. There is to be no order as to costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are threefold: firstly, whether the Arbitrator erred in finding that the Appellant was not a ‘worker’; secondly, whether the Arbitrator erred in finding that the Appellant had not suffered an ‘injury’; and thirdly, whether the Arbitrator erred in determining that employment was not a substantial contributing factor to the claimed injury.
ON THE PAPERS REVIEW
Section 354(6) of the1998 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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by both 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.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount at issue on appeal satisfies the threshold requirements of section 352(2) however, the appeal was filed out of time in contravention of section 352(4) of the 1998 Act.
In his appeal application, the Appellant submitted that the appeal was out of time because “The Appellant was only advised by Counsel to proceed with the appeal on 10 February 2009.” Later in that document he claimed that “…Counsel’s advice to proceed with the appeal was obtained on 11 February 2009.”
The Respondent opposes the granting of any extension of time to appeal. Detailed reasons for this were provided in the ‘Notice of Opposition’ to which I will refer later.
As a result of the Appellant’s failure to provide “full details of the arguments in favour of granting an extension of time…” as required by Rule 16.2(12) of the Workers CompensationCommission Rules 2006 (‘the Rules’) I issued a Direction on 23 April 2009 directing the Appellant to file and serve written submissions as to why an extension of time should be granted.
Those submissions were received by the Commission on 6 May 2009. On 20 May 2009, the Respondent wrote to the Commission advising that it had not received any submissions from the Appellant. The Appellant was then directed to serve his submissions forthwith, and an extension of time was granted to the Respondent to file any submissions in reply.
On 3 June 2009, the Respondent advised the Commission that it did not intend to file any further submissions.
The Legal Framework
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.”
Rule 16.2(11) of the Rules provides a discretion to extend time, in the following terms:
“The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
There are no factors set out in Rule 16.2(11) to guide the exercise of the discretion to extend time. Some useful principles may be found in Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 (‘Gallo’) where McHugh J said:
“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.” (at 480)
These principles have been applied in numerous decisions in the Commission, for example, Department of Corrective Services v Buxton [2007] NSWWCCPD 55 (‘Buxton’), O’Carroll Constructions Pty Ltd v Burgess [2007] NSWWCCPD 224 (‘Burgess’) and New SouthWales Fire Brigades v Turton [2008] NSWWCCPD 66 (‘Turton’).
The starting point is to consider whether exceptional circumstances exist in this matter.
The Appellant submits that the appeal was filed out of time because Counsel’s advice to proceed was not received until 11 February 2009. In his submissions filed on 6 May 2009, the Appellant adds that, because of the Arbitrator’s findings (on the issue of costs) at [39] that the claim had been made without justification as was alleged by the Respondent, it was inappropriate to proceed without Counsel’s advice as to the prospects of success. While I accept the validity of that submission, there remains no explanation in those submissions as to the delay in obtaining such advice.
What constitutes ‘exceptional circumstances’ has been considered by the Commission in a number of decisions. In Department of Education and Training v Mekhail [2006] NSWWCCPD 1 Handley ADP dealt with an appeal filed a few days out of time, when appeal documents were given to the filing section of the appellant’s solicitors, but not filed for some days due to “unforeseen error”. Handley ADP said the appeal was filed out of time due to “administrative error”, which did not constitute “exceptional circumstances” so as to enliven the discretion in rule 16.2(11). In Buxton ADP Snell dealt with an appeal lodged approximately one week out of time, after the appellant’s solicitors miscalculated the time within which an appeal could be brought. As he said at [26]:
“An error by the solicitors for the Appellant Employer, in calculating the period during which any appeal needed to be filed, is the dominant, probably the only, reason for the appeal being out of time in the current matter. The circumstances of each case require consideration on their own facts. I am not obliged to take the same approach as Handley ADP, in forming a view regarding whether ‘exceptional circumstances’ are made out. I have however reached a similar view. I cannot see a simple error, in calculating the time in which an appeal could be brought, is sufficient to constitute ‘exceptional circumstances’. I am not satisfied ‘exceptional circumstances’ exist, so as to enliven the discretion in Rule 16.2(11). For this reason the application to extend the time for making the appeal should be refused.”
And as DP Roche noted in Burgess at [22], “inadvertence or administrative errors by a legal practitioner do not amount to exceptional circumstances.”
In the present case, I am similarly not persuaded that exceptional circumstances exist. I have been guided in my determination by the observations of Campbell JA in Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 (‘Yacoub’), dealing with the phrase “exceptional circumstances” in the Uniform Civil Procedure Rules 2005 where he said:
”Exceptional circumstances are out of the ordinary course or unusual, or special, or uncommon. They need not be unique, or unprecedented, or very rare, but they cannot be circumstances that are regularly, routinely or normally encountered: R v Kelly (Edward) [2000] 1 QB 198 (at 208).”
In my view, delays by Counsel in providing timely advice are regularly encountered. That factor by itself then does not constitute exceptional circumstances. It is the absence of any explanation by the Appellant for the delay upon which my decision to decline to extend the time for making the appeal is primarily based.
I note also at this point the submissions made by the Respondent in its ‘Notice of Opposition’. In addition to its argument that no exceptional circumstances exist in this case, the Respondent submits that an extension of time should not be granted given the history of the proceedings between the parties. As noted earlier, the current Application is the fifth filed by the Appellant. The Arbitrator accepted at [38] the Respondent’s allegation that no substantially new evidence had been provided over the course of the various proceedings and that the Appellant had failed to point to any new evidence in response to that allegation. It was on the basis of this history that the Arbitrator concluded at [39] that “…the current claim was made without justification…” The fact that a number of applications have been filed by the Appellant and discontinued is not of itself determinative of whether time to appeal should be extended, but in this particular case, the conduct of the Appellant as referred to by the Arbitrator is a factor I have taken into consideration in coming to the conclusion that time to appeal should not be extended.
Even if ‘exceptional circumstances’ existed, it would not be appropriate to exercise the discretion to extend time for making the appeal, since in my view, the appeal does not demonstrate reasonable prospects of success. It would be inappropriate to exercise the discretion to extend in such circumstances: Gallo, Howell v Stringvale Pty Limited [2004] NSWWCCPD 22).
This requires detailed consideration of the merits of the appeal.
The Merits of the Appeal
The Appellant claimed in his various statements that, in the relevant period, he was a working director involved in the day-to-day running of the business. In support of his assertions, he included in his Application a letter from Mr Bob Debus dated 22 October 2007. Mr Debus said:
“My recollection is that Mr Plant was often engaged directly in the provision of services – taking orders at the company premises and delivering equipment to hirers.”
These statements in themselves however are insufficient to establish that the Appellant was a ‘worker’ within the meaning of section 4 of the 1998 Act. As the Arbitrator rightly pointed out at [17]:
“The essential feature of the definition of worker…is the ‘contract of service’. The onus is on the applicant to show that the relevant contract is one of employment.”
To determine whether a ‘contract of service’ exists requires consideration of the factors or ‘indicia’ set out in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 (‘Stevens’).
These factors were considered by the Arbitrator at [19] to [25] of her Reasons. Relevant findings are set out as follows:
“22.There is no evidence of the Applicant receiving any remuneration from the Respondent other than director’s fees, except his own bare assertion that he was paid a salary of $750 up until 30th September 2004. His 2002 and 2003 Income Tax Returns show only $6800 in director’s fees as income for each year. The 2004 Return shows a nil income. The Respondent’s Returns for 2002 and 2003 show wages of $54,446.50 and $36,990 respective in addition to the director’s fees. There is no evidence that the wages were paid to Mr Plant. The Respondent’s wage declaration for the period 27th November 2003 to 27th November 2004 signed and dated by the applicant on 12th November 2004 identifies only two employees during that period, neither of whom is the applicant, and a Gross Wages figure (which includes amongst other things payments to working directors) $21,163.04 paid to the two named employees. No financial records have been produced by the applicant in relation to himself or the Respondent or of the partnership between the Respondent and the Delfsmas for the 2004, 2005, 2006 or 2007 financial years, save those referred to, despite requests to do so and Directions for Production in earlier proceedings involving the same parties and issues.
23.The Respondent’s records for 2002 do disclose a sum of $238,715 owed to its directors. In 2003 this item was $150,485. The loan appears to have been repaid to the extent of $88,000 but this does not take the Applicant any further in proving there was a contract of employment between him and the Respondent.
24.The Applicant in his submissions relies on his own bare statements and a statement of Mr Debus dated 22nd October 2007 to establish himself as a worker and manager in the Respondent’s business…None of the statements or other evidence addresses the issues raised by the financial records.
25.On balance, the evidence shows that Mr Plant did not have a contract of employment with the Respondent. It was not denied that the Respondent was under the control of the Applicant. It did not make those arrangements which it was legally obliged to as an employer. There is no record of moneys paid as wages – any money paid to the Applicant in the relevant period appears to have been as director’s fees or the repayment of loans. As there is no contract of service Mr Plant cannot meet the definition of ‘worker’ and is not entitled to compensation.”
The Appellant has not challenged the Arbitrator’s findings of fact particularly as to the financial arrangements between the parties. Indeed, the appeal merely asserts that the Arbitrator erred in her findings as to ‘worker’ and ‘injury’. The Appellant’s submissions are confined to the assertion that “the applicant was employed as a manager and worker in the respondent [sic] business.”
Having reviewed the evidence before the Arbitrator, I can find no error in her findings of fact set out in paragraphs [22] to [25] of her Reasons. The Appellant’s own personal view as to his status in the company is immaterial: there must be evidence of the relevant ‘contract of service’ in order for him to establish that he is a ‘worker’ within the meaning of the 1998 Act. In these circumstances, there is simply no merit in the Appellant’s assertion that the Arbitrator erred in her determination on the issue of ‘injury’.
Her findings were consistent with the decision of DP Roche in Riverwood Legion &Community Club Ltd v Morse [2007] NSWWCCPD 88 and the authorities referred to therein. As McCardie J said in Moriarty v Regent’s Garage Company [1921] 1 KB 423 at 445:
“ …a Director is not, I agree, a servant of the company in the ordinary sense, but he may be a servant under the terms of his agreement as director, so that he may be indicted for embezzlement as a ‘clerk or servant’, as was decided in Reg v Smart. A director is in fact a director or controller of the company’s affairs. He is not a servant.”
The Arbitrator’s findings were also consistent with a recent decision of Mullins J of the Supreme Court of Queensland in Williamson v Suncorp Metway Insurance Ltd & Anor [2008] QSC 244 to which the Respondent has referred in its Notice of Opposition. In that case, the plaintiff was injured whilst undertaking work for a company controlled by his son. The plaintiff made a claim on that company’s public liability insurer. The policy excluded liability for personal injury to a worker. An issue to be determined was whether the plaintiff was engaged by his son’s company under a contract of service. The evidence was that the plaintiff was assisting his son at flexible times and for flexible amounts of pay, his motivation being to assist in his son’s business at a time of both personal and financial difficulty on his son’s part. The court there found that in the absence of an intention to create legal relations between the plaintiff and his son’s company, there was no contract of service and the plaintiff was not therefore a worker.
As to the Arbitrator’s findings on ‘injury’, there was no real dispute between the parties that the Appellant suffers from a depressive illness. What was in dispute was whether such an injury fell within the meaning of sections 4 and 9A of the 1987 Act. The Arbitrator dealt with this issue at [26] of her Reasons. She said:
“However, even if Mr Plant had been able to demonstrate that he did meet the definition of ‘worker’, the overwhelming weight of the evidence is that the psychiatric condition he suffers arose from his role as director and owner of the company. This appears not only in his own statements but in the history he gives to doctors. If he is both director and worker, any compensable injury must arise from his role as worker and not as director. (See Tannous v Hyclass Tiling Pty Ltd NSW Compensation Court 2nd July 2003 per Judge Burke, and the authorities there referred to.)”
The Arbitrator found that the evidence did not support the Appellant’s assertion that his concerns as both a director and employee “overlapped’ stating at [29]:
“All of the evidence points to the stress and anxiety arising from the financial situation of the company, which eventually lead him personally into bankruptcy and the loss of his home. Had Mr Plant been an employee, even as manager, he could have walked away from the Respondent and obtained alternative employment. As the owner of the business he could not do that. Any concern he could have had as an employee over the loss of his employment was very minor compared to the distress he suffered as the owner of the business. As an employee, he was not required to sign personal guarantees, which lead to the devastating personal financial loss he has suffered nor would he have been involved in litigation. It was these factors which, on his own and other evidence, has lead to his understandably high levels of stress and his anxiety and depression.”
As a consequence of these findings, the Arbitrator concluded that the Appellant’s condition could not be said to have arisen from his ‘employment’, nor that ‘employment’ was a substantial contributing factor to his psychological condition.
In the Appellant’s submissions on appeal, he states:
“In our submission there is no doubt on the evidence that the applicant suffers from a primary psychiatric injury caused by the problems he experienced running his business,(my emphasis), these included;
(a)The financial stress caused by the downturn in work experienced by the business in his role as manager;
(b)The lack of support he received in running the business from business partners;
(c)The bad advice he received from his accountant resulting in hardship to the business and himself as manager.”
These submissions are quite simply fanciful, and utterly inconsistent with the evidence. For example, Mr Carlos Camacho, a psychologist to whom the Appellant was referred by his solicitors, recorded this history in his report dated 13 June 2006:
“Mr Lawrence states that he accumulated debt in attempting to save his business. He states that he owed $80,000.00 to the Australian Tax Department. He owned his business… with his wife and another couple as business partners. He states that he was given financial advice that was detrimental to his financial situation, business and health. The Tax Office was threatening to re-possess his business products unless the money was paid immediately… He ended up getting himself into further debt and paid the Tax Department. During this time, he experienced severe psychological pressure.”
In his statement dated 11 May 2007, the Appellant said:
“As a result of the mismanagement of our financial affairs largely through our accountant the business went into financial difficulties and I started to suffer from stress, anxiety and depression. The banks had required that I be a Guarantor on behalf of the Company in relation to a string of various financial obligations and dealings including all the leases, loans and overdrafts of the business which meant that when the business failed all of the business’ liabilities in relation to those matters were directed to me. This caused me considerable stress during the running of the business as I was aware that if the business failed I was a Guarantor in relation to the business…following the failure of the business I have had continual litigation in which I have been sued on these Guarantees. We are losing our house and we have lost our livelihood.”
This evidence is totally consistent with the Arbitrator’s conclusions set out at [29] to which I have referred. Accordingly, I am not persuaded that the Arbitrator erred in her findings on these issues.
One further matter I should note at this point. In his submissions filed on 6 May 2009 in response to my direction, the Appellant states:
“The Respondent has already paid the Applicant as a ‘worker’ in relation to his industrial deafness claim and the necessary binding findings apply.”
No further particulars are provided, and the relevance of this submission on the issue of an extension of time to appeal is not clear. In any event, it does not appear to have been specifically raised before the Arbitrator. There is a reference in the Appellant’s statement of 11 May 2007 to “…the Insurer met my previous claims including industrial deafness and injuries to my face…” but there is simply no reference as to when and in what circumstances such a claim was made or apparently met. In his present Application, the Appellant relies on the “nature and conditions of employment” between January 2001 and August 2004 as causative of his injury. His employment status at other times is not entirely clear such that in the absence of any other information I am simply unable to assess the merits of this allegation. In the Appellant’s Application, there were documents headed “Employer Compensation Management Services / OAMPS” completed in about December 2003,one of which appears to relate to QBE Workers Compensation. The document appears to have been completed and signed by the Appellant’s wife in connection with the partnership with the Delfsmas known as “Party Hire”. It would appear that it was the partnership that obtained a workers compensation policy with QBE, but the information is scant indeed, and again, does not assist me in assessing the merits of this submission.
In any event, it does not take the matter further since such information does not assist me in assessing whether exceptional circumstances exist to warrant the granting of an extension of time, nor does it assist the Appellant in establishing a contract of employment with the Respondent.
CONCLUSION
The Arbitrator’s determination was thorough and well reasoned. Her findings were completely consistent with the evidence, and the Appellant has failed to establish either that exceptional circumstances exist or that his appeal has reasonable prospects of success.
DECISION
For the reasons set out above, I decline the application for an extension of time to appeal.
COSTS
In the proceedings before the Arbitrator, the Respondent sought costs against the Appellant on the grounds that the claim was frivolous, vexatious or made without proper justification. The Arbitrator accepted the Respondent’s submissions stating at [39] as follows:
“…the Commission has to conclude that the current claim was made without justification as alleged by the Respondent. However, there would appear to be little utility in awarding costs against the Applicant as a bankrupt. The awarding of costs is a discretionary matter and this is not a case where costs should be awarded against the claimant.”
The Respondent seeks an order that the Appellant pay the costs of the appeal. There is considerable merit in this application, but in the circumstances, I adopt the views expressed by the Arbitrator on this point, and I make no order as to costs of the appeal.
Deborah Moore
Acting Deputy President
10 June 2009
I, MARIE JOHNS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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