Polak v Feature Homes Pty Ltd
[2005] NSWWCCPD 125
•3 November 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Polak v Feature Homes Pty Ltd [2005] NSW WCC PD 125
APPELLANT: Mela Polak
RESPONDENT: Feature Homes Pty Ltd
INSURER:CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC 2640-04
DATE OF ARBITRATOR’S DECISION: 16 June 2004
DATE OF APPEAL DECISION: 3 November 2005
SUBJECT MATTER OF DECISION: Meaning of ‘work’ in paragraph (a) of Schedule 1, clause 2 of the Workplace Injury Management and Workers Compensation Act 1998
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Ken Cush & Associates, Barristers & Solicitors
Respondent: Sparke Helmore, Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator is confirmed.
No order is made as to the costs of this appeal.
BACKGROUND TO THE APPEAL
On 14 July 2004, Mela Polak sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against a decision of an arbitrator dated 16 June 2004.
Mrs Polak is the widow of Drago Polak who died on 12 April 1999 after falling from scaffolding while painting a house at Hay, in New South Wales, on 10 April 1999. The builder of the house, Feature Homes Pty Ltd, is the Respondent to the appeal.
Mr Polak was born on 6 October 1944 and was aged 54 at the time of his death. He had worked as a painter, mostly painting houses, since at least 1970. Mr Polak conducted his work under the name D and M Polak. He undertook the painting work, while his wife did the associated paperwork and sometimes delivered paint to sites where Mr Polak was working. Mr Polak regularly undertook work for Feature Homes, as well as for others.
Mrs Polak’s lawyers notified Feature Homes of her husband’s death on 12 April 1999. On 2 July 2003, she lodged a compensation claim under the WorkCover NSW Uninsured Liability and Indemnity Scheme for $12,767 paid in respect of medical, hospital or related expenses and a lump sum of $245,540 in respect of her husband’s death. Her lawyers also notified Feature Homes of this claim by letter of the same date.
On 9 February 2004, Mrs Polak’s ‘Application to Resolve a Dispute’ was registered by the Commission. On 27 April 2004, the Arbitrator conducted a teleconference with the parties and, on 31 May 2004, conciliation having proved unsuccessful, he conducted an arbitration hearing. The Arbitrator’s determination of the matter, dated 16 June 2004, is set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 16 June 2004, records the Arbitrator’s orders as follows:
“1. This matter is resolved in favour of the Respondent.
2. The Respondent is to pay the Applicant’s costs as agreed or assessed.
3. I certify this is a complex matter.”
In his ‘Statement of Reasons for Decision’, the Arbitrator found on the basis of the evidence before him that Mr Polak was not a ‘worker’ within the meaning of the definition in section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), nor deemed to be a worker pursuant to Schedule 1, clause 2 of the 1998 Act.
The Arbitrator found, on the balance of probabilities, that although there was no direct evidence that Mr Polak erected the scaffolding from which he fell, “it seems more than likely that he did, if the evidence of Mr Elphick is correct and there was nobody else there” (paragraph 37, Statement of Reasons). The Arbitrator found “It is one of the features of the painting trade that there will be occasions when it is necessary to use devices including scaffolding to paint above ground level”. Mr Polak had been painting for at least 29 years and “would have experienced this problem before, probably many times” (paragraph 38). The Arbitrator found the erection of the scaffolding was incidental to Mr Polak’s trade or business and he was not, therefore, a ‘deemed worker’, but was an independent contractor.
On 3 August 2004, the Arbitrator issued an Amended Certificate of Determination stating:
“1. That the costs order made in this matter on 16 June 2004 is rescinded and in substitution there be no order as to costs.
2. The order that the matter is a complex matter is re-affirmed.”
ISSUES IN DISPUTE
The issue in dispute in this matter is whether Mr Polak was a ‘deemed worker’ pursuant to Schedule 1, clause 2 of the 1998 Act. The grounds of appeal identified by Mrs Polak’s lawyers focus on the Arbitrator’s treatment of the evidence and his findings derived therefrom.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act states:
“(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.”
I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties. Mrs Polak’s lawyers submit that there should be an oral hearing because of the subject matter of the application and the importance of the proceedings. Feature Homes submits that the matter should be dealt with on the papers. Having considered these submissions, 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.
Neither party sought to adduce fresh evidence.
LEAVE
Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The Appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), according to Mrs Polak’s lawyers, the amount of compensation at issue is $245,550. The Arbitrator made no award of compensation. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.
SUBMISSIONS
Mrs Polak’s lawyers submit that, on the evidence, the Arbitrator was not entitled to find the erection of scaffolding was incidental to his trade or business as a painter. While accepting the Arbitrator’s finding that, on the balance of probabilities, Mr Polak erected the scaffolding, Mrs Polak’s lawyers submit:
“The evidence therefore discloses in summary that Mr Polak was a domestic painter who used ladders and a plank to paint at height. He had not used scaffolding before although was expected to use it by the respondent. The work needed to be done. It seems a reasonable inference that the scaffolding was put together by Mr Pollack to enable him to continue painting at the height over the weekend while he was at Hay. There is evidence [sic] that Mr Polak as a domestic painter – probably more often painting ‘extensions’ to homes, was ever required to use scaffolding let alone erect it. The Arbitrator fell into serious error in concluding that it was incidental to Mr Polak’s trade and therefore removed him from the provisions of the ‘deemed worker’.”
Mrs Polak’s lawyers contend it was incidental to Mr Polak’s business to use two ladders and a plank to paint at height rather than using scaffolding. The scaffolding at the house was used principally by several other trades people engaged in working on site.
With reference to Schedule 1, clause 2 of the 1998 Act, Feature Homes submit that the ‘work’ to be performed by Mr Polak was to paint a house, and that this work was incidental to his trade or business as a house painter: “The mechanism by which the deceased carries out the work to be performed pursuant to the contract is irrelevant”. The word ‘work’ in the phrase “work incidental to his trade or business” has the same meaning as the word ‘work’ appearing earlier in paragraph (a) of Schedule 1, clause 2. Thus, Mrs Polak’s lawyers’ submission that there is no evidence to suggest that the deceased regularly used scaffolding, or that he was trained in the erection of scaffolding, is irrelevant to the determination of Mrs Polak’s claim: “What is relevant is whether the activities that he was pursuing in performance of the contract was [sic] part of the contract to perform work and that that work was incidental to his trade.”
DISCUSSION
The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Mrs Polak must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.
As stated above, the issue in dispute in the appeal is whether Mr Polak should be deemed a ‘worker’ pursuant to Schedule 1, clause 2 of the 1998 Act. In submissions on the appeal, Mrs Polak’s lawyers stated she wished to proceed only on this ground. They accepted that, on the evidence, “the Arbitrator was entitled to find that Mr Polak was an independent contractor”. They thereby conceded that Mr Polak was neither a worker at common law nor within the definition of a ‘worker’ as defined in section 4 of the 1998 Act. However, Schedule 1, clause 2 states relevantly:
“ 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) to perform any work as an outworker, 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.”
The former, but essentially similar, version of this clause - Schedule 1, clause 2 of the Workers Compensation Act 1987, was considered by Bainton AJA in Scerri v Cahill (1995) 14 NSW CCR 389:
“On its proper construction cl 2 of Sch 1 requires an applicant who relies on it to establish each of the ingredients, both positive and negative, to identify the relevant ‘work’. What he must establish is:
(a) that he was a party to the contract with the respondent to perform work;
(b) that the work exceeds $10 in value;
(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;
(d) that the applicant has neither sublet the contract nor employed workers in the performance of it.”
Mrs Polak’s case turns on whether paragraph (c) is satisfied. There is no dispute that paragraphs (a), (b) and (d) are satisfied. Deputy President Byron reviewed the relevant law in Zhao v Monlea Pty Ltd t/as Nordex Interiors [2003] NSW WCC PD 11. At paragraph 63, the Deputy President referred to Dixon J’s discussion of this in Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 401-2:
“Dixon J said that the provision was intended to draw a distinction between two classes of independent contractors. These are on the one hand those whose relation to the principal is special or particular, and on the other hand there are those who perform contract work successively for customers or others. The first class is a contractor whose contract with the principal stands outside the course of the general business of the contractor or the general practice of his trade. This class is outside the statutory exclusion and, therefore, obtains the protection of the Act. The second class is a contractor who conducts as a matter of course a definite trade or business that he carries on systematically, or a contractor who holds himself out as ready to do so. This class comes within the statutory exclusion and does not have the benefit of the protection provided by the Act. To be excluded from the benefits of the Act, the applicant must have had at the date of entering into the contract with the person engaging him or her, an existing business in the course of which he carried on his trade regularly, either in his own name or under a firm or business name. His Honour went on to say at 402 that;
‘… these all indicate a business or trade conceived as independently existing or exercised by a person holding himself out to the public under that 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 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 trade or business or outside his trade or business should, like an ordinary employee, be insured against the risk of injury in his work.’”
It is clear from this discussion of the law that the word ‘work’, which appears twice in paragraph (a) of Schedule 1, clause 2, in each case bears the same meaning and refers to the type of work the person was engaged to perform. In Mr Polak’s case this was house painting. Thus, the relevant issue is whether the house painting that Mr Polak was engaged by Feature Homes to undertake at the site in Hay was incidental to the work Mr Polak regularly carried out in the course of his business as an independent house painting contractor. Only if the work he was engaged to undertake was not incidental to his regular work, would he be deemed an employee of Feature Homes. The second use of the word ‘work’ in paragraph (a) does not refer to the way in which Mr Polak performed his work and whether, in this case, he used scaffolding or ladders and a plank.
Essentially, there is no dispute as to the main facts. Mrs Polak’s lawyers accept that the Arbitrator was entitled to find that Mr Polak was an independent contractor. In particular, Mrs Polak’s lawyers do not dispute that Mr Polak probably erected the scaffolding, which had previously been taken down after use by other trades people working on site to enable the joiners to undertake some work. However, they challenge the Arbitrator’s finding that Mr Polak’s erection and use of the scaffolding was incidental to his trade or business as a house painter, submitting that he had never erected scaffolding before and had, apparently, never used scaffolding. Rather, the evidence was that the equipment Mr Polak used for painting out of reach of ground level comprised ladders and a plank.
Feature Homes submit that a finding on whether the erection and use of scaffolding by Mr Polak was incidental to his trade or business as a house painter is irrelevant to the determination. They contend Mrs Polak’s lawyers have misinterpreted the meaning of the word ‘work’ in the phrase “work incidental to a trade or business” in paragraph (a) of Schedule 1, clause 2 of the 1998 Act.
As will be apparent from my discussion of the meaning of the word ‘work’ in paragraph (a) of Schedule 1, clause 2, I agree with Feature Homes’ submission. Mrs Polak’s lawyers’ submission is flawed because it equates the way in which the work was undertaken - the methods used to perform the work – with the type of work that was the subject of the contract. Whether Mr Polak’s erecting and using scaffolding to paint the house was something he had never done before is not relevant to the determination. He was an independent contractor undertaking work of a type that he regularly undertook in pursuit of his usual trade or business and was not, therefore, a deemed employee pursuant to Schedule 1, clause 2 of the 1998 Act.
In conclusion, I am not satisfied that the Arbitrator made an error of law and his determination must therefore be affirmed.
DECISION
The decision of the Arbitrator is affirmed.
COSTS
No order is made as to the costs of this appeal.
Robin Handley
Acting Deputy President
3 November 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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