Pasqua v Morelli Constructions Pty Ltd
[2009] NSWWCCPD 153
•02 December 2009
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Pasqua v Morelli Constructions Pty Ltd [2009] NSWWCCPD 153 | ||||
| APPELLANT: | Rocco Pasqua | ||||
| RESPONDENT: | Morelli Constructions Pty Ltd | ||||
| INSURER: | GIO General Limited | ||||
| FILE NUMBER: | A1-3756/09 | ||||
| ARBITRATOR: | Mr J Wynyard | ||||
| DATE OF ARBITRATOR’S DECISION: | 7 August 2009 | ||||
| DATE OF APPEAL DECISION: | 02 December 2009 | ||||
| SUBJECT MATTER OF DECISION: | Deemed worker; Schedule 1 clause 2 of the Workplace Injury Management and Workers Compensation Act 1998 | ||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | AM Legal | |||
| Respondent: | TurksLegal | ||||
| ORDERS MADE ON APPEAL: | The Arbitrator’s determination of 7 August 2009 is revoked and it is determined that, as at 1 September 2008, the applicant was a deemed worker under Schedule 1 clause 2 of the Workplace Injury Management and Workers Compensation Act 1998. The matter is remitted to a different Arbitrator for re-determination of all outstanding issues. | ||||
| The respondent employer is to pay the appellant worker’s costs of the appeal. | |||||
BACKGROUND
The appellant, Mr Pasqua, started work as an apprentice carpenter with the respondent, Morelli Constructions Pty Ltd (‘Morelli’) in about 1999. He injured his back in the course of his employment with Morelli on or about 9 September 2005. His claim for compensation was accepted and he returned to work on light duties after an absence of about four to five months. He suffered a further exacerbation of his back condition and was again off work for a couple of months. Ultimately, he returned to his full duties as a carpenter.
Mr Pasqua stopped work for Morelli in mid 2007 and started working independently as a carpenter. As his work was “a little slow”, he contacted Morelli in June 2008 and asked if they could offer him any work. He then worked for Morelli on a contract basis from 10 June until 1 September 2008 when he again injured his back. His claim for compensation was disputed on the ground that he was not a worker or a deemed worker under the provisions of the legislation.
In an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 15 May 2009, and as amended at the arbitration hearing, Mr Pasqua alleged that he injured his back and legs, and sustained psychological sequelae as a result of injuries on or about 9 September 2005 and on about 1 September 2008 (T3.52-57). He claimed weekly compensation in the sum of $1,760.00 from 2 September 2008 to date and continuing together with hospital and medical expenses.
The insurer’s section 74 notice disputed that Mr Pasqua was a worker or a deemed worker at the time of his injury on 1 September 2008. The Reply filed on behalf of the respondent on 5 June 2009 sought to dispute an additional 20 issues, including injury. At the arbitration counsel for Morelli amended the Reply to delete paragraphs 6 to 10 and 17 to 21 inclusive (T10.20). The Arbitrator deferred ruling on whether he would give Morelli leave to rely upon the remaining issues in its Reply (T7.57).
In his reserved Statement of Reasons (‘Reasons’) delivered on 7 August 2009, the Arbitrator identified the only issue for determination to be whether Mr Pasqua was a deemed worker (Reasons at [12]). He determined that issue in favour of Morelli and, notwithstanding that he identified the deemed worker issue as the only issue in dispute, he also determined that Mr Pasqua had recovered from the effects of the 2005 injury and made an award in favour of the respondent. The Commission issued a Certificate of Determination on 7 August 2009 in the following terms:
“1.Award in favour of the respondent.
2.No order as to costs.”
Though the Arbitrator made an award for the respondent on the deemed worker issue, he also made findings that the alleged leg and psychological injuries had not been proven and failed, notwithstanding that the insurer had not disputed injury in its section 74 notice. In the event that he was wrong on the deemed worker issue, he determined Mr Pasqua’s potential entitlement to weekly compensation to be $238.00 per week, based on a current weekly wage rate of $798.00 per week and an ability to earn in some suitable employment of $560.00 per week.
By an appeal filed on 7 September 2009, Mr Pasqua sought leave to challenge the Arbitrator’s determination with respect to the deemed worker issue.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
It is not disputed that the monetary thresholds in section 352(2) are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
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 Numbers 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
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a) failing to correctly apply a legal test;
(b) failing to properly weigh the evidence when addressing a question of fact, and
(c) failing to reach the true and correct decision.
THE EVIDENCE
Mr Pasqua’s evidence is set out in two statements. The first is dated 24 April 2009 and the second is dated 1 July 2009.
In his first statement, Mr Pasqua refers in detail to his 2005 injury. After being off work for a substantial period, he eventually returned to work on light duties and ultimately resumed unrestricted carpentry work, but took care not to exacerbate his back. He continued to work without incident until he ceased in mid 2007 and started working for himself. In June 2008, his work was “a little slow” so he called one of Morelli’s directors, Adrian Morelli, and asked if he could offer him any work. Mr Pasqua then worked for Morelli on a contract basis from 10 June until his second injury on 1 September 2008.
Whilst working for Morelli in this period, he worked on four specific jobs. They were at Enmore, Gladesville, Darlinghurst and Birchgrove. He states that he was under the direction, control and supervision of a member of the Morelli family. Every time he worked for Morelli he wore a work shirt with the Morelli company insignia.
He had his own tools, but regularly used equipment provided by Morelli. He did not employ any workers to assist him with the work he performed for Morelli.
Apart from days when jobs were not ready to start or he was sick, Mr Pasqua states that he worked a full 40-hour week with Morelli. If jobs were not ready, he did some renovation work on his own unit. That work involved co-ordinating and supervising tradespeople.
In the period from 10 June 2008 until 1 September 2008, Mr Pasqua’s income was derived from the work he performed with Morelli.
In his second statement, Mr Pasqua adds that he took no new work in his own business after starting with Morelli in June 2008 and that he worked full time with Morelli until his injury on 1 September 2008. Whilst working for Morelli he had no advertisements running for his own business in the local newspaper or in the Yellow Pages. He had no signage on his vehicle. He printed no new business cards for his business and he handed out no old business cards. He was directed which job to go to and when he arrived on site there was always someone to supervise his work. He felt he was “always under their control”. He worked fixed hours starting at 7.00 am and working until 3.30 pm for a fixed rate.
Mr Pasqua has also tendered a copy of his diary covering the period 9 June 2008 until 2 September 2008. The diary confirms that during the period covered Mr Pasqua only worked at the four job sites identified above. It also confirms that his usual hours were from 7.00 am until 3.30 pm.
Mr Pasqua has also tendered certain tax invoices he submitted to Morelli between June and September 2008. The tax invoices are on the letterhead “Rocco Pasqua Carpentry” and claim lump sums based on the hours worked plus 10 per cent for GST. Included on the bottom of the invoice are Mr Pasqua’s Australian Business Number and his licence number. Also in evidence are documents headed “Job Sheets” under the heading of Rocco Pasqua Carpentry with the builder identified as Morelli Constructions. The job sheets set out the date, job site, work carried out, the time taken and total hours worked.
In respect of his injury, Mr Pasqua states that he performed various jobs involving heavy lifting on 1 September 2008 when he felt “a sore back”. He did not think anything of it at the time as he thought it was temporary soreness from the physical exertion. However, the next morning he woke up with intense back pain. He reported the pain to Nick Morelli on 2 September 2008 and he has not returned to work since.
Morelli relies on several documents. In particular, it relies on a document headed “Period Trade Contract Conditions” dated 31 July 2008 made between the “principal contractor” (Morelli Const P/L) and the “trade contractor” (Rocco Pasqua Carpentry) (‘the Period Trade Contract’). That contract provides:
“1. In consideration of:
(a) the trade contractor agreeing to quote for trade works whenever asked
by the principal contractor; and
(b)the principal contractor agreeing to pay, on demand by the trade contractor, the sum of $1.00,
the parties agree that the period trade contract conditions overleaf are deemed to be incorporated into each trade contract for a period of 12 months from the date of this agreement.
2.The trade contractor acknowledges and agrees that:
(a) the principal contractor has not made any representation; and
(b) the trade contractor has not relied on any representation made by the
principal contractor, as to the availability of work or the number of work orders that will be issued by the principal contractor.
3.The parties agree that for each trade contract the scope of the trade works, the commencement and completion dates of the trade works and the price of the trade works shall be set out:
(a)in a quote from the trade contractor that is accepted by the principal contractor;
(b)in a work order issued by the principal contractor that is accepted by the trade contractor; or
(c)as otherwise evidenced in writing and signed by the parties.
4.The parties agree that this agreement does not form a contract to carry out work. The obligation to carry out work arises on the formation of a trade contract as described in paragraph 3 above.
5.‘Defects liability period’ in the trade contract means a period of 13 weeks/months from the practical completion of the work under the head contract.”
The Period Trade Contract was signed by a representative on behalf of Morelli and by Mr Pasqua. In addition, Mr Pasqua provided details of his public liability insurance and his personal sickness and accident insurance together with his Australian Business Number. He also confirmed that he was registered for the goods and services tax.
Morelli also relies on a document headed “Subcontractor Information Form” completed by Anna Morelli on 22 December 2008 at the request of GIO General Ltd (‘GIO’), Morelli’s workers compensation insurer. The document contains the following information:
“1. Does the claimant only work for you? No
If yes > How many hours per week? 40
2. Does the claimant do work for anybody else? Yes
If yes > Does the claimant advertise his/her services? Don’t know none [sic] our concern
3.Does the claimant employ other people to help do the work? Not on my job
If yes > Does the claimant have any Workers Not known
Compensation Insurance?
4.Do you pay the claimant wages on an hourly basis? Yes
5.Do you deduct any tax from the payments to the claimant? No
6.How do you pay the claimant? Cheque or
internet
7. When you pay the claimant, who do you pay? Trading name
(for example, the person direct or a company name) Rocco Pasqua
Carpentry
8. Who supplies necessary tools and equipment to the claimant? He has his own
9. Who controls the direction and completion of the work done? Contractor”
In a claim form completed by Mr Pasqua on 12 December 2008, he described his employer as “Morelli Construction P/L” and stated that he worked Monday to Friday 7.00 am until 4.00 pm.
In a letter to GIO dated 9 February 2009, Anna Morelli referred to the invoices submitted by Rocco Pasqua Carpentry and added that there were some days when Mr Pasqua was unavailable because he “had other work to do”. She also advised that Morelli had engaged the services of Rocco Pasqua Carpentry in February, March and September of 2007. On those occasions, Mr Pasqua submitted invoices in exactly the same way as he submitted in the period from June to September 2008.
Attached to Anna Morelli’s letter of 9 February 2009 are copies of two faxes said to be from Mr Pasqua to Morelli dated 5 February 2007. The first states “my insurance policy number et221-3987.NRMA”. The second fax provides new insurance policy numbers with the GIO.
THE ARBITRATOR’S REASONS
After referring to various authorities, the Arbitrator concluded:
(a)there was no doubt that the work Mr Pasqua was doing at the time of his injury in September 2009 was “incidental to his trade of carpentry, so that the question of whether that claim [sic] was regularly carried on by the applicant resolves itself into one of fact” (Reasons at [45]);
(b) the WorkCover medical certificates dated 2, 9 and 16 September 2008 described the employer as “Morelli Construction”. However, certificates dated 1 and 24 October 2008 and 25 November 2008 describe the employer as “Rocco Pasqua Carpentry” (Reasons at [55] and [56]). The medical certificate dated 10 December 2008 describes the employer as “Rocco Pasqua Carpentry Do Not Use” (Reasons at 57]);
(c)that Mr Pasqua was carrying on his business in his own name or business name was demonstrated by the use of the name “Rocco Pasqua Carpentry” in both the invoices submitted to Morelli and by Mr Pasqua’s signature to the periodic trade contract. The histories in the differing WorkCover medical certificates corroborated that situation (Reasons at [75]);
(d)the only reason Mr Pasqua could not work for anybody else was because there had been a slow down and Morelli was the only company with regular work for him (Reasons at [77]);
(e)looking at the situation as a whole, Mr Pasqua had been working as a subcontractor since the middle of 2007 after he resigned from being an employee with Morelli. In his subsequent dealings with Morelli he regarded himself as a contractor. He obtained his own sub-contractor’s contract and his own insurance. The real question was whether it could be said that Mr Pasqua was carrying on his work “regularly” (Reasons at [78]), and
(f) he was satisfied that Mr Pasqua was able to, and would have, worked for other clients had work become available. That Mr Pasqua chose to work for Morelli between June and September 2008 was not an indication that he no longer “regularly” carried on his business. There was no reason why Mr Pasqua could not take other work, except that business had become slow. Mr Pasqua did not work continuously for Morelli, but used his down time to supervise the renovations to his unit (Reasons at [79]).
SUBMISSIONS, DISCUSSION AND FINDINGS
Mr Pasqua argues that he is a deemed worker under the provisions of Schedule 1 clause 2 of the 1998 Act (‘the Schedule’). That clause provides:
“2 (1) Where a contract:
(a) to perform any work exceeding $10 in value (not being work incidental to
a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) (Repealed)
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.
(2) (Repealed)
(3) A person excluded from the definition of worker in section 4 (1) because of
paragraph (d) of that definition is not to be regarded as a worker under this clause.” (emphasis included)
The Court of Appeal considered this provision in Scerri v Cahill & another (1995) 14 NSWCCR 389 where Bainton A/JA (with Kirby A/CJ and Rolfe A/JA agreeing) held that an applicant who relies on Schedule 1 must prove:
(a) that he was a party to a contract with the respondent to perform work; and
(b) that work exceeds $10.00 in value; and
(c) that the work is not incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name; and
(d) that the applicant has neither sublet the contract nor employed workers in the performance of it.
It is not disputed that Mr Pasqua was a party to a contract with Morelli to perform work, or that the work exceeded $10.00 in value.
Mr Pasqua submits that the Arbitrator erred in stating that there was no doubt that the work he was performing at the time of his September 2008 injury was “incidental to his trade of carpentry” (Reasons at [45]) and that this error is repeated at [76] of the Arbitrator’s Reasons where he said that the real question was whether Mr Pasqua was carrying on his work “regularly”.
It is argued that the Arbitrator erred in his approach to the issue and that he did not properly define the meaning of “trade” in accordance with the decision of Dixon J (as his Honour then was) in Humberstone v Northern Timber Mills (1949) 79 CLR 389 (‘Humberstone’). It is submitted that Dixon J held in Humberstone that it is sufficient for a claimant to prove that he or she did not regularly carry on a trade or business independent of the contract with the relevant respondent, notwithstanding that he or she may have contracted with the respondent for work which was, in its own right, a trade or business carried on regularly. Reliance is placed on the following statement by Dixon J in Humberstone at 401:
“I think that the purpose of the exception or exclusion expressed by the words in question was to confine the benefit of the conclusive presumption which it establishes to persons who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name as carrying on such a trade or business and who do not in the course of that trade or business, as an incident of its exercise, undertake the work by entering into the contract. The provision will thus cover men who work for the principal but have no independent business or trade and men who though carrying on an independent trade or business undertake a contract outside the scope or course of that trade or business. The word ‘trade’ is capable of including any handicraft and in that sense it may seem to lack the element of systematic practice or holding out which the idea of openly conducting a distinct or independent trade or business and seeking custom implies. But a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.”
Reliance is also placed on the following statement in the same passage by Dixon J:
“The suggestion which this language conveys of the existence of a business or the practice of a trade is much strengthened in sub-s. (6) by the words ‘carried on,’ ‘regularly’ and ‘in his own name or under a firm or business name.’ These all indicate a business or trade conceived as independently existing or exercised by a person holding himself out to the public under a name or style. No doubt the policy is a matter of inference but it seems reasonable to suppose that it was considered proper that a person conducting a business in the course of which he contracted to perform work should himself carry the risk of personal injury as one of the hazards of his business, while the man who worked under contract but only for the employer or without any general trade or business or outside his trade or business should, like an ordinary employee, be insured by the Act against the risk of injury in his work.”
It is unclear if the Arbitrator failed to properly define the meaning of “trade”, as has been submitted on appeal. Nevertheless, that is not critical to the outcome of the appeal. Of more importance is the fact that the Arbitrator failed to determine whether Mr Pasqua was regularly carrying on a “trade or business”.
Mr Pasqua relies on the Court of Appeal decision in Wathen v AUT Holdings Pty Ltd [1977] 51 WCR 1 (‘Wathen’). In that case the deemed worker had been conducting a general carrying business prior to contracting with AUT to carry pipes exclusively for that company. AUT argued that the work performed under the contract was work “incidental to a … business regularly carried on by [the worker] in his own name or under a business or firm name”.
After referring to Dixon J’s decision in Humberstone, Mahoney JA noted (at 5):
“In the present case, the worker had no trade or business other than what he was doing for the defendant. The case was therefore not ‘work incidental’ in the subsection. In my opinion, the learned Judge properly held that s6(3A) applied to deem the worker to be a worker within the Act.”
Rather than determining whether Mr Pasqua was regularly carrying on a “trade or business”, the Arbitrator appears to have assumed that he was conducting the trade or business of carpentry and that the work he was performing at the time of his injury was incidental to that trade or business. The evidence does not support that conclusion.
Mr Pasqua’s evidence, which I accept, is that his business had been very quiet in June 2008 and that was why he “went back” to Morelli. The critical evidence is his assertion that he took no new work after starting with Morelli and that he worked full-time for that company between June and September 2008. That assertion is partly corroborated by the diary entries which suggest that, apart from six days, he worked for Morelli on every weekday between 10 June and 1 September 2008. His diary does not reveal what he did on those six days and only the entry on 18 July 2008 has the entry “sick”.
Mr Pasqua states, and his diary essentially confirms, that he worked regular hours for Morelli. He did not advertise his business between June and September 2008 and did not hand out business cards. Though he had his own tools, that fact is not decisive in determining whether or not he was regularly carrying on a trade or business. Morelli does not dispute that he did not sublet the relevant work with it and did not employ any workers.
Mr Pasqua’s evidence is that when jobs were not ready with Morelli, he did some renovation work on his own unit. That work did not involve the carrying on of a trade or business, but was clearly of a personal or private nature. That Mr Pasqua worked exclusively for Morelli during the relevant period is also confirmed by his bank statements which confirm that his only credit deposits during the relevant period were from “Morelli Group”. Similarly, his bank statements do not reflect a pattern of expenditure consistent with the conduct of a trade or business of carpentry.
The only evidence that contradicts Mr Pasqua’s evidence that he worked exclusively for Morelli during the relevant period is the Sub-Contractor Information Form and the letter from Anna Morelli dated 9 February 2009. Dealing firstly with the Sub-Contractor Information Form, the assertion that Mr Pasqua did not work exclusively for Morelli is inconsistent with the next answer on that form, namely that he worked for Morelli for 40 hours per week. The other answers on the form are either consistent with Mr Pasqua’s assertions, or at least not inconsistent with them. They confirm, for example, that he did not employ other people to do the work. It was not known if he advertised his services. Mr Pasqua’s evidence is that he did not advertise in the local newspaper between June and September 2008. Had he advertised in that period, it would have been a simple matter for Morelli to call evidence to that effect. It did not. In these circumstances, I accept Mr Pasqua’s evidence that he did not advertise during the relevant period.
At the arbitration, counsel for Morelli relied on the invoicing procedure adopted by the parties as evidence that Mr Pasqua was carrying on his business as a contractor. I accept that the method of invoicing was not inconsistent with Mr Pasqua carrying on a business as a contractor. However, I must weigh that fact against the other evidence in the case, namely that he did not advertise or perform work for other companies or businesses during the relevant period. These factors are important in determining whether Mr Pasqua was conducting a trade or business.
Counsel for Morelli also submitted at the arbitration that Mr Pasqua mainly used his own tools, no income tax was deducted from payments made to him, and the diary entries and invoices were more consistent with that of a sub-contractor rather than an employee. These submissions miss the point. It is not argued that Mr Pasqua is a “worker” under the legislation, but that he is in fact a sub-contractor who is, because he was not during the relevant period conducting a trade or business, entitled to the benefits of the deemed worker provisions in Schedule 1.
Next, the Arbitrator appears to have concluded that Mr Pasqua was carrying on a business because of the use of the name “Rocco Pasqua Carpentry” in both the invoices submitted to Morelli and in the Period Trade Contract. The fact that Mr Pasqua used a business name in his dealings with Morelli is not determinative. The question is not whether he had a business name, but whether he was regularly carrying on a trade or business during the relevant period. I am comfortably satisfied that, at the time of his injury, he was not.
The Arbitrator placed great weight on the reference to the employer in the WorkCover medical certificates. The certificates are inconclusive and merely record information provided by Mr Pasqua. Mr Pasqua is not to be expected to have an intimate knowledge of Schedule 1 of the 1998 Act and I place no weight on the identification of the alleged employer in the medical certificates. They do not contradict Mr Pasqua’s evidence that he was not carrying on a trade or business during the relevant period.
Counsel for Morelli also submitted at the arbitration that the evidence clearly showed that Mr Pasqua held himself out as being a contract carpenter. I do not accept that submission. The Schedule is designed to allow contractors to recover benefits under the legislation provided the work being performed is not work incidental to a “trade or business” regularly carried on by the contractor. As observed by Dixon J in Humberstone, a distinction must be drawn between an independent contractor whose relationship with the principal is “special or particular”, on the one hand, and, on the other hand, an independent contractor who “performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.” Clearly, Mr Pasqua had a special or particular relationship with Morelli.
Later authority has established that it is not necessary to establish a “holding out” before the Commission can find that a contractor is regularly carrying on a trade or business (Higgins v Jackson [1976] HCA 37; (1976) 135 CLR 174). The authorities are clear, however, that contractors who are not “in business for themselves” are entitled to the benefits of the deemed worker provisions (Turner v Stewardson [1962] NSWR 137). This result is consistent with Cam v Cousins Interstate Transport Pty Ltd [1964] NSWR 1288 (‘Cam’) where the applicant had regularly carried on the business of a carrier up until six months prior to his accident when he ceased his regular carrying business and operated his truck solely for the purpose of the respondent’s business. He had no business address or telephone book entry relating to an occupation or business as a general carrier and he did not advertise or hold himself out to the public as being in the trade or business of a carrier. It was held that he was entitled to the benefits of the deemed worker provisions under the Workers Compensation Act 1926.
The circumstances in Cam and Wathen are analogous to the present matter. Mr Pasqua clearly conducted a carpentry business until June 2008. From that time, however, his circumstances changed and he contracted exclusively for Morelli, but not as a part of a trade or business systematically or regularly carried on by him. As in Cam and Wathen, Mr Pasqua ceased conducting his business once he contracted exclusively with Morelli in June 2008. In these circumstances he is entitled to the benefit of the deemed worker provisions.
The Arbitrator misdirected himself where he said (at [78]) “the real question would appear to be whether…it could be said that the applicant was carrying on his work ‘regularly’.” As can be seen from a review of the above authorities, the appropriate question in cases of this kind is whether or not the contractor was, at the relevant time, regularly carrying on a trade or business in his own name or under a business or firm name. For the reasons outlined above, I am comfortably satisfied that, at the time of his accident, Mr Pasqua was not regularly carrying on a trade or business. It follows that the work he was performing at the time of his injury was not incidental to a trade or business regularly carried on.
The basis for the Arbitrator’s satisfaction that Mr Pasqua was able to, and would have, worked for other clients had work become available is unclear. The evidence establishes that he in fact worked exclusively for Morelli between June and September 2008. For that reason, he did not take other work and I do not accept that he was regularly carrying on a trade or business. For the reasons set out above, I do not agree with the Arbitrator’s conclusion that Mr Pasqua did not work “continuously” for Morelli. Apart from the few days off dealt with at paragraph [42] above he worked exclusively for Morelli.
On appeal, it is submitted on behalf of Morelli that the wearing of a Morelli company shirt did not indicate that Mr Pasqua was not engaged in work incidental to his business. I do not accept this submission. The wearing of Morelli’s company uniform was clearly consistent with Mr Pasqua’s evidence that he ceased operating his business between June and September 2008.
It is submitted that it is not significant that Mr Pasqua had no marketing, signage or advertising because word of mouth recommendations carry as much or more weight with head contractors in the building industry as signage and advertisements. Whilst it is true that personal recommendations are important in all industries, the lack of marketing, signage and advertising is a further indicator, though not decisive, that Mr Pasqua was not regularly carrying on a trade or business during the relevant period.
It is argued that the Period Trade Contract was not a contract guaranteeing work, but merely a contract setting out the terms on which any work offered would be performed within the 12 months following its signing. It is correct that the Period Trade Contract was not a guarantee of work, but that is not determinative. At the most, it indicates that Mr Pasqua was a contractor, as he concedes.
Morelli argues that Mr Pasqua is asking the Commission to find that unless he was engaged contemporaneously with another principal at the time he was providing services to Morelli, he cannot be said to be engaged in a business at that time. I do not accept that submission. As noted above, it is necessary to consider whether the contractor is in business for himself or herself and whether a trade or business is carried on systematically and regularly. The arrangement may well have come to an end at the conclusion of the work at Birchgrove and Mr Pasqua may well have returned to his business at that time. However, that does not assist Morelli in dealing with the current claim. In any event, the evidence is that Mr Pasqua planned to continue the existing arrangement “well beyond” the time of his injury on 1 September 2008 (paragraph three of Mr Pasqua’s statement of 1 July 2009).
OTHER MATTERS
On reviewing the matter, it was clear that the parties’ submissions had not dealt with all issues. In a teleconference on 16 November 2009, I granted Mr Pasqua leave to file an amended appeal with submissions in support and Morelli leave to file submissions in response. Mr Pasqua now seeks to argue that the Arbitrator erred in finding:
(a) that Mr Pasqua’s incapacity resulted solely from the injury on 1 September 2008;
(b) the allegations of injury to the legs and of psychological injury had not been proven;
(c) Mr Pasqua to be partially incapacitated and not totally incapacitated, and
(d) average weekly earnings of $798.00 per week and that Mr Pasqua has an ability to earn $560.00 per week.
Pursuant to leave granted at the teleconference, Mr Pasqua seeks to amend Part 5.6 of the Application to claim lump sum compensation of $16,170.00 in respect of 11 per cent whole person impairment as a result of injury to his lumbar spine on the dates referred to in schedule one of the Application and to claim $30,000.00 for pain and suffering. On condition that Mr Pasqua’s separate proceedings for lump sum compensation (matter No 6987 of 2009) are discontinued within seven days, I make that amendment to the Application. This will require that Morelli be given a reasonable time in which to arrange a medical examination, if it wishes to do so.
Given this amendment, and given that Mr Pasqua appears to argue that part of his impairment and, presumably, part of his entitlement to section 60 expenses and weekly compensation, has resulted from the 2005 injury, the first issue is whether Morelli should be given leave to argue any of the many issues in its Reply, though the section 74 notice only disputed worker or deemed worker. Morelli’s solicitor has not made any submissions on this critical preliminary issue and has offered no explanation as to why the additional issues were not disputed in the section 74 notice. As a result, and as a result of the generally unsatisfactory state of the evidence and the pleadings, the matter will be remitted to another Arbitrator for all outstanding issues to be re-determined.
The pleadings refer to Mr Pasqua having injured his “back, legs and psychological sequelae”. That is misleading. As I understand it, Mr Pasqua does not allege that he injured his legs or that he suffered a psychological injury, but merely that, as a result of his back injuries in 2005 and/or 2008, he has symptoms in his left leg and psychological symptoms. There is clear evidence that he suffers from symptoms in his left leg as a result of his back condition. Those symptoms are not, however, a separate injury but have resulted from the back injury or injuries. In respect of the “psychological sequelae”, there is some evidence of Mr Pasqua experiencing depression and anxiety after the 2005 injury (see Ms Antonios’ report of 3 November 2005) but there is no evidence of such problems after the 2008 injury. Due to the way Mr Pasqua has pleaded his case and the insurer’s limited section 74 notice, it is unclear precisely what is claimed and what is genuinely in dispute.
The Arbitrator’s findings in respect of the claim for weekly compensation wrongly determined Mr Pasqua’s average weekly earnings to be the same as his current weekly wage rate. As this matter must be re-determined in any event, it will also be necessary to re-determine Mr Pasqua’s entitlement to weekly compensation, if leave is granted to dispute that part of the claim.
Morelli’s solicitors are reminded that they should only seek leave to dispute matters that are genuinely in dispute. It is completely inappropriate and unacceptable to list every conceivable issue in a Reply, as TurksLegal did in the Reply filed on 5 June 2009.
Last, though Morelli did not seek and was not given leave to make further submissions on the deemed worker issue, it has made additional submissions on that issue. Whilst I have considered those further arguments in the course of my reasons, parties are reminded that when leave is granted to file further submissions on specific issues, it is inappropriate to go outside the scope of that leave (Bull v Lee (No 2) [2009] NSWCA 362).
CONCLUSION
Having conducted a review on the merits (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 286 at [28]), I have concluded that, as at 1 September 2008, Mr Pasqua was a deemed worker under Schedule 1 clause 2 of the 1998 Act.
DECISION
The Arbitrator’s determination of 7 August 2009 is revoked and it is determined that, as at 1 September 2008, the applicant worker was a deemed worker under Schedule 1 clause 2 of the Workplace Injury Management and Workers Compensation Act 1998. The matter is remitted to a different Arbitrator for re-determination of all outstanding issues.
COSTS
The respondent employer is to pay the appellant worker’s costs of the appeal.
Bill Roche
Deputy President
02 December 2009
I, TUYET WALLIS, 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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