Pinzon v Targett and JAG Pumping Pty Ltd
[2017] ACTMC 9
•7 June 2017
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Pinzon v Targett & JAG Pumping Pty Ltd |
Citation: | [2017] ACTMC 9 |
Hearing Date(s): | 6 March 2017 |
DecisionDate: | 7 June 2017 |
Before: | Magistrate Theakston |
Decision: | 1. In the Plaintiff’s claim against the Defendant, judgment be entered for the Defendant. 2. In the Defendant’s claim against the Third Party, judgment be entered for the Third Party. 3. The Plaintiff pay 50% of the Third Party’s costs of the proceedings, as agreed or assessed. 4. Order 3 does not take affect if, within seven days of this order, a party notifies my Associate in writing that it wishes to be heard in relation to alternative orders as to costs. |
Category: | Principal Judgment |
Catchwords: | NEGLIGENCE – excavator collide with bridge – damage subsequently repaired – employee or independent contractor – in the course or scope of employment - vicarious liability – COSTS – plaintiff unsuccessful in third party matter |
Legislation Cited: | Court Procedures Rules 2006 (ACT) |
Cases Cited: | Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6 Abdalla v Viewdaze Pty Ltd [2003] AIRC 927971; (2003) 53 ATR 30 Prince Alfred College Incorporated v ADC [2016] HCA 37 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Barclays Bank v Tom [1923] 1 KB 221 at 224 Furber v Stacey & Anor [2005] NSWCA 242 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688 |
Texts Cited: | Amended Practice Direction No 2 of 2014 - Case Management in Proceedings Commenced by Originating Claim |
Parties: | Pablo Pinzon (Plaintiff) Garry Phillip Targett (Defendant) JAG Pumping Pty Ltd (Third Party) |
Representation: | Counsel Mr A Herring (Plaintiff) Self-represented (Defendant) Ms A Irving (Third Party) |
| Solicitors Streeterlaw (Plaintiff) Self-represented (Defendant) Collaery Lawyers (Third Party) | |
File Number(s): | CS 320 of 2013 |
MAGISTRATE THEAKSTON
Situation
On a morning in October 2011, an excavator, being carried on the back of a tip truck, collided with the Commonwealth Bridge in Canberra. The excavator was substantially damaged.
This is a claim by the owner of the excavator (Mr Pinzon) against the driver of the truck (Mr Targett). Mr Targett has claimed in turn, by Third Party Notice, against his putative employer and owner of the truck (JAG Pumping). Mr Pinzon’s claim is in negligence and Mr Targett effectively claimed indemnity from JAG Pumping on the basis of an employment relationship.
Mr Targett did not dispute key elements of liability. He admitted he owed a duty to Mr Pinzon, he breached that duty and the excavator was damaged as a consequence. While Mr Targett did not admit the quantum of the damage claimed by Pinzon, he did concede the excavator was damaged substantially. Notwithstanding those concessions, Mr Targett claimed the damage had been made right by JAG Pumping. Put simply, Mr Targett admitted liability but claimed there was no enduring damage as pleaded.
Mr Targett asserted, that on the relevant morning, he was employed by JAG Pumping and was driving the truck, at the direction of JAG Pumping. This was denied, with JAG Pumping claiming Mr Targett was an independent subcontractor, who had borrowed the truck to transport the excavator following a request by Mr Pinzon.
Accordingly the issues left to be decided in this matter are:
(a)Was Mr Targett employed by JAG Pumping on the day in question?
(b)Was Mr Targett acting in the course or scope of his employment at the time of the incident and therefore was JAG Pumping vicariously liable for his actions?
(c)Was the excavator fully repaired by JAG Pumping following the incident?
In addition to the parties, another key player was Mr Glen Kennedy, the sole director of JAG Pumping.
Was Targett employed by JAG Pumping on the day in question?
It was common ground between Mr Targett and JAG Pumping that at the relevant time the latter supplied the former with:
(a)non-compulsory work uniform items,
(b)a mobile phone, and
(c)fuel for Mr Targett’s car.
Mr Targett gave unchallenged evidence that when working with JAG Pumping there was no written agreement, he was directed by Mr Kennedy when to start and when to finish. He usually started and finished at JAG Pumping’s yard and was directed by Mr Kennedy where to attend for work during the day. He was directed what work to do. I infer from this that Mr Targett did not have the option to delegate the work to another without reference to JAG Pumping. The work included everything that JAG Pumping did. For example, pumping concrete, placing concrete, finishing concrete, operating machines, driving tip trucks, fixing the pump and collecting and transporting materials. The equipment Mr Targett used was provided by JAG Pumping. Mr Targett was paid a daily rate of $300 directly into his bank account. There were in excess of 10 employees and they all performed the same range of tasks. At one point Mr Kennedy went away for a week or two and left Mr Targett to take all company phone calls, organise the jobs and allocate staff to those jobs.
It was common ground that at the relevant time JAG Pumping did not withhold tax for Mr Targett and that Mr Targett had an ABN. Mr Targett ordinarily worked four days a week. At some point following the incident Mr Targett ‘went on wages’ that involved withholding tax and the payment of superannuation contributions by JAG Pumping.
10. Mr Kennedy explained that transition during his evidence:
... He was a subcontractor for a while and, you know, after growing the company you like to try and make sure that you’re doing the right thing. We were going off the ABN number. Then after a while we were told we needed to pay them – like it doesn’t matter what happens they’re going to be deemed an employee so you need to pay them super, tax, everything. So then we did, we changed it. ... [T 62.26]
11. Earlier in his evidence Mr Kennedy described a degree of uncertainty about Mr Targett’s status, when he said:
So he was a subcontractor and at this time it was all a little bit – back in that time on these dates there was a lot of arguments on who was a subcontractor and who was working under ABN and who was deemed an employee and we weren’t too sure on how to go about it and we were only an early company. We’d only just started out. ... [T 52.36]
12. There was no evidence about the provision of other employee entitlements, the allocation of risk or whether Mr Targett maintained a separate place of work, advertised or performed similar work for other entities.
13. The traditional common law test, to determining whether a person was an employee, focused on an assessment of control exercised over the person by the putative employer. In Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at 39, the High Court confirmed the transition from that traditional test, to a more fundamental distinction between a person who serves an employer in the employer’s business, and a person who carries on a business of their own, with an eye to the question did the person perform the work as a representative of the putative employer?
14. In Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339, the ACT Court of Appeal considered the term ‘employee’ at common law, and adopted the methodical list of indicia described in Abdalla v Viewdaze Pty Ltd [2003] AIRC 927971; (2003) 53 ATR 30 at 42. In that decision, a Full Bench of the Industrial Relations Commission distilled the list of indicia following Hollis for the purpose of inferring whether or not the person was a servant of another in that other person’s business, or whether the person was conducting a business of his or her own.
15. Without reproducing the list verbatim, I observe that the evidence establishes the following indicia consistent with Mr Targett being an employee of JAG Pumping:
(a)JAG Pumping exercised control over where, when and how Mr Targett worked.
(b)JAG Pumping provided Mr Targett with the tools and equipment he needed to use.
(c)Mr Targett was not at liberty to delegate his tasks to another without reference to JAG Pumping,
(d)By encouraging Mr Targett to wear a JAG Pumping uniform and use a JAG Pumping provided phone and require him to drive JAG Pumping vehicles, JAG Pumping presented Mr Targett to the world as emanating from the JAG Pumping business.
(e)Mr Targett was paid for each day’s work, as opposed to at the completion of a particular task.
16. Out of completeness I note there was no evidence to suggest the following indicia:
(a)which are more consistent with Mr Targett being an independent contractor:
(i)Mr Targett performing any work for other entities,
(ii)Mr Targett maintaining any separate place of work or advertising his services to the world at large,
(iii)Mr Targett generating any goodwill or other saleable assets in the course of his work, and
(iv)Mr Targett spending a significant portion of his remuneration on business expenses; or
(b)which are more consistent with Mr Targett being an employee:
(i)JAG Pumping having any right to suspend or dismiss Mr Targett,
(ii)JAG Pumping having any right to the exclusive services of Mr Targett, and
(iii)Mr Targett receiving any paid holidays or sick leave.
17. The only indicia consistent with Mr Targett being an independent contractor is that he had an ABN and received his pay from JAG Pumping without tax being withheld.
18. While JAG Pumping denies that Mr Targett was an employee, Mr Kennedy conceded that at the time, there was some uncertainty about Mr Targett’s status. The single indicia in favour of Mr Targett being an independent contractor does not displace the preponderance of available indicia that are clearly in favour of Mr Targett being an employee. When viewed collectively, it is patent that Mr Targett was not operating his own business, but rather serving JAG Pumping in its business and performing that work as a representative of the company. Accordingly, I find that on the relevant day, Mr Targett was an employee of JAG Pumping.
Was Mr Targett acting in the course or scope of his employment at the time of the incident and therefore was JAG Pumping vicariously liable for his actions?
19. The High Court, in Prince Alfred College Incorporated v ADC [2016] HCA 37, summarised the various principles of vicarious liability and noted the traditional method at common law of confining liability, required the employee’s conduct to be conducted within the course or scope of employment.
20. In the present case there was a minor dispute about how and why Mr Targett was driving the tip truck. Mr Targett testified that he arrived late to work. He asked Mr Kennedy ‘What’s happening?’ Mr Kennedy responded ‘You’re taking the [excavator] to the other side of town for [Mr Pinzon].’ The excavator was already loaded onto the truck. Mr Pinzon gave Mr Targett the address and Mr Targett drove the truck away, subsequently colliding with the bridge.
21. Mr Kennedy’s testimony was less clear. Mr Kennedy testified that on the day in question he did not have any work for Mr Targett, but conceded under cross-examination that Mr Targett was initially going to work for JAG Pumping that day. Mr Kennedy initially denied Mr Targett worked for JAG Pumping that day. However, under cross-examination he conceded that Mr Targett did work that afternoon by repairing the truck’s damaged tailgate. Further, Mr Kennedy was certain that Mr Targett loaded the excavator onto the truck. However, when asked directly how he knew that, he made no reference to personally observing the excavator being loaded, but rather made references to a range of usual practices, that another person had loaded and transported the excavator on the truck once before, and suggested that Mr Targett and or Mr Pinzon had later told him that Mr Targett had copied how the other person had loaded the excavator in the past.
22. Mr Kennedy also testified that he was asked by Mr Pinzon to transport the excavator, and he said ‘No, I can’t do it. If you want, get [Mr Targett] to do it.’ He later said to Mr Targett, ‘You know, you can take that out if you want. Talk to [Mr Pinzon]. Get the message or address off [Mr Pinzon] and go do what you’ve got to do.’ Mr Kennedy reasoned that as the request had come originally from Mr Pinzon, he had merely lent his truck to Mr Targett. Consequently any arrangement for Mr Targett to transport the excavator was directly between Mr Targett and Mr Pinzon.
23. The question of whether or not Mr Kennedy personally loaded the excavator is little more than a distraction. The real issue is whether the transportation of the excavator was in the course or scope of Mr Targett’s employment, and that assessment is informed by what was said by Mr Kennedy to Mr Targett about the task and the nature of the relationship at that time.
24. Due to the inconsistencies and extrapolation within Mr Kennedy’s evidence I prefer the evidence of Mr Targett. However, even on Mr Kennedy’s evidence it is open that Mr Targett transported the excavator at the direction, or at least with the sanction, of Mr Kennedy. This is because the words used by Mr Kennedy must be understood in the context of Mr Targett ordinarily working for and under the direction of Mr Kennedy. By Mr Kennedy saying ‘You can take that out if you want’ is at the very least authority to perform that task and, in the absence of any express statement to the contrary, would be assumed to be a task within the ordinary relationship between the two men. There was no evidence, or even the suggestion, that words were said by anyone indicating a departure from that ordinary arrangement. For example, there was no evidence to suggest that an extraordinary financial arrangement had been discussed and agreed between the men. Further, there was uncontested evidence that Mr Targett was regularly tasked by Mr Kennedy with a wide range of tasks, including moving material and equipment around.
25. In those circumstances I am well and truly persuaded that Mr Targett was transporting the excavator in the course and scope of his employment, and I find accordingly.
Was the excavator fully repaired by JAG Pumping following the incident?
26. The only evidence before the court in relation to the final state of the excavator was that of Mr Kennedy and Mr Targett. They testified that following a delay associated with the insurance assessment process, the following repairs were performed on the excavator by JAG Pumping:
(a)The two damaged hydraulic pistons (or rams) were removed, sent to Austec Engineering, re-conditioning and subsequently reinstalled with new bushes.
(b)Structural cracks were welded.
(c)The boom and dipper arm were sandblasted and crack tested.
(d)Worn hydraulic hoses were replaced.
(e)An over-heating problem was corrected.
(f)The entire excavator was repainted.
27. Mr Kennedy estimated that he spent $7,500 on those repairs and that the total cost, including labour would be approximately $10,000. A number of receipts were admitted into evidence consistent with the above evidence. Mr Targett explained he was a qualified diesel mechanic and had years of experience in operating and repairing machines and had operated the excavator, both before the collision and after the repair. In his assessment, the excavator was left in a better position than it had been before the collision with the bridge. The damage had been repaired, there was less movement in the piston bushes, it no longer overheated when worked hard and was completely repainted.
28. The evidence of Mr Gupta, a chartered loss adjuster and engineer called by Mr Pinzon, did not address the final state of the excavator and, in any event, only provided a cursory and hearsay description of the damage.
29. The assertion that the excavator was eventually repaired was pleaded by Mr Targett in his defence. Notwithstanding that the excavator remains in Mr Pinzon’s possession, there was no evidence led in his case about the final state of the excavator and no application to lead evidence in reply. Ultimately, the evidence from Mr Kennedy and Mr Targett went unchallenged, there was no evidence to the contrary and Mr Pinzon’s final submissions essentially only suggested Mr Targett had not adequately demonstrated that the repairs returned the excavator to a pre-accident condition.
30. I accept the evidence of Mr Kennedy and Mr Targett in relation to the repairs performed on the excavator and that it was placed in a better condition than it was before the collision. I also accept that JAG Pumping, as Mr Targett’s employer, was liable to indemnify Mr Targett in relation to that damage. Accordingly, I find that Mr Pinzon has not established the loss and damage as pleaded in his Statement of Claim, as the excavator was repaired by JAG Pumping.
Conclusion
31. In the absence of any damage, Mr Pinzon’s claim must fail. For the same reasons Mr Targett’s claim against JAG Pumping must fail. However, I note that had damage been established Mr Targett’s claim would have succeeded.
Costs
32. I note that the parties have included within their final submissions arguments about costs. Accordingly, I will now proceed to determine the issue of costs based upon those submissions. However, out of an abundance of caution I will structure the resultant order to allow further submissions on the issue if that becomes appropriate and necessary.
33. The Court Procedures Rules 2006 provides the court with the discretion to award costs between the parties. That discretion must be exercised judicially and costs ordinarily follow the event: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72. The application of that principle in a third party matter, if unsuccessful due principally to the plaintiff not establishing its case, would result in the plaintiff paying the defendant’s costs and the defendant paying the third party’s costs. However, the justice of such a case may require a departure from that ordinary approach and the court has the discretion to do so. The object of third party procedures was discussed in Barclays Bank v Tom [1923] 1 KB 221 at 224 and included to:
(a)bind a third party to the decision between a plaintiff and defendant;
(b)decide the issue between a defendant and third party as soon as possible after the decision is made between a plaintiff and defendant; and
(c)avoid multiplicity of proceedings and thereby avoid the risk of extra expenses.
34. Hodgson JA in Furber v Stacey & Anor [2005] NSWCA 242 at [31] discussed the relevant considerations for a departure from the ordinary approach in the case of an unsuccessful third party claim. When doing so he noted the observation in Barclays Bank that it may be reasonable, and even necessary, for a defendant to claim against a third party and the plaintiff’s claim, if established, could be the basis of the defendant’s claim against the third party. If the defendant took action only subsequently against the third party, as opposed to joining them in the proceedings, the defendant would run the risk of not being able to establish the elements of the plaintiff’s claim essential to the defendant’s subsequent claim. In such a case the defendant may be ‘virtually forced by the plaintiff’s allegations, in order to protect itself, to bring in the third party’.
35. Hodgson JA went on to adopt, from Barclays Bank, a guiding principle:
Where the nature of the plaintiff’s claim ... render it reasonable, having regard to the purposes of third party procedure, to bring in the third party, and the third party claim is unsuccessful solely by reason of the failure of the plaintiff to sustain its claim ... the defendant should ordinarily recover from the plaintiff the costs of the third party claim including those which the defendant is ordered to pay to the third party.
36. Hodgson JA also adopted other guiding principles, as described in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688 at [72] – [75], namely:
(a)Was the plaintiff’s claim a catalyst for the third party claim, but noting that causation alone is insufficient to justify a pass on order.
(b)The nexus between the original and the third party claims, including does the nature of the plaintiff’s claim render it reasonable or appropriate for the defendant to, in turn, bring in the third party?
37. Finally and at [33], Hodgson JA added the consideration that the third party may be left to bear some or all of its own costs, where it would have been reasonable to leave an issue to be defended by the defendant and or the third party incurred costs in relation to an unsuccessful issue raised against the defendant.
38. In the instant case JAG Pumping seeks costs directly against Mr Pinzon. Mr Targett was self represented and there is no suggestion he has incurred any legal costs. He makes a late claim for restitution in his final submission, which cannot be entertained in its current form. Mr Pinzon seeks costs not be ordered.
39. It has been established that Mr Targett was an employee of JAG Pumping and the latter is vicariously liable for the relevant activities of the former. Clearly Mr Pinzon’s claim was the catalyst for Mr Targett’s claim. Taking into account the close nexus between the two claims and the purposes of third party procedures, it was more than appropriate for Mr Targett to bring in JAG Pumping and seek indemnification. In doing so, the issue of vicarious liability could be addressed simultaneously with the question of principal liability, and any risk of uncertainty, unnecessary delays and extra costs associated with Mr Targett’s claim were avoided. With Mr Targett being self represented, it also allowed JAG Pumping to augment Mr Targett’s defence. I accordingly find it was reasonable and appropriate in the circumstances for Mr Targett to bring in JAG Pumping as a third party.
40. However, the instant case involved two controversies. The first was liability dependant on the final state of the excavator, and the second was whether JAG Pumping was vicariously liable to Mr Targett. JAG Pumping was not successful in relation to the second controversy. It would not be just to insist upon Mr Pinzon paying JAG Pumping’s costs associated with that part of the litigation. The two controversies were of about the same scale and took up about the same amount of time at the hearing. Accordingly, JAG Pumping should bear 50% of its costs.
41. For completeness, I note Mr Pinzon submitted that Mr Targett did not formally file or serve before the hearing any evidence in relation to the issue about the final state of the excavator and, therefore, no costs should be awarded against Mr Pinzon. I observe that neither the Court Procedures Rules 2006 nor the Amended Practice Direction No 2 of 2014 - Case Management in Proceedings Commenced by Originating Claim mandate the disclosure of such evidence, and that the parties were at liberty to request directions to that effect. In this case no such directions were made.
Orders
42. I make the following orders:
1. In the Plaintiff’s claim against the Defendant, judgment be entered for the Defendant.
2. In the Defendant’s claim against the Third Party, judgment be entered for the Third Party.
3. The Plaintiff pay 50% of the Third Party’s costs of the proceedings, as agreed or assessed.
4. Order 3 does not take affect if, within seven days of this order, a party notifies my Associate in writing that it wishes to be heard in relation to alternative orders as to costs.
| I certify that the preceding forty-two [42] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Magistrate Theakston Associate: Taden Kelliher Date: 07 June 2017 |
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