Paillas v Astra Chauffeur Limousines (Aust) Pty Ltd and Anor (No.2)

[2017] FCCA 1530

FEDERAL CIRCUIT COURT OF AUSTRALIA

PAILLAS v ASTRA CHAUFFEUR LIMOUSINES (AUST) PTY LTD & ANOR (No.2) [2017] FCCA 1530

Catchwords:
INDUSTRIAL LAW – Whether the applicant was in an employment relationship with the first respondent or second respondent – the whole circumstances does not give rise to an relationship of employment between the applicant and the first respondent or the second respondent – the applicant was working as an independent contractor in relation to the second respondent – no order as to costs against the applicant – the application is dismissed.

Legislation:

Fair Work Act 2009, ss.45, 357, 359, 566, 570.

Cases cited:

ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146
AMP v Chaplin (1978) 18 ALR 385
On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) 206 IR 252
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

Applicant: SCOTT PAILLAS

First Respondent: ASTRA CHAUFFEUR LIMOUSINES (AUST) PTY LTD ACN 086 088 664

Second Respondent: BUTLERS DE WHEELS PTY LTD ACN 167 967 740

File Number: SYG 723 of 2017

Judgment of: Judge Street

Hearing date: 3 July 2017

Date of Last Submission: 3 July 2017

Delivered at: Sydney

Delivered on: 3 July 2017

REPRESENTATION

Counsel for the Applicant: Ms S Walsh

Counsel for the Respondents: Mr I Latham

Solicitors for the Respondents: Fazzini Lawyers & Consultants

ORDERS

1. Annexure A to the affidavit of Scott Paillas dated 3 April 2017 is to be treated as a confidential exhibit and the Affidavit together with Annexure A is to be marked as the subject of a confidentiality order on the Electronic Court Filing system.

2. Tab 11 to Exhibit D, being Exhibit AM-1 to the Affidavit of Alfio Merlino sworn 23 May 2017 is to be kept confidential and is to be marked as the subject of a confidentiality order on the Electronic Court Filing system.

3. The application is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 723 of 2017

SCOTT PAILLAS

Applicant

And

ASTRA CHAUFFEUR LIMOUSINES (AUST) PTY LTD

First Respondent

BUTLERS DE WHEELS PTY LTD

Second Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.566 of the Fair Work Act2009 (“the Fair Work Act”) for relief in respect of the alleged contravention of s.357 and s.359 of the Fair Work Act as well as an alleged cause of action for quantum merit. The Court is also hearing an application for assessment of quantum, if any, in respect of a default judgment entered against the second respondent for failure to appear.

2. The applicant alleged that he was employed by the first respondent from 22 October 2015 through to 15 December 2015. The applicant gave evidence of a conversation taking place on 16 October 2014 with Mr Alf Merlino in relation to his engagement. There is almost no material difference between the applicant’s version of the conversation and Mr Alf Merlino’s in relation to the proposition that drivers would be paid 40% of what the customer would be charged, that all the work is supplied to the driver, as well as a car and that the driver is provided with a phone and notebook computer to receive jobs, that the driver has to supply fuel for the vehicle, that there was a charge imposed for the phone and notebook on a weekly basis, and a charge imposed for cleaning.

Evidence given by the Applicant

1. The applicant’s evidence was that he was informed he had to clean the car each day and was provided with a tie which on the reverse side had Astra Group. The applicant was provided with a business card which identified different Astra vehicles as well as an email booking and website and space for the chauffeur and mobile number. The vehicles also had Astra signage and brochures inside the vehicle.

2. There is a difference in relation to that conversation on 16 October 2014 in respect of whether or not Mr Alf Merlino identified the company, Butlers De Wheels. Mr Alf Merlino’s version of the conversation is that he identified that the company, Butlers De Wheels, was looking for subcontractor drivers. The reference to that company was denied by the applicant.

3. The applicant gave evidence that he was required to take every job and that he could not refuse assignments. That was evidence given in answer to questions asked by the Court. I do not accept the applicant’s evidence in that regard to be truthful.

Evidence given by Mr Alf Merlino

1. Where the applicant’s evidence is in conflict with the evidence of Mr Alf Merlino, I accept the evidence of Mr Alf Merlino. I find that the applicant could decide whether or not to accept a proposed assigned job. On the evidence of Mr Alf Merlino, which I accept, it was open to the applicant to decide when he worked and what jobs he accepted. I accept the evidence of Mr Alf Merlino that there was no suggestion of drivers being the subject of their contracts being terminated or other adverse steps by reason of declining to undertake proposed assignments. There was a level of control in relation to the work being performed and that was it was customers in relation to the Astra Group who were identified as potential work opportunities for the applicant. The control did not compel the taking of that work and I find the applicant could have returned the vehicle at any time and was free to conduct other work, not using the car.

2. I accept the evidence of Mr Alf Merlino that the applicant could return the vehicle at any point in time he wished to stop undertaking the subcontracting work. There was no term imposed that required the applicant to give notice to terminate the arrangement in terms of the supply of the vehicle and other equipment. The applicant was not prevented from performing other work not using the supplied vehicle.

Assessment of the Applicant’s credibility

1. In assessing the credit of the applicant, I have also taken into account the applicant’s admitted falsity in his tax return of the description of his employment. In the tax return, the applicant identified that he was employed as a taxi driver. The applicant then in evidence said that he was a hire car driver. The tax return identifies the applicant’s ABN and is consistent with the applicant carrying on his own business as an independent contractor.

2. Most significantly in the present case is the fact that the applicant has signed on a weekly basis invoices in the name of the second respondent and identified the work allegedly performed on behalf of the applicant for the second respondent. I reject the applicant’s evidence that the only mention of the second respondent was on the cheques in payment. The applicant must have been aware from the invoices of the existence of the second respondent. The invoices support the applicant being an independent contractor of the second respondent and that the applicant was not an employee of the first respondent.

3. The applicant sought to argue that there was a sham arrangement between the first respondent and the second respondent. The evidence fell well short of establishing any sham between the first respondent and the second respondent. Evidence was adduced in relation to the sending of invoices between the first respondent and the second respondent in respect of services provided by independent contractors relating to the vehicles supplied by the first respondent to the drivers who, in this case, I find, are the subject of an independent contracting engagement with the second respondent.

Consideration of the existence of an employment relationship

1. In determining whether or not there is an employment relationship between the applicant and the first respondent and/or the second respondent, the Court has taken into account the principles identified in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 39 [49] as well as in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) 206 IR 252 at [208] and also what was said in ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [25] and AMP v Chaplin (1978) 18 ALR 385 at 391.

2. There are a number of indicia upon which the applicant relied in seeking to assert that there is an employment relationship. The applicant focused on the provision of the tie, the business card with the Astra logo, the Astra markings on the vehicle, the Astra dedicated system of customer assignment with no ability of the applicant to use the vehicle to carry out other work, as well as the provision of the software program that generated the invoices which the applicant regularly signed as invoices to the second respondent. These indicia do not establish an employment relationship between the applicant and the first respondent. Nor do the indicia establish an employment relationship between the applicant and the second respondent. On the material before the Court the applicant was conducting his own independent contracting business with the second respondent.

3. The material issue between the parties in that regard was the contention that the applicant was required to take the work assigned. Ms Walsh of counsel on behalf of the applicant sought to identify the considerable number of jobs and days over which the applicant had over the 14 months undertaken assignments and maintained that the applicant was required to accept those assignments. Ms Walsh of counsel also submitted that the recorded telephone evidence adduced by Mr Alf Merlino in relation to the ability of the applicant to take days off whenever he wanted was not compelling. Ms Walsh of counsel submitted that the applicant effectively, was on standby between jobs because the applicant had the vehicle at his home and that the applicant was effectively, required to be available to take the next assignment and had no choice in that regard. I reject these submissions.

4. I accept the evidence of Mr Alf Merlino. The applicant was not required to take assignments and it was a matter for the applicant whether he sought to accept those assignments. I do not accept that the applicant was on standby between jobs. I do not accept that the applicant was not free to do as he wished in relation to the proposed assignments. I do accept that the applicant could not use the vehicle under the terms of the arrangement between the second respondent and the applicant for other work. I do not regard the indicia in the present circumstances, taken together with the whole of the circumstances involving the applicant’s provision of invoices, use of his ABN and freedom to decide whether he accepted an assignment or when he worked or whether he continued to keep the vehicle as giving rise to an employment relationship between the applicant and the second respondent.

5. On no view was there an employment relationship between the applicant and the second respondent. On no view was there an employment relationship between the applicant and the first respondent. The first respondent was not the entity that paid the applicant, it was the second respondent.

The suggestion of a sham arrangement

1. The suggestion of a sham arrangement appears to have been advanced on the basis there was a misrepresentation as to whether the applicant was an independent contractor. I do not accept that there was any misrepresentation. The applicant was an independent contractor of the second respondent. There was no contravention of s.357 or s.359 of the Fair Work Act made out against the first respondent and no case is pleaded in that regard against the second respondent.

Consideration of cause of action for quantum merit

1. Insofar as the case against the first respondent is advanced on quantum merit, on the evidence before the Court, the applicant received payment for work undertaken. A quantum merit is not a basis upon which an award is enforced. This is not a case where there is an alleged contravention of s.45 of the Fair Work Act. On the evidence before the Court, the applicant was working as an independent contractor in relation to the second respondent.

2. I do not accept that the applicant performed work for the first respondent. I do not accept that the applicant was the employee of the first respondent. I do not accept that the applicant is entitled to any quantum merit against the first respondent. The applicant has failed to make out any contravention of the Fair Work Act as alleged against the first respondent. The applicant’s case against the first respondent should be dismissed.

3. In relation to the second respondent, judgment was entered for want of the filing of a defence and appearance by the second respondent. The consequence of judgment being entered on the pleading is that there stands admitted the content of the pleading and the facts asserted in that statement of claim. Those facts did not plead any contravention of the Fair Work Act as against the second respondent.

4. The only cause of action identifying the second respondent was a cause of action on quantum merit. In relation to the cause of action on the quantum merit, it is apparent on the evidence that the applicant has received remuneration pursuant to an arrangement between the second respondent and the applicant.

5. The Court is not satisfied that the applicant is entitled to any other relief against the second respondent. Accordingly, the application is dismissed.

Order for costs raised by the first respondent

1. The first respondent has moved for an order for costs and has tendered a letter dated 23 June 2017 which effectively was a without prejudice offer by the first respondent to the applicant. Whilst I accept that such a communication enlivens the Court’s discretion under s.570(2) of the Fair Work Act, the scheme of the Act is for there to be no costs order unless the court is satisfied of the requirements under s.570(2) of the Fair Work Act. In that regard, a discretion arises and, in the present case, much confusion may well have been avoided had there been a written agreement entered into at the time of the engagement of the applicant with the second respondent. There might also have been clearer recording of the arrangements between the first and second respondents. I also take into account the amount of the offer as against the issues in the proceedings and the said scheme of the Act.

2. In these circumstances, I refuse to make an order under s.570 of the Fair Work Act.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 19 July 2017