Pursell v Newberry

[1968] HCA 45

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Kitto, Taylor and Owen JJ.

PURSELL v. NEWBERRY

(1968) 118 CLR 381

1 August 1968

Workers' Compensation (N.S.W.)

Workers' Compensation (N.S.W.)—"Worker"—Contract of service—Persons deemed workers—Arrangement between adjoining owners for erection of dividing fence and clearing of adjacent land by one for specified sum—Contribution by other owner of labour in return for loan of employee and of tractor—Injury whilst working—Dividing Fences Act, 1951 (N.S.W.), s. 7—Workers' Compensation Act, 1926-1964 (N.S.W.), s. 6 (1) "Worker", (3A), (5)(a).

Decisions

August 1.
The following written judgments were delivered:-
BARWICK C.J. Bruce Allan Pursell (the appellant) carried on in partnership with two other persons, on a property in New South Wales known as "Woodlands" (Guyra) Pastoral Co. (the partnership), the business of grazing. The appellant lived on the property with his wife and children and was retained by the partnership as the manager of the property on a weekly salary of 25 pounds together with material advantages such as free accommodation, whilst the partnership met the telephone account and provided expenses for the running of motor vehicles. (at p382)

2. The respondent was also a grazier, owning a property known as "Churchill" which adjoined the partnership property. The common boundary of the two properties extended for about two miles and, at the time of the events to be described, the boundary fence had fallen into a state of disrepair. (at p382)

3. The appellant some time in June 1964 decided that the state of the fence was so bad that a new fence should be erected. He accordingly resolved to speak to the respondent and telephoned him with a view to discussing on the site what should be done. A meeting was arranged and it was then resolved between the two men that a new fence be erected of an agreed type. It was also agreed that the land on each side of the proposed fence for the width of one chain should be cleared. The appellant told the respondent that he did not have the time to work on the fence and suggested that a contract be let for the carrying out of the work. The respondent thereupon suggested that he (the respondent) be allowed to contract to erect the fence and this was agreed upon. Throughout the dealings between the two men, the appellant acted as a principal though he was in truth the manager for the partnership of which he was also a member. Nothing, however, in my opinion, turns on this aspect of the relationship of the parties. (at p383)

4. The precise finding of the Workers' Compensation Commission as to the agreement made between the appellant and the respondent was as follows:

"The respondent said, 'I will contract to do the fence'. The applicant said 'at what price' and the respondent said (at the price of) 4 pounds per chain for the construction of the fence, clearing the chain on each side, pulling the old fence down and reconstructing the new fence, pulling the old wires out of the old fence and putting them in the new fence. The material for the fence to be supplied half each except that timber posts required for it should be obtained by the respondent from timber to be felled by the respondent in clearing the chain wide and on each side. It seems clear from the applicant's evidence in cross-examination that the price of 4 pounds per chain was to be paid only for one half the total number of chains in the fence line upon the basis of equal contribution by each owner to the contract price of the new fence." (at p383)

5. The respondent already had on hand the material which he was to contribute but the appellant did not. A short time thereafter, however, the appellant provided his share of the fencing material, other than the fence posts, and the respondent commenced to construct the fence with assistance from two or three people, whom he employed on his own account at wages. One of these was a man named Vic. Maskie. (at p383)

6. During the course of the work on the fence, the appellant approached the respondent and asked if he could "borrow" Maskie for a day to assist him with some work associated with the management of the stock on the partnership property. To this the respondent agreed. Pursuant to this arrangement, Maskie did do the work required by the appellant. He was not paid by the appellant but apparently was paid by the respondent for the day's work. In return for this work so done by Maskie, the appellant offered either to pay the respondent the value of Maskie's services or himself to work for a day on the fence. The precise expression used in his offer was "to give you a day on the fence". The respondent chose the latter alternative. There was evidence, which the Commission accepted, that the value of one day's labour of a person such as Maskie was 5 pounds: presumably, the appellant's labour would have a similar value. (at p384)

7. In March 1965 the appellant borrowed the respondent's tractor when his own had broken down and he used it for some four days: but he provided the fuel and oil himself. When the appellant returned the tractor, he told the respondent that he would work for another day on the fence in payment for the use of the tractor. The respondent accepted that situation. The appellant gave evidence that the value of the loan of the tractor would have been about 4 pounds to 5 pounds. (at p384)

8. Shortly after this time the appellant again spoke to the respondent telling him that it had been some time since he had borrowed Maskie and the tractor. He asked the respondent if he would rather be paid in cash than by two days' work. The respondent affirmed that he would prefer the appellant to work for two days on the fence bringing over his tractor, which had by then been repaired, with a blade on it to help move some big trees in the area to be cleared beside the fence, that clearing apparently being within the arrangement made by the respondent in connexion with the erection of the boundary fence. (at p384)

9. About a week before the day of the accident on 6th July 1965, the appellant visited the respondent whilst he was working on the fence and during discussion said that he would come on the following Monday to do the two days' work on the fence that he had promised to do, saying that he felt that he would be needed on the steep part of the fence. Thus it would seem that a factor in the minds of each of the men in choosing the days the appellant should work on the fence may well have been that at the time in question the fence would be in course of erection upon a steep part of the boundary. (at p384)

10. The appellant later found that he could not go to work on the fence on that Monday but on the Tuesday he put the blade on his tractor at his own premises and prepared to go to the site of the work on the fence. The evidence established that he drove to the work on the fence and there joined the others, including the respondent, working on it. Whilst working with Maskie felling a tree, which, as I read the evidence, particularly as Maskie was working on it, would appear to be within the area to be cleared by the respondent pursuant to the initial arrangement, a branch of the tree broke away, landed between the two men and "flicked off" on to the appellant causing very serious injuries. He thereupon instituted proceedings for compensation under the Workers' Compensation Act, 1926-1964 (N.S.W.) (the Act). The only evidence given as to the facts I have recited came from the appellant who was regarded by the Commission as a witness of truth. His account was wholly accepted. (at p385)

11. The Commission found:

"The respondent in the course of and for the purposes of his trade or business entered into a contract with the applicant under which the applicant agreed to perform for the respondent two days labouring work upon the fence line and during the course of such labouring work agreed to supply and operate the blade tractor of the partnership for the purposes of assisting the respondent in the felling of a couple of large trees in the area then to be cleared by the respondent under his contract with the partnership. It is, I think, to be inferred from the conversations between the applicant and the respondent evidencing the agreement that during the period of the two days labour the applicant would assist the respondent, and any workers then employed by the respondent, in carrying out work that was then in hand on the fence line under the respondent's fencing agreement with the partnership. The agreement between the applicant and the respondent did not, in my opinion, operate to waive or discharge, pro tanto, the obligations of the respondent as the contractor under his earlier contract with the partnership. Nor did that agreement operate to disentitle the respondent to the remuneration agreed upon under the main contract for the work executed under it." . . . "The work to be performed by the applicant under the agreement, at least as an incident of it, included work of the description appearing in par. (ii) - It is not however, I think clearly established that under the agreement the applicant promised to perform or assist the respondent in performing any of the other kinds of work appearing in the remaining paragraphs of sub-s. (5) (a). It is, I think, open to be inferred from the circumstances surrounding the making of the agreement, and in particular, from what is known of the circumstances under which the respondent was carrying out work upon the fence line, that it was mutually contemplated by the applicant and the respondent that the applicant, in carrying out the work that he had promised to do upon the fence line, would submit to whatever arrangement and organization of the work had been made, or were made, by the respondent on the days upon which the applicant was working on the fence line. It was contemplated by them, I think, that the applicant would perform his work with the respondent and workers employed by the respondent and that, as and when required, they would act together as a team; using where necessary equipment provided by the respondent for the doing of the work. The work on the fence line was clearly under the control of the respondent at the time of the various conversations between them relating to the work to be performed by the applicant, and in my view it should be inferred that on the days upon which the applicant should work under his agreement or arrangement with the respondent, the respondent would continue to have the right of manner of doing that work. For these reasons, I think, it should be found that the ultimate right of control over the manner of doing the work on the fence line, including that to be done by the applicant, was intended to remain with the respondent. The Commission therefore finds that the applicant was employed by the respondent under a contract of service to assist him in performing part of the work that the respondent as contractor had undertaken to perform for the partnership. The agreement under which the applicant promised to work upon the fence line is not in the Commission's view to be taken as effecting a sub-letting to him of part of the work to be performed by the respondent under the fencing contract between the partnership and him." (at p386)

12. The respondent appealed to the Supreme Court by notice of appeal which claimed (1) that there was no evidence that the now appellant was employed by the now respondent under a contract of service, (2) that there was no evidence that the ultimate right of control over the manner of doing the work on the fence line including that to be done by the now appellant was intended to remain with the now respondent, (3) that the Commission erred in law in making the award and that upon the evidence the Commission was bound to make an award for the now respondent. Other grounds asserted that inferences drawn by the Commission as part of the finding of the fact of employment were not reasonably open upon the evidence. (at p386)

13. It is quite clear, both upon the terms of the Act and of the notice of appeal, that the only question before the Supreme Court, and now before this Court, is whether there was any evidence upon which a finding could be made that the appellant was a worker in the employ of the respondent within the meaning and operation of the Act at the time he suffered the injury caused by the falling branch of the tree he was assisting to fell. (at p386)

14. The Supreme Court set aside the award, holding that the appellant at that time "was neither actually, . . . nor notionally . . . a 'worker' employed by" the respondent (per Sugerman J.A. with whom McLelland J.A. agreed): and that the finding that the appellant was a worker of the respondent under a contract of service was not open (per Jacobs J.A.). (at p386)

15. It will be observed that the Commission found that the respondent had contracted to erect the fence for a price of 4 pounds per chain and that the appellant had agreed to pay that price calculated upon half the length of the fence and to provide his share of the material other than fence posts. For my part, I have examined the evidence closely, bearing in mind that the two men were neighbouring graziers and I am unable to find in that circumstance or in any other disclosed in the evidence any reason to displace the Commission's finding of fact. That the fence needed replacement is clear: that each adjoining owner was liable either to join physically in replacing it or to contribute in equal proportion to its replacement is also clear: see s. 7 of the Dividing Fences Act, 1951 (N.S.W.). That the appellant did not want to "join" in the work of replacement is manifest from his accepted evidence. There is, in my opinion, no impediment in law to one of two adjoining owners contracting with the other, or for that matter with himself and that other, to replace a boundary fence for a mutually agreed unit price for each undifferentiated unit of length of the boundary, the other making his equal contribution by charging that price upon one half only of the total length of the boundary fence. (at p387)

16. This is primarily what the Commission found to have happened and what, in my opinion, the evidence, accepted as it was by the Commission, clearly supported. However, the majority of the Supreme Court, apparently because of the obligation imposed on adjoining owners by the Dividing Fences Act, 1951, concluded that -

"Although Newberry said that he would 'contract' to do the fence, in substance and reality what the parties undertook as between themselves was the joint venture of constructing a new dividing fence. It was one single line of fencing that was to be constructed along their common boundary and as their common property and not as to one half of it the fence of the partnership and as to the other half Newberry's fence. Newberry was to contribute the whole of the labour, but, since the co-adventure was to be on the basis of equality of contribution, the partnership was to pay him for equality half the labour cost. Materials were to be provided equally except that the timber posts, whose obtaining was included in the labour cost to which the partnership was contributing, were to be supplied by Newberry from the timber got from the clearing" (1967) 67 SR (NSW), at p 418; 86 WN (Pt 2), at p 277 . (at p387)

17. Consequently, the majority thought that no relationship of employer and employee could arise between the parties to the co-adventure and therefore -

"When, at a later stage and for whatever cause, Pursell also contributed by giving his labour and the use of his tractor and blade, he did so as a further contribution on his part to the joint venture. In effect the arrangement was, not that Pursell should work for two days for Newberry, but that he should contribute two days' work and the use of his tractor and blade to the joint enterprise" (1967) 67 SR (NSW), at p 419; 86 WN (Pt 2), at pp 277-278 . (at p388)

18. As to these reasons, I desire to say with respect two things. In the first place, it was not for the Supreme Court to determine for themselves what inferences or conclusions of fact should be drawn from the evidence, and, secondly, the view of the facts which the majority took completely ignores, as it seems to me, the fact that a price was fixed between the parties for the work of demolishing the old fence, erecting the new and clearing the land (heavily timbered as the evidence discloses) on either side of the boundary for a width of one chain - a matter not expressly covered by the Dividing Fences Act, 1951 and not necessarily to be implied from the mere need for the erection, reparation or replacement of a dividing fence. The price agreed upon by the parties allowed of a profit or a loss by the respondent, in neither of which situations the appellant had any financial interest or concern. (at p388)

19. Once the appellant had agreed to pay a price for the work of fencing to be done for him on terms that he supplied certain material, he had fulfilled his obligations under the Dividing Fences Act, 1951, though possibly subject to payment of that price. He was thereafter under no obligation himself to work on the fence or, indeed, to do anything else in relation to it. Consequently, there could, in my opinion, be no joint venture in the erection of the fence. The making of the contract and the fixing of a price for the work to be done, in my mind, denied that the subsequent work on the fence was in any legal sense a joint venture. Therefore, when the appellant offered two days' labour, it could not, in my opinion, be held that he was performing an obligation he had under the Dividing Fences Act, 1951 or which he had under some joint venture arrangement with the respondent. (at p388)

20. Of course, the position of the parties and the terms of the Dividing Fences Act, 1951 would have their place if one were deciding the credibility of the story told by the appellant, or if one were resolving a conflict of fact between the parties. But there was no conflict and, in any case, the credibility of the story told by the appellant is not a matter for the appellate courts. That was resolved by the Commission which accepted the story. Being accepted, its central and, to my mind, as I have said, decisive feature is that the appellant and the respondent fixed a price for the whole work to be done by the respondent. With due respect, therefore, I am unable to accept the course taken by the majority of the Supreme Court. (at p388)

21. In my opinion, the evidence before the Commission justified the conclusion that both at the time the appellant borrowed the services of Maskie and at the time he borrowed the respondent's tractor, the parties could be thought to contemplate a business transaction in the sense that the one expected to give and the other to receive a valuable recompense for the borrowing. That the borrowing had financial consequences can be seen from the evidence in that the respondent had to pay Maskie for work of which he obtained no benefit and that the appellant obtained an advantage from the use of the respondent's tractor upon which a money value could be and indeed was placed. When, therefore, the appellant, with the respondent's acceptance, agreed to give two days' work on the fence as the valuable recompense for the borrowings it seems to me that it could be inferred that legal relationships were contemplated by the two men. So far from being merely neighbourly, they had, according to the evidence, treated each other as virtual strangers in the matter of the borrowings. It is clear that the Commission did infer that legal relationships as distinct from mere neighbourly and social co-operation were in contemplation by the parties. In my opinion, the Commission was entitled to do so. (at p389)

22. The question remains whether the relationship between the parties could be held to have become that of master and servant in relation to the work the appellant was engaged upon when injured by the falling branch of the tree. This will be answered, as it seems to me, by deciding whether, from what the parties said and did, it could be inferred that the appellant for the purpose of working on or in connexion with the fence entered the respondent's employ. The appellant in the circumstances which I have detailed offered the respondent two days' labour on the fence. The respondent accepted and the appellant performed work in pursuance of the arrangement thus made. The appellant regarded himself as indebted to the respondent for the value of the borrowings and the respondent expected a recompense to cover that value. Two days' work had been fixed by the two men as effecting the necessary equivalence. (at p389)

23. I might mention here in passing that one is not concerned in this case with any question whether a past consideration is sufficient to support a promise which is sought to be enforced. The question here is quite otherwise. It is whether the appellant became the worker of the respondent. That he had already been paid for his work in anticipation, or that the value of his work was to be offset against an existing indebtedness does not seem to me to have any bearing on that question, once it is inferred that legal relationships were in contemplation when the arrangement to do work was made. (at p390)

24. If a stranger had simply offered two days' work on the fence in circumstances where legal relationships were in contemplation, it could scarce be denied that if, with the other's acceptance, he worked those days on the fence an inference would be open to a tribunal of fact that the relationship of master and servant in relation to that work arose. If further analysis were necessary, it seems to me it could be inferred that the offeror had placed himself in the performance of that work under the authority direction and control of the other. (at p390)

25. But it was submitted, and in the Supreme Court Jacobs J.A. accepted the view, that such an inference could not be drawn in the instant circumstances. His Honour conceded in his reasons that if the offeror had had no interest in the fence the inferences could be drawn. But as I read his Honour's judgment, he concluded that it could only be inferred that the appellant agreed to do work on the fence which fell within the existing arrangement between them in relation to the fence. He seemed to think either that the work which the appellant was doing when injured was outside the arrangement made between the appellant and the respondent with respect to the replacement of the fence or that, as he read the evidence, because the offer of work for two days was not confined to the area of that arrangement, it could not be held that the appellant had placed himself under the direction of the respondent to do work outside that arrangement. Consequently, as the suggested contract of service must, in his Honour's opinion, necessarily extend so far, no contract of service at all could be held to be established. (at p390)

26. But, as I have already indicated, the actual work being done at the time of the accident appears to me to have been within the initial arrangement. With due respect, I find no difficulty myself in supporting the inference in the circumstances of the case that when the appellant offered two days' labour "on the fence", he was submitting himself to the direction of the respondent in relation to the performance of work on the fence and that, in that context, "work on the fence" included work in clearing the adjacent chain of timbered country. In fact, it would seem open upon the evidence to conclude that it was the respondent who directed the appellant to the tree in question - indeed, it may have been the tree in respect of which the respondent because of the nature of that tree asked for the use of the appellant's tractor and blade - and that it was the respondent who assigned Maskie also to work on the tree. Consequently, I am unable to accept the analysis made by his Honour and I conclude that there was evidence upon which the Commission could find the relationship of master and servant in respect of the work then being done by the appellant for the two days the appellant had agreed to work "on the fence". (at p391)

27. There remains only one other question, namely, whether the provisions of s. 6 (5) (a) of the Act preclude a finding that the appellant was at the time in question a "worker" within s. 6. I see no occasion to deal with the Commission's views under s. 6 (3A). The submission in this connexion is that because of the nature of the work to be done, s. 6 (5) (a) operated to make the applicant (and presumably also the respondent if the contract to construct the fence be regarded as made by the respondent with himself and the appellant) an employer of the respondent and his workers. (at p391)

28. I am prepared to assume for the purposes of this part of my reasons that this is correct: but it seems to me that, none the less, it can be held that the appellant was an actual employee for the time being of the respondent whilst he was also, if any relevant occasions arose to consider the rights of other persons, a notional employer in relation to the whole of the work to be done "on the fence". I think the reasoning of McNamee v. Partridge (1959) 101 CLR 384 applicable to this aspect of this matter. Section 6 (5) (a) in relation to the situations which it covers does no more than deem a person in the place of the appellant to be an employer. It does not make him so to the exclusion of any other relationship which in fact exists. The section carries no negative implication: see per Kitto J. (1959) 101 CLR, at p 395 . (at p391)

29. In my opinion, the Commission was at liberty to find that the appellant in relation to the work on which he was at the time engaged was an employee of the respondent though the Commission might also be prepared to find that that work fell within s. 6 (5) (a), with the consequences which in appropriate circumstances that section produces. This appeal therefore should be allowed and the award of the Workers' Compensation Commission restored. (at p391)

McTIERNAN J. I agree in the judgment of the Chief Justice. (at p391)

KITTO J. I agree in the judgment of the Chief Justice and wish to add very little. The crucial question concerns the nature of the relationship which was created by the agreement made between the parties to the effect that the appellant should recompense the respondent for the loan of Maskie for one day and the loan of the tractor for a few days by giving the respondent two days' work on the fence. Whether or not the loan of Maskie, who was on the respondent's pay-roll, and the loan of the tractor were originally intended by the parties as acts of friendship not entailing any obligation upon the appellant to make adequate recompense in cash or in kind, the conclusion seems to me to have been open, if indeed it was not an inevitable conclusion, that the agreement with which we are concerned treated the appellant as being under such an obligation and was an agreement as to the way in which the obligation should be discharged. The appellant gave the respondent the option of being paid in cash or by means of two days' work on the fence, and the respondent chose the latter. By "work on the fence" was meant, plainly enough, assistance in carrying out the arrangement under which the respondent was to be allowed 4 pounds per chain as between himself and the partnership for which the appellant was the manager. It was thus assistance in the earning of money, to be given as a pro quo for the money's worth which the appellant had already received. Accordingly a finding was at least open that the two days' work was itself intended by the parties to constitute money's worth and to be accepted as such in satisfaction of the appellant's obligation. The respondent had obtained similar help from other men in return for wages, and notwithstanding the neighbourly relation between the parties I am unable to see why it was not open to the primary judge to reach the conclusion that the mutual intention of the parties was that the appellant should for two days occupy in relation to the respondent a position exactly similar to that of his other hired workers. It does not seem a possible view that the appellant was to do the work as an independent contractor, for what he undertook was not to do defined work in his own way, but to give the respondent what was described in general terms only, namely two days' work, that is to say to put himself for two days at the disposal of the respondent in connexion with the fencing and clearing. These considerations appear to me to be decisive in favour of the view that the learned judge was justified in finding that the relationship created for those two days was the ordinary relationship of master and servant. (at p392)

2. I would allow the appeal. (at p392)

TAYLOR J. The question in this appeal is whether the undisputed evidence in the case was sufficient to support the conclusion that the appellant, Pursell, was, qua the respondent, a "worker" within the meaning of the Workers' Compensation Act, 1926 (as amended) at the time when he sustained personal injury whilst assisting in the felling of a tree incidentally to the erection of a new boundary fence between two grazing properties known respectively as "Woodlands" and "Churchill". The latter property was owned by the respondent, and the appellant, who was a member of a partnership the members of which owned part of "Churchill", was a "worker" if he was a person who had entered into or worked under a contract of service with the respondent. Alternatively it is contended by the appellant that in the circumstances as they existed he was deemed to be a worker by the provisions of either s. 6 (3A) or s. 6 (5) (a) of the Act. The Court of Appeal rejected all three submissions and this appeal is brought from the order which allowed the appeal to that Court and directed that the award made by the Workers' Compensation Commission in favour of the appellant should be set aside. (at p393)

2. The facts of the case have already been related both here and in the judgments of the Court of Appeal and it is unnecessary to restate them fully. It is of importance, however, that a sharp distinction should be drawn between the position of the respondent who had, by agreement between the parties, undertaken the work of erecting the fence and the clearing of adjacent land on either side, and the position of the appellant who, pursuant to that agreement, was to take no part in such work but who, in return for the loan of the services of one of the respondent's employees for one day while the work was in progress and of the respondent's tractor on a later occasion, undertook to give the respondent a "couple of days' work" on the fence. I say this because it is suggested by the respondent that if the evidence is capable of supporting the conclusion that the appellant was, qua the respondent, a "worker" the same line of reasoning which permits of this conclusion would lead also to the conclusion that the evidence would justify a finding that the respondent was, qua the appellant as an employer, also a "worker" so that if they had both been injured in the work of felling the tree each would have been entitled to compensation from the other. (at p393)

3. There is no doubt upon the evidence that both parties had agreed that the old fence was in such a state of disrepair that a new one was needed or that in those circumstances s. 7 of the Dividing Fences Act, 1951 became applicable. That section provides that "the owners of adjoining lands not divided by a sufficient fence shall be liable to join in or contribute in equal proportions to the construction of a dividing fence between such lands". Provision is made by the Act for the serving of an appropriate notice but the parties had no necessity to resort to these provisions of the Act. Instead they made what I shall call an arrangement, the substance of which is indicated in the following passage from the Commission's reasons:

"About the month of June 1964, following a telephone call by the applicant to the respondent, the applicant and the respondent met together upon the boundary fence and the applicant said to the respondent, 'I feel that this fence is very badly dilapidated and requires reconstructing in the form of posts, a batten fence with netting'. The respondent expressed agreement with these views, and there then ensued a discussion between them as to the type of fence that should replace the existing fence. The two men reached agreement as to the specifications of the proposed fence. The applicant said there was a lot of clearing to be done. The respondent agreed that was so. Thereupon the applicant said that a contractor should be engaged to erect the fence, as he, the applicant, was unable to spend any time upon the fence. The respondent said, 'I will contract to do the fence'. The applicant said 'at what price' and the respondent said (at the price of) 4 pounds per chain for the construction of the fence, clearing the chain on each side, pulling the old fence down and reconstructing the new fence, pulling the old wires out of the old fence and putting them in the new fence. The material for the fence to be supplied half each except that timber posts required for it should be obtained by the respondent from timber to be felled by the respondent in clearing the chain wide and on each side."

Obviously what was intended was that the rate of 4 pounds per chain was to be charged against the adjoining owners, that is to say, the appellant and the respondent, and the result would be that if the arrangement were carried into effect each party would contribute one-half of the stipulated price calculated at the agreed rate. But the arrangement was not simply that the appellant would pay for the erection of one-half of the fence, or, that he would pay 2 pounds per chain in respect of the entire fence. This may have represented the limit of the responsibility which he assumed but the arrangement was that they should contribute equally to the cost of erecting the fence. The situation is curious and it may be that the agreement ought to be regarded as one whereby the respondent undertook with both adjoining owners, of which he was one, to erect the fence for 4 pounds per chain and that they both undertook to contribute equally to the cost. Whether, this being so, it constituted a contract enforceable at common law is very much open to doubt (see De Tastet v. Shaw (1818) 1 B &Ald 664 (106 ER 244) ; Ellis v. Kerr (1910) 1 Ch 529 , and Napier v. Williams (1911) 1 Ch 361 . But, what is more to the point, it is difficult to say, in the language of the initial definition of "worker" in s. 6 (1) of the Act, that the respondent was a "person who has entered into or works under a contract . . . with an employer" when, in truth, the arrangement contemplated that he would, jointly with the appellant, be liable at the agreed rate for the work of erecting the fence and that the work should be performed on behalf of both of them. Much the same observation may be made concerning the phrase in s. 6 (3A) -

"Where a contract to perform any work . . . is made with the contractor " -

and that in s.6 (5) (a) -

" Where any person (in this paragraph referred to as 'the principal') in the course of, or for the purposes of, his trade or business, enters into a contract, agreement, or arrangement, with any other person or persons (in this paragraph referred to as 'the contractor')".

Additionally, in the case of the last-mentioned provision, if what I have called the arrangement was "a contract, agreement, or arrangement" within the meaning of that provision, it is clear that it was entered into in the course of, and for the purposes of the trade or business of both the appellant and the respondent and not simply in the course of or for the purposes of the appellant's trade or business. I add that I have not overlooked the provisions of s. 72 of the Conveyancing Act, 1919-1964 concerning agreements made by a person with himself and another or others. It seems to me that that section has no bearing on the matter for we are here concerned, not with the construction of the agreement, but with the question of who, in fact, were the parties. (at p395)

4. However, whatever the legal effect of the arrangement between the parties was, it is plain that its purpose was to provide for the discharge of their obligations under the Dividing Fences Act. They were not to join in the construction of the new fence; the work was to be done by one of them and his remuneration, to be borne jointly by them, was to be at the rate of 4 pounds per chain. In this sense the arrangement was complete in itself and not relevant to the question whether at some later time the appellant became, qua the respondent, a "worker" for the purposes of the Act except, perhaps, as a background against which it is suggested that later events ought to be considered. (at p395)

5. At a later stage, when the work of erecting the fence had begun and the respondent had engaged labour to assist in the work, a fresh development occurred. The appellant, for purposes solely concerned with the conduct of the partnership grazing business, had asked the respondent for, and received, the loan of one of his employees for one day. Maskie, the employee, apparently received his wages for this day from the respondent. Later, again, for purposes solely concerned with the partnership property, the appellant obtained the loan of the respondent's tractor. There was an abundance of evidence to support the conclusion that the respondent was to be remunerated in some way or other for these loans and I quote from the judgment of the Commission:

"About September 1964, the applicant approached the respondent and said to him, 'Would you loan me Vic. Maskie so that I can decide whether to get a contractor to do this ropelling or whether I can do it myself'. Ropelling referred to the work of injecting the sheep on 'Woodlands' with hormones - a project the applicant was then about to commence. The respondent said that he would lend the applicant Vic. Maskie to help him. When the applicant borrowed Maskie he said to the respondent, 'Would you like me to pay you for Vic. or give you a day on the fence'. The respondent replied 'I will prefer you to give me a day on the fence'. In the month of October Maskie came to 'Woodlands' and worked for one day assisting in the ropelling. Subsequently the ropelling work was carried out for the partnership by a contractor. The applicant did not pay Maskie for his day's work. The usual rate of payment made at this time for casual day labour of the type that Maskie performed was 5 pounds per day. About the month of March 1965, the applicant's tractor broke down. He went to the respondent and said to him, 'Will you lend me your tractor'. The respondent agreed to lend him his tractor and the applicant subsequently had the use of the respondent's tractor for about four days supplying himself fuel and oil required for it. When the applicant returned the tractor to the respondent he said to him, 'I will give you another day - some work on the fence to repay the loan of your tractor'. . . . In the month of March 1965, the applicant met the respondent near the fence line and said to him that it had been a long time since he had borrowed Vic. Maskie and that he had also borrowed the tractor. Would he prefer the applicant to pay him for Maskie and the tractor instead of giving him a couple of days' work on the fence? The respondent replied, 'No, I prefer you to bring your tractor over on to the fence. There are a couple of big trees that I am unable to move with my tractor and with your blade we will be able to do it.' The applicant replied, 'Yes'. There are some passages in the evidence of the applicant from which it would rather appear that it was the applicant who suggested to the respondent that he would bring his blade tractor to the fence line. But whoever was the first to suggest that, it is plain enough that both of them agreed together that the applicant should during his two days' work bring to the fence line his blade tractor."

It was whilst the appellant was engaged in performing work for the respondent during two specified days that he was injured. (at p397)

6. It can be seen that, in a very real sense, this arrangement and the initial arrangement for the erection of the fence were quite independent of one another. But a majority of the Court of Appeal thought that it was "impossible to say that Pursell undertook work for Newberry as a contractor or that he entered into or worked under a contract of service with Newberry". This view was based upon the proposition that the work of erecting the fence was a joint enterprise and that "what, at a later stage and for whatever cause, Pursell also contributed by giving his labour and the use of his tractor and blade, he did so as a further contribution on his part to the joint venture". With respect I am unable to agree. In my opinion the view was at least open upon the evidence that the parties had finally determined the manner in which their respective liabilities in relation to the erection of the new fence should be discharged and the arrangement that it should be erected by the respondent did not involve the conclusion that the work of erecting it was a joint venture. It is true that in one sense it was being erected for the adjoining owners but it was a venture undertaken by the respondent alone and any resultant profit or loss would be on his account. Further, it was the respondent alone who was the employer of the workmen engaged in the work. Again, the loan of Maskie and of the respondent's tractor did not operate in any way to alter or unsettle their obligations under their arrangement with respect to the erection of the fence and the act of the appellant in giving to the respondent "two days' work on the fence" was not intended to make any necessary adjustment; it was something undertaken in discharge of this liability for the loan of Maskie and of the respondent's tractor. As I see the matter the offer by the appellant - accepted as it was by the respondent - to give the respondent two days' work on the fence was quite sufficient to support a conclusion of fact that a contract of service in relation to such work arose between them. I add that the question for our determination is, not whether the conclusion of fact was erroneous, but whether there was evidence capable of supporting the conclusion that the appellant was a "worker", that is to say primarily, whether he was working under a contract of service, at the relevant time. (at p398)

7. In view of the conclusion to which I have come I find it unnecessary to determine whether the provisions of s. 6 (3A) or s. 6 (5) (a) have any application in the circumstances of the case. There are obvious difficulties in the way of saying that they do but I prefer to leave the matter open. (at p398)

OWEN J. The appellant obtained from the Workers' Compensation Commission an award for worker's compensation against the respondent, the Commission holding that he was a "worker" within the definition of that word in s. 6 (1) of the Workers' Compensation Act, that is to say that at the relevant time he was a person who had entered into or was working under a contract of service with the respondent. In the alternative the appellant had claimed that, if not a "worker" as so defined, he was nevertheless to be treated as though he was a "worker" either under s. 6 (3A) or s. 6 (5) (a) of the Act. An appeal by way of notice of motion was taken to the Court of Appeal and was upheld, the Court being of opinion that on the undisputed primary facts found by the Commission, the conclusion could not reasonably be reached that the appellant, at the relevant time, was working under a contract of service made with the respondent. Their Honours were of opinion also that in the circumstances of the case neither s. 6 (3A) nor s. 6 (5) (a) could have any application. (at p398)

2. The circumstances which led up to the happening of the appellant's injuries were these. The appellant was the managing partner in a partnership which owned a property known as "Woodlands" upon which it carried on the business of a grazier. The respondent owned an adjoining grazing property known as "Churchill". The properties were separated by a common boundary fence about two miles long which had fallen into disrepair. In June 1964 the appellant, acting for the partnership of which he was a member, and the respondent agreed that the fence should be renewed. In these circumstances the effect of s. 7 of the Dividing Fences Act was to require that each party should join in or contribute in equal proportions to the construction of the new fence. As well as agreeing that the fence should be renewed and that each should supply one half of the material required, they agreed further that a strip of land one chain wide on each side of the fence line should be cleared of timber which was growing on it. The appellant told the respondent that he was not able to give up any time to work on the fence himself and suggested that they should employ a contractor to erect the fence and do the clearing. The respondent replied that he would "contract to do the fence", that is to say the whole length of the fence, and the clearing of the timber on each side of it for a figure which would represent 4 pounds per chain multiplied by half the number of chains in the total length of the fence. It is not disputed that this arrangement was designed by the parties as the means whereby each would discharge the obligation owed to the other under the Dividing Fences Act. (at p399)

3. Following this the respondent began the work of renewing the fence and clearing the land on each side of it and for these purposes employed several men, including a man named Maskie. While the work was in progress the appellant asked the respondent whether the latter would "lend" him Maskie to help him with some work which he was doing on "Woodlands". The respondent agreed and Maskie spent a day assisting the appellant with this work, returning thereafter to his work on the fence. The appellant did not pay Maskie for his day's work and later told the respondent that he would give the latter a day's work on the fence in return for the loan of Maskie's services. Later again a tractor used by the appellant on "Woodlands" broke down and he asked the respondent for and was given the loan of the respondent's tractor for a few days. When he returned the tractor, the appellant told the respondent that he would give another day's work on the fence in return for the loan of the tractor. Some time afterwards the appellant asked the respondent whether he would prefer him to pay him for the loan of Maskie's service and the loan of the tractor instead of working on the fence for two days. The respondent replied that he would prefer the appellant "to bring his tractor over on to the fence" so that it might be used to move some large trees which the respondent was unable to move with his own tractor. Later again the appellant told the respondent that he would "repay him the two days" that he owed him and would bring his tractor to help remove the trees. About a week afterwards the appellant took his tractor to the fence and began to assist in clearing the timber. In the course of the work and while felling a tree he was struck by a falling branch and severely injured. (at p399)

4. The first question is whether on these facts the Commission could reasonably conclude that, when he received his injuries, the appellant was working under a contract of service with the respondent. The views taken by their Honours in the Court of Appeal may, I think, be correctly summarized by saying that the erection of the new fence and the clearing of the timber on each side of it was what Sugerman J.A. described as a "joint enterprise" to which each of the parties was to contribute equally, the respondent to do the work, each to contribute half of the necessary material and the "Woodlands" partnership to pay the respondent for one half of the work done by the latter. The work which the appellant was doing when he was injured was merely part of the partnership contribution to the carrying out of this "joint enterprise" and in these circumstances the appellant could not be found to have been a "worker" employed by the respondent under a contract of service (s. 6 (1)) nor could he be treated as though he was such a worker under s. 6 (3A) or s. 6 (5) (a) of the Act. It is clear that, as their Honours said, the evidence as to the "repayment" by the appellant for the loan of Maskie's services and of the respondent's tractor cannot be looked at in isolation in determining whether the appellant was working under a contract of service with the respondent. Regard must be had to all the surrounding circumstances. The two men were neighbours and friends, each running a grazing property. It is common knowledge that in such a case circumstances often arise in which one neighbour assists the other by working with him in the carying out of work on that other's property. In such cases and in the absence of some clear evidence to the contrary no reasonable man would, I venture to think, conclude that the relationship of master and servant with all that that implies was thereby created. And if, as here, the work in question is being carried out for the benefit of both neighbours, it seems to me to be quite impossible to conclude that the one was the master and the other the servant. I can find no evidence in the present case which could justify such a finding. The respondent had, it is true, undertaken to carry out the whole of the work of erecting the fence and clearing the timber. By lending the appellant his tractor and the services of one of his employees, Maskie, the respondent had assisted the appellant in doing some work on "Woodlands". In return the appellant was giving some needed assistance to the respondent in clearing the timber along the fence line, not in the capacity of a "worker" employed by the respondent but as a neighbour jointly interested with the respondent in erecting a common boundary fence. (at p400)

5. I agree with their Honours in the Court of Appeal that the Commission's finding that the appellant was a "worker" employed by the respondent is not one which, on the evidence, could reasonably be made. (at p400)

6. It remains to consider the appellant's alternative claims based upon s. 6 (3A) and s. 6 (5) (a) of the Act. Section 6 (3A) provides that

"Where a contract to perform any work exceeding five pounds in value (not being work incidental to a trade or business regularly carried on by the contractor in his own name, or under a business or firm name) is made with the contractor, who neither sublets the contract, nor employs workers, the contractor shall, for the purposes of this Act, be deemed to be a worker employed by the person who made such contract with the contractor."

7. As I understand it, the contention which was put forward on behalf of the appellant before the Commission but not elaborated before this Court was that the appellant had made a contract with the respondent to work on the fence and timber clearing for two days; that this was a contract to perform work exceeding five pounds in value; that the work was not incidental to the business of running a grazing property; that the appellant had neither sublet the contract nor employed workers to carry it out; and that he was therefore to be deemed to be a worker employed by the respondent. The Commission rejected this submission because it was of opinion that the work which the appellant had offered to do and which he was performing when he was injured was "work incidental" to the appellant's business as a grazier. This undoubtedly affords one answer to the appellant's contention. It is answered also if, as I think, a finding that the appellant entered into a contract with the respondent to work on the fence and timber clearing could not reasonably be made. (at p401)

8. I turn then to the submission based upon s. 6 (5) (a), the material part of which is in these terms:

"Where any person (in this paragraph referred to as 'the principal') in the course of, or for the purposes of, his trade or business, enters into a contract, agreement, or arrangement, with any other person or persons (in this paragraph referred to as 'the contractor') under which the contractor agrees - (i) . . . (ii) to fell or ringbark trees, or cut scrub, or haul or load timber, or haul and load timber; or
(iii) to clear land of stumps or logs; (iv) . . . (v) . . . and the contractor does not either sublet any part of the work
to be carried out, or employ a worker or although either subletting part of the work or employing a worker actually performs some part of the work himself, the contractor and any worker so employed by him shall, for the purposes of this Act, be deemed to be workers employed by the principal." (at p401)

9. The Commission found it unnecessary to consider this submission since if, as it found, the appellant was a "worker" within s. 6 (1), it rightly considered that s. 6 (5) (a) could have no application. If, however, the finding that the appellant was a "worker" within s. 6 (1) is incapable of being supported, them the effect of s. 6 (5) (a) must be considered. The "Woodlands" partnership, in the course of its business as a grazier and by the hand of its managing partner the appellant, entered into a contract with the respondent whereby the respondent agreed to renew the fence and to the timber clearing. In respect of this work the partnership was the "principal" and the respondent the "contractor", and had the respondent suffered an injury arising out of or in the course of doing the work contracted to be done, it seems to me that compensation could have been recovered from the partnership by the respondent. As I understand it, the contention put forward on behalf of the appellant is that after the making of the agreement between the partnership and the respondent, the appellant had entered into an "arrangement" with the respondent to do some of the work of felling trees and clearing stumps and logs. As between the respondent and the appellant, therefore, the former, it was said, became the "principal" and the latter became the "contractor". This would lead to a strange situation. The respondent would be deemed to have been a worker employed by the partnership and the appellant, as a member of that partnership, would in turn be deemed to have been a worker employed by the respondent. I am very doubtful whether the sub-section is designed to cover such a case. But whether this be so or not, I am of opinion that the sub-section has no application where a claimant for compensation, not being a "worker" employed by his neighbour under a contract of service, is injured whilst assisting the latter to carry out some of the work involved in the renewal of a common boundary fence to the cost of which each must contribute equally whether in cash or in kind. (at p402)

10. I would therefore dismiss the appeal. (at p402)

Orders

Appeal allowed with costs. Order of the Supreme Court of New South Wales set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.