Malivanek v Ring Group Pty Ltd - [2014] NSWWCCPD 4

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Malivanek v Ring Group Pty Ltd [2014] NSWWCCPD 4
APPELLANT:	Christopher Malivanek
RESPONDENT:	Ring Group Pty Ltd
INSURER:	CGU Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-6401/12
ARBITRATOR:	Ms K Haddock
DATE OF ARBITRATOR’S DECISION:	8 October 2013
DATE OF APPEAL HEARING:	20 January 2014
DATE OF APPEAL DECISION:	29 January 2014
SUBJECT MATTER OF DECISION:	Worker; deemed worker; cl 2 of Sch 1 to the Workplace Injury Management and Workers Compensation Act 1998; whether applicant regularly carried on a trade or business; additional evidence on appeal; s 352(6) of the Workplace Injury Management and Workers Compensation Act 1998; non-compliance with Practice Direction No 6; general approach to whether an applicant is a worker; the “ultimate question” in worker cases; principles in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 and Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 discussed
PRESIDENTIAL MEMBER:	Deputy President Bill Roche
HEARING:	Oral
REPRESENTATION:	Appellant:	Ms L Goodman, instructed by Owen Hodge Lawyers
Respondent:	Mr L Morgan, instructed by Moray and Agnew
ORDERS MADE ON APPEAL:	1. Paragraphs 2 and 3 of the Certificate of Determination of 8 October 2013 are revoked and the following orders made in their place: “2. The matter is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of whole person impairment resulting from the injury to the applicant worker’s lumbar spine, upper left extremity and both lower extremities. 3. The applicant worker’s claims for weekly compensation, and for hospital and medical expenses, are remitted to a different Arbitrator for determination. 4. The respondent employer is to pay the applicant worker’s costs of the arbitration, which is certified as complex with an uplift of 30 per cent.” 2. The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST. Costs of the second arbitration are to follow the outcome of that arbitration and are in addition to the costs of the first arbitration.

INTRODUCTION

The appellant worker, Christopher Malivanek, is a carpenter. In March 2007, Alan Ring, the managing director of the respondent, Ring Group Pty Ltd, engaged (to use a neutral term) Mr Malivanek to assist another person (Grant Tully) install a skylight at a house in Laurel Avenue, Willoughby (the Willoughby property). While performing that work on 22 March 2007, the first day of a one-day job, Mr Malivanek fell from the roof and suffered serious injuries.
The only issue argued before the Arbitrator, and on appeal, is whether, at the time of the accident, Mr Malivanek was a worker or a deemed worker under the terms of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). The Arbitrator held that he was neither a worker nor a deemed worker and made an award for the respondent. Mr Malivanek has appealed both findings.

FACTUAL BACKGROUND

To understand this claim properly it is necessary to set out the long history between Mr Malivanek and Mr Ring. That is unfortunate because much of this history has only limited relevance to the issues in dispute and most of it is disputed. However, it provides necessary context to the various allegations and counter allegations made by each side.
Mr Malivanek and Mr Ring have known each other for many years and they were, until the March 2007 accident, good friends. Though the evidence is far from clear, it seems that their first association was in the 1990s when Mr Ring bought frames and trusses from a business run by Mr Malivanek. Regrettably, this is about the only fact on which the men agree. It is convenient to first set out the competing versions from Mr Malivanek and Mr Ring and then to summarise the relevant evidence from some of the more independent witnesses.

Mr Malivanek’s version

In about November 2000, Mr Ring offered Mr Malivanek full time work with his company, Commercial and Residential Construction Pty Ltd (CRC), but Mr Malivanek had to work as a contractor. (CRC was a building company run by Mr Ring and his co-director, Matthew Huttary.) Mr Ring allegedly told Mr Malivanek that this would be better because Mr Malivanek could claim more deductions and pay less tax, but he would come under CRC’s insurance if there were an accident.
Mr Malivanek therefore set up a business known as Mallows Building Services (Mallows) and worked for CRC from late 2000. Mr Ring and Mr Huttary told him that they would supply him with constant and ongoing work. He said that he worked exclusively for CRC, Monday to Friday, and for no other builder.
Mr Ring told Mr Malivanek that he was part of the family. He mostly received instructions from Mr Ring as to when and where to start work. CRC supplied all tools for him, except for his hammer, nail bag, tape, chisel and handsaw. Mr Huttary or Mr Ring supplied all materials and directed and inspected all work. Mr Malivanek submitted invoices weekly in the name of Mallows. Though he charged GST and paid his own income tax, Mr Malivanek considered himself an employee of CRC. He did not advertise for business and his vehicle (a sedan) did not display any name on it.
Mr Malivanek worked on Mr Ring’s home at Thornleigh. Exactly when he did this work is unclear, but it seems to have been completed in about 2002. He said that this work was billed to and paid by CRC.
Between April 2005 and May 2006, Mr Malivanek worked as the manager of a frame and truss company, known as Bay Milling (Glendenning Wholesale Trust), and did no work for CRC. Between May 2006 and October 2006, Mr Malivanek took an extended holiday to help his daughter renovate her house in Queensland.
In January 2006 CRC went into liquidation (other evidence suggests that this occurred on a different date).
In about October 2006, Mr Ring rang Mr Malivanek and offered him work with the respondent. Mr Ring said that things would be the way they were with CRC, except that Mr Ring was the only director. Mr Malivanek accepted the work, saying that it was “the same arrangement” as for CRC. Mr Malivanek denies that Mr Ring mentioned sub-contracting work, saying that Mr Ring just offered him work with similar conditions as for CRC. Mr Ring told Mr Malivanek where to work and what to do. Mr Malivanek started work in October 2006 at the house at Laurel Street, Willoughby, where his accident occurred in March 2007. He also did work for the respondent in October 2006 at a property at Northmead.
Mr Malivanek submitted three invoices for his work at Willoughby and Northmead in 2006, all under the Mallows business name. He worked on those jobs from 7 am until 3.30 pm on 5, 6, 9, 13, 17, 18, 19, 20, 23, 24, 25, 26, 27, 30, 31 October and on 1 and 2 November 2006. The invoices record that he charged “SUB CONTRACT CARPENTRY” at $45 per hour. The invoice dated 2 November 2006 includes an additional item, namely, “LABOURER” for Monday 23 October. The labourer was Mr Malivanek’s son, Lewis, for whom Mr Malivanek charged a total of $200 for eight hours at $25 per hour. How Lewis came to work at the site is the subject of conflicting evidence that is discussed below.
Mr Malivanek said that Mr Ring was very strict about starting and finishing times. Mr Malivanek never worked whenever he felt like it and was not allowed to come and go as he pleased. Mr Ring knew that Mr Malivanek would “abide by his [Mr Ring’s] rules and that was not to take on other work while [Mr Malivanek] worked for him”.
Though Mr Malivanek said he did not employ anyone, he told Mr Ring that he needed help while making roof frames for the Willoughby property. Mr Ring allegedly said, “I don’t have anyone. Can you get your brother Tom to come and help you?” Mr Malivanek said that his son Lewis could help for the day. Mr Ring replied, “Get him and I will pay him cash” $200 for the day. Lewis worked the next day, but Mr Ring said he had no money to pay him and asked Mr Malivanek to put it on his account and he (Mr Ring) would fix it up.
Though he was not happy with that arrangement, Mr Malivanek went along with it and added the cost of Lewis’s labour to his invoice. He said it was never his intention to employ Lewis and it was only at Mr Malivanek’s request that he added Lewis to the invoice. Mr Malivanek said he worked for no one else and that Mr Ring knew that. In one of his earlier statements, Mr Malivanek said that his son had helped him on the Willoughby job for a couple of days while another man (James Walsh) was away. In another statement, he said he never employed any workers.
Mr Malivanek’s first involvement in the Willoughby property ended in November 2006. He then had surgery on his right shoulder and did no work until Mr Ring contacted him in March 2007 and asked him to install a skylight at the Willoughby property. Had the accident not happened, this job was to be the start of a lot more work for Mr Malivanek with the respondent.
On the morning of 22 March 2007, Mr Malivanek arrived at the Willoughby property and Mr Ring showed him where to put the skylight, but gave him no other instruction or induction and, in particular, gave no instruction not to go onto the roof. Mr Malivanek said he was to do all the work involved in fitting the skylight, but acknowledged that another man, Grant Tully, was also present at the property to help install the skylight. (Whether Mr Malivanek was helping Mr Tully or Mr Tully was helping Mr Malivanek is disputed. Mr Malivanek claims the former, because Mr Tully had limited knowledge of carpentry, and Mr Ring claims the latter.) One of the few things that is agreed is that Mr Ring had arranged for Mr Tully’s presence at the site.
Mr Ring took Mr Malivanek and Mr Tully upstairs with the skylight and pointed to where he wanted it installed and left. He gave no induction and did not say not to go on the roof, but said to be careful when working out there. Mr Malivanek put on his harness and climbed out of the upstairs window to access the roof. When he got to the ridge of the house, he attempted to remove a tile, so he could attach his harness to a rafter, when he slipped and fell onto the concrete below.
An ambulance took Mr Malivanek to hospital where he was admitted for six days suffering from three fractured vertebrae and injuries to his left shoulder and his legs. Mr Malivanek said that Mr Ring visited him in hospital the next day and cried. He asked Mr Malivanek not to sue him as another worker had been fatally injured at a worksite and he did not want anyone to investigate him. An inspector from WorkCover, Chris Henson, contacted Mr Malivanek, but it is unclear if he took a statement from him.
A few days after Mr Malivanek left hospital, Mr Ring paid him $200 for his work. (The invoice from Mallows on 24 March 2007 for the work done on 22 March 2007 records that “Alan paid … $500”.)
On 13 July 2009, Mr Malivanek resumed contract work. As the Arbitrator did not deal with the claim for weekly compensation, it is not necessary to consider this work or his earnings from that date.
On 21 December 2009, Mr Malivanek completed an Uninsured Liabilities Claim Form (the claim form) in which he said that his weekly wage at the time of the injury was $1,800, that he worked 30 – 40 hours per week, and that he not only worked for the respondent, but also for Huttary Contracting. In answer to the question “[w]ere you carrying on a trade or business on your own account or in partnership with others?” Mr Malivanek wrote “Y” (yes), stating that he was a contract carpenter with the business name of “Mallow [sic] Building Services”.

Mr Ring’s version

Mr Ring said that Mr Malivanek approached him in around 2002 and asked if he had any work he could do. Mr Ring and his “partner” (Mr Huttary) hired Mr Malivanek “under a sub contract arrangement where [Mr Malivanek] did some work for us [CRC] under his own business name of Mallows Building Services”. The arrangement was that Mr Malivanek had his own insurance, kept his own books, and provided tax invoices for the services he carried out and for any materials he purchased. If he needed other labour, he “supplied or employed his own staff”. He could work whatever hours and days he wanted and never worked for CRC full time. Mr Ring knew that Mr Malivanek worked for other builders, and for framing and truss companies, as a sub-contractor.
Mr Ring said that he ceased being a director of CRC “due to health reasons” in September 1999 and resumed in August 2003. In this period, Mr Huttary and James Twomey ran the company, which went into liquidation in 2003 (this date is inconsistent with a later statement from Mr Ring).
Mr Ring denied having ever offered Mr Malivanek full time employment, having told him that it would be better financially for him to be employed as a contractor, or that Mr Malivanek would come under CRC’s insurance cover in the event of an accident. It was Mr Ring’s understanding that Mr Malivanek was working for himself and was only contracted to CRC to work on the roof and “fixout” of Mr Ring’s home at Thornleigh in 2000 (this date is inconsistent with Mr Ring’s earlier statement that Mr Malivanek approached him in 2002).
Mr Ring said that Mr Malivanek:
“was a carpenter with casual employees subcontracting for CRC and taking the [sic] instructions from the director of CRC (Matthew Huttary) with the exception of the carpentry works on [Mr Ring’s] home at … Thornleigh which was completed in around mid 2002. The instructions I gave Chris as the owner of the home was how I wanted different components built.”
Mr Ring said he did not know if Mr Malivanek worked for CRC from Monday to Friday and he did not tell him where and when to start work; those instructions came from Mr Huttary. While he said that Mr Malivanek worked his own hours, Mr Ring could not confirm the exact hours. In response to Mr Malivanek’s evidence that he worked regular hours for CRC, Mr Ring said that it was reasonable to expect that a job be consistently worked on and to ensure that it was competed in a reasonable time.
Mr Ring said that neither CRC nor the respondent ever employed Mr Malivanek. Mr Huttary, of CRC, supplied all tools and materials, but Mr Malivanek had his own hand tools and electrical tools. Mr Ring did not know if Mr Malivanek remained on site all day, but said he was paid for the hours he worked. He did not know if Mr Malivanek advertised for business.
Contrary to his first statement – that he and Mr Huttary had hired Mr Malivanek – Mr Ring said in a later statement that, as the sole managing director of CRC, Mr Huttary engaged Mr Malivanek as a sub-contractor to undertake random carpentry between 2000 and 2005. He added:
“From late 2003 I was reinstated as a director until late 2005 when I put the company into liquidation. I would have inspected works on site. I may have given [Mr Malivanek] instructions then or while I worked in the office. I may have telephoned [Mr Malivanek] regarding the technical nature of how a job should be done or if there were issues relating to quality. At all times, [Mr Huttary] authorised work to be completed because he was the managing supervisor.”
Mr Ring said he did not know what Mr Malivanek did between April 2005 and May 2006, but he believed he was subcontracting to other people, including Riverstone Frame and Truss, Malcolm Lothian, a loss adjustor, and Tony Meaney. He did not know what Mr Malivanek did between May 2006 and October 2006.
Mr Ring said that, as he was 66, he decided to retire in 2006.
In about June 2006, the owners of the Willoughby property asked him to build some additions to it. At about the same time he was asked to close a veranda at Northmead. He undertook both jobs in the name of the respondent, a company he had formed in 1978 and of which he was the sole director.
The Northmead job took approximately two weeks. Mr Ring’s son-in-law, James Walsh, helped him. Mr Ring asked Mr Malivanek, working as Mallows, to install the metal roof, which he did on 5, 6 and 9 October 2006 at $45 per hour.
On the Willoughby job, Mr Ring said Paul Maloney and Mr Walsh assisted him. In late October/November 2006, Mr Walsh went on holidays to Ireland and Mr Ring contacted Mr Malivanek and asked him to sub-contract the second story roof frame carpentry works at $45 per hour including GST. Mr Malivanek agreed and asked if he could bring his son, Lewis, to assist him. Mr Ring agreed.
Mr Malivanek started work on the Willoughby property on 13 October 2006 and “completed his contracted works on” 2 November 2006. Mr Malivanek submitted three invoices for the work, all under the Mallows name. Mr Ring could not confirm if Mr Malivanek worked for anyone else between 13 October 2006 and 2 November 2006.
Mr Ring said that the work on the Willoughby property took five months to complete after Mr Malivanek had completed the roof frame.
Mr Ring denied asking Mr Malivanek to get his brother (Tom) to help him, adding that he would never have Tom on site because “he could not hold his attention”. He said that Mr Malivanek knew this after Tom had worked on Mr Ring’s house at Thornleigh.
With regard to Lewis working at Willoughby, Mr Ring said that Mr Malivanek approached him and asked if it was okay for his son to come and work as he was out of work and needed money because he was going overseas. Mr Ring agreed to the rate of $25 per hour for Lewis “to labour”, as he was not a tradesperson. Mr Ring did not know how much Mr Malivanek was going to pay Lewis, or how Lewis was to be paid. He only agreed to be invoiced by Mallows at the rate of $25 per hour for Lewis. He denied ever having offered to pay Lewis separately and denied that Mr Malivanek ever requested him to do so.
Mr Ring was unable to comment on whether Mr Malivanek worked between November 2006 and March 2007.
Dealing with the installation of the skylight, Mr Ring said that one of the owners of the Willoughby property contacted him in March 2007 and asked that a skylight be fitted in the upstairs bathroom. He went to the property with Mr Tully, who he described as a “contractor I had engaged to do the final fix [sic] out of the property” and they measured the skylight and discussed how it was to be installed. They agreed it could be done from the inside, without going on the roof. However, Mr Tully was not confident of installing the skylight himself and said he wanted some help.
Mr Ring ordered the skylight, which took three weeks to be delivered, and contacted Mr Malivanek and asked him if he was available to assist Mr Tully to install it. Mr Ring said that it would be a “day’s work under the usual sub contract arrangements”. Mr Malivanek replied that he would fit the work around his other work commitments and that he could attend the premises on 22 March 2007 to install the skylight. They arranged to meet (at the Willoughby premises) on that day.
Mr Ring added, in a later statement in which he responded to Mr Malivanek’s evidence:
“I told him it would only take one day and I asked him if I could contract him for the day. At no time did I ask [Mr Malivanek] to come back to work as an employee. He was never an employee and always invoiced me through Mallows Building Services. He was one of a few sub-contractors I used from time to time. If he had been unavailable, then I would have asked one of the other sub-contractors on my short lift [sic] of contractors to help Grant Tully.”
At 7.30 am on 22 March 2007, Mr Ring met Mr Malivanek at the Willoughby property and discussed the position of the skylight with him and the owner. He then gave Mr Malivanek an “induction of what had to be done”, which lasted 20 minutes, and told him not to go onto the roof, as the tiles were glazed and were wet from dew. In addition, the roof tiler had not yet finished his work and the tiles and flashing could be left for the tiler to complete.

Before Mr Ring finished the induction for Mr Malivanek, Mr Tully arrived and Mr Ring:
“went over the whole induction again with both [Mr Malivanek] and [Mr Tully] and explained to them whilst they were both together, what it was that [he] wanted done and how [he] wanted the work to be carried out and [he] told them they were not to go outside onto the roof of the premises under any circumstances. [Mr Tully] was also fully aware of how the sky light [sic] was to be installed as [they] had discussed this matter on a number of occasions for the 2 weeks prior to this day.”
Mr Ring said that part of the induction included that, if they needed access to the roof to move tiles, they could do it from inside the premises. Mr Malivanek and Mr Tully both agreed they could install the skylight “by this method”. He also told them that, if they had to access the roof, they were to comply with WorkCover safety practices and use a harness, and lash themselves to the rafters.
Mr Tully went to get a Stanley knife from his car to cut the gyprock. While he was doing that, Mr Malivanek punched a hole in the gyprock with his hammer. When Mr Tully returned, he removed sections of the gyprock with his Stanley knife, to locate the rafters.
Once they could see the rafters, Mr Malivanek and Mr Ring measured the skylight and “set it out” on the bathroom ceiling. Mr Ring said that both men were “made aware again that no one was to go onto the roof and that they were to work together from the floor of the bathroom and to assist and look after one another”. Mr Ring “ensured that they had the tools they required to do the job such as ladders, steps and drop sheets etc”.
At about 8.15 am, when he was confident that “everything was in place and that [Mr Malivanek] and [Mr Tully] understood what it was they were to do”, Mr Ring left. He had only driven about one kilometre when Mr Tully rang him to tell him that Mr Malivanek had fallen from the roof.
A few days after Mr Malivanek’s release from hospital, Mr Ring visited him and the following conversation is said to have taken place:
“‘Chris you are a sub contractor and you are aware of that aren’t you’. He said. ‘Yes I am aware of that and I told WorkCover that I was a sub contractor’. I said, ‘Chris you know that you were given [an] induction for this job and I told you, you were not to go onto the roof’. He said, ‘Yes I know that and I told the WorkCover guy that’. I said, ‘You have your own tools and that’. Chris said to me, ‘Yes I told that to Chris Henson and that I went onto the roof of my own accord’. When I discussed these things with Chris he also said to me, ‘Alan I’ve got no workers comp or sick or accident insurance’. I was shocked when he told me this and I think from memory I gave him $200.00 which I had in my wallet because he also told me he had no money at that time.”
Mr Ring added, in another statement, that he visited Mr Malivanek some weeks after he was released from hospital and “believe[s]” he gave him around $2,000 in cash.

Mr Tully’s evidence

Mr Tully’s evidence (which was admitted without objection) consisted of an unsigned record of interview given over the phone to an investigator on 2 March 2010. He said he was a “basically self-employed” carpenter who did the majority of his work for the respondent. He knew Mr Malivanek to be a carpenter or builder.
Mr Tully said that he would probably have done the job (fitting the skylight) for Mr Ring, but as he had not installed a skylight before, Mr Ring said he would get someone to do it with him.
On the morning of 22 March 2007, Mr Ring went through “how he wanted it done” and said he did not want either man to go onto the roof. This instruction had come from Mr Tully’s advice (to Mr Ring about the roof) because, having worked on the job before, he was aware that the roof tiles were very slippery.
Mr Tully said:
“I think [Mr Ring] basically said, he, he definitely told us to do the job from inside the premises, to cut a hole through the gyprock on the rafters and then set out the size of the skylight; reach up, remove [the] roof tiles; frame it out and install it basically …”
After “running through the job”, Mr Ring left “to go to the hardware or do something” and Mr Tully and Mr Malivanek “commenced work”. Mr Tully was walking back from getting some tools from his car when he heard a noise that turned out to be the noise of Mr Malivanek sliding off the roof.
As a sub-contractor, Mr Tully said he always supplied his own tools and he carried his own ladders on the roof of his car. He thought that Mr Malivanek “had at least a ladder on board” and had “a harness and stuff there”.

Mr Walsh’s evidence

James Walsh is Mr Ring’s son-in-law. He worked for CRC as a sub-contractor from about 2001. He said he would invoice CRC weekly. He denied being an employee and did not accrue leave or holiday pay entitlements.
Mr Walsh was aware that Mr Malivanek had his own clientele. He recalled Mr Malivanek telling him about jobs he was doing for Tony Meaney at Thorne Street, Pennant Hills and at Seaforth.
Mr Walsh had no knowledge of the working arrangement between Mr Malivanek and the respondent, but was aware that Mr Malivanek had fallen off a roof at Willoughby. He did not recall working with Mr Malivanek at Willoughby in 2006. He said he worked on that job from when it started until about January 2007, but took three weeks off to return to Ireland in October 2006. He did recall working with Paul Maroney. He said he was Mr Ring’s “eyes and ears on the job, overseeing things”. He sub-contracted to Mr Ring, which he thought was “through Ring Group Pty Ltd”.
Mr Walsh added that Mr Malivanek did some work for him on Mr Walsh’s own house in 2004 and 2005. Mr Malivanek agreed he did this work, but added that he was paid by CRC.
Mr Walsh could not tell the investigator of one person employed by CRC or the respondent. As far as he was aware, neither company had any employees.

Mr Twomey’s evidence

Mr Twomey was employed as the financial controller for CRC from early 2003 to 11 September 2004.
He said that Mr Ring only “resigned on paper from the directorship of CRC from 1999 to 2003 to avoid a conflict of interest” because he operated as a loss assessor under the Ring Group, where he was also a director. In that capacity, Mr Ring had done loss assessments for insurance claims and given the repair work to CRC.
Mr Twomey said that Mr Ring “removed his name only from CRC” but was “actively involved in the day to day management of CRC during the period of time he was alleged to have resigned from the directorship” of CRC. Mr Ring looked after all insurance repair works involving insurance claims and residential projects. He had his shares in CRC in trust with his then solicitor, Shah Rassidi, from 1999 to 2003.
When Mr Twomey worked for CRC, he worked at the company’s head office and saw Mr Ring working there. In addition to his work as the financial controller, Mr Twomey had to attend many building sites and Mr Ring accompanied him to those sites.
Mr Twomey regularly saw Mr Malivanek at those building sites, but only spoke to him if there was a query about his invoices.
Mr Twomey heard Mr Ring say on numerous occasions to CRC’s sub-contractor’s that they were like family and would be looked after. He said he was told to pay James Walsh when he was on holidays, even though he was a sub-contractor.

Mr Malivanek’s response

Essentially, Mr Malivanek disputes virtually everything that Mr Ring says. As I have already identified most of the matters in dispute, I will only mention a few of the more important points here.
Mr Malivanek maintains that Mr Ring, not Mr Huttary, initially engaged him (presumably in 2000 and not in 2002). When he worked on Mr Ring’s house at Thornleigh, Mr Ring introduced Mr Malivanek to his number one man, Mr Huttary, saying that Mr Huttary would tell him where to go and what to do when he was not around.
Mr Malivanek said that CRC “had a team that were put on different jobs where required” and that “you never brought other people along unless at his [Mr Ring’s] direction”. He said that Mr Ring was in charge of every job CRC did.
With regard to hours of work, Mr Malivanek said that “[c]ompany hours were 7 am till 3.30 pm and overtime if the job required it which was often” and that Mr Ring was “strict with starting and finishing”. Mr Malivanek never worked whenever he felt like it.
Mr Malivanek maintains that Mr Ring never mentioned sub-contracting when he first asked him to work at the Willoughby property; he just offered him work with similar conditions as for CRC.
With regard to going onto the roof at Willoughby, Mr Ring knew Mr Malivanek had his harness with him because he had it across his shoulder when he met him on site. It was always Mr Malivanek’s intention to go onto the roof because, he said, “it was how we installed all skylights on any job I did with CRC”.
With regard to tools for the job on 22 March 2007, Mr Malivanek said his car was a sedan, which had no roof racks. He only carried basic tools and did not carry a ladder, as Mr Ring always supplied the ladder and “most of the tools”.
Mr Malivanek denied Mr Ring’s claim that the flashings would be finished later by a tiler, explaining that “we installed all flashings and finished the job completely otherwise water would be able to penetrate the upper level and the house was occupied by the owner”.
In response to Mr Walsh’s evidence that Mr Malivanek had his own clientele, Mr Malivanek said that his work for his clientele was “two hours helping a friend move a partition after work in Chippendale at a fashion house”, for which he was not paid, and a job at Seaforth, which was Mr Malivanek’s own residence, a property owned by his then wife, Michelle Staunton. Mr Malivanek said that Mr Walsh did some electrical work and his wife paid Mr Walsh cash. He did not say if he had worked for Mr Meaney or Mr Lothian.

THE ARBITRATOR’S REASONS

After setting out a detailed summary of the evidence, the Arbitrator dealt with the worker issue. She said (at [144]) that she found the evidence of the arrangements with CRC of limited assistance. However, as Mr Malivanek had placed a great deal of emphasis on those arrangements, she considered them.
The Arbitrator noted that Mr Malivanek had an ABN, operated under a business name, and issued invoices (which included GST) for the work he did for the respondent. None of the invoices issued to the respondent included any charge for materials, but some issued to CRC did. No deductions were made for income tax and there was no evidence that Mr Malivanek was entitled to sick leave or annual leave.
While Mr Malivanek said that CRC provided him with tools, though he had a few tools of his own, he gave no evidence whether the respondent provided him with tools. Given the evidence that the arrangements with the respondent were to be the same as with CRC, the Arbitrator assumed that the respondent would provide Mr Malivanek with tools.
The Arbitrator noted (at [148]) that Mr Ring gave evidence that he ensured the men had all the tools they required (for fitting the skylight at the Willoughby property), but he did not say that he provided them. She also noted Mr Tully’s evidence that he was collecting his tools when Mr Malivanek fell, that he (Mr Tully) always provided his own tools and believed that Mr Malivanek had “a harness and stuff”, adding (at [149]) that Mr Tully did not think that the respondent provided any tools for the job on 22 March 2007.
Though Mr Malivanek denied employing anyone while he worked for the respondent, the Arbitrator said (at [150]) that he was entitled to do so, at least when he worked for CRC, where the same arrangements applied. She noted Mr Malivanek’s statement that his son (Lewis) had helped him for a couple of days at Willoughby, which conflicted with his later statement that he never employed a worker. The Arbitrator acknowledged that it was possible that Lewis helped Mr Malivanek without being paid but, as he sought to be paid for the job at Willoughby, that appeared unlikely. The Arbitrator said that the discrepancy was not explained.
The Arbitrator noted (at [153]) that Mr Malivanek did not work every day for the respondent. In respect of the first work at Willoughby, the invoices revealed that Mr Malivanek worked on 10, 11, 12 and 16 October and on 3 November 2006. With regard to Mr Malivanek’s work for CRC, the invoices showed that there were some weeks when he did not work every day for CRC and there was one invoice issued by Mr Malivanek to Riverstone Frame and Truss Pty Ltd on 16 July 2004.
Though Mr Malivanek said he was not paid for the work at Chippendale, and the work at Seaforth involved his own home, he did not address Mr Walsh’s evidence that he also did work for Tony Meaney, or Mr Ring’s evidence that he did work for Malcolm Lothian. The Arbitrator said (at [155]) that Mr Ring’s knowledge of Mr Malivanek working elsewhere, while also contracting to CRC, was at odds with him not being able to take on other work.
The Arbitrator then (at [156]) referred to matters in favour of Mr Malivanek being a worker. They included:
(a)     Mr Ring directed Mr Malivanek to attend the job site at Willoughby on a certain date and, it may be assumed, at a certain time;
(b)     Mr Ring said he provided an induction, which suggested some degree of control, though Mr Malivanek denied that any induction took place (the Arbitrator added that such an induction was not inconsistent with the relationship of contractor and sub-contractor), and
(c)     the fact that Mr Malivanek did not advertise his services and did not display his name on his vehicle.
However, though Mr Ring was entitled to direct Mr Malivanek as to where and when the work was to be done, apart from telling Mr Malivanek and Mr Tully not to go onto the roof, which Mr Malivanek denied was said, Mr Ring left the actual “carrying out of the work to the two other men” ([158]).
Having considered and weighed the indicia, the Arbitrator was satisfied that Mr Malivanek was not a worker employed by the respondent.
On the question of whether Mr Malivanek was a deemed worker, the Arbitrator referred to relevant authorities and said (at [167]) that Mr Malivanek’s arrangements with CRC were not “of particular assistance in determining the arrangement with the respondent”.
The Arbitrator said (at [168]) that Mr Malivanek regularly carried on business in the name of Mallows and, whatever may have been the arrangement with CRC, he had performed only a few jobs for the respondent. She felt it was unlikely that, at least initially, the respondent would have been in a position to offer Mr Malivanek continuous work.
The evidence was that, with the respondent, Mr Malivanek had worked on only two sites (Northmead and Willoughby). He did not work full-time for the respondent during October and November 2006, and his evidence was that he was unable to work for a time as he was recuperating from surgery. There was no evidence that he was required to work for a number of hours while he performed work for the respondent. He submitted invoices for the hours he worked and was paid an hourly rate.
The Arbitrator said that, while at the Willoughby property on 22 March 2007, Mr Malivanek and Mr Tully “were not under the supervision of anyone from Ring Group and [Mr Malivanek] did not wear its uniform” ([174]).
The Arbitrator then referred (at [176] and [177]) to the evidence on whether Mr Ring had given Mr Malivanek an induction at the Willoughby property and told him not to go on the roof. She saw no reason not to accept Mr Tully’s evidence the Mr Ring told them to do the job from inside the premises.
On the question of whether Mr Malivanek did work for anyone else while working for the respondent, the Arbitrator referred (at [178]) to Mr Malivanek’s evidence in the WorkCover claim form that he worked 30 to 40 hours per week as a contract carpenter and that he not only worked for Ring Group, but also for Huttary Contracting.
Dealing with the claim form, the Arbitrator added, at [179]:
“If [Mr Malivanek] accurately completed the claim form, and there is no reason to assume that he did not, he was not working solely for the respondent at the relevant time. He also regarded himself as carrying on a trade or business, although his evidence is that the arrangement he had with the respondent was the same as that with CRC, where he considered himself its employee. The discrepancy between the claim form and his evidence is not explained.”
On the issue of whether Mr Malivanek employed anyone, the Arbitrator rejected the respondent’s submission that the “employment” of Lewis was fatal to Mr Malivanek’s claim that he was a deemed worker, noting (at [180]) that Mr Malivanek did not employ anyone in the performance of the work on the day of his injury.
The Arbitrator then referred to other conflicts in the evidence, namely, how much Mr Ring paid to Mr Malivanek after the accident, whether Mr Ring begged Mr Malivanek not to contact WorkCover (because of a previous fatality), and whether there was any conversation (either after or before the accident) about Mr Malivanek’s insurance cover. On the last issue, she said that it was probably unnecessary to determine the correct version of events, but it was yet another example of the conflicting evidence in the matter.
The Arbitrator concluded that Mr Malivanek bore the onus and, having considered the evidence in all its “sometimes unsatisfactory state”, she was not satisfied that Mr Malivanek was a deemed worker as at 22 March 2007.
The Commission issued a Certificate of Determination on 8 October 2013 in the following terms:
“The Commission determines:
1.   That the name of the respondent is amended to Ring Group Pty Ltd.
2.   That there is an award for the respondent.
3.   That there is no order for costs.”

ISSUES IN DISPUTE

The grounds of appeal identified in Mr Malivanek’s amended submissions on appeal alleged that the Arbitrator erred in failing to:
(a)     properly weigh the relevant indicia;
(b)     find that Mr Malivanek was a worker within the meaning of the Act at the time of his injury on 22 March 2007;
(c)     determine that Mr Malivanek was not regularly carrying on a “trade or business” at the relevant time;
(d)     find that Mr Malivanek was a deemed worker at the relevant time, and
(e)     give proper weight to Mr Malivanek’s evidence.
The above “grounds” did not comply with Practice Direction No 6. They merely complained that the Arbitrator erred in not finding in Mr Malivanek’s favour. They did not properly identify how the Arbitrator erred. Given the number of times this has been raised in Presidential decisions, that was most unsatisfactory. At the oral hearing of the appeal, Mr Malivanek’s counsel, Ms Goodman, submitted that the Arbitrator erred in that, on the worker issue, she failed to:
(a)     deal with the control issue correctly (control);
(b)     deal with the submissions on the provision of tools (tools);
(c)     take into account Mr Malivanek’s statement in response to Mr Tully’s evidence on the provision of tools (tools);
(d)     deal with the conflict in the evidence on whether Mr Malivanek employed Lewis on the Willoughby job (employment of workers);
(e)     deal with the submission that Mr Malivanek’s evidence, on how he came to engage Lewis, was more plausible (employment of workers);
(f)      appropriately deal with the relevant indicia of employment, in particular, the evidence that Mr Ring exercised control over Mr Malivanek (indicia);
(g)     deal with the evidence of the induction Mr Ring said he gave on 22 March 2007 (the induction), and
(h)     consider Mr Malivanek’s evidence that Mr Ring was strict about the hours Mr Malivanek worked (hours).
On the question of whether Mr Malivanek was a deemed worker, Ms Goodman submitted that the Arbitrator erred in her approach to whether Mr Malivanek was conducting a business between October 2006 and March 2007 because she failed to:
(a)     consider the fact that Mr Malivanek did not work for anyone other than the respondent in that period;
(b)     deal with Mr Malivanek’s evidence of his activities since April 2005;
(c)     refer to Mr Malivanek’s tax returns;
(d)     determine if Mr Malivanek had employed workers (or a worker), in particular Lewis, and
(e)     say why Mr Malivanek was not a deemed worker.

In addition, Mr Malivanek seeks to tender “new evidence” on appeal. It is convenient to deal with that application first and to then deal with the other issues under “worker” and “deemed worker”. The parties have agreed that, if I determine that the Arbitrator erred, I should re-determine the matter.

FRESH EVIDENCE

Mr Malivanek sought leave to tender on appeal two additional statements. First, a further statement from himself dated 31 October 2013 and, second, a statement from Matthew Huttary of the same date. Mr Malivanek’s statement is as follows:
“1. I wish to refer to my answer to question 7(l) of the Uninsured Liabilities Claim Form dated 21 December 2009 which reads ‘Did you only work for this employer?’ and wish to address it as follows:
(a)     When I completed the form in December 2009, I mistakenly answered ‘no’ as my mind was directed at the point in time in December 2009.
(b)     I did not work for anyone when I was working for Ring Group Ltd.
(c)     Matt Huttary, who I have known for many years through my working with CRC had given me work in about July 2009 to about February 2010 through Buildtech Pty Ltd. Matt Huttary was a director of Huttary Contracting Pty Ltd. He ran building projects for Buildtech and subcontracted work to me. I was told to send my invoices to Buildtech for payment.
2. Some of my work was not paid by Buildtech until about December 2010.
I made this statement to the best of my ability and believe it to be true.”

Mr Huttary’s statement is as follows:
“1. I have known Chris Malivanek for about 15 years.
2. I am a director of Huttary Contracting Pty Ltd. For the period from about 2007 to 2012 I ran building projects for Buildtech Plumbing and Building Pty Ltd.
3. Huttary Contracting Pty Ltd was sub-contracted by Buildtech. I was projects manager. Part of my roles was to hire and supervise sub-contractors.
4. I recall hiring Chris Malivanek to work on many projects that I managed for Buildtech in about mid 2009 to about February 2010.
5. As those projects belonged to Buildtech, I told Chris to send his invoices to Buildtech for payment. Chris did work for Huttary Contracting Pty Ltd during such time. However as I engaged him, he sometimes would have mentioned Huttary Contracting.
I make this statement to the best of my recollection and swear it to be true.”
In support of the application to tender the above evidence on appeal, Mr Malivanek’s counsel, Ms Goodman, submitted that Mr Malivanek became aware that he had completed the claim form incorrectly after hearing the respondent’s submissions at the arbitration and he “therefore wishes to introduce a statement dealing with such matter together with a statement from Matthew Huttary confirming his evidence”. She argued that “such new evidence be considered” and “that the failure to grant leave would cause [Mr Malivanek] substantial injustice in the case”.
The respondent’s solicitor, Mr Harris, has opposed the introduction of the fresh evidence on the ground that the evidence was available to Mr Malivanek and could reasonably have been obtained by him prior to or at the time of the arbitration. Mr Harris said that Mr Huttary’s statement does not contain any evidence of relevance to the issues in the dispute. He added that Mr Malivanek has provided no information as to why the new evidence was not available to him and could not reasonably have been obtained by him at or prior to the arbitration.
The admission of fresh evidence or additional evidence on appeal is governed by s 352(6) of the 1998 Act. The Commission is not to grant leave to a party to rely on fresh evidence on appeal unless it is satisfied that:
(a) the evidence concerned was not available to the party, and could not reasonably have been obtained by the party, before the proceedings concerned, or
(b) failure to grant leave would cause substantial injustice in the case.
In Northern NSW Local Health Network v Heggie [2013] NSWCA 255, Sackville AJA (Ward JA agreeing) observed (at [66]) that, having regard to the limited nature of an appeal under s 352(5), the basic purpose of the power in s 352(6):
“is to allow the Commission to admit further additional evidence which, if accepted, would be likely to demonstrate that the decision appealed against was erroneous: CDJ v VAJ [1998] HCA 67; 197 CLR 172, at [109], per McHugh, Gummow and Callinan JJ.”
It is clear that Mr Malivanek’s evidence was available at the arbitration and Ms Goodman has offered no satisfactory explanation as to why it was not tendered. The claim form was tendered as part of Mr Malivanek’s case and he was obviously aware of its contents. Even if he only became aware of its significance after hearing the respondent’s submissions at the arbitration, that does not mean that the evidence now sought to be tendered was not available at the arbitration.
Similarly, there was no proper explanation as to why no statement was obtained from Mr Huttary. It was not acceptable for Ms Goodman to attempt to explain from the bar table during the appeal why it was not possible to call evidence from Mr Huttary at the arbitration. That evidence should have been set out in a detailed statement from Ms Goodman’s solicitor and formed part of the additional evidence sought to be tendered. It follows that Mr Malivanek cannot satisfy the first limb in s 352(6).
Dealing with the second limb of the sub-section, Barrett JA (Macfarlan JA agreeing) said in Chep Australia Ltd v Strickland [2013] NSWCA 351 (Strickland), at [31]:
“The task is to decide whether absence of the evidence ‘would cause’ substantial injustice in the case. There must therefore be a decision as to the result that ‘would’ emerge if the evidence were taken into account and the result that ‘would’ emerge if it were not. If the result would be the same on each hypothesis, the ends of justice cannot be said to have been defeated by exclusion.”
After referring to the passage from Heggie quoted above, Barrett JA said (at [35]) that the question was whether the further evidence in Strickland (the general practitioner’s clinical notes) were “indicative of error of fact by reason of absence of the additional information contained in the notes, compared with the information in the [doctor’s medical] certificate”. As the notes would have strengthened the worker’s case, and not advanced the employer’s case, the decision that no substantial injustice would be occasioned by exclusion of them did not involve an error of law.
In light of the above principles, it is appropriate to consider first what “would” emerge if the additional evidence were not considered and then what “would” emerge if the additional evidence were admitted and considered. For the reasons explained below, I have concluded that, without regard to the additional evidence sought to be tendered, the Arbitrator erred in her approach and conclusion on the deemed worker issue. In these circumstances, there is no injustice if the additional evidence is excluded.
I note, in passing, that it will only be in the most exceptional case that evidence of the kind sought to be tendered on appeal in this case, that is, evidence that was available at the arbitration to deal with an issue that was fully argued at the arbitration, will be allowed into evidence on appeal as additional evidence. Parties are reminded, yet again, that arbitrations are not a preliminary hearing where they can await the outcome and then seek to tender on appeal evidence that was readily available at the arbitration.

WORKER

Submissions

Ms Goodman placed great emphasis, as she did at the arbitration, on the evidence that Mr Ring directed Mr Malivanek to attend the site at Willoughby on 22 March 2007 and that, by telling Mr Malivanek not to go onto the roof, and that all the work was to be undertaken from inside, he was controlling the way the job was to be done and this was a strong indication that, at the time of the accident, Mr Malivanek was a worker.
When it was pointed out at the oral hearing of the appeal that this approach did not indicate that the Arbitrator had erred, but proceeded as if the appeal were a rehearing, Ms Goodman argued that, having found that Mr Ring had the right to direct Mr Malivanek as to where and when the work was to be done, the Arbitrator did not have to do more.
Ms Goodman contended that the Arbitrator erred in that she did not give sufficient weight to the fact that Mr Ring directed and controlled Mr Malivanek “in the manner in which he was to do the task”. Had she given that fact appropriate weight, it, together with the finding that Mr Malivanek did not advertise his services, nor display his name on his vehicle, and that the respondent supplied most tools (ladders, drills, saw, etc), would have been sufficient to support a finding that Mr Malivanek was a worker.
Dealing with the supply of equipment and tools, Ms Goodman argued that the Arbitrator failed to deal with the submissions made to her about the provision of tools and did not take into account Mr Malivanek’s statement in response to Mr Tully’s evidence. She relied on Mr Ring’s evidence that he ensured that Mr Malivanek and Mr Tully had the tools required to do the job, which was not consistent with Mr Malivanek being an independent contractor. Mr Malivanek’s evidence, which the Arbitrator failed to consider, was that he carried only basic tools, as Mr Ring had always supplied the ladder and most tools, which was also not consistent with Mr Malivanek being an independent contractor.
Ms Goodman also referred to the evidence that Mr Malivanek also drove a sedan, which did not have a roof rack, and that he did not carry a ladder. She said it was not unreasonable that Mr Malivanek carried his own harness, as it is something that is adjusted to one’s own size, and that should not detract from “the overall situation of the tools for the job being provided by [the respondent] and not by [Mr Malivanek]”.
Turning to the other indicia, Ms Goodman contended that the Arbitrator did not say what the indicia were, how she balanced them, or how she concluded that Mr Malivanek was not a worker. She said the Arbitrator was silent on the indicia that indicated Mr Malivanek was not a worker.
To the extent that she considered the indicia, Ms Goodman said that the Arbitrator expressed no conclusion on conflicting evidence. For example, Ms Goodman submitted that Mr Malivanek’s version of how Lewis came to work for him was more plausible, but the Arbitrator failed to deal with that submission. She also submitted that the Arbitrator failed to determine the dispute about whether Mr Ring gave the induction he claimed.
Last, it was argued that the Arbitrator failed to consider Mr Malivanek’s evidence that Mr Ring was strict about hours.
Counsel for Mr Ring, who did not appear at the arbitration, Mr Morgan, submitted that the Arbitrator considered the issues and applied the correct principles. Having weighed the relevant indicia, she was satisfied that Mr Malivanek was not a worker. That conclusion was open to her and disclosed no error.

Discussion and findings

Control

The Arbitrator considered the issue of control and noted, in favour of Mr Malivanek, Mr Ring’s evidence that he provided an induction, “which would suggest some degree of control” ([156]). She added (at [157]) that the concept of direction must not be confused with that of control.
The Arbitrator then (at [157]) quoted Basten JA’s observation in Wesfarmers Federation Insurance Ltd v Stephen Wells t/as Wells Plumbing [2008] NSWCA 186 at [31] (Wesfarmers) that the “actual exercise of control may itself be relevant” and said (at [158]) that though Mr Ring was entitled to direct Mr Malivanek where and when the work was to be carried out, apart from telling Mr Malivanek and Mr Tully not to go on the roof, he left the actual carrying out of the work to the two other men. This statement was open on the evidence.
The submission that, having found that Mr Ring had the right to direct Mr Malivanek as to where and when the work was to be done, the Arbitrator did not have to make any further finding (for Mr Malivanek to succeed) was not supported by any authority or reasoned argument. The fact that Mr Ring directed Mr Malivanek where and when the work was to be done was a factor the Arbitrator considered, but it was certainly not determinative.
Moreover, the Arbitrator assumed (at [158]), in favour of Mr Malivanek, and despite his denials, that Mr Ring had told him not to go onto the roof, but concluded that Mr Ring left the actual carrying out of the work to the two men. This conclusion was consistent with Mr Malivanek’s evidence and Ms Goodman referred to no evidence or authorities to suggest that the Arbitrator erred on this point.
Apart from the direction that the men were not to go on the roof, which may be seen as a general direction from a head contractor in control of the particular site, there was no other persuasive evidence that Mr Ring exercised control over how the men were to do their work. Indeed, Mr Malivanek firmly denied any such control. Consistent with this denial, the evidence suggests that Mr Malivanek was engaged on the job because of his particular expertise.
It follows that the submission that the Arbitrator failed to give sufficient weight to the direction and control exercised by Mr Ring is without substance.

Tools

While the provision of tools by the claimant is often an indication that the relationship is not one of employment, it is not necessarily determinative (Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 516).
At the arbitration, Ms Goodman took the Arbitrator to Mr Malivanek’s evidence dealing with tools at T8.33:
“MS GOODMAN:
‘CRC also supplied all the tools that I required for my work, for example ladders, drills, saws, et cetera.’
The Applicant says:
‘I had a few tools that I carried around, for example my hammer, nail bag, tape, chisel and handsaw. However, the bulk of the tools were supplied by CRC.
Once I arrived at the site in the morning, I did not leave the site until the end of the day. All materials were supplied by either Alan or Matt.’”
Consistent with this submission, the Arbitrator said, at [147]:
“147. [Mr Malivanek] says that CRC provided him with tools, although he had a few tools of his own. He has given no evidence about whether the respondent provided him with tools, although given his evidence that the arrangements were the same I assume that he would maintain that the respondent was to provide him with tools.”
The Arbitrator then recorded (at [148]) Mr Ring’s evidence that, on the day of the accident, he “ensured” that the men had all the tools they required, such as ladders, steps and drop sheets. She correctly observed that Mr Ring did not say that he provided those things. She added that Mr Tully said that he was collecting his tools when Mr Malivanek fell, that he always provided his own tools, and that he believed that Mr Malivanek had “a harness and stuff”.
At [149], the Arbitrator referred to Mr Malivanek’s evidence that he had his own harness. She also referred to Mr Tully’s evidence that he had his own ladder, that he thought Mr Malivanek also had one and that he did not think Mr Ring or the respondent provided any tools for the job. This summary of Mr Tully’s evidence was broadly accurate, save that Mr Tully said that he always carried his own ladders on the roof of his car, not that he had his own ladder. The Arbitrator made no other reference to tools until [171], when she dealt with the deemed worker issue.
The evidence on which Ms Goodman relies is found in Mr Malivanek’s statement of 25 April 2011, in which he responded to Mr Tully’s evidence. He said, among other things, that he drove a sedan, did not carry a ladder, and only carried basic tools, “as [Mr Ring] always supplied the ladder and most tools”. Significantly, he did not say, either in this statement or in any other, that Mr Ring provided any tools for the job on 22 March 2007.
While it is correct that the Arbitrator did not refer to Mr Malivanek’s statement, given in response to Mr Tully’s evidence about tools, Ms Goodman made no submissions at the arbitration about that evidence. Her only reference to tools was in the passage quoted at [130] above and at T14.4 where she referred to Mr Ring’s evidence that he “ensured that they had the tools they required to do the job”. The Arbitrator referred to that evidence. In these circumstances, it is not open to argue on appeal that an Arbitrator erred in failing to deal with evidence that was never the subject of submissions (Brambles Industries Limited v Bell [2010] NSWCA 162 at [22] and [30]).
Though the Arbitrator made no express finding about who provided which tools for the job on 22 March 2007, given the state of the evidence, that was not surprising. The evidence was merely that Mr Ring “ensured” that the men had the tools they required for the job. That was ambiguous. It may have meant that Mr Ring provided the tools, or that he merely checked with Mr Tully and Mr Malivanek that they had what was required. Given Mr Tully’s evidence that he did not think that Mr Ring provided any tools, which Mr Malivanek did not challenge, the better view is that Mr Ring did not provide any particular tools for the work and that Mr Tully provided the necessary tools and Mr Malivanek provided his own hand tools.
Whether Mr Malivanek carried his own ladder is not determinative. Even if it is accepted that he did not, there is no persuasive evidence that the respondent provided the necessary tools for the job. Rather, the evidence establishes that Mr Tully provided some tools and equipment and that Mr Malivanek provided his own hand tools and harness. In these circumstances, the Arbitrator’s failure to make any express finding about the equipment Mr Malivanek provided, and its significance, does not advance Mr Malivanek’s position on appeal. If the Arbitrator erred in not referring to this part of Mr Malivanek’s evidence, it makes no difference to the outcome.

Employment of workers

Ms Goodman submitted that the Arbitrator failed to deal with the dispute over whether Mr Malivanek employed workers (or a worker). This issue turned on whether he had ever employed his son, Lewis.
The Arbitrator dealt with this issue from [150] to [152], inclusive. She said:
“150.While [Mr Malivanek] denies employing anyone while he performed work for the respondent, he was entitled to do so at least when he worked for CRC, where according to him the same arrangements applied. I refer in this regard to his statement of 25 April 2011, when he says that his son helped him for a couple of days at Willoughby. This conflicts with his evidence of 23 May 2012 that he has never employed a worker.
151.It is at least possible that [Mr Malivanek’s] son helped him without being paid, but given that he sought to be paid for the job for the respondent, it appears unlikely. However, the discrepancy in [Mr Malivanek’s] evidence is not explained.
152.Mr Ring disputes that [Mr Malivanek] never employed workers, describing him as a director and driving force of Riverstone Timbers who employed many employees, including labourers, carpenters and truck drivers, and including his brother. [Mr Malivanek] says Mr Ring took this out of context and he never employed anyone while in ‘his’ employ.”
The Arbitrator again considered this issue when looking at whether Mr Malivanek was a deemed worker and noted that there was a dispute as to the circumstances in which Lewis worked on 23 October 2006. She also noted that Lewis had not given evidence and that there was no explanation as to why he had not given evidence. However, she did not say what flowed from that and did not draw any Jones v Dunkel [1959] HCA 8; 101 CLR 298 (Jones v Dunkel) inference.
Ms Goodman submitted to the Arbitrator that Mr Malivanek had never employed Lewis and referred to Mr Malivanek’s evidence that he only engaged Lewis on the Willoughby property in 2006 because he needed help and Mr Ring said that he would pay Lewis. Mr Ring disputed this and said that Mr Malivanek had asked if Lewis could work on the site. Mr Ring agreed that he could and agreed to the rate of $25 per hour, though he said he did not know how much Mr Malivanek paid Lewis.

It is correct, as Ms Goodman submitted, that the Arbitrator did not determine the dispute on this issue. Rather, she found that Mr Malivanek was entitled to employ workers, at least when he worked for CRC, where the same arrangements applied. That was not consistent with the evidence.
Mr Ring’s evidence that he would never have Tom on site because “he could not hold his attention” was strong evidence that, at least as far as the job at Willoughby in 2006 was concerned, Mr Ring considered that he had control over who Mr Malivanek engaged to help him. This was consistent with Mr Malivanek’s evidence that “you never brought other people along unless at his [Mr Ring’s] direction”. This pointed to Mr Malivanek not being an independent contractor. If he were an independent contractor, it is difficult to see that Mr Ring could have had control over who he could and could not engage to assist him.
In addition, the invoice of 2 November 2006, which included an amount for Lewis’s labour, included it as an additional item. After Mr Malivanek had listed the days and hours he worked, he added:
“LABOURER
Mon 23/10 – 8 hrs @ $25/hr
200 20 220”
The reference to “20” was a reference to $20 for GST. It follows that Mr Malivanek added the cost of labour to the invoice, as if it were the cost of materials. That is not how one would expect an independent contractor would bill the cost of labour. Such a cost would be included as part of the overall bill, as employed labour is a normal expense for most businesses and it is rarely (if ever) invoiced as a separate item. This points to Mr Malivanek having not employed Lewis on 23 October 2006 and to his version of how Lewis came to be working on site as being correct.
The Arbitrator was correct to note the inconsistency between Mr Malivanek’s evidence in his 25 April 2011 statement, when he said his son helped him for a couple of days, and his statement of 23 May 2012, when he said he never employed a worker. However, as I have noted, the Arbitrator failed to consider Mr Malivanek’s explanation as to how Lewis came to be working at the Willoughby property and failed to determine the factual dispute on this issue.
Instead, the Arbitrator referred to Mr Ring’s evidence that Mr Malivanek had employed workers at Riverstone Timbers. That Mr Malivanek may have employed workers when he was at Riverstone Timbers was irrelevant to the issue before the Arbitrator and did not determine if he employed workers while doing work for either CRC or the respondent.
The better view is that, having regard to the structure of the invoice of 2 November 2006, and the fact that Mr Ring clearly considered that he had the right to determine whom Mr Malivanek brought onto the site, Mr Malivanek’s version of how Lewis came to be working at Willoughby in 2006 is the more plausible and is the preferred version. It follows that I do not accept that Mr Malivanek employed Lewis on 23 October 2006.
This still leaves the discrepancy between Mr Malivanek’s statement that Lewis helped him for three days and his later statement that he did not employ workers. I do not believe this discrepancy is of any significance. The suggestion that Lewis helped Mr Malivanek is no more than that. If Mr Malivanek engaged his son for reward for three days, one would have expected to see an amount for his labour to appear on more than just the invoice of 2 November 2006. The fact that it does not strongly suggests that Lewis was only doing what Mr Malivanek said, namely, helping out, and that he did not employ workers.
Whether the Arbitrator’s errors on this issue have affected the outcome is discussed below.

Indicia

Ms Goodman submitted that the Arbitrator did not say what the indicia were that she considered, how she balanced them, or how she concluded that Mr Malivanek was not a worker. She added that the Arbitrator was silent as to the indicia that Mr Malivanek was not a worker.
Mr Morgan submitted that it was not necessary for the Arbitrator to indicate a particular weighting for each of the relevant indicia. She “considered and weighed the indicia” ([159]) and that was sufficient.
I do not accept that the Arbitrator was silent on the indicia she considered. She referred (at [146]) to the relevant indicia that supported the conclusion that Mr Malivanek was an independent contractor. Those matters were:
(a)     Mr Malivanek had an Australian Business Number (ABN);
(b)     Mr Malivanek operated under a business name;
(c)     Mr Malivanek issued invoices for the work he performed for the respondent;
(d)     Mr Malivanek charged GST on his invoices;
(e)     there was no evidence that the respondent was entitled to Mr Malivanek’s exclusive services;
(f)      though none of the invoices issued to the respondent included any payment for materials, some issued to CRC included such payments;
(g)     the respondent made no deduction for income tax from the payments made to Mr Malivanek, and
(h)     there was no evidence that Mr Malivanek was entitled to sick leave or annual leave.
All of these matters pointed to Mr Malivanek not being a worker employed under a contract of service and, though no one matter was determinative, they were matters the Arbitrator was entitled to consider. (Whether they indicated that Mr Malivanek regularly conducted a trade or business is considered below under “deemed worker”.)
The Arbitrator then dealt with the provision of tools and considered whether Mr Malivanek employed anyone while he performed work for the respondent. As noted above, if the Arbitrator erred in not referring to all the relevant evidence on the issue of tools, that error has not affected the outcome and is of no consequence.
The issue of whether Mr Malivanek employed workers is not determinative of the worker issue. The finding I have made on appeal, namely, that Mr Malivanek did not employ workers (or a worker), is a factor that suggests he did not conduct a business, which is relevant to both the worker and the deemed worker issues, but is not determinative of whether he was a worker. That is because, depending on the circumstances, it is open to find that a person who conducts a business is still a worker (see, for example, Victorian WorkCover Authority v Game [2007] VSCA 86 at [27] where the deceased, who conducted a bricklaying business in a partnership, was held to be a worker). Given the factors listed at [153] above, I do not believe the error on whether Mr Malivanek employed workers (or a worker) has affected the outcome on the worker issue.
Next, the Arbitrator said that Mr Malivanek did not work every day for the respondent, noting that the invoices for the Willoughby job showed that he did not work on 10, 11, 12, 16 October or on 3 November 2006. She noted Mr Malivanek’s evidence that Mr Ring knew Mr Malivanek would abide by his (Mr Ring’s) “rules” and not take on other work while he worked for him, and Mr Ring’s evidence that he did not know if Mr Malivanek worked elsewhere. However, the Arbitrator made no finding of whether she accepted Mr Malivanek’s evidence that he worked for no one else for the duration of the Willoughby and Northmead jobs.
Though Mr Malivanek said he worked only for CRC, the Arbitrator noted that the invoices issued by Mallows showed that there were some weeks when he did not work every day for CRC. Despite the “rules”, the Arbitrator said that Mr Malivanek had issued an invoice to Riverstone Frame and Truss Pty Ltd on 16 July 2004. The Arbitrator made no express finding of the significance of these matters, but the inference is that she considered that they pointed to Mr Malivanek conducting a business and therefore not being a worker. (As previously noted, even if Mr Malivanek conducted a business, that did not necessarily determine whether he was a worker on 22 March 2007 employed under a contract of service.)
Dealing with whether Mr Malivanek worked for entities other than CRC and the respondent, the Arbitrator noted Mr Malivanek’s evidence that he was not paid for the job at Chippendale and the job at Seaforth involved his own home (see [76] above), but added that Mr Malivanek had not addressed Mr Walsh’s suggestion that he had done work for Mr Meaney, or Mr Ring’s suggestion that he had done work for Mr Lothian. She added that Mr Ring’s knowledge of Mr Malivanek working elsewhere, while contracting with CRC, was at odds with Mr Malivanek not being able to take on other work. The Arbitrator did not say what weight, if any, she placed on this evidence, but the inference is, considering the whole of the decision, that she felt these factors weighed against Mr Malivanek being a worker on 22 March 2007.
The Arbitrator then considered (at [156] to [159] inclusive) the matters in favour of Mr Malivanek being a worker employed by the respondent. They were:
(a)     Mr Ring directed Mr Malivanek to attend the job site at Willoughby on a certain date and, she assumed, at a certain time;
(b)     Mr Ring said he provided an induction, which suggested “some degree of control” ([156]), though Mr Malivanek denied that there was any induction;
(c)     Mr Ring was entitled to direct Mr Malivanek as to where and when the work was to be carried out, and
(d)     Mr Malivanek did not advertise his services and did not display his name on his vehicle.
Though the Arbitrator mentioned the induction in the same paragraph that she listed the matters in favour of Mr Malivanek being a worker, she also referred, with apparent approval, to the respondent’s submission that “such an induction is not inconsistent with the relationship of contractor and sub-contractor”.
The Arbitrator concluded (at [159]) that “having considered and weighed the indicia” she was satisfied that Mr Malivanek was not a worker employed by the respondent.
The above analysis demonstrates that, contrary to Ms Goodman’s submission, the Arbitrator did say what indicia she considered. Though she did not say what weight she gave to each of the indicia involved, it will rarely, if ever, be possible for that to be done with any sort of mathematical precision. It follows that I reject Ms Goodman’s submissions on this point.
Ms Goodman’s main point in her written submissions on appeal was that Mr Malivanek was a worker because Mr Ring directed and controlled the way the job was done. I have dealt with this issue at [123] to [128] above. As already noted, even assuming that Mr Ring told Mr Malivanek not go on the roof, that did not amount to sufficient control to establish an employer/employee relationship in the circumstances of this case.
However, as the control test is not determinative, that is not the end of the analysis. The other indicia that must be considered include the provision of tools and equipment, the method of remuneration, the arrangements about hours of work and the provision of holidays, the obligation to work, the arrangements about taxation, and the capacity to delegate work (Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 at 24 (Stevens v Brodribb)).
I have already discussed the provision of tools. While I accept that Mr Malivanek did not carry a ladder, and that he only had hand tools, there is no persuasive evidence that the respondent provided any tools or equipment for the job. To the extent that Mr Tully provided tools and equipment, he did so as a contractor and not as the respondent’s employee or agent. Therefore, this issue points to Mr Malivanek being an independent contractor.
The method of remuneration is a less than ideal indicator that must be treated with care. A contract that gives a quote for a specific outcome is often associated with an independent contractor relationship, but that will not always be so. Remuneration at an hourly rate, as opposed to remuneration for a specific outcome, may be consistent with an employer/employee relationship or an independent contractor relationship (see the discussion on this topic in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 at [277] (On Call Interpreters)).
Though the invoice for the work on 22 March 2007 did not have any dollar amount on it and merely referred to “Install skylight”, and said that Mr Ring paid $500, the agreement was that Mr Malivanek was to work for an hourly rate, as he had in 2006. For his work in 2006, Mr Malivanek charged an agreed hourly rate ($45). This tends to suggest that he was selling his labour (as an employee) and not contracting for a specific outcome (as an independent contractor).
There were no fixed arrangements for the hours of work on 22 March 2007. Mr Ring and Mr Malivanek met at the site at 7.30 am. He was to work until the job was completed, though it was not expected to take more than a day. However, Mr Malivanek said that he previously worked for the respondent from 7 am to 3.30 pm and that Mr Malivanek was very strict about starting and finishing times.
This regularity of hours suggests an employer/employee relationship. Mr Ring’s evidence that Mr Malivanek worked his own hours was inconsistent with the invoices submitted by Mr Malivanek, which record regular and consistent hours, as per Mr Malivanek’s evidence, and I therefore do not accept Mr Ring’s evidence. This issue points to an employer/employee relationship.
There were no arrangements for holidays or sick pay and this points to an independent contractor relationship.
The evidence did not properly address the obligation to work. Mr Ring’s evidence that, if Mr Malivanek had not been available, he would have selected another contractor suggests that there was no obligation to work and this points strongly to an independent contractor relationship.
Mr Ring did not deduct tax from the payments he made to Mr Malivanek. This fact, and the fact that Mr Malivanek charged GST, points strongly to an independent contractor relationship.
The power to delegate is an important factor in deciding whether a worker is a servant or independent contractor (Stevens v Brodribb at 26, citing Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407). Regrettably, the evidence does not directly deal with whether Mr Malivanek could have delegated the work on 22 March 2007. Given Mr Tully’s request for assistance, because of his lack of experience in installing skylights, and given Mr Malivanek’s experience, it seems logical that Mr Ring contacted Mr Malivanek with the intention of engaging him to do the work. It is therefore a reasonable inference to conclude that, had someone else turned up in Mr Malivanek’s place, say, for example, his brother Tom, then that would not have been acceptable to Mr Ring. This strongly points to an employer/employee relationship.

The induction

This has been dealt with above and it is not necessary to repeat what was said.

Hours

This has been dealt with above under “indicia”.

Conclusion on worker

In an appeal of this kind, it is important to keep in mind the observations of McColl JA in Australian Air Express Pty Ltd v Langford [2005] NSWCA 96 at [15] (Langford). Referring to the approach an appellate court should take to reviewing an exercise whose resolution is “one of ‘fact and degree’ in respect of which views might legitimately differ”: Roy Morgan Research Ltd v Commissioner of State Revenue (1997) 37 ATR 528 at 533, her Honour said that:
“it is not enough that an appellate court might have come to a different conclusion - before an appellate court will intervene the appellant must show error on the part of the primary judge: JA & BM Bowden & Sons Pty Limited v Chief Commissioner of State Revenue (2001) NSWCA 125; (2001) 105 IR 66 at 68 [14] per Ipp JA.”
The resolution of the worker issue in the present matter was not easy or straightforward. It is certainly a case where views might legitimately differ. On appeal, Ms Goodman has established that the Arbitrator erred in her approach to some of the issues. On other issues, in the absence of expressly stated conclusions, I have had to infer what conclusion the Arbitrator reached.
Notwithstanding these shortcomings in the Arbitrator’s decision, a detailed review of the relevant indicia reveals that only the power of delegation, the method of remuneration and the hours of work point to Mr Malivanek being a worker within the meaning of the legislation. However, they do not point decisively in that direction. Considering these matters and weighing them against the other indicia discussed above, it is apparent that the Arbitrator was faced with a choice between conclusions that were finely balanced and where there was no clearly right or wrong view.
In these circumstances, given the way the arbitration and appeal were argued, it was open to the Arbitrator to conclude as she did on this issue and her conclusion has disclosed no error that has affected the outcome.
In view of the difficulty posed in cases of this kind I add, for completeness, McColl JA’s second observation in Langford, at [16]
“The second observation concerns the distinction between an employee and an independent contractor. That distinction has been said to be ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own’: Marshall v Whittaker’s Building Supply Co [1963] HCA 49; (1963) 109 CLR 210 at 217 per Windeyer J. Although this statement was criticised by Wilson and Dawson JJ in Stevens (at 34) as ‘posing the ultimate question in a different way rather than offering a definition which could be applied for the purpose of providing an answer’, it was referred to with approval by the majority in Hollis (at 38 – 39 [39] – [40] [Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 (Hollis)]).”
Consistent with this approach, Buchanan J (Lander and Robertson JJ agreeing) observed in ACE Insurance Ltd v Trifunovski [2013] FCAFC 3 ([93]) that in Hollis “a real emphasis was authoritatively placed on the notion of working in the business of another, rather than in the business of the individual”. This statement attempts to overcome the broad, and often unhelpful and imprecise, “multi-factorial” approach developed in Stevens v Brodribb.
As Bromberg J explained in On Call Interpreters, while the majority in Hollis applied a multi-factorial approach, they provided a “focal point around which relevant indicia can be examined”. His Honour added, at [207]:
“That focal point has been elsewhere expressed as the ‘ultimate question’ posed by the totality approach: Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34] (referred to with approval by Crispin P and Gray J in Yaraka Holdings Pty Ltd v Gilgevic (2006) 149 IR 339 at [303]); and see Sappideen C, O’Grady P and Warburton G, Macken’s Law of Employment, (6th ed, Lawbook Co., 2009), at [2.80]. As Wilson and Dawson J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 observed at 35 ‘the ultimate question’ was posed by Windeyer J in Marshall v Whittaker’s Building Supply Co Ltd (1963) 109 CLR 210 at 217, in a passage which the majority in Hollis strongly endorsed at [40]. The majority in Hollis (citing Windeyer J) said, the distinction between an employee and an independent contractor is ‘rooted fundamentally’ in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business: at [40]. Unless the work is being provided by an independent contractor as a representative of that entrepreneur’s own business and not as a manifestation of the business receiving the work, the person providing the work is an employee: Hollis [39], [40], [47], and [57] and see Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at [30]-[32]. The English courts have taken a similar approach. There the ‘entrepreneur test’ seems to be the dominating feature: Selwyn NM, Laws of Employment (2006) Oxford University Press at [2.34].
[208] Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:
Viewed as a ‘practical matter’:
(i) is the person performing the work an entrepreneur who owns and operates a business; and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.” (emphasis added)

Regrettably, no argument along these lines was presented in the present matter, either before the Arbitrator or on appeal, and it is unnecessary to express a view on whether, if it had been, it would have led to a different outcome. Suffice to say that, in cases of this kind in the future, the parties would be well advised to give careful attention the questions posed by Bromberg J in On Call Interpreters, which are based on the majority decision in Hollis. A consideration and balancing of the indicia is critical, but the focal point around which one examines the indicia is whether the applicant is working in the business of another, or in the business of the applicant.

DEEMED WORKER

The legislation

Clause 2 of Sch 1 to the 1998 Act provides:
“2 (1) Where a contract:
(a) To perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) (repealed)
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
In Scerri v Cahill (1995) 14 NSWCCR 389, Bainton AJA (Kirby ACJ and Rolfe AJA agreeing) held (at 399D) that, to rely on cl 2 of Sch 1, an applicant must establish that:
(1)     he (or she) was a party to a contract with the respondent to perform work;
(2)     the work exceeded $10 in value;
(3)     the work is not work incidental to a trade or business regularly carried on by the applicant in his (or her) own name or under a business or firm name, and
(4)     the applicant has neither sublet the contract nor employed workers in the performance of it.

Submissions

Ms Goodman submitted that the Arbitrator erred in her approach to whether Mr Malivanek was conducting a business between April 2005 and March 2007 because she did not deal with Mr Malivanek’s evidence that:
(a)     he stopped carrying on a business in April 2005, when he became an employee of Glendenning Wholesale Trust, and where he remained (as an employee) until 10 May 2006 (I should add that I did not understand this submission to be a concession that Mr Malivanek was conducting a business up to April 2005);
(b)     between May 2006 and October 2006, Mr Malivanek took an extended holiday to help his daughter renovate her house in Queensland, and
(c)     in October and November 2006, Mr Malivanek only did work for the respondent and no one else.
The Arbitrator acknowledged (at [168]) that from November 2006 until 22 March 2007, Mr Malivanek did no work because he was recovering from shoulder surgery.
Ms Goodman argued that the Arbitrator erred in failing to refer to Mr Malivanek’s tax returns (particularly the 2007 business return), which confirmed that he did not work for anyone other than the respondent in the 2007 financial year. In light of this evidence, combined with Mr Malivanek’s evidence that he did not work for anyone else in that period, the Arbitrator erred in not finding that Mr Malivanek was not regularly carrying on a business between April 2005 and March 2007.
Ms Goodman submitted that the Arbitrator failed to determine if Mr Malivanek employed Lewis and failed to specifically say if Mr Malivanek was a deemed worker.
Mr Morgan submitted that the Arbitrator made no error and that her conclusion was open to her. He conceded, however, that some aspects of the Arbitrator’s reasoning process were not explicit. He contended that, if the Arbitrator erred in that respect, it makes no difference to the outcome because Mr Malivanek carried out a business in the name of Mallows and the way he conducted himself before April 2005 was the way he intended to conduct himself in 2006. He said there was no evidence that Mr Malivanek decided in April 2005 that he was no longer going to run his own business. He said it could not be disputed that Mr Malivanek conducted a business and he noted the various deductions in his tax returns in support of that submission.
Dealing with the word “regularly” in Sch 1, Mr Morgan said that if one only looks at 22 March 2007, that word has no work to do. Therefore, “regularly” must extend beyond the day when the accident occurred.
Mr Morgan argued that Mr Malivanek had specialised skills in roofing and roofing carpentry and the March 2007 contract was different to the October/November 2006 work because Mr Ring required someone with a particular expertise. This kind of work was work Mr Malivanek did on a regular basis, which was supported by Mr Malivanek’s answers in the claim form.
Dealing with the October/November 2006 work that Mr Malivanek did for the respondent, Mr Morgan said that it was roof truss work and that Mr Malivanek had been brought onto the site to do a specific job. In that sense, it was similar to the March 2007 job and indicated that Mr Malivanek conducted a trade or business, as he had done for the whole time he knew Mr Ring.

Discussion and findings

In the present case, the parties have agreed that, in respect of the work performed on 22 March 2007:
(a)     Mr Malivanek was a party to a contract with the respondent to perform work;
(b)     the work exceeded $10 in value, and
(c)     Mr Malivanek did not sublet the contract nor employ workers in the performance of it.
It follows that the only issue in dispute is whether the work being performed on 22 March 2007 was work incidental to a trade or business regularly carried on by Mr Malivanek in his own name or a business or firm name. That was, or should have been, the only issue on the deemed worker question before the Arbitrator.
The Arbitrator appears to have concluded (at [168]), without explanation or analysis, that Mr Malivanek regularly carried on business in the name of Mallows. She said:
“168.The applicant regularly carried on business in the name of Mallows, a name he had registered in 2000. Whatever may have been the arrangement with CRC, he had performed only a few jobs for the respondent, although there was a period where he was unable to work at all, having undergone surgery.”
The Arbitrator (at [169]) dealt with several matters of limited, if any, relevance to whether Mr Malivanek regularly carried on a business at the relevant time. They related to whether Mr Ring had come out of retirement to do only a few jobs, and whether he had promised Mr Malivanek regular work. Whether it was unlikely that the respondent would have been in a position to offer Mr Malivanek regular work, as the Arbitrator found, was largely irrelevant to whether Mr Malivanek was regularly conducting a trade or business.
The Arbitrator then referred to, and distinguished, the decision of Pasqua v Morelli Constructions Pty Ltd [2009] NSWWCCPD 153 (Pasqua). She said (at [173]) that, whatever may have been Mr Malivanek’s arrangement with CRC, the evidence was that, for the respondent, Mr Malivanek worked (only) on two sites, Willoughby and Northmead, and he did not work full-time on those jobs. She noted his time off for surgery.
The Arbitrator added, referring to the invoices, that there was no evidence that Mr Malivanek was required to work for a fixed number of hours for the respondent. This statement was generally correct. However, Mr Malivanek gave evidence that Mr Ring was very strict with hours and, consistent with that evidence, his invoices corroborated that Mr Malivanek worked regular hours for Mr Ring’s companies.
At [174], the Arbitrator noted that, after the induction, Mr Ring left the site and Mr Malivanek and Mr Tully were left without supervision. She added that, unlike the situation in Pasqua, Mr Malivanek did not wear the respondent’s uniform. The first point suggested a lack of control, which was relevant to the worker issue. The second point pointed to Mr Malivanek not being part of the respondent’s organisation. However, in the absence of evidence that Mr Malivanek wore a Mallows uniform, and there is no evidence that he did, it carried little weight on the deemed worker issue.
Noting that neither Mr Malivanek nor Mr Ring gave oral evidence, the Arbitrator said (at [175]) that she approached their evidence with some caution. She said that, in some instances, their versions could not be reconciled. On the question of the directions Mr Malivanek received about installing the skylight, she said that Mr Tully contradicted Mr Malivanek’s evidence. This statement was correct. However, though these matters were relevant to the question of control, and therefore relevant to the worker issue, the Arbitrator did not explain their relevance to the deemed worker issue.
The Arbitrator returned (at [176] and [177]) to the issue of whether Mr Ring told Mr Malivanek not to go on the roof. As I have said, this was relevant to the control issue, but not to the deemed worker issue.
Also at [176] the Arbitrator referred to Mr Malivanek’s evidence that he never employed workers, but gave evidence that his son had helped him at Willoughby for a couple of days. Whether Lewis worked for Mr Malivanek in 2006 is not fatal to the deemed worker issue, something the Arbitrator acknowledged at [180]. That is because the parties have (correctly) agreed that Mr Malivanek neither sublet the contract on 22 March 2007 nor employed workers in the performance of it.
Whether Mr Malivanek employed workers in 2006 may have been relevant to whether Mr Malivanek was a deemed worker at that time, but the Arbitrator did not deal with it in that context. She returned to this issue at [181], but only to note that there was a dispute between Mr Malivanek and Mr Ring as to the circumstances in which Lewis came to work with Mr Malivanek on 23 October 2006, and that Lewis had not given evidence. She did not, however, resolve that dispute and, as previously noted, did not draw any Jones v Dunkel inference.
On the question of whether Mr Malivanek worked for anyone else, the Arbitrator noted (at [178]) Mr Malivanek’s evidence that he did not and referred to the evidence in the claim form that was to the contrary. She said (at [179]) that if Mr Malivanek accurately completed the claim form, and there was no reason to assume that he had not, he was not working solely for the respondent in March 2007. She added (presumably on the basis of the claim form) that Mr Malivanek regarded himself as carrying on a trade or business, though his evidence was that the arrangement he had with the respondent was the same as that with CRC, where he considered himself an employee.
Without saying which evidence she accepted and which she rejected, and without referring to the 2007 business tax return, the Arbitrator merely said (at [179]) that the discrepancy between the claim form and Mr Malivanek’s evidence was not explained. Thus, without referring to an important piece of evidence, namely, the 2007 tax return, to which Ms Goodman expressly referred in her submissions at T15.25, the Arbitrator failed to determine an important point on the deemed worker issue. This is a critical error that has affected the outcome. (Though the 2007 business tax return was not in the appeal papers, and appears to have been mislaid, the fact the Ms Goodman addressed on it establishes that it was before the Arbitrator and Mr Morgan (after obtaining instructions) did not submit to the contrary. On appeal, I allowed a copy of that document to be handed up and placed with the papers and marked “A”.)
The Arbitrator then (at [182]) referred to the conflict in the evidence as to how much Mr Ring paid Mr Malivanek after the accident, but made no finding about which evidence she accepted, or the relevance of that evidence.
At [183], the Arbitrator referred to the dispute about whether Mr Ring had begged Mr Malivanek not to contact WorkCover. Without making a finding, she said that Mr Ring confirmed that he was the director of a company when one of its employees was fatally injured on site, which tended to support Mr Malivanek’s version. This matter had no relevance to the deemed worker issue.
Next, the Arbitrator referred to the disputed evidence as to whether there was any conversation about Mr Malivanek’s insurance cover and said it was not possible to determine the correct version of events. She said that it was unnecessary to resolve that issue. However, if Mr Malivanek carried his own insurance, that would point to him conducting a business, though would not be determinative.
The Arbitrator concluded at [185]:
“185.The applicant bears the onus. Having considered the evidence in all its sometimes unsatisfactory state, I am not satisfied that he was a deemed worker of the respondent as at the date of the injury. There will accordingly be an award for the respondent.”
It follows that, for the reasons explained above, and without regard to the additional evidence sought to be tendered on appeal, the Arbitrator erred in failing to properly consider and determine the deemed worker issue. In the event that I determined that the Arbitrator erred, the parties consented to me re-determining this issue.
It is first appropriate to look at the authorities that have considered the same or similar provisions.
In Humberstone v Northern Timber Mills [1949] HCA 49; 79 CLR 389 (Humberstone), Dixon J (as his Honour then was) said, starting at 401:
“I think that the purpose of the exception or exclusion expressed by the words in question was to confine the benefit of the conclusive presumption which it establishes to persons who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name as carrying on such a trade or business and who do not in the course of that trade or business, as an incident of its exercise, undertake the work by entering into the contract. The provision will thus cover men who work for the principal but have no independent business or trade and men who though carrying on an independent trade or business undertake a contract outside the scope or course of that trade or business. The word ‘trade’ is capable of including any handicraft and in that sense it may seem to lack the element of systematic practice or holding out which the idea of openly conducting a distinct or independent trade or business and seeking custom implies. But a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.” (emphasis added)
His Honour added, at 402:
“The suggestion which this language conveys of the existence of a business or the practice of a trade is much strengthened in sub-s. (6) by the words ‘carried on,’ ‘regularly’ and ‘in his own name or under a firm or business name.’ These all indicate a business or trade conceived as independently existing or exercised by a person holding himself out to the public under a name or style. No doubt the policy is a matter of inference but it seems reasonable to suppose that it was considered proper that a person conducting a business in the course of which he contracted to perform work should himself carry the risk of personal injury as one of the hazards of his business, while the man who worked under contract but only for the employer or without any general trade or business or outside his trade or business should, like an ordinary employee, be insured by the Act against the risk of injury in his work.”
In Turner v Stewardson [1962] NSWR 137 (at 139) the Court of Appeal considered the situation where a carpenter, who contracted his work when employment was difficult to obtain, was regularly carrying on a trade or business:
“Looked at broadly the Legislature meant to provide that persons who are in business for themselves and who systematically and regularly accept work to be done under contract and who hold themselves out as open to be employed under contract are expected to undertake the risk of injury and not to rely for compensation upon the principal whose contract work they are performing at the moment of injury. The original notion that the contractor is deprived of the benefits of the Act because he is not a worker has disappeared and today many small contractors are covered by the Act. This is in keeping with modern practice as to payment for labour at piece work or contract rates.” (emphasis added)
The question of whether there must be a “holding out” before an applicant is prevented from relying on Sch 1 was considered by the High Court in Higgins v Jackson [1976] HCA 37; 135 CLR 174 (Higgins) at 176 where Barwick CJ (Stephen, Mason and Murphy JJ concurring) said:
“The subsection requires the business to be carried on with regularity. Thus a contractor who regularly contracts can scarcely be said not to hold himself out as carrying on the business in the course of which he makes the contracts. But in my opinion, there is no separate element required by the subsection of holding out. It is sufficient, as I have said, that the contractor regularly carries on business in his own or a firm name.”
In Cam v Cousins Interstate Transport Pty Ltd [1964] NSWR 1288 the applicant was the owner and driver of a large truck registered in his name. He was injured in the course of a journey from Melbourne to Sydney when he was carrying steel for the respondent at a fixed rate per ton. For six months prior to the accident he had ceased to regularly carry on the business of a carrier, but operated his truck solely for the business of the respondent. He had no business address or telephone book entry relating to an occupation or business as a general carrier, nor did he advertise or hold himself out to the public as being in the trade or business of a carrier.
On appeal it was held that the trial judge was not in error in holding that the applicant was a deemed worker under the provisions of s 6(3A) of the Workers Compensation Act 1926, which was in similar terms to Sch 1. This decision must now be read in the light of the High Court decision in Higgins, which establishes that there is no separate element required by the provision of holding out, but it remains relevant as it illustrates some of the matters to be considered in determining whether the applicant is conducting a business.
In Wathen v AUT Holdings Pty Ltd [1977] 51 WCR 1 (Wathen) the applicant had been conducting a general carrying business prior to contracting with AUT to carry pipes exclusively for that company. AUT argued that the work performed under the contract was work “incidental to a ... business regularly carried on by [the worker] in his own name or under a business or firm name”.
After referring to Humberstone, Mahoney JA noted, at 5:
“In the present case, the worker had no trade or business other than what he was doing for the defendant. The case was therefore not ‘work incidental’ in the subsection. In my opinion, the learned Judge properly held that s 6(3A) applied to deem the worker to be a worker within the Act.”
Considering the evidence as a whole, and applying the above authorities, I am comfortably satisfied that the work Mr Malivanek performed when he was injured on 22 March 2007 was not work incidental to a trade or business regularly carried on by him in his name or a business or firm name. My reasons are as follows.
Considering the period from April 2005 until 22 March 2007, the evidence is that Mr Malivanek worked as an employee with Glendenning Wholesale Trust from April 2005 until 10 May 2006, that he then assisted his daughter in Queensland between May 2006 and October 2006, that he did work for the respondent on two jobs at Willoughby and Northmead in October and November 2006 and that he did no work from November 2006 until his accident on 22 March 2007.

Mr Ring said he did not know what Mr Malivanek did between April 2005 and May 2006, but added that he believed that he was subcontracting to other people. His “belief” is not borne out by the evidence in the invoices, which cease in April 2005. Mr Ring offers no credible support for his assertion that Mr Malivanek was subcontracting to other people in that period, such as names of people or businesses for whom the work was done, dates on which it was done, or details of the work. Given that he said he did not know what Mr Malivanek did in that period, I do not accept Mr Ring’s evidence, which smacks of a speculation that suits his cause.
The reference to Mr Malivanek having done work, as part of his business, for Mr Meaney and Mr Lothian was vague and imprecise and generally of no persuasive value. It made no reference to when the work was done, the nature of the work, or the basis on which it was done. Moreover, as the invoices in evidence covering the period from March 2004 until 4 April 2005 make no reference to work done for either of those men, the reasonable inference is that, if that work was done in the name of Mallows, it was done sometime before March 2004, more than three years before the accident.
The other work relied on to establish that Mr Malivanek was conducting a business is the work at Chippendale and at Seaforth. In view of the vagueness of Mr Walsh’s evidence, I accept Mr Malivanek’s evidence that the work at Chippendale was for two hours helping a friend and that the work at Seaforth was on his home. This evidence did not establish that he was conducting a trade or business. Therefore, contrary to Mr Walsh’s statement, the evidence does not establish that Mr Malivanek had his own clientele.
The tax return for 2006 corroborates Mr Malivanek’s evidence that he was employed by Glendenning Wholesale Trust from April 2005 till May 2006 and I accept his evidence that he did no other work in that period. I also accept his unchallenged evidence that he assisted his daughter in Queensland between May 2006 and October 2006.
As to the work for the respondent in October and November 2006, Mr Malivanek’s evidence was that, as per his arrangement with CRC, he did no other work in that period. While the invoices show that he did not work for the respondent on 10, 11, 12 and 16 October and on 3 November 2006, he denies having worked elsewhere and Mr Ring did not suggest that he had. Mr Malivanek’s evidence that he did not work elsewhere is corroborated by his 2007 business tax return, which discloses an income roughly equivalent to his gross income from the Willoughby and Northmead jobs.
The only evidence that Mr Malivanek was working elsewhere at the time of the accident is in the claim form and in Mr Ring’s evidence that, when he contacted Mr Malivanek in March 2007, Mr Malivanek said he would try and fit the work around his other work commitments. However, even without referring to the additional evidence sought to be tendered on appeal, the 2007 business tax return establishes that the claim form was incorrect and that Mr Malivanek’s statement was accurate.
I do not accept Mr Ring’s evidence that Mr Malivanek said he would try to fit the work around his other work. The documentary evidence suggests that Mr Ring was not a reliable historian. He said, for example, that he had retired as a director of CRC for health reasons and that, during the period from September 1999 and August 2003, Mr Huttary and Mr Twomey ran the business.
This was inconsistent with Mr Twomey’s evidence, which was independent, as he stopped work for CRC in 2004, that Mr Ring resigned to avoid a conflict of interest because he operated as a loss assessor under the Ring Group, where he was also a director. Mr Twomey’s evidence also suggested that Mr Ring’s efforts to distance himself from CRC’s actions, by suggesting that Mr Huttary authorised the work, were less than genuine, noting that Mr Ring only removed his name from CRC, but was “actively involved in the day to day management of CRC” when he was not a director.
Moreover, Mr Ring’s own evidence as to when he first engaged Mr Malivanek was inconsistent. In his first statement, he said that he and Mr Huttary hired Mr Malivanek in 2002. In a later statement, he said that Mr Huttary, as the sole managing director of CRC, hired Mr Malivanek.
Mr Malivanek’s evidence of Mr Ring’s involvement with CRC was that he received instructions from Mr Ring, and that, in effect, Mr Ring ran things with Mr Huttary. This accords with Mr Twomey’s independent evidence and is inconsistent with Mr Ring’s evidence that Mr Huttary authorised work because he was the managing supervisor. Further, Mr Twomey’s evidence that he heard Mr Ring say on numerous occasions to CRC’s sub-contractors that they were “like family” and would be “looked after”, was consistent with Mr Malivanek’s evidence to similar effect.
For these reasons, I have real reservations about the reliability of Mr Ring’s evidence in general and, unless it is independently corroborated (as it was with respect to the induction on 22 March 2007), where it conflicts with Mr Malivanek’s evidence, I accept Mr Malivanek’s evidence. In particular, I accept Mr Malivanek’s evidence, corroborated by the tax returns, that in the period from April 2005 to 22 March 2007 he only worked for Glendenning Wholesale Trust, as an employee, and then for the respondent.
It follows that Mr Malivanek’s relationship with the respondent was clearly “special or particular” (Humberstone at 401) and that he did not perform work successively or concurrently for his customers in the course of a trade or business. He had no customers and no independent business outside of the work he did for the respondent. This is sufficient to enable Mr Malivanek to succeed on the deemed worker issue. There are, however, additional reasons in support of this conclusion.
First, as already noted, Mr Malivanek did not employ workers (or a worker) on 22 March 2007. Nor did he employ workers at any other time. For the reasons previously explained, I prefer Mr Malivanek’s evidence as to the circumstances in which Lewis came to work at Willoughby. I am satisfied that he was not employed by Mr Malivanek and that he only came to work on the site with Mr Ring’s approval and, further, on the understanding that Mr Ring would pay him.
Second, while Mr Malivanek had a business name, Mallows, and an ABN, the circumstances in which he acquired them were that he wanted to obtain regular work from CRC and was told that, if he wanted that work, he had to set up a business name. He did obtain regular work from CRC and I accept that, except for one job for July 2004 for Riverstone Frame and Truss, he worked exclusively for CRC from about 2000 until April 2005. Therefore, even if one considers Mr Malivanek’s dealings with CRC, which were years before the work in March 2007 and therefore of doubtful relevance to the deemed worker issue in the current claim, the arrangement with that company does not support a finding that he regularly carried on a trade or business prior to April 2005.
Third, there is no evidence that Mallows had any tangible assets (other than hand tools) that were used by or in support of the business. I acknowledge that Mr Malivanek claimed car expenses in his tax return, but there is no evidence the Mallows owned the vehicle. There is no evidence that Mallows even had a business phone number or home office.
Fourth, the evidence from Mr Malivanek, which is unchallenged, and which I accept, is that he did not advertise for work and that his vehicle (a sedan) had no name and, I infer, no advertising on it.
Fifth, Mr Ring’s evidence that he would never have had Mr Malivanek’s brother Tom on site strongly suggests that the personal skill and experience of Mr Malivanek was important and that Mr Malivanek was not free to engage whomever he wished, as a business would normally be free to do.
Sixth, Mallows had no identifiable goodwill. All the income generated by Mallows came from Mr Malivanek’s labour and all of its contracts were with the respondent.
Seventh, though Mallows issued invoices, they were all hand written. They had no letterhead, no business address, and no phone number and, apart from an ABN, none of the other information one would normally expect for a business.
Last, apart from work from work for CRC and the respondent, and acknowledging that it is not necessary for there to be a “holding out” before an applicant can be said to be regularly conducting a trade or business, Mr Malivanek did not “systematically and regularly accept work to be done under contract” (Stewardson). In other words, as in Wathen, Mr Malivanek had no trade or business other than what he was doing for the respondent.

Conclusion on deemed worker

It follows that the work Mr Malivanek performed on 22 March 2007, when he suffered his injuries, was not work incidental to a trade or business regularly carried on by him in his own name or a firm name and, as the other conditions in Sch 1 are satisfied, he was a deemed worker at that time and is entitled to receive benefits under the legislation.

CONCLUSION

Mr Malivanek has failed with his challenge to the Arbitrator’s finding that he was not a worker, but has succeeded in establishing that he was a deemed worker. In that event, the parties agreed that the matter should be remitted to the Registrar for referral to an Approved Medical Specialist for assessment of Mr Malivanek’s claim for lump sum compensation and that the claim for weekly compensation and hospital and medical expenses be remitted to another Arbitrator for determination. They are the orders that will be made.

DECISION

Paragraphs 2 and 3 of the Certificate of Determination of 8 October 2013 are revoked and the following orders made in their place:
“2. The matter is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of whole person impairment resulting from the injury to the applicant worker’s lumbar spine, upper left extremity and both lower extremities.
3. The applicant worker’s claims for weekly compensation, and for hospital and medical expenses, are remitted to a different Arbitrator for determination.
4. The respondent employer is to pay the applicant worker’s costs of the arbitration, which is certified as complex with an uplift of 30 per cent.”

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,530 plus GST. Costs of the second arbitration are to follow the outcome of that arbitration and are in addition to the costs of the first arbitration.

Bill Roche
Deputy President

29 January 2014

I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE