Melmouth v Ian and Melissa Bennett Trading as Bennett's Tree Services
[2006] NSWWCCPD 133
•29 June 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Melmouth v Ian & Melissa Bennett t/as Bennett’s Tree Services [2006] NSWWCCPD 133
APPELLANT: Tony Lee Melmouth
RESPONDENT: Bennett’s Tree Services
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC17207-05
DATE OF ARBITRATOR’S DECISION: 3 February 2006
DATE OF APPEAL DECISION: 29 June 2006
SUBJECT MATTER OF DECISION: Procedural fairness; adequacy of evidence for ‘Worker’ (section 4 and Schedule 1.2 of the Workplace Injury Management and Workers Compensation Act 1998).
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hasson Dent
Respondent: Sparke Helmore
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator dated 3 February 2006 is confirmed.
2. No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
Tony Lee Melmouth (‘Mr Melmouth) claimed that he was employed by Ian and Melissa Bennett trading as Bennett’s Tree Services (‘the Bennetts), as a tree lopper.
On 10 October 2005, he filed an ‘Application to Resolve a Dispute’ in the Commission seeking medical, hospital or related expenses and permanent impairment/pain and suffering compensation as a result of an injury to his left hand which he alleged occurred in the course of his employment with the Bennetts on 2 August 2004.
On 28 October 2005, the Bennetts filed a Reply, disputing that Mr Melmouth was a worker or deemed worker within the terms of section 4 and/or Schedule 1.2 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The matter was listed for conciliation/arbitration hearing on 17 January 2006. On 3 February 2006 a ‘Certificate of Determination’ with accompanying ‘Statement of Reasons’ was issued. The determination of the arbitrator was as follows:
“1. Award in favour of the Respondent in respect of the Applicant’s claim for lump sum compensation under section 66 of the Workers Compensation Act 1987.
2. The Respondent is not liable for the payment of the Applicant’s claim under s.67 of the Workers Compensation Act 1987.
3. Award in favour of the Respondent in respect of the Applicant’s claim for expenses under s.60 of the Workers Compensation Act 1987.
4. No order as to costs.”
On 1 March 2006, Mr Melmouth filed an ‘Appeal Against Decision of Arbitrator’. Mr Melmouth cites two grounds of appeal: firstly, that the Arbitrator denied him ‘procedural fairness’ in the conduct of the arbitration hearing and secondly, that the Arbitrator erred in law in her determination that he was not a worker or a deemed worker.
On 28 March 2006, the Bennetts filed a ‘Notice of Opposition to the Appeal’. Briefly, the Bennetts submit that there was no denial of procedural fairness and that the Arbitrator’s determination on the issue of ‘Worker’ was consistent with the evidence before her.
LEAVE TO APPEAL
The amount at issue on appeal satisfies the criteria set out in section 352(2) of the 1998 Act. The appeal was filed within the time limits prescribed by section 352(4) of that Act.
Leave to appeal is granted.
ON THE PAPERS REVIEW
Mr Melmouth agreed in his Application that the appeal could be “decided solely on the basis of the written application and any written notice of opposition lodged.” However, in his submissions, he states that “… the leave application and the appeal [should] proceed via oral argument given the complicated factual circumstances and the need for their application to the extensive case law on this issue.”
The Bennetts submit that the matter is suitable for a determination ‘on the papers’.
Section 354(6) of the 1998 Act provides that: “If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The issues in dispute have been clearly identified by Mr Melmouth. I have before me the transcript and all the evidence before the Arbitrator together with the detailed submissions and authorities relied upon by the parties on appeal. Having carefully read this material, I am satisfied that I have sufficient information to proceed ‘on the papers’ and that this is the appropriate course in the circumstances.
SUBMISSIONS, EVIDENCE AND FINDINGS
The ‘Procedural Fairness’ Issue
Mr Melmouth submits that:
“The Arbitrator denied the appellant procedural fairness in refusing leave to direct the respondent (Mr Bennett) to give oral evidence and to allow cross examination of the Respondent in circumstances where there were clear inconsistencies in the statements provided by the appellant and the respondent or in the alternative seeking to clarify the inconsistencies through her inquisitorial powers.”
Mr Melmouth’s principle complaint in his submissions is that:
“The respondent (Mr Bennett) was available on the day, the Arbitrator preferred however to refuse the Appellant the right to test the respondent’s ‘evidence’ preferring to find the appellant as ‘unconvincing’”.
Mr Melmouth makes reference to a number of authorities on this issue together with the Commission’s ‘Guideline for the Practice of Conciliation/Arbitration’ (‘the Guideline’) and Practice Direction No. 1 and Rule 71 of the Workers Compensation Commission Rules 2003 (‘the Rules’).
As Mr Melmouth rightly points out:
“Procedural fairness dictates that a person whose rights are to be affected has a consequent right to address the case put against it or, in the alternative, to be heard in relation to that case and to have that case decided by an independent decision maker.”
However, this principle must be considered in the context of the provisions of the 1998 Act and the objectives of the Commission.
It is not disputed that an Arbitrator is bound by the principles of ‘procedural fairness’. What is in issue is whether the Arbitrator, in this particular case, denied Mr Melmouth ‘procedural fairness’ in allegedly refusing to “… direct Mr Bennett to give oral evidence and allow cross examination.”
An examination of the transcript is crucial on this issue. At the outset, the Arbitrator invited Counsel for Mr Melmouth to outline the “material on which he wished to rely”. Counsel then indicated the documentary evidence upon which he relied. The following exchange then took place between Counsel for Mr Melmouth and Counsel for the Bennetts (pages 2 and 3 of the transcript):
“Counsel for Mr Melmouth: ‘I’d like to seek to tender two documents which are under the hand of Mr Bennett, which I’d seek leave to have some evidence with respect to in due course’ …
Counsel for the Bennetts: ‘What does it go to?’
Counsel for Mr Melmouth: ‘Oh, employment’
Counsel for the Bennetts: ‘But it is common ground, isn’t it, that there was work being performed up until May of 2004?’
Counsel for Mr Melmouth: ‘Oh, no, no. It’s just the system that the employer was using with respect to the provision of invoices.’
Counsel for the Bennetts: ‘This injury occurred at the rental property where Mr Melmouth was living’.
Counsel for Mr Melmouth: ‘That’s right’.
Counsel for the Bennetts: ‘You say there was some sort of contract to do that?’
Counsel for Mr Melmouth: ‘Well, that’s what he says in his statement.’
Counsel for the Bennetts: “That’s it. You say that’s the evidence of a contract?’
Counsel for Mr Melmouth: ‘Mmm’.
Counsel for the Bennetts: ‘Okay. I don’t object. I oppose any oral evidence about it but I don’t object to the tender of the document.’”
Further material was then tendered by both parties by agreement. At page 5 of the transcript, Counsel for Mr Melmouth said:
“I feel this is a matter, given there is such a wide disparity in the two versions of the factual circumstances in this matter, that it’s appropriate that you either have regard to the intentions of the legislation with respect to resolution of disputes and use your inquisitorial powers with respect to satisfying yourself from a credit point of view as to which version of events you might choose to accept.
Mr Melmouth is here today and Mr Bennett is not. You have the opportunity if you have any difficulties with respect to Mr Melmouth’s evidence to make enquiries of him so as to satisfy yourself … to matters going to credit. Alternatively, there is the power, or the Commission certainly has the power, to take oral evidence, … which could then be tested, through which you might then have the ability to again form your own opinion of matters going to credit.”
Counsel for Mr Melmouth then moved into submissions which are contained on pages 5 to 20 of the transcript. Counsel for the Bennetts then made submissions recorded on pages 20 to 25 of the transcript. There follows further submissions in reply by Counsel for Mr Melmouth contained in pages 25 to 29. At page 29, the following exchange took place between the Arbitrator and Counsel for Mr Melmouth:
“Arbitrator: ‘Well, that really does only leave one question for me of Mr Melmouth as to – and I’d like to do this on oath and allow [Counsel for the Bennetts] the opportunity to follow the questioning.’
Counsel for Mr Melmouth: ‘Well, Arbitrator, I’d object to that course.’
Arbitrator: ‘It was actually proposed by you at one stage’.
Counsel for Mr Melmouth: ‘It was. I certainly proposed and was more than happy for you to use whatever inquisitorial powers you had in relation to satisfying your own mind what evidence ought be preferred, but I’d have very serious reservations with respect to cross examination of Mr Melmouth in circumstances where Mr Bennett is not here and I would not be given the same opportunity with respect to some of the evidence.’
Arbitrator:‘Well, that is an issue for [Counsel for the Bennetts] as to whether or not Mr Bennett is here or not.’
Counsel for Mr Melmouth: ‘Well, perhaps if you ask the questions, I can deal with the cross examination function.’”
Throughout the proceedings, Counsel for Mr Melmouth appears to have been at pains to have the Arbitrator use her “inquisitorial powers” to examine his own client’s evidence with a view to establishing his credit. At no stage did Counsel for Mr Melmouth make any application to cross examine Mr Bennett. Nothing in the transcript indicates that at any stage, Mr Melmouth’s Counsel was “refused leave” to obtain oral evidence from Mr Bennett.
The Bennetts submit that:
“The Arbitrator was advised that Mr Bennett was contactable by telephone and that he asked to be excused from attendance. Whether he could have attended could have been dealt with had an application been made for him to be cross examined. Further, he could have been cross examined by telephone.”
Although not entirely clear from the transcript, it appears that Mr Bennett had health problems on that day.
Mr Bennett provided a lengthy handwritten statement (undated) to his insurer which formed part of the Reply. He had also signed a further typed statement on 8 August 2005. His absence in the proceedings was, as the Arbitrator right pointed out, a matter for his legal representatives to consider in the context of the adequacy of his written statements.
The question of ‘procedural fairness’ in proceedings before the Commission was dealt with recently by the Court of Appeal in Aluminium Louvres & Ceilings Pty Limited v Zheng (2006) NSWCA 34 (‘Zheng’s case’). The circumstances in that case were not dissimilar in that there was conflicting evidence by the parties as to the events surrounding Mr Zheng’s injury. The employer claimed that it had been denied ‘natural justice’ because cross examination of Mr Zheng had been limited. The employer complained that it was never allowed to put its factual basis forward which could have been dealt with by further cross examination of Mr Zheng.
Bryson JA noted that (paragraph 20):
“The practices of common law courts are not the only way in which fair procedures may lead to a just determination of facts which are in dispute. As ever when a claim is made that Natural Justice has not been accorded, regard must be paid to the legal context in which the decision-maker operates and to the law regulating the conduct of the proceedings.”
Bryson JA then went on to discuss the provisions of section 354 of the 1998 Act dealing with procedures before the Commission noting that (paragraph 22) “Section 354 and other provisions give the present Commission a wider range of discretionary choices about the procedure appropriate for a particular case than existed under earlier legislation.”
He went on at paragraph 25 as follows:
“The requirements of the rules for information to be lodged in advance and for statements revealing the cases of parties to be made in advance, taken with the width of the sources of information on which the Commission is authorised to act and the ways in which it is authorised to proceed, mean that assumptions upon which common law trials are conducted should not be readily carried over when testing contentions that a hearing before an Arbitrator was not conducted in a fair way. The environment of contestation and the confrontational methods of a common law trial would not usually be appropriate; there may be issues of kinds which it is appropriate to deal with in that style, and much is left to the discretion of the Arbitrator. The Arbitrator is in a good position to decide on and to impose appropriate controls on the adduction of evidence, by cross examination or otherwise. The Arbitrator will usually be in a position to perceive whether a wish to pursue an issue has a basis, whether it is a sound basis, whether some issue or line of questions is merely exploratory, or for that matter whether questions are merely the product of inventiveness.”
Bryson JA concluded at paragraph 26:
“In the present case, the Arbitrator was in possession of material lodged in advance of the hearing by the parties, and was entitled to act on the material. This put her in a good position to make a judgment about whether treatment or further treatment of any issue or line of enquiry in cross examination was appropriately to be allowed or to be restricted.”
In the present case, as the Arbitrator rightly pointed out, because the claim for non-economic loss had not been referred to an ‘Approved Medical Specialist’, “the issues in dispute … are in respect of whether the Applicant is a worker or deemed worker within the meaning of the 1987 Act.”
The Arbitrator listed at paragraph 13 of her ‘Statement of Reasons’ all the evidence before her. This evidence she summarised in detail at paragraph 22. Her reasons for concluding that Mr Melmouth was not a worker or deemed worker within the meaning of the 1987 Act, or indeed the 1998 Act, were set out at length at paragraph 20 [sic – 24]. Mr Melmouth’s oral evidence was confined to one question from the Arbitrator as to the owner of a chainsaw he was using at the time he injured his left hand. Despite the request (then denial) by Mr Melmouth’s counsel for the Arbitrator to use her inquisitorial powers to further examine Mr Melmouth’s evidence, the Arbitrator, as is evidenced by her reasons, clearly made a judgment that any further “line of enquiry in cross examination” was neither necessary nor appropriate.
Given that there had been no specific request by Mr Melmouth’s Counsel for Mr Bennett to be present and cross examined, this reflected a proper exercise of the Arbitrator’s discretion.
As Bryson JA in Zheng’s case pointed out at paragraph 37:
“An assessment of whether the Arbitrator’s decision should be set aside for want of procedural fairness is no simple matter and could not be disposed of by applying any legal tests susceptible of clear statement [sic] relating to entitlement to cross examine an applicant, or a witness. There is no legal right to cross examine an applicant or other witness in the Workers Compensation Commission, and decisions whether to allow cross examination or to limit it are discretionary decisions which must be made in a [sic] context of the legislation and practices which the Commission follows, and, at least as importantly, in the context of the facts and circumstances of the case under consideration.”
The facts and circumstances of the present case are a little different to Zheng’s case in that the Arbitrator concluded that Mr Melmouth had “… not proved his case …” despite his own (albeit brief) oral evidence. The evidence required was in effect twofold; firstly, whether there was evidence of a contract of employment between the Bennetts and Mr Melmouth; and secondly, whether such an employment relationship existed at the time of the accident on 2 August 2004, where it was clear that Mr Melmouth was injured whilst pruning a hedge at the property he rented from the Bennett.
The evidence as to the second point was scant indeed, and disputed not just by the Bennetts but by others whose evidence I will deal with later. Mr Melmouth’s Counsel complained to the Arbitrator (page 25 transcript) in relation to Mr Bennett’s statements: “We don’t have Mr Bennett here to back it up. We don’t have Mr Bennett here in circumstances where he might be asked some questions to say under oath the things he is prepared to put in writing.”
It is mere speculation of course to suggest that Mr Bennett may have had something different to say. Moreover, such assertions are inconsistent with the objectives of the Commission which require each party to present its case well prior to any arbitration hearing. It is indeed common in the Commission for parties to present conflicting statements as to the circumstances of any injury. The onus is on a worker to demonstrate that he was a worker, and injured in the course of his employment. The task of the Arbitrator is to make a decision based upon all the available evidence.
As Bryson JA said in Zheng’s case (paragraph 31):
“The ordinary expectation should reasonably be that every material thing which a witness has to say about the facts will appear in the statement of the witness produced before the Arbitration hearing by the person who relies on what a witness has to say.”
The Arbitrator determined that Mr Melmouth had failed to discharge the onus upon him. He gave oral evidence. There was no oral evidence from the Bennetts such that the evidence, as the Bennetts pointed out in their submissions “… was dealt with even-handedly”. There was no requirement on the part of the Arbitrator to “clarify the inconsistencies through her inquisitorial powers.” She was required to determine the matter on the evidence before her. The adequacy of that evidence I will deal with shortly in relation to the issue of ‘worker’.
Nothing in Mr Melmouth’s submissions disclose that he was denied ‘procedural fairness’ in circumstances where he not only failed to prove his own case, but failed to seek leave from the Arbitrator at any stage to “direct … Mr Bennett to give oral evidence and allow cross examination …” on the alleged inconsistencies in the respective statements of the parties.
The ‘Worker’ Issue
Mr Melmouth submits that “the Arbitrator erred in law in her determination that the Appellant was not a worker or deemed worker” and that she “… did not apply the appropriate test either to the existence of an employee/employer relationship nor to whether the Appellant was a deemed worker.”
Mr Melmouth claims that:
“The Arbitrator in attempting to find a contract of employment misdirected herself by looking for what could be described as a traditional contract (paragraph 20) and was not satisfied one existed preferring to characterise the relationship as one of contractor/sub-contractor.”
Reference is made by Mr Melmouth in his submissions to Hollis v Vabu Pty Limited (2001) 207 CLR 21, and quotes as follows:
“… the High Court agreed with Mason J in Stevens v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR that the test was not the exercise of control per se, but the right to exercise control, and further, that control is not the only relevant factor. Rather, it is the totality of the relationship between the parties that must be considered.”
The question then becomes, did the Arbitrator in this case consider the totality of the relationship between the parties?
In his statement, Mr Melmouth said: “Whilst I was technically employed as a sub-contractor I pretty much worked exclusively for Bennett’s Tree Services.” He went on to describe the method of payment, the equipment provided by the Bennetts, and other indicia that reflected, he claimed, “… in substance … my relationship with Ian Bennett was one of employer and employee considering he exercised complete control over my practices and me.” This, and other evidence, was noted by the Arbitrator at paragraph 22 of the ‘Statement of Reasons’.
Mr Bennett in his statements maintained that Mr Melmouth was a subcontractor only. In support of this, he referred to a signed sub-contractor’s agreement, annexed to the Reply. That agreement made reference, inter alia, to the requirements for Mr Melmouth to maintain his own insurance coverage. The Bennetts claim that Mr Melmouth was informed in mid 2004 that they would not provide him with any more work unless he renewed his insurance policies. The evidence disclosed, and was not disputed, that this was not done and that invoices for what was described as “sub-contract tree work” submitted by Mr Melmouth to the Bennetts ceased in about May 2004.
There was further evidence from the Bennetts that suggested that Mr Melmouth operated his own business ‘TM’s Tree Service’, and had an employee. A Statutory Declaration from a Mr Morris that both prior to and after August 2004 Mr Melmouth was working for him in his business known as Island Tree Service was also in evidence, together with documents relating to a transfer of a mobile phone from the Bennetts to Mr Melmouth. Again, all this evidence was referred to by the Arbitrator in her ‘Statement of Reasons’.
The Arbitrator concluded at paragraph 20 [sic – 24] that:
“I find for the Respondent for the following reasons:
In order for the Applicant to succeed, the questions to answer are those which will satisfy criteria that the Applicant was at the time of the injury, a worker (s4) or should be deemed a worker under s20 of the 1987 Act. Was there a contract of employment in existence between the parties at the time of the injury? If yes, was the nature of the contract an employer/employee or sub-contractor falling under the deeming provisions of s.20?
I find that the Applicant and Respondent had entered into an employment contract which existed without difficulty between them from 2002 through to June 2004. I find that the nature of the contract was that of a sub-contractor as evidenced by:
·The Applicant’s statement that he was employed as a sub-contractor;
·The Respondent’s statement that he was employed as a sub-contractor;
·The co-signed sub-contractor’s agreements dated 30 February 2002 and 1 July 2003 in which the responsibilities of the sub-contractor was [sic] clearly stated as well as information sources in respect of the nature of the agreement;
·The Applicant’s actions to take out comprehensive insurance coverage for his business in the year 2003/2004;
·The fact that the Applicant was paid on invoice, albeit he was assisted at regular periods with summaries of the worker performed;
·The entry in the hospital clinical records state that the Applicant was ‘self employed’. This information could only have been given to the writer by the Applicant and reflects his own view of his position at the time;
·No tax or other statutory entitlements of the employee was paid by the Respondent;
·The fact that the Applicant took work from other sources and advertised his own business for work.
In respect to the Applicant’s assertions that the actual nature of the contract was an employer/employee contract based on casual terms and conditions, I find the Applicant has not been convincing. While there are some indicia identified such as the supply of tools and phone which the Applicant asserts complies with the control test laid down in Stevens v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR, I find that the level and nature of control in this case is uncertain. Brodribb made it clear that there is no exhaustive list of indicia of the employment relationship and it is necessary to consider all available facts in the particular case and then balance the indicia for and against employment.”
Whilst reference is made by the Arbitrator, incorrectly, throughout the proceedings to the provisions of the 1987 Act, nothing turns on this error since the provisions are in similar terms.
The crucial issue however was the nature of the relationship between the parties at the time of the injury on 2 August 2004. In his statement, Mr Melmouth said: “On 2 August 2004, I was working at ground level pruning a hedge which Ian had asked me to do.” It was common ground that the hedge was at the property rented by Mr Melmouth from the Bennetts. Nothing more was said by Mr Melmouth to indicate that there was any contract of employment between the parties on that particular day. Mr Bennett in his statement claimed that Mr Melmouth “… was required to mow the lawns at the premises, but was not required to carry out any other maintenance on the property.” Mr Bennett denied that he had asked Mr Melmouth to prune the hedge. Mr Bennett in his statement then referred to a telephone conversation with Mr Melmouth in around mid August 2004 where Mr Melmouth stated that he was unable to work for anyone as he “got bored and was mucking around with a chain saw in the backyard and cut the tip off my finger.”
The Arbitrator summarised this evidence at paragraph 20 [sic – 24] of the ‘Statement of Reasons’ as follows:
“Turning to the time of the accident and whether there was a contract established as a separately negotiated agreement. I find no evidence of this. Mr Bennett stated that he had not asked the Applicant to cut the hedge. The Applicant stated to both Mr Bennett and the real estate agent that he undertook this work on his own initiative. His tenancy agreement obligations went only as far as requiring him to mow the lawn. In short, there is no evidence of a concluded agreement between the Applicant and Bennett’s Tree Services in respect to the work he performed on Mr Bennett’s private rental property at the time of his accident. I find no intention of collateral benefit between the parties. There was no consideration given.”
That conclusion was entirely open to the Arbitrator on the evidence to which I have referred. Mr Melmouth bore the onus. His statement that he was injured during an activity “which Ian had asked me to do” was simply insufficient to establish that at the time of his injury he was employed in any capacity by the Bennetts.
In his submissions, Mr Melmouth makes extensive reference to the decision of Savage v Programmed Maintenance Service Pty Limited (2002) 22 NSWCCR 670, a decision of Walker J as he then was which summarised a number of principles in determining whether or not an employer/employee relationship exists. Mr Melmouth points out that “the Court must examine the totality of the relationship between the parties.” It is Mr Melmouth’s submission that “on an examination of the evidence and its application to the above principles, the Arbitrator should have been satisfied that an employment relationship existed.”
However, what Mr Melmouth has overlooked is that the evidence as to the relationship between the parties at the time of his accident was extremely limited and did not canvass any of the “principles” to which Mr Melmouth has referred in his submissions. Nothing in the Arbitrator’s decision suggests, as Mr Melmouth submits, that “the Arbitrator denied the Appellant ‘procedural fairness’ in making a finding adverse to the Appellant’s credit.” Rather, Mr Melmouth failed to adduce sufficient evidence to prove his case.
CONCLUSION
The conduct of the arbitration hearing did not establish any denial of ‘procedural fairness’ by the Arbitrator.
The decision of the Arbitrator was supported by the totality of the evidence before her and in line with the authorities to which she (and the parties) referred. I can see no error of law that would justify the revocation of her order.
DECISION
The decision of the Arbitrator dated 3 February 2006 is confirmed.
COSTS
No order as to costs of the appeal.
Deborah Moore
Acting Deputy President
29 June 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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