Palmer Coolum Resort Pty Ltd v WorkCover Queensland & Simon Blackwood (Workers' Compensation Regulator)
[2014] ICQ 26
•1 September 2014
INDUSTRIAL COURT OF QUEENSLAND
CITATION: | Palmer Coolum Resort Pty Ltd v WorkCover Queensland & Simon Blackwood (Workers' Compensation Regulator) [2014] ICQ 026 |
PARTIES: | Palmer Coolum Resort Pty Ltd v WorkCover Queensland & Simon Blackwood (Workers' Compensation Regulator) |
CASE NO: | C/2013/21 |
PROCEEDING: | Appeal against decision of Industrial Magistrate |
DELIVERED ON: | 1 September 2014 |
HEARING DATE: | 20 December 2013 |
MEMBER: | Deputy President O'Connor |
ORDERS: | 1. The appeal is dismissed. 2. No order as to costs. |
| CATCHWORDS: | WORKERS' COMPENSATION - APPEAL AGAINST DECISION OF INDUSTRIAL MAGISTRATE - SETTING PREMIUM CHANGE ON CHANGE OF OWNERSHIP OF BUSINESS - CHANGE IN OWNERSHIP OF SHARES IN HOLDING COMPANY WHICH OWNS AND OPERATES AN EMPLOYER - WHETHER CONSTITUTES A CHANGE IN OWNERSHIP OF EMPLOYER Acts Interpretation Act 1954, s 14 |
CASES: | Allesch v Maunz (2000) 203 CLR 172 |
| APPEARANCES: | Mr P. B. O'Neill for the appellant, instructed by Hopgood Ganim Lawyers. |
Reasons for Decision
This is an appeal against a decision of an industrial magistrate pursuant to s 561(1) of the Workers' Compensation and Rehabilitation Act 2003 ("the Act").[1] The appellant is Palmer Coolum Resort Pty Ltd. It seeks to have the decision of the Industrial Magistrate in WorkCover v The Review Unit, Q-Comp & Palmer Coolum Resort Pty Ltd[2] set aside, and for the Court to substitute a new decision confirming that of the Q-COMP Review Unit dated 7 December 2012. The entity which was formerly known as Q-COMP is now known as "Simon Blackwood (Workers' Compensation Regulator)". That entity is the second respondent in this appeal. The first respondent is WorkCover Queensland.
[1] On the nature of an appeal to the Industrial Court pursuant to s 561(1), see Davidson v Blackwood [2014] ICQ 008. See also Allesch v Maunz (2000) 203 CLR 172; Fox v Percy (2003) 214 CLR 118.
[2] (Unreported, Industrial Magistrates Court of Queensland, Industrial Magistrate Kluck, 24 April 2013).
Background
The resort which lies at the centre of this appeal ("the Resort Business") opened at its Coolum location in 1987, or thereabouts. At the time of its opening, the Resort Business was owned and operated by a company with the Australian Company Number 010 593 638 ("the operating company"). That is still the case.
Although the Resort Business, and the operating company, have changed their respective names many times since the resort's opening in 1987, the operating company, like the Resort Business it owns and operates, has always maintained the same ACN: 010 593 638. That remains so even now.
The operating company has always been wholly owned by a holding company called Couer de Lion Holdings Pty Ltd (ACN: 033 209 934) ("CDLH"). That also remains the case.
On 20 May 1988, the first respondent issued accident insurance policy WCA 871114428 to the appellant under the Workers' Compensation Act 1996 and later Workers' Compensation and Rehabilitation Act 2003.
On 1 July 2011, the shares in CDLH which were previously owned by Lend Lease Developments Pty Ltd ("Lend Lease"), were purchased by two companies within the Clive Palmer group of companies: Queensland North Pty Ltd ("Queensland North") and Closeridge Pty Ltd ("Closeridge").
The change in ownership of the shares in CDLH also brought about a change in its directorship, and that of the Resort Business which it operates, which had by then become known as Palmer Coolum Resort Pty Ltd, the appellant in this proceeding. All of the previous directors of CDLH and the Resort Business, who had been appointed by Lend Lease, were removed. In their place, Mr Clive Palmer, Mr Basil Ahyick, and Mr Geoffrey Smith were appointed as directors.
On 15 February 2012 Mr Schoch was appointed as the sole director of the appellant. Hyatt Hotel Management Group was removed as managers of the appellant on 28 March 2012. The appellant then requested that the first respondent set a new premium payable in respect of its workers' compensation insurance policy with the first respondent, arguing that it should be set at the industry rate on the basis that the ownership of the business had changed. The first respondent rejected that request by reasons for decision dated 17 August 2012.
The appellant applied to Q-COMP (as the second respondent was then known) for review of that decision on 22 October 2012. By reasons for decision dated 7 December 2012, the second respondent set aside the first respondent's decision, substituting it with a new one that recalculated the premiums for the 2011-12 and 2012-13 periods without applying "succession" to the policy, in accordance with ss 54, 55 and 56 of the Act. It was against that decision that the first respondent appealed to the Industrial Magistrates Court.
The decision of the Industrial Magistrate
In his reasons for decision dated 24 April 2014, after reciting the submissions of the parties, the learned Industrial Magistrate concluded:
"I have considered all of those submissions and upon a consideration of them and the evidence before me I have come to the view that the interpretation to be given to s.55 is that submitted on behalf of WorkCover. The Part of the Act which contains s. 55 deals with Insurance under WorkCover policies generally. Such policies are held by employers. The persons referred to in s.55 must be employers; there must be evidence of a 'new employer' and a 'former employer'. I am satisfied that the employer in this matter is PCR and has been since 1986 under its various former names. The A.C.N. number has not changed in that time and that is evidence of PCR's corporate heritage. PCR was not a 'new employer' as from 1 July 2011. It owns the business and has contracts of service with the staff of the business; it pays the wages, superannuation, tax on behalf of employees; it owes a duty of care in respect of its employee's workplace health and safety; and it would be vicariously liable for wrongful acts or omissions of its other employees. All of this was nothing 'new' on 1 July 2011. The parent companies were not the new employers in the circumstances as was submitted on behalf of PCR. They were the new shareholders but they could not act as shareholders (on the authorities cited on behalf of WorkCover and which I accept apply here) acquire the business on 1 July 2011; for the purposes of s.55 the parent companies would have to have been 'new employers'.
I am satisfied that the legislature is presumed to have used the term 'employer', as in 'new employer', deliberately when applying it to 'a person' in s.55 and presumed to have been aware of the consequences that may flow with respect to corporations. There is nothing in the extrinsic material submitted to persuade me otherwise. It would also not be expected that a company in PCR's case would always be burdened with its claims history. Although there is no specific evidence before me to show it, it would perhaps be reasonably expected that if it improves its workplace health and safety record over time eventually the premium would be re-assessed favourably. I simply make this observation because it was raised in submissions but it has had no bearing on my determination of this appeal."[3]
[3] WorkCover v The Review Unit, Q-Comp & Palmer Coolum Resort Pty Ltd (Unreported, Industrial Magistrates Court of Queensland, Industrial Magistrate Kluck, 24 April 2013) [14]-[15].
Grounds of appeal
The appellant now appeals against that decision on the following grounds:
"(a)The Industrial Magistrate erred in law in the construction of section 55(1) of the Workers' Compensation and Rehabilitation Act 2003 (Qld) by focusing on whether there was evidence of a 'new employer' and 'former employer' rather than on whether there had been an acquisition of the whole or part of the business.
(b) The Industrial Magistrate further erred in law in the construction of section 55 of the Workers' Compensation and Rehabilitation Act 2003 in holding that for the purposes of section 44(1) of the Act the parent companies, Queensland North Australia Pt Ltd and Closeridge Pty Ltd were not the new employers.
(c) The Industrial Magistrate further erred in law in the construction of section 55 of the Workers' Compensation and Rehabilitation Act 2003 by failing to utilise the heading to section 55 as an aid in the construction of the section.
(d) The Industrial Magistrate further erred in holding in paragraph 15 that the legislature is presumed to have used the term 'employer' deliberately when applying it to 'a person' in section 55 of the Act.
(e)The Industrial Magistrate further erred in law in the construction of section 55(1) of the Workers' Compensation and Rehabilitation Act 2003 (Qld) by failing to give effect to a clearly stated legislative intention that 'succession' should not apply to an acquirer of a business such as Queensland North Australia Pty Ltd and Closeridge Pty Ltd.
(f) The Industrial Magistrate erred in fact and law in his Honour's finding of what constituted the relevant 'business' for the purposes of section 55 of the Act.
(g) The Industrial Magistrate erred in failing to provide adequate reasons for his Honour's decision."
Question for determination and relevant statutory provisions
The question for determination by this Court is whether or not the change of shareholders of the holding company which owns the appellant constituted a change of ownership of the appellant and, consequently, whether the appellant became a "new employer" within the meaning of s 55 of the Act. That question requires the Court to determine the proper construction of s 55, which provides:
"55 Setting premium on change of ownership of business
(1) This section applies if a person (a new employer) acquires the whole or a part of a business from an employer (a former employer) who is currently insured under a policy with WorkCover.
(2) In calculating the premium payable by the new employer, WorkCover may have regard to the claims experience of the business under the former employer.
(3) In deciding whether to have regard to the claims experience of the business under a former employer, WorkCover may consider any relevant matter, including the following—
(a) if the new employer is an individual, whether the new employer is or was—
(i) a partner of the former employer; or
(ii) an officer or shareholder of the former employer; or
(iii) an officer or shareholder of a related body corporate of the former employer;
(b) if the new employer is a partnership, whether any of the partners of the new employer is or was—
(i) an individual who was the former employer; or
(ii) a partner of the former employer; or
(iii) an officer or shareholder of the former employer; or
(iv) an officer or shareholder of a related body corporate of the former employer;
(c) if the new employer is a body corporate, whether the new employer is or was a related body corporate of the former employer;
(d) if the new employer is a body corporate, whether any of the officers or shareholders of the new employer is or was—
(i) an individual who was the former employer; or
(ii) a partner of the former employer; or
(iii) an officer or shareholder of the former employer; or
(iv) an officer or shareholder of a related body corporate of the former employer.
(4) However, subsection (2) applies only if the predominant industry activity of the business remains the same as under the former employer.
(5) In this section—
officer has the meaning given by the Corporations Act."
An "employer" is defined by s 30:
"30 Who is an employer
(1) An employer is a person who engages a worker to perform work.
(2) Also, schedule 3 sets out who is an employer in particular circumstances.
(3) To remove doubt, a reference to an employer of a worker who sustains an injury is a reference to the employer out of whose employment, or in the course of whose employment, the injury arose.
(4) In this section—
contract includes agreement and arrangement.
person includes—
(a) a government entity; and
(b) the legal personal representative of a deceased individual."
The proper construction of s 55
Section 55(1) of the Act requires that there must be a "new employer" and a "former employer". The appeal before the learned Industrial Magistrate proceeded on the basis of an Agreed Statement of Facts.[4] In particular, it was agreed that: "At all times from 1986 to the present date, all workers employed to work in the Business have been employed by a company with the ACN 010 593 638." Whilst over the course of time the company's name has changed, there has been no change to the corporate identity of the policy holder of the policy issued by the first respondent to cover workers at the resort business.
[4] Ex 21.
The first respondent contends that the appellant has always been, and remains, the "employer" for the purposes of the Act such that there has been no "change of ownership of business" for the purposes of the Act. However, even if the Court found that there was a change in ownership of the business, unless there is also a "new employer" acquiring that business from a "former employer", s 55 does not apply.
The appellant has submitted that s 55(1) is ambiguous and, as a consequence, the learned Industrial Magistrate erred by not referring to the heading of the section to assist in interpreting the meaning and application of s 55(1). Pursuant to s 14 of the Acts Interpretation Act 1954, a heading to a chapter, part, division or subdivision of an Act is part of the Act. It was argued before the Court that under sch 6 of the Act there is no definition of "new employer", "former employer", "business", or "acquire". As a consequence, it was argued that the language of s 55 of the Act is doubtful or ambiguous and therefore reference ought to be made to the rules for the use of headings to aid interpretation propounded by Murray CJ in Ragless v District Council of Prospect [1922] SASR 299 at 311, in particular, the third rule which provides: If the language of the sections is doubtful or ambiguous, the meaning which is consistent with the headings is to be adopted.
It was argued that the learned Industrial Magistrate put to one side the issue as to whether there had been a change of ownership of the business in favour of a narrow and strict analysis of whether there was a new or former employer.
The language of s 55 is clear and the heading whilst part of the Act is in my view, on a proper construction, referable to a change in the employing entity, in other words, where there is a "new employer" who acquires the whole or part of a business from a "former employer" and who is currently insured under a policy with WorkCover.
I accept the correctness of first respondent's submission that a change in the shareholding of CDLH did not alter the corporate identity of the employer for the purposes of the WorkCover policy.
In Re Reference to Court of Disputed Returns; Re Webster (1975) 132 CLR 270 at 287 Barwick CJ wrote:
"under the general law it is well established that a shareholder does not have any legal or equitable interest in the assets, including agreements, of the company. Even where a shareholder owned almost all the shares of a company, he had no legal or equitable right or interest in the company's assets: see Macaura v. Northern Assurance Co. Ltd., per Lord Buckmaster L.C. (33); per Lord Sumner (34)."
There is no change of ownership of the appellant. It has at all times been owned by the holding company CDLH. It was submitted in argument before the Court that the appellant, despite various name changes has at all times been the holder of the policy of insurance with WorkCover to cover the employees, employed in the resort business.
Whilst "new employer" and "former employer" are not defined in the Act, "employer" is defined in s 30. Importantly, under s 30(1)(a), an employer is a person for whom an individual works under a contract of service.
The submission that the two Palmer companies - Closeridge and Queensland North - were the "new employer", and that Lend Lease, being the person from whom the business was acquired, was the "former employer", is not supported by the facts at first instance. There was no evidence before the Court below to suggest that either Lend Lease or the two Palmer Companies employed workers at the resort business under a contract of service. Indeed, the statement of agreed facts and the evidence of Mr Schoch was that the employer was the company with the ACN 010 593 638, namely, the appellant.[5]
[5] T1-39, Ll 1-3. See also Ex 21.
There has been no acquisition either wholly or in part of a business from an employer who is currently insured under a policy of insurance with WorkCover for the purposes of s 55 of the Act.
Adequacy of Reasons
The appellant submits that the learned Industrial Magistrate failed to bring an independent judicial mind to the arguments presented by the parties.
The failure to give sufficient reasons constitutes an error of law.[6]
[6] Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 270, 279-280 (McHugh JA).
In Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219, Muir JA (with whom Holmes JA and Daubney J agreed), observed:
"[58]The rationale for the requirement that courts give reasons for their decisions provides some guidance as to the extent of the reasons required. The requirement has been explained, variously, as necessary: to avoid leaving the losing party with "a justifiable sense of grievance "through not knowing or understanding why that party lost; to facilitate or not frustrate a right of appeal; as an attribute or incident of the judicial process; to afford natural justice or procedural fairness; to provide "the foundation for the acceptability of the decision by the parties and the public" and to further "judicial accountability".
[59]The extent to which a trial judge must expose his or her reasoning for the conclusions reached will depend on the nature of the issues for determination and "the function to be served by the giving of reasons."
The question before the learned Industrial Magistrate was a relatively distinct point, namely, the proper construction of s 55 of the Act and whether or not a change of shareholders of CDLH which holds the shares in resort business constituted a change of "employer" for the purposes of s 55 of the Act.
The learned Industrial Magistrate, at paragraphs [14] and [15], set out his reasons for decision. He has, by his reasons, articulated the grounds upon which his decision rests.[7] He has summarised the factual background, dealt with the submissions of the parties and, upon a consideration of the applicable law, accepted a construction of
s 55 that favoured the first respondent. As Samuels JA wrote in Strbak v Newton [1989] NSWCA 202:"What is necessary, it seems to me, is a basic explanation of the fundamental reasons which led the judge to his conclusion. There is no requirement, however, that the reasons must incorporate an extended intellectual dissertation upon the claim of reasoning which authorises the judgment which is given."
[7] Ibid.
His Honour's reasons for decision are such as the losing party should know or understand why they lost.[8] I am satisfied that his Honour has, in his reasons for decision, provided a sufficient level of particularity to enable an assessment as to whether or not he has fallen into error.[9] As Hall P observed in Q-COMP v Mana, "one should not be overzealous to seek to discern inadequacy".[10] I am unable to discern any inadequacy in the reasons of the learned Industrial Magistrate.
[8] Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, 442; Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219.
[9] Svenson v Q-Comp (2006) 181 QGIG 629, 632.
[10] Q-COMP v Mana (C/2011/48) - Decision < [2].
Conclusion
A change of shareholders and directors in CDLH or the change to the directors of the appellant does not alter the fact that the resort business remains the "employer". The appellant is and has always been the "employer" and there has been no "change in ownership of the business" for the purposes of the Act.
Orders
The appellant has not demonstrated any error sufficient to require that this appeal be allowed. The appeal is dismissed.
I do not regard the appeal to this Court as having been instituted vexatiously or without reasonable cause and so, pursuant to s 563 of the Act, there should be no order as to costs.
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