Nguyen v WorkCover Authority of New South Wales
[2011] NSWWCCPD 55
•29 September 2011
| WORKERS COMPENSATION COMMISSION | ||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||
| CITATION: | Nguyen v WorkCover Authority of New South Wales [2011] NSWWCCPD 55 | |||
| APPELLANT: | Bong Kim Nguyen | |||
| FIRST RESPONDENT: | WorkCover Authority of New South Wales | |||
| SECOND RESPONDENT: | Hoan Lam Ton | |||
| INSURER: | Uninsured | |||
| FILE NUMBER: | A1-179/10 | |||
| ARBITRATOR: | Mr M Snell | |||
| DATE OF ARBITRATOR’S DECISION: | 29 June 2011 | |||
| DATE OF APPEAL DECISION: | 29 September 2011 | |||
| SUBJECT MATTER OF DECISION: | Employment; identity of worker’s employer; whether employed by an individual or a partnership; whether a partnership existed; credit findings; application of principles in Fox v Percy [2003] HCA 22; 214 CLR 118 | |||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | |||
| HEARING: | On the papers | |||
| REPRESENTATION: | Appellant: | Quy Lawyers | ||
| First Respondent: | Sally Nash & Co | |||
| Second Respondent: | Gajic Lawyers | |||
ORDERS MADE ON APPEAL: | The Senior Arbitrator’s decision of 29 June 2011 is confirmed. The appellant is ordered to pay the costs of the first respondent and of the second respondent. | |||
INTRODUCTION
This appeal concerns a dispute about who employed Van Thach Nguyen (the worker) on 20 February 2008. On that day, the worker fell through an open skylight at premises at 4 Hughes Street, Cabramatta while he was assisting two men (Bong Kim Nguyen and Hoan Lam Ton) to replace an air-conditioning unit.
The worker said that Mr Nguyen employed him. Mr Nguyen said that Mr Ton employed the worker and himself or, in the alternative, a partnership made up of Mr Nguyen and Mr Ton employed the worker. Mr Ton denied employing either the worker or Mr Nguyen.
Because Mr Nguyen was uninsured, the worker claimed compensation from the Nominal Insurer. There being no issue that the worker was a “worker” under the legislation, or that his injuries arose out of or in the course of his employment, the Nominal Insurer accepted the claim and paid weekly and other compensation.
Acting on behalf of the Nominal Insurer, the WorkCover Authority of New South Wales (WorkCover) issued a notice under s 145 of the Workers Compensation Act 1987 (the 1987 Act) against Mr Nguyen seeking to recover the compensation paid by the Nominal Insurer to or on behalf of the worker.
After the Commission dealt with several earlier proceedings (the details of which are not relevant to the present appeal), Mr Nguyen ultimately filed an application seeking a determination under s 145(3) as to his liability in respect of the payments made by the Nominal Insurer. This application named WorkCover as the first respondent and Mr Ton as the second respondent.
FACTUAL BACKGROUND
Mr Nguyen is an electrician. Between September 2004 and 16 January 2008, he was the proprietor of Bhess Electrical and Security Systems. From 16 January 2008, his daughter, Rose Nguyen, was the proprietor of that business, but Mr Nguyen continued to perform electrical work.
Mr Ton carries on a refrigeration and air-conditioning business under the business name of HLT Refrigeration and Air-Conditioning. One of his customers was “Apex Accounting”, whose business is at 4 Hughes Street, Cabramatta. Mr Ton dealt with Mr Duong from Apex Accounting. In February 2008, Mr Ton provided a quote, which Mr Duong accepted, to replace the air-conditioning unit at Hughes Street, Cabramatta for $7,040.
On or about 15 February 2008, the worker telephoned Mr Nguyen in response to an advertisement in a Vietnamese newspaper. The worker worked for Mr Nguyen (on a different job) on 18 February 2008 and Mr Nguyen paid him $80. Mr Nguyen asked the worker if he wanted to work on 20 February 2008 for $100 per day. The worker agreed. He was to go to Mr Nguyen’s house at about 8.00 am on that day.
On 19 February 2008, Mr Nguyen paid for the new air-conditioning unit for the Cabramatta job with a cheque given to him by Mr Ton. Mr Nguyen also paid for the cost of hiring a hoist from Kennards Hire and for various electrical components. Mr Ton repaid Mr Nguyen for the cost of those items.
After arriving at Mr Nguyen’s house at about 8.00 am on 20 February 2008, the worker loaded his tools into Mr Nguyen’s vehicle and was driven to the Cabramatta site. As the worker had not previously met Mr Ton, Mr Nguyen introduced the worker to him at the site.
The three men worked at the site on 20 February 2008, removing the existing air-conditioning unit and, until the accident, installing the new one.
After the accident, Mr Nguyen visited the worker in hospital on 21 February 2008 and gave him $100.
The above summary is largely uncontroversial.
Based on the worker’s evidence, which Mr Nguyen disputed, the Senior Arbitrator accepted (at [117]) that:
(a) Mr Nguyen told the worker what to do on the site. This included telling him to help Mr Ton and to do what Mr Ton said, while Mr Nguyen was away from the site. It also included being directed by Mr Nguyen to remove the skylights and climb up a ladder onto the roof;
(b) an agreement was entered between the worker and Mr Nguyen at the time of the initial telephone conversation on 15 February 2008;
(c) the worker carried out general labouring work for Mr Nguyen and nothing was said to bring that relationship to an end. Mr Nguyen said that, when the worker was required, he would contact him;
(d) when Mr Nguyen called him, the worker had to work;
(e) the worker was paid $80 for his first day’s work with Mr Nguyen and that, if there was more work, he would be paid $100;
(f) as part of this arrangement, the worker attended at Mr Nguyen’s house on the morning of 20 February 2008 and Mr Nguyen drove him to the Cabramatta site, and
(g) Mr Nguyen’s electrical tools were unloaded by the worker from Mr Nguyen’s vehicle for use at the Cabramatta site and the worker’s tools were left in the van.
Mr Nguyen’s case was quite different. He said that, about one week before the accident, and at Mr Ton’s invitation, he went with Mr Ton to visit the owner of 4 Hughes Street, Cabramatta. Mr Ton discussed with the owner the replacement of the air-conditioning unit. Mr Nguyen alleges that Mr Ton said to him, “If they agree to replace it, you will handle the electrical work and I will handle the rest. The machine is quite heavy. We need another man to help us”.
A few days later, Mr Nguyen said he received a call from Mr Ton, who said that the owners had accepted his quote. He said that Mr Nguyen could help with the electrical work and that another man would be needed for a day to help lift the air-conditioner. Either Mr Ton could get his man or Mr Nguyen could get someone to help. They would split the profit after deducting expenses. Mr Nguyen agreed.
With regard to the extra help, Mr Nguyen’s evidence was:
“Lam [Mr Ton] said ‘I cannot get someone for the job. Are you able to get someone to help us for the day?’
I said ‘How much do you pay?’
Lam [Mr Ton] said ‘$100 to $120 a day’.
I turned around and asked Thach [the worker]: ‘The air conditioner boss on the phone. He asked me to bring someone to help him the day after tomorrow. Are you interested?’”
Mr Nguyen agreed that the worker worked for him on 18 February 2008, but, because the worker complained that $80 was too little, he claimed that the employment relationship terminated then and there.
Mr Nguyen said that the worker rang him on the evening of 19 February 2008 to see if he could get a job. Mr Nguyen said he “referred him to work for Lam [Mr Ton] on 20 February 2008”. After the accident, Mr Ton told Mr Nguyen to go and see the worker in hospital and pay him $100. Mr Nguyen said he did as he was told.
Two or three weeks later, Mr Ton gave Mr Nguyen $1,000, being his half-split after all expenses. Mr Nguyen said that he was only left with $179.15 after allowance for sums he had paid out for electrical parts and for half of the $100 paid to the worker. In other evidence, he said he had been paid $1,000 as his share of the profits and that Mr Ton had reimbursed him for all money spent on electrical parts and the hoist.
Mr Nguyen said that Mr Ton supervised all the work and the workers, and that Mr Ton had told him to arrange help for installing the air-conditioning system. He said that he worked for Mr Ton and did whatever Mr Ton told him.
Mr Ton gave a different account of the arrangements. He said that it was Mr Nguyen who said the job was “hard” and that he (Mr Nguyen) would need to call someone to help. Mr Ton asked if Mr Nguyen had workers compensation insurance and was told that he did. He agreed that he had never met the worker until he saw him at the site on 20 February 2008. He never discussed anything about paying the worker and it was his understanding that Mr Nguyen would pay him.
Mr Ton denied having asked Mr Nguyen to give the worker $100. He agreed that he later gave Mr Nguyen $1,000 in cash for his share of the profits from the job, in addition to giving him $663.85 and $107 cash for the amounts he spent on materials. He denied having given Mr Nguyen $50 to cover half of the $100 Mr Nguyen gave the worker in hospital. He insisted that the worker’s remuneration was to be “sorted out” between Mr Nguyen and the worker.
Mr Ton denied that most of the worker’s activities on 20 February 2008 were carried out at his direction, but he agreed that he had “overall supervision of the situation” when lifting the new air-conditioning unit. He regarded Mr Nguyen as a sub-contractor, who provided his skills as an electrician in exchange for a share of the profits.
In cross-examination, Mr Ton said that he installed air-conditioning units like the one at Cabramatta perhaps three times a year. The jobs required two people, himself and a licensed electrician. During 2007 and 2008, he had worked with three electricians in this way. Sometimes he would pay them and sometimes he would split the profit half-and-half. Mr Ton denied that he regarded the Cabramatta job as a three-man-job, or that he had discussed the matter with Mr Nguyen and formed that view. Mr Ton denied that the worker turned up on 20 February 2008 in response to a request by him that Mr Nguyen get some extra help.
THE ARBITRATION HEARING
The Commission listed the matter for arbitration before Senior Arbitrator Snell on 19 October 2010. The matter could not conclude on that day and the arbitration continued on 1 December 2010 and 9 February 2011. In view of the significant credit issues involved, the Senior Arbitrator gave leave for Mr Nguyen, the worker and Mr Ton to give oral evidence and be cross-examined.
The main issue before the Senior Arbitrator was who employed the worker. He concluded that Mr Nguyen employed the worker and that there was no partnership or joint venture between Mr Nguyen and Mr Ton. As a result, Mr Nguyen was liable to reimburse the Nominal Insurer the amount specified in the relevant s 145 notice. He made an award in favour of Mr Ton and ordered Mr Nguyen to pay the costs of WorkCover and Mr Ton.
Mr Nguyen has appealed this decision.
ON THE PAPERS
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
ISSUES IN DISPUTE ON APPEAL
Counsel for Mr Nguyen, Mr F Curran, submitted that the Senior Arbitrator erred in:
(a) determining that Mr Nguyen and Mr Ton were not in a partnership (the partnership issue);
(b) failing to properly assess the employment indicia and, in so doing, erred in determining that the worker was employed by Mr Nguyen (employment indicia);
(c) his assessment of the creditworthiness of the worker (the worker’s credit);
(d) determining that Mr Ton did not pay the worker (whether Mr Ton paid the worker), and
(e) ruling that Mr Nguyen could not amend the application to claim indemnity from Mr Ton for one-half of any liability Mr Nguyen has under the s 145 notice (amendment).
THE PARTNERSHIP ISSUE
The Senior Arbitrator found (at [132]) that, as there was no basis to conclude that Mr Nguyen and Mr Ton were “carrying on a business in common with a view of profit” (s 1(1) of the Partnership Act 1892), there was no partnership. He noted that they did not share expenses and profits.
He observed that Mr Ton issued the only invoice for the Cabramatta job. Mr Ton received the GST payment and had to account for it to the Australian Tax Office. The ABN on the invoice was not connected with Mr Nguyen, or any business conducted by him. Mr Nguyen paid for the electrical components for the job, the hiring of a hoist, and $100 to the worker. Whether Mr Ton refunded half of the $100 paid to the worker was disputed, but was not critical to the partnership issue.
The Senior Arbitrator said that Mr Nguyen had expressly denied that there was any sharing of profits from the job. Mr Nguyen’s evidence (not accepted by the Senior Arbitrator) was that Mr Ton employed him. Though Mr Ton eventually paid Mr Nguyen $1,000, the basis on which that payment was made was unclear. That payment was, however, inconsistent with an equal division of profit.
The Senior Arbitrator concluded (at [134]) that the “evidence overall does not suggest there was a partnership between the applicant [Mr Nguyen] and the second respondent [Mr Ton]”.
Submissions
Mr Curran submitted that:
(a) there was no dispute between Mr Nguyen and Mr Ton that the expenses for the job were to be paid, and that the profit derived thereafter be divided between them on the basis that Mr Nguyen would receive $1,000. The clear characterisation of the arrangement relating to expenses was that they would be “a joint equal cost”, which was intrinsic to how the profit was calculated. The only divergence in the evidence was that Mr Ton said that the profit was to be equally divided and Mr Nguyen said “that he was employed by the Second Respondent [Mr Ton], on the basis that he would receive $1,000 for his work”;
(b) in the state of the evidence as it was, and in light of Mr Ton’s position that the profit after payment of expenses was to be equally divided between Mr Nguyen and Mr Ton, the Senior Arbitrator erred in determining that there was no partnership;
(c) in the circumstances, there seems to have been a partnership between Mr Nguyen and Mr Ton, the terms of which were that they would jointly work on the project, share expenses and then either (on Mr Ton’s case) share profits equally, or (on Mr Nguyen’s case, if he was not an employee of Mr Ton’s) Mr Nguyen would get $1,000 and Mr Ton the balance, and
(d) the Senior Arbitrator should have found that Mr Nguyen and Mr Ton were in partnership and that they both employed the worker, and that the s 145 notice should not have been issued solely in Mr Nguyen’s name.
Discussion and findings
I do not accept these submissions.
The Full Federal Court held in Amadio Pty Ltd v Henderson (1998) 81 FCR 149 at 179 that “existence of a partnership is determined by reference to the true contract and intention of the parties as appearing from all the facts and circumstances relevant to the relationship of the parties”.
In AM Marketing Pty Ltd v Howard Media Pty Ltd [2010] NSWSC 803 (AM Marketing), Barrett J observed (at [76]) that it is implicit in s 1 of the Partnership Act that, for a partnership to exist, three conditions must be satisfied:
(a) a business must be carried on;
(b) it must be carried on by persons in common, and
(c) it must be conducted with a view to profit.
Business is defined in s 1B of the Partnership Act as every “trade, occupation or profession”.
Mr Ton carried on a refrigeration and air-conditioning business as HLT Refrigeration and Air-Conditioning. He agreed with Mr Duong that he would replace the air-conditioning unit at the Hughes Street premises for $7,040. Mr Nguyen played no part in the making of that contract. The Senior Arbitrator correctly observed that Mr Ton issued the only invoice for the job.
Mr Nguyen is an electrician. Though his daughter conducted the business of Bhess Electrical and Security Systems from 16 January 2008, he agreed that she is a bookkeeper and that, after the transfer of the business into her name, he continued working in his own name as an electrician.
Mr Ton contacted Mr Nguyen because he “needed some electrical help” with the Cabramatta job, and “the job was too big for me to do alone and it needed another person”. There is nothing to indicate that Mr Ton regarded Mr Nguyen as his partner. He regarded him as a sub-contractor, providing his skills as an electrician in exchange for a share of the profits.
These facts do not support a conclusion that Mr Nguyen and Mr Ton carried on a business in common. They conducted quite separate and distinct business activities. While it is not necessary that each of the alleged partners should take an active part in the direction and management of the business, the person conducting the business must be doing so as agent for all other persons who are said to be partners (The Duke Group Ltd v Pilmer [1999] SASC 97). More than mere agency is required; there must be mutuality of rights and obligations (Lang v James Morrison & Co Ltd [1911] HCA 49; 13 CLR 1 at 11). There is no evidence that Mr Ton acted on behalf of Mr Nguyen in his dealings with Mr Duong, or that there was any mutuality of rights and obligations.
I do not accept that there was no dispute between Mr Nguyen and Mr Ton that the expenses for the job were to be paid, and that the profit divided between them on the basis that Mr Nguyen would receive $1,000. Mr Nguyen expressly denied that the profits were to be divided. He gave the following evidence (at T57.10) on 1 December 2010:
“Q. Now when Mr Hoan Lam Ton rang you and that is on the 19th of February 2008, he suggested to you, did he not, that you and he split the costs of the job and split the profit? Is that not the case?
A. It wasn’t the case.
Q. It was not the case?
A. [Unclear 2:21:04.5].
Q. Well you’ve given evidence that after the job you split the profits and the costs, haven’t you?
A. After the job completed, Mr Lam [Mr Ton] can deduct any costs and then he just gave me whatever he think is fit.”
He added, at T60.45:
“Q. Thank you. You had an agreement prior to the work commencing as to what would happen with the profits, isn’t that the case?
A. No.
Q. So are you telling this Commission you had no idea whether you would be paid or not?
A. Wasn’t sure how much I’m going to get.
Q. No idea?
A. No.”
The submission that the characterisation of the arrangement relating to expenses was that they would be “a joint equal cost” is incorrect. The contract price quoted by Mr Ton was $7,040. Mr Ton met the expenses and later paid $1,000 to Mr Nguyen. How that amount was calculated was never properly explained. It is clear, however, that it was not half the amount left over after expenses, which was about $1,500.
The submission that Mr Nguyen was to receive $1,000 after all expenses is also incorrect. Mr Nguyen’s evidence was that Mr Ton would give him “whatever he thinks fit”. Further, Mr Nguyen gave inconsistent evidence as to the amount he received for the job. He said in his statutory declaration dated 7 August 2009 that, after payment of expenses, his $1,000 left him with $179.15. In his statement of 19 May 2010, he said that expenses were reimbursed by Mr Ton in addition to the $1,000.
Even assuming that Mr Curran’s submission about profit sharing is correct, that does not establish the existence of a partnership in the present case. The agreement to share profits (if there was such an agreement) did not come from any decision to go into business together. It was the consideration for the performance of Mr Nguyen’s services as an electrician. It was the agreed machinery for arriving at a sum of money (Haggitt v Watson [1927] NZLR 209 at 230). The argument that there was a partnership would have been much stronger if there had been an agreement to share losses. There was no agreement to share losses.
There is no evidence of a sharing of accounts, joint financial statements, a common tax file number, common business activity statements, partnership meetings, business plans or any other of the indicia of a partnership. The absence of evidence on these matters strongly supports the Senior Arbitrator’s conclusion that there was no partnership.
Mr Nguyen’s evidence at the arbitration that Mr Ton had employed both him (Mr Nguyen) and the worker is also inconsistent with the existence of a partnership. Though it was argued on behalf of Mr Nguyen that, in the alternative, if Mr Ton did not employ him, he was in a partnership with him involved in a joint enterprise to install the air-conditioner, as noted above, Mr Nguyen expressly denied there was any agreement to split the profits. This strongly suggests that no partnership existed.
If there was any sharing of profits, the amount was at Mr Ton’s discretion. That was inconsistent with a partnership. The payment of the $1,000 was inconsistent with an equal share of the profits and there is no evidence of any other basis on which the profits of any “partnership” were to be shared.
It follows that the Arbitrator did not err in finding that Mr Nguyen and Mr Ton were not in a partnership.
EMPLOYMENT INDICIA
The Senior Arbitrator reviewed the evidence in detail and concluded that he found the worker’s evidence more acceptable than the evidence of either Mr Nguyen or Mr Ton.
He then referred to Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 (Stevens), and said, at [120]:
“Mason J in Stevens described the control test as ‘significant’, although not the ‘sole criterion’ to judge whether a relationship was one of employment. Other relevant matters raised by his Honour were ‘the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision of holidays, the deduction of income tax and the delegation of work by the putative employee’. Wilson and Dawson JJ described the control test, in many if not most cases, as ‘the surest guide as to whether a person is contracting independently or serving as an employee’. Their Honours referred to Zuijs v Wirth Bros. Pty Ltd (1955) 93 CLR 561, as authority that ‘it is the right to control rather than its actual exercise which is the important thing’.”
Applying the criteria in Stevens, the Senior Arbitrator found, at [122]:
“(a) The worker worked under the control of [Mr Nguyen];
(b) Even when he was working under the direction of [Mr Ton] (for example while the [Mr Nguyen] was absent getting the hoist), [Mr Nguyen] had the right of control. The worker obeyed the direction of [Mr Ton] over this time because [Mr Nguyen] had instructed him to do so;
(c) The worker said he had to work if [Mr Nguyen] called him;
(d) The worker discussed remuneration only with [Mr Nguyen];
(e) The worker was paid in cash by [Mr Nguyen], on the days he worked;
(f) The worker used [Mr Nguyen’s] tools on the Cabramatta site; he said his own tools were left in [Mr Nguyen’s] vehicle;
(g) The hours of work, on 20 February 2008, involved commencing at 8 am by arriving at the [Mr Nguyen’s] house as directed, and working through until the time of his injury. I infer from the worker’s statement at [9] that the worker, who was told what to do by [Mr Nguyen], was not, prior to his injury, told to take a break for lunch;
(h) There is no suggestion the worker would have been at liberty to delegate his work to another, and
(i) There is no indication [Mr Nguyen] made any provision for holidays, or deducted income taxation from the worker’s pay.”
The Senior Arbitrator said that the evidence favoured the conclusion that Mr Nguyen had the right of control over the manner of performance by the worker of his work. He said (at [123]) that the criteria “overall favour the conclusion the worker was engaged as a worker by [Mr Nguyen]” and (at [124]) that there was a corresponding lack of indication, applying the criteria, that the worker was working under a contract of service with Mr Ton.
To the extent that, from time to time, Mr Ton directed the worker what to do, the worker’s evidence, which the Senior Arbitrator accepted on this issue, was that he obeyed Mr Ton’s directions because Mr Nguyen had told him to do so. He added that Mr Ton did not pay the worker and that there was no evidence that the worker regarded himself as under an obligation to work for Mr Ton, who had never been introduced to him until after arriving at the Cabramatta site on 20 February 2008.
As regards delegation, Mr Ton had not previously met the worker and did not know him until he met him on site. It was of no concern to Mr Ton who attended with Mr Nguyen. That was so even if one assumed, in favour of Mr Nguyen, that Mr Ton had “given some agreement to a third person being arranged for the job”.
The criteria did not point to there being a contract of service between Mr Ton and the worker. Accepting the worker’s evidence as to direction, the control test was consistent with the conclusion that the worker was employed by Mr Nguyen, and not by Mr Ton.
The Senior Arbitrator observed that, for there to be a contract of employment between Mr Ton and the worker, it would be necessary for there to be an intention by those parties to enter legal relations. Whether parties have formed a contract is judged objectively, not by reference to the parties’ subjective beliefs (Lindeboom v Goodwin (2000) 21 NSWCCR 297). The evidence, viewed objectively, did not support the contention that the worker and Mr Ton had entered into legal relations.
While there were parts of Mr Nguyen’s evidence which, if accepted, would suggest that Mr Nguyen was acting as Mr Ton’s agent when he engaged the worker’s services, that evidence was inconsistent with the worker’s evidence, whose evidence was to the effect that it had not been suggested to him that anyone other than Mr Nguyen was his employer. The Senior Arbitrator preferred the worker’s evidence on this issue.
Submissions
Mr Curran submitted that the Senior Arbitrator erred in:
(a) failing to have proper regard to the fact that the project was an air-conditioning installation project, not an electrical project per se, was instigated by Mr Ton, largely organised by Mr Ton, that Mr Ton handled all funds associated with the project, paid out funds for all expenses and had all dealings with the owners of the premises on which the work was done;
(b) taking a “selective micro-view of some of the evidence” as to the dealings between the worker and Mr Nguyen and dealings between Mr Nguyen and Mr Ton, but gave insufficient weight to the fact that Mr Ton was the driving force, organiser and major profiteer from the project and Mr Nguyen was “essentially a mere functionary brought into the project for the sake of making a single electrical hook up of the installed air-conditioner to the power system and signing off on that”, and
(c) making no reference to significant factors such as the size and weight of the air-conditioner, and the difficulty posed in the installation of it in the upper roof area of the building, all of which were the only conceivable reasons for bringing an unskilled labourer (like the worker) into the project. Mr Nguyen did not need the worker to assist him in the electrical installation in any way.
Discussion and findings
I do not accept the above submissions.
The issue before the Senior Arbitrator was who employed the worker. The Senior Arbitrator approached this question by applying accepted High Court authorities. It has not been suggested that he wrongly applied those authorities, or should have applied different authorities.
The submission that the Senior Arbitrator failed to have proper regard to the fact that the project was an air-conditioning installation project, not an electrical project, is incorrect. He noted the circumstances surrounding the project and that it had been submitted that Mr Ton was the “main operative”. However, that provided little guidance as to who employed the worker. Many building sites have a “main operative” or “organiser”. That does not make that entity the employer of all workers on site. The issue of who employed the worker had to be approached by a careful analysis of the evidence and an application of the accepted legal authorities to the found facts. That is what the Senior Arbitrator did.
The submission that the Senior Arbitrator took a “selective micro-view” of the evidence and that he gave insufficient weight to the fact that Mr Ton was the “driving force, organiser and major profiteer from the project”, and Mr Nguyen was a mere functionary, fails to address the issue in dispute, namely, whether the worker entered a contract of employment with Mr Nguyen or Mr Ton. Mr Ton may well have been the driving force behind the project. That did not make him the worker’s employer in circumstances where, for the reasons outlined by the Senior Arbitrator, the evidence firmly established that Mr Nguyen employed the worker.
I do not accept that the size and weight of the air-conditioning unit, or the difficulty posed by the installation in the upper roof area, were decisive, or even particularly relevant factors, in determining who employed the worker. I assume the point being made is that, because the unit was large and heavy, three men were required and, as Mr Ton was the “driving force” and “organiser”, the Senior Arbitrator should have concluded that Mr Ton employed the worker. That conclusion does not follow from an objective analysis of the evidence. The Senior Arbitrator’s findings were open on the evidence and disclose no error. The fact that the Senior Arbitrator failed to refer to the size and weight of the air-conditioning unit makes no difference to the outcome because the size and weight of the unit was not determinative of the dispute.
The submission that Mr Nguyen did not need the worker to assist with the electrical installation is not determinative. It ignores the evidence that the worker not only assisted with moving the air-conditioning unit, but also assisted Mr Nguyen with the electrical conduit needed for the installation, as he did on 18 February 2008.
The submissions on this issue have ignored one fundamental matter: for the reasons he explained in detail, which are discussed below, the Senior Arbitrator preferred the worker’s evidence and did not accept Mr Nguyen’s evidence. That was open to him and disclosed no error.
THE WORKER’S CREDIT
All the parties recognised there were credit issues and, for that reason, the Senior Arbitrator gave leave for the three key witnesses to be cross-examined. For reasons that were fully explained at [98]–[108] of his decision, he found various aspects of Mr Nguyen’s evidence to be “implausible” and he preferred the worker’s evidence where it conflicted with Mr Nguyen’s evidence.
With regard to the worker’s evidence, it was noted that, as the claim had been paid by WorkCover, the worker had no apparent motivation to be untruthful. The Senior Arbitrator did not form the impression that, in his oral evidence, the worker was “other than attempting to give truthful evidence”. On many essential issues, he noted that Mr Ton’s evidence was consistent with the worker’s evidence.
Where the worker’s evidence differed with that of Mr Nguyen and Mr Ton about hiring the hoist, and was inconsistent with the invoice from Kennards Hire, the Senior Arbitrator accepted that the worker’s evidence on that issue was probably mistaken. However, that did not demonstrate an intention to mislead.
The worker gave evidence, contrary to Mr Ton’s, that Mr Ton was at the site when he (the worker) and Mr Nguyen arrived. The Senior Arbitrator said that this was a discrepancy that would not be unexpected and that nothing turned on it.
Overall, the Senior Arbitrator found the worker’s evidence “more acceptable than that of either the applicant [Mr Nguyen] or the second respondent [Mr Ton]” ([115]).
Submissions
Mr Curran has submitted that the issue of who employed the worker was a matter to be properly determined on the overall evidence and not the “perception” of the worker. The details of instructions given to the worker and activity on the work site had nothing to do with why Mr Nguyen was on site, namely, to do the electrical hook up of the air-conditioning unit, and everything to do with the installation of the air-conditioner.
The Senior Arbitrator gave insufficient weight to:
(a) the finding that the three men worked together on site to remove the existing air-conditioner and install a new one;
(b) the fact that the air-conditioning unit was paid for by Mr Nguyen using a cheque given to him by Mr Ton, and
(c) the fact that Mr Nguyen paid for a hoist and various electrical components and ultimately recouped those costs from Mr Ton.
The Senior Arbitrator accepted the worker’s evidence without making any proper evaluation of his perceptions and making allowances for those perceptions.
After noting that parts of Mr Nguyen’s evidence suggested that he was acting as agent for Mr Ton, the Senior Arbitrator went on to critically observe that that evidence was inconsistent with the worker’s evidence, which was to the effect that it was not suggested to him that anyone other than Mr Nguyen was his employer. That was “an entirely illogical approach to the issue” and for the Senior Arbitrator to “take this into account and to adopt such a factor in the reasoning process is appealable error”.
Discussion and findings
I do not accept these submissions.
The Senior Arbitrator did not base his decision on the worker’s “perception” of the relevant events. He based his decision on the worker’s direct evidence of what happened on and leading up to 20 February 2008. It is therefore untenable to suggest that the Senior Arbitrator did not make a proper evaluation of the worker’s “perceptions”.
After seeing and hearing Mr Nguyen, Mr Ton and the worker give evidence, he accepted the worker’s evidence. He correctly observed that, as WorkCover had satisfied the worker’s claim for compensation, the worker had no reason to give anything other than a truthful account of what happened. That account supported a conclusion that Mr Nguyen had employed the worker.
Though the details of instructions given to the worker on site and the activities performed on site were not the only matters relevant to deciding who employed the worker, they were directly relevant to that issue because they demonstrated who had the right to control him. On the evidence accepted by the Senior Arbitrator, the worker was on site because Mr Nguyen had employed him to work for him.
The Senior Arbitrator had to consider the evidence of the relationship between the parties. That evidence included the worker’s evidence that, on 15 February 2008, he responded by phone to an advertisement he read in a Vietnamese newspaper. The person he spoke to said he was an electrician who needed help and that he would be “working for BHESS”. The person said, “I am the owner. It is all OK”. The worker attended at an address given to him and helped to install conduit under Mr Nguyen’s supervision. Mr Nguyen paid him $80. Though the evidence was unclear, the Senior Arbitrator concluded, and it has not been challenged on appeal, that the worker probably did this work on 18 February 2008.
The critical conversation between Mr Nguyen and the worker occurred on 19 February 2008. The worker said that, on that day, Mr Nguyen telephoned him and said, “I’ve got another job for you to help me at a shop at Cabramatta”. As instructed by Mr Nguyen, the worker went to Mr Nguyen’s house on 20 February 2008. Mr Nguyen drove the worker to Kennards Hire and then to the Cabramatta site. The worker was asked to remove equipment from Mr Nguyen’s vehicle and put it into a storage room.
The worker then described Mr Nguyen directing him to perform various tasks, such as getting ladders and removing two skylights, preparing electrical cabling, and helping to pull an air-conditioning unit through the hole where the skylights had been removed. The worker said that “mainly” he helped Mr Nguyen. At the direction of Mr Nguyen, he also helped Mr Ton. Mr Nguyen directed him to go up the ladder onto the roof where he fell through one of the holes left by the removed skylight.
On 21 February 2008, Mr Nguyen saw the worker in hospital and gave him $100 in cash, this being the daily rate Mr Nguyen had agreed to pay him. At the site, the worker was introduced as the person assisting Mr Nguyen. It was never suggested to the worker that Mr Ton employed him. Mr Ton gave oral evidence that Mr Nguyen told him that he (the worker) worked for Bhess.
In cross-examination, the worker said that Mr Nguyen had called him and he had to go to work. The physical work was to lift the air-conditioner and to help Mr Nguyen install electrical conduit. Mr Nguyen said he would pay the worker. He did just that. The worker said that Mr Nguyen was the boss and told him what to do. This included taking instructions from Mr Ton.
In light of this direct evidence of the employment relationship between Mr Nguyen and the worker, the submission that the Senior Arbitrator gave insufficient weight to the evidence that the three men worked together on site to remove the existing air-conditioning unit and to install a new one is unpersuasive. Similarly, the fact that Mr Ton paid for the air-conditioner and the hoist is merely consistent with Mr Ton performing his contract with Mr Duong. Neither matter suggests that the Senior Arbitrator erred in his conclusion that Mr Nguyen employed the worker.
The payment by Mr Nguyen of the hiring cost of the hoist and various electrical components and the recovery of those costs from Mr Ton does not support an argument that Mr Nguyen was not the employer, or that the Senior Arbitrator erred in finding that he was. Those payments merely confirm that Mr Ton agreed to meet the cost of materials and equipment for the job. It does not go close to displacing the worker’s evidence as to the circumstances in which Mr Nguyen engaged him, or the relevance of the control exercised by Mr Nguyen over the worker.
The Senior Arbitrator accepted the worker’s evidence in preference to Mr Nguyen’s evidence because there were several aspects of Mr Nguyen’s evidence that he found “implausible” or contradictory.
First, Mr Nguyen gave two conflicting versions of how the worker was engaged to work on 20 February 2008, which the Senior Arbitrator discussed at [98]–[103]. As it has not been suggested that his analysis of those inconsistencies was incorrect, I will not repeat it.
Second, in cross-examination, Mr Nguyen said he did not employ anyone after the business transferred to his daughter in January 2008, but agreed that he had employed the worker on 18 February 2008.
Third, Mr Nguyen said that, notwithstanding there were no arrangements as to wages, he attended the site on 20 February 2008 as an employee. This was implausible and inconsistent with his statement of 19 May 2010 that he said he agreed to split the profits with Mr Ton.
Fourth, Mr Nguyen’s denial that he was an electrical contractor on 20 February 2008 was inconsistent with his evidence that he had worked in that capacity just two days earlier.
Fifth, as I have previously noted, Mr Nguyen gave inconsistent evidence as to how much he made from the job. He said in his statutory declaration of 7 August 2009 that, after expenses, the $1,000 he received from Mr Ton left him with only $179.15. However, in his statement of 19 May 2010, he said that, after expenses, he received $1,000.
Sixth, it was implausible that Mr Ton would have asked Mr Nguyen to get a hoist “on his behalf”.
Last, it was implausible that Mr Nguyen saw the worker at the hospital because he had been told to do so by Mr Ton.
Having regard to these matters, the Senior Arbitrator concluded that Mr Nguyen was “prepared to say whatever was required, to distance himself from the proposition there was a contract of service between him and the worker” (at [108]). This damning criticism was a clear rejection of Mr Nguyen’s credit. In these circumstances, it was open to the Senior Arbitrator to conclude that, where Mr Nguyen’s evidence conflicted with the worker’s evidence, he preferred the worker’s evidence.
The Senior Arbitrator reached his conclusions after a detailed analysis of the evidence and after referring to significant inconsistencies in Mr Nguyen’s evidence. To the extent that the Senior Arbitrator based his conclusion on an assessment of the credit of the main witnesses, having had the advantage of hearing and seeing those witnesses, his conclusions should stand unless it is shown that he “has failed to use or has palpably misused his advantage”, or acted on evidence which was “inconsistent with facts incontrovertibly established” or “glaringly improbable” (Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472 at 479, 480–481; Fox v Percy [2003] HCA 22; 214 CLR 118 at [25]–[27]). Mr Nguyen has not referred to any evidence that suggests that the Arbitrator’s conclusions are inconsistent with facts incontrovertibly established or that they are glaringly improbable.
The Senior Arbitrator’s conclusion was consistent with the “contemporary materials, objectively established facts and the apparent logic of events” (Fox v Percy at [31]). Neither his approach nor his conclusion demonstrates any error.
Mr Curran’s submission that the Senior Arbitrator took an “entirely illogical approach to the issue” was surprising and unhelpful. Other than the bald assertion that the conclusion was illogical, Mr Curran did not develop this submission. The Senior Arbitrator did not accept that Mr Nguyen engaged the worker as agent for Mr Ton because the evidence in support of that proposition was inconsistent with the evidence he accepted from the worker that it was not suggested that anyone other than Mr Nguyen employed the worker.
The Senior Arbitrator was right to conclude that the agency argument was inconsistent with the worker’s evidence. That evidence was that Mr Nguyen hired the worker, exercised control over him, and paid him. It was open to the Senior Arbitrator to accept that evidence as supporting a finding that Mr Nguyen employed the worker and that Mr Ton did not. Acceptance of the worker’s evidence logically involved a rejection of Mr Nguyen’s evidence on the critical employment issue, including the argument that Mr Nguyen acted as Mr Ton’s agent.
WHETHER MR TON PAID THE WORKER
After concluding that Mr Nguyen employed the worker, the Senior Arbitrator said (at [124]) that, applying the criteria, there was a corresponding lack of indication that the worker was working under a contract of service with Mr Ton. To the extent that, from time to time, Mr Ton directed the worker what to do, the Senior Arbitrator accepted the worker’s evidence that he obeyed Mr Ton’s directions because Mr Nguyen had told him to do so. He added that Mr Ton “did not pay the worker” and that there was no evidence that the worker regarded himself as under any obligation to work for Mr Ton, who he had never met until being introduced to him after arriving at the site on 20 February 2008.
Submissions
Mr Ton’s evidence was that he asked Mr Nguyen to see the worker in hospital because, according to Mr Ton’s statement, “it was a nice thing to do”. The evidence as to the source of the $100 paid to the worker was contradictory: Mr Nguyen said that he paid the worker and was reimbursed $50 by Mr Ton, but Mr Ton denied having given Mr Nguyen an additional $50 to cover the worker’s wages. Mr Curran submitted on appeal that, beyond expressing reservations about the credibility of Mr Ton and Mr Nguyen, the Senior Arbitrator could not reasonably make a finding that Mr Ton did not pay the worker.
Discussion and findings
It was open to the Senior Arbitrator to find that Mr Ton did not pay the worker. He found that Mr Nguyen was prepared to say whatever was required to distance himself from the proposition that he employed the worker. This finding, coupled with the worker’s evidence that Mr Nguyen paid him $100 in hospital, and Mr Ton’s denial that he reimbursed $50 of that amount to Mr Nguyen, provided a sound basis for the Senior Arbitrator’s finding. His finding discloses no error.
AMENDMENT
On 9 February 2011, the third day of the arbitration, the Senior Arbitrator refused Mr Curran’s application to amend to claim an indemnity from Mr Ton for one-half of any liability he had to WorkCover under the s 145 notice.
Submissions
Mr Nguyen has submitted that he applied for the amendment “for a determination of the liability of the Appellant [Mr Nguyen] under” the s 145 notice. He sought to establish that, at worst, his liability under the notice was for one-half of the amount claimed and that Mr Ton was liable for the remaining half. The application would not have altered the nature, length or extent of the hearing and there was no prejudice to the other parties if the amendment had been allowed.
Discussion and findings
As counsel submitted on 9 February 2011, the amendment was only sought to identify “the nature of the relief sought”. This question only became relevant if Mr Nguyen succeeded in his argument that the worker was employed by a partnership made up of Mr Nguyen and Mr Ton. As that argument failed before the Senior Arbitrator, and on appeal, this ground of appeal is of no consequence to the outcome. However, I make the following observations.
As the Senior Arbitrator observed, in light of the findings made, any right of recovery Mr Nguyen has against Mr Ton can only be based on some alleged commercial agreement. Given the evidence called at the arbitration, it is difficult to see what that agreement was, if it was not the alleged partnership.
The Commission’s jurisdiction, like that of the Compensation Court before it, is to hear and determine all matters arising under the 1998 Act and the 1987 Act (s 105 of the 1998 Act). The Court of Appeal considered the jurisdiction of the former Compensation Court in GRE Workers Compensation Insurance (NSW) Ltd v Nohil Pty Ltd (1996) 13 NSWCCR 74 (GRE). In that case, a s 145 notice was served on an employer, which sought to have determined, as part of its application under s 145(3), whether it was entitled to indemnity from an insurer.
On the question of whether the Compensation Court had jurisdiction to make an order that the insurer indemnify the employer, the Court of Appeal held that the determination of “a person’s liability” in s 145(3) includes not only any obligation to pay compensation, but also that person’s right to indemnity from its insurer.
Cole JA (Clarke and Handley JJA agreeing) held that the power permitted the Compensation Court (and now the Commission) to:
“make orders adjusting the rights of all persons or bodies who may have an existing or potential liability or entitlement to be relieved of liability because of insurance in respect of compensation claimed by or awarded to the injured worker.”
The Commission is a statutory body that derives its powers from the 1987 Act and the 1998 Act, and the Rules and Regulations validly made under those Acts. It does not have any inherent jurisdiction (Raniere Nominees Pty Ltd t/as Horizon Motor Lodge v Daley [2006] NSWCA 235; 67 NSWLR 417).
It follows that, even if the partnership argument had succeeded, the Commission has no jurisdiction to determine the rights and liabilities of the alleged partners. The Senior Arbitrator correctly concluded that such a matter does not arise under the 1987 Act or the 1998 Act and he was right to refuse the application to amend.
CONCLUSION
After a lengthy hearing where the Senior Arbitrator gave leave for extensive cross-examination, he delivered a detailed decision dealing with all issues and explaining why he did not accept Mr Nguyen’s case. His decision is not affected by any error.
DECISION
The Senior Arbitrator’s decision of 29 June 2011 is confirmed.
COSTS
The appellant is ordered to pay the costs of the first respondent and of the second respondent.
Bill Roche
Deputy President 29 September 2011
I, PENELOPE FLEMING, 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
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