Potts v Old Brown Dog Pty Ltd - [2002] WADC 29

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: POTTS -v- OLD BROWN DOG PTY LTD [2002] WADC 29

CORAM: WISBEY DCJ

HEARD: 31 JANUARY 2002

DELIVERED : 19 FEBRUARY 2002

FILE NO/S: CIV 2723 of 1999

BETWEEN: DARREN PAUL POTTS
Plaintiff
AND
OLD BROWN DOG PTY LTD
Defendant

Catchwords:

Workers' compensation - Contract of employment - Whether deck-hand remunerated by percentage share of profits is an employee entitled to benefits under Act - Whether plaintiff making contribution to cost of working vessel

Legislation:

Workers' Compensation and Rehabilitation Act 1981, s 17

Result:

Plaintiff subject to provisions of Workers' Compensation and Rehabilitation Act 1981

Representation:

Counsel:

Plaintiff: Mr T N Cullity
Defendant: Ms P A Saraceni

Solicitors:

Plaintiff: Trewin Norman & Co
Defendant: Cocks Macnish

Case(s) referred to in judgment(s):

Greene v Moss & Anor, unreported; FCt SCt of WA; Library No 950682; 13 December 1995

Case(s) also cited:

Caldwell v Starr (1980) 1 WCR (PT 1) 241
Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41
Davey v Cray Holdings Pty Ltd (1996) 68 IR 285
Hollis v Vabu Pty Ltd [2001] HCA 44
Marshall v Whittaker's Building Supply (1963) 109 CLR 210
Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 17
TNT Express Worldwide (NZ) Ltd v Cunningham [1993] 3 NZLR 681
Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561

WISBEY DCJ: At callover on 29 October 2001 the Principal Registrar ordered (inter alia) that this action be listed for trial on 31 January 2002 "on preliminary issue". Unfortunately that issue was not formulated. When the matter came before me, it was formulated as follows:
"Was the nature of the plaintiff's engagement with the defendant as at 24 April 1996 such that the provisions of the Workers' Compensation and Rehabilitation Act 1981 are excluded by reason of s 17 of the said Act."
Section 17 provides that:
"This Act does not apply in respect of disabilities occurring to such members of the crew of a fishing vessel as contribute to the cost of working that vessel, and are remunerated by shares in the profits or the gross earnings of the working of that vessel."
The legislative intent is to exclude from the protection and benefits provided by the said Act a crew member of a fishing vessel if that crew member:
(a)contributes to the cost of working the vessel, and
(b)is remunerated by a share in the profits or the gross earnings of the working of the vessel.
One of the critical issues in the resolution of the present controversy is determining the distinction (if any) between contributing to the cost of working a vessel, and being remunerated by a share in the profits or the gross earnings of the working of a vessel.
It is to be noted that the Workers' Compensation Act1912, which preceded the present legislation, provided in s 19(4) that:
"This Act does not apply in respect of accidents to such members of the crew of a fishing vessel as are remunerated by shares in the profits or the gross earnings of the working of such vessel."
The essential difference between the provision presently under consideration, and its predecessor, is the addition of the words and requirement that the crew member "contribute to the cost of working that vessel".
The task is to determine the fiscal situation necessary to meet the above requirement; that is to construe the meaning of the phrase as it appears in the section.
The phrase is necessarily disjunctive to that which follows it, having regard to the fact that the legislature saw fit to add it to the words appearing in the corresponding section of the repealed Act.
In interpreting the phrase it is necessary to adopt a construction that "promotes the purpose or object" underlying the legislation (Interpretation Act 1984 s 18).
Although in his second reading speech on 1 October 1981 the Honourable the Minister for Labour and Industry did not refer to s 17, he addressed the object of the legislation as follows:
"I consider it important to recapitulate on the overall content and intent of this Bill … the Bill applies to all individuals properly classified in a somewhat broad sense as workers who have an employer responsible for their conditions of work and with the right to exercise some control over the manner in which the worker performs the task he is employed to do."
The purpose or object identified by the Honourable the Minister was to extend the protective cover of the Act to anyone who could be broadly classed as working for another.
Having regard to the fact that remuneration by receipt of a percentage of the value of the catch is the common basis for remuneration of crew members of fishing vessels, and given the notoriety of that custom within the industry, I think the Parliament added the requirement under consideration so that only those who could be said to be joint venturers or have an entrepreneurial interest in the activity, would not be covered by the Act.
The parties did not adduce oral evidence before me, being content to have the issue determined on the basis of agreed facts, and an agreed book of trip records.
I was not provided with a mutual memorandum of agreed facts, receiving instead an outline of evidence of the plaintiff, and the defendant's submissions on the preliminary question which identified agreed and assumed facts. An examination of those documents demonstrates that it is appropriate to proceed on the following factual basis:
1.The plaintiff worked as a deck-hand on the defendant's fishing vessel "Souwester".
2.There were no set hours of work, but there was a regime whereby the plaintiff worked two trips on and one off. He was at liberty to negotiate the "work on trips".
3.The plaintiff and defendant did not have a written agreement identifying the terms of their relationship.
4.The plaintiff did not receive a weekly wage, the basis of his remuneration being that he received 11 per cent of the net product of the sale of the fish caught on the trip less a deduction therefrom of the 'running costs of the vessel' being fuel, bait, ice, freight costs for provisioning the vessel and despatching the catch to market, and provisions for the sustenance of the crew. The other deck-hand, and the skipper (being the total crew compliment) were similarly remunerated, although the percentage appears to have varied according to responsibility and experience. The defendant made a deduction from each crew member's entitlement, for tax in accordance with their respective PAYE obligations.
5.At the conclusion of each trip a record was completed setting out the financial consequences of the trip, calculating the percentage share due to each member of the crew, and identifying the manner of payment.
6.The plaintiff completed and submitted to the Australian Taxation Office an employment declaration form wherein he declared himself an employee, named the defendant as employer, and specified the nature of the employment.
7.The defendant maintained a statutory worker's compensation insurance policy covering the skipper and crew.
It is on the above facts that this controversy falls to be resolved.
In the written outline of submissions, and orally before me, Mr Cullity for the plaintiff submitted that whether or not the plaintiff was an employee or an independent contractor, and the intention of the plaintiff and the defendant as to their contractual relationship, was not material to a determination of the issue; the question simply being whether the plaintiff was a person to whom s 17 of the Act had application. In a broad sense that is correct, although it is necessary to have regard to the contractual relationship, to determine the application of the section to that relationship.
Mr Cullity argues that the plaintiff made a contribution to the cost of working the vessel because in the trip records the defendant brought to account the variable costs in determining the balance from which the plaintiff was entitled to receive a percentage. He also says that the trip records make it clear that the plaintiff was remunerated by way of a share in the profits or the gross earnings of the working of the vessel because his entitlement was 11 per cent of the proceeds of the sale of the catch, less expenses.
There can be no doubt that the plaintiff was remunerated by way of a share in the profits or gross earnings of the working of the vessel, and the defendant does not contend otherwise. The question is whether it can also be said that the plaintiff thereby contributed to the cost of working the vessel. If the answer to that question in the particular circumstances, is in the affirmative, it would suggest that no distinction can be drawn between the concept of the cost of working the vessel, and that of receiving a share in the profits or the gross earnings of the working of the vessel. The principles of statutory interpretation dictate that cannot be so.
I was referred in argument to Greene v Moss & Anor, unreported; FCt SCt of WA; Library No 950682; 13 December 1995 which involved a consideration of the application of s 17 of the Act to a crewman of a fishing vessel whose contract of employment was governed by a share-fishing agreement. Referring to the agreement Murray J said:
"... a share-fishing agreement in standard form for the industry was tendered in evidence to reveal the terms of one such period of employment. The document is simple enough. It is set out on one page. It deals with the period of employment from 10 to 30 September 1986 as a share-fisherman on the vessel, the 'Mascot'. The agreement provided that the appellant was to be remunerated by an entitlement to 10 per cent of the gross proceeds of sale of the fish caught during the trip. The agreement also provided that the appellant was to bear 5 per cent of the 'operating expenses of the vessel', a term which was defined to include the cost of fuel, oil, bait and general provisions for the sustenance of the crew, but not to include the cost of maintaining the vessel in good and seaworthy order and condition, a cost which was to be borne solely by the owner, Mr Totterdell. This was clearly a share-fishing agreement which would activate the provisions of the Act s 17."
The significance of the agreement is that the crewman, a party to the agreement, contracted responsibility for a percentage of the operating expenses of the vessel. That liability existed independently of the fiscal result of the venture. Quite clearly in the circumstances he was required to contribute to the cost of working the vessel.
That is to be distinguished from the position of the present plaintiff who did not have such a contractual liability. It does not appear on the material before me that the defendant could look to him for a contribution to the cost of working the vessel, the position simply being that his remuneration was based on a percentage share of the profits from the working of the vessel remaining after the defendant had discharged the operating costs.
In the result s 17 of the Act does not affect the plaintiff's employment. That conclusion is entirely consistent with the primary purpose of the legislation.