Rizk v BB Dundas Pty Ltd
[2023] FedCFamC2G 583
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Rizk v BB Dundas Pty Ltd [2023] FedCFamC2G 583
File number(s): SYG 2059 of 2020 Judgment of: JUDGE D HUMPHREYS Date of judgment: 7 July 2023 Catchwords: INDUSTRIAL LAW – Fair Work – Building and Construction General On-Site Award 2010 – whether employee or independent contractor – whether the first and second respondents are accessorily liable. Legislation: Fair Work Act 2009 (Cth) ss
Building and Construction General On-Site Award 2010
Cases cited: Ace Insurance Limited v Trifunovski (2013) 209 FCR 146
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Jin v Premium Travel Pty Ltd [2023] FedCFamC2G 22
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 13
Division: Division 2 General Federal Law Number of paragraphs: 53 Date of last submission/s: 30 June 2023 Date of hearing: 8 June 2023 Place: Sydney Solicitor for the Applicant: Mr Kutasi Solicitor for the Respondents: The First and Second Respondents appeared in person ORDERS
SYG 2059 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: RIZK RIZK
Applicant
AND: BB DUNDAS PTY LTD (ACN 605797457) AS TRUSTEE FOR THE BB DUNDAS TRUST (ABN 65 355 767 782)
First Respondent
DANNY BASSEAL
Second Respondent
HABIB BOUSTANY
Third Respondent
order made by:
JUDGE D HUMPHREYS
DATE OF ORDER:
7 July 2023
THE COURT ORDERS THAT:
1.The application is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE D HUMPHREYS
INTRODUCTION
The applicant is a Carpenter. The applicant alleges that between at least June and August 2018, he was employed by the first respondent on a casual daily basis to undertake carpentry fit out to a building under construction in Dundas NSW. The applicant claims that he was underpaid by reference to the Building and Construction General On-Site Award 2010 in that, he was paid a flat rate of $400.00 per day cash for each day worked.
The applicant seeks orders in relation to the alleged underpayments in an amount of $7,991.75 plus pecuniary penalties for the alleged breaches of the Fair Work Act 2009 (the Act), together with interest and costs.
The first and second respondents claim that the applicant was not employed, but rather, he was an Independent Contractor
The First Respondent has been de-registered by the Australian Securities and Investment Commission (ASIC) on 28 September 2020. The applicant now seeks to proceed against the second respondents, Mr Basseal and Mr Boustany on the basis of accessorial liability to the alleged breaches of the Act.
In order to succeed, the applicant needs to first satisfy the Court that he was an employee, rather than an Independent Contractor.
For the reasons set out below, the applicant has not satisfied the Court that he was an employee. In those circumstances, the application must be dismissed.
THE APPLICANT’S EVIDENCE
The applicant was the only witness in his case. He relied on two Affidavits, the first, affirmed on 16 June 2021. In that Affidavit the applicant deposes that he did not have any formal trade qualifications, however, that he has a specialty in concreting and carpentry. The applicant provides those types of services to other licensed building tradesmen.
The applicant was introduced he was introduced to Mr Boustany by his brother, in around late 2016. In or around March 2018, Mr Boustany asked the applicant if he could do some work at Mr Basseal’s place, at Hazel Place in Dundas. For each day that he attended, he was paid $400.00 in cash by Mr Boustany.
In late May 2018, the applicant deposes that he received another telephone call from Mr Boustany to undertake carpentry fit out work at a premises in Dorahy Street, Dundas.
Around the beginning of June, the applicant attended with Mr Boustany upon Kelso doors at Wentworthville, where they jointly went shopping for doors, door handles skirting and architraves. These items were paid for by Mr Boustany.
Over the next three months, the applicant claims he regularly worked at Dorahy Street, installing and fitting doors, handles, skirting and architraves to both houses a the duplex type construction.
While working on the site, the applicant claims that Mr Boustany was almost always on-site supervising tradesmen. He also assisted Mr Boustany on one occasion with landscaping of the property
Around 22 June 2018, the applicant claims to have a conversation with Mr Basseal asking to be paid. In response, Mr Basseal gave him $500.00 in cash and promised to give him more cash when they had it.
The applicant claims that his work was completed on 22 August 2018, and in that time, he was paid a total of $4765.00 in cash by either Mr Boustany or Mr Basseal, with the exception, where on one occasion when he was paid $200.00 by a third person.
The applicant claims that he recorded the days that he worked together with the amounts that he received in a notebook which was tendered before the Court as Exhibit 3.
This notebook records less amounts having been received, owing a total $4105.00. As to the days worked, it commences with an entry of up to Friday 1 June 2018, 18 days worked, and then records various days worked in June and August 2018. It is to be noted that on some days the applicant records that he worked half a day, for example on Monday, 4 June 2018. He then worked on 6, 7, and 8 June 2018, but did not then work until 1 August 2018. The notebook shows that the applicant worked on 1 and 2 August 2018, followed by a gap until 7 to 11 August 2018, and then 13 to 22 August 2018. In the last two days, the applicant only worked half days.
The diary concludes with an entry that the applicant performed work that he says, totalled $11,650.00 for which he received $4765.00 in payment, leaving an unpaid amount owing of $6885.00.
In his second Affidavit, affirmed 27 September 2021, the applicant concedes that he undertook work for both the second and third respondents at relevant times in 2017 and early 2018.
The applicant confirms that he is not registered for goods and services tax (GST) and it was on this basis that he did not issue tax invoices.
The applicant concedes that he “strung” Mr Basseal along for months, promising to do further work at his house. He used this as an opportunity to squeeze Mr Basseal for cash. The applicant claimed that he did not work essentially for free for three months and it makes no sense for the respondents to allege that he was working to help his parents, who did not own the properties.
In cross examination, it was put to the applicant by Mr Basseal that the agreement was that he would be paid cash in an amount of $400.00 per day, and this was on the same basis that he had performed work Mr Basseal’s premises.
In cross examination by Mr Boustany, the applicant was unable to recall where he worked in March. The applicant was unable to recall the exact days that he worked prior to 1 June 2018, notwithstanding the fact that he claimed he had undertaken 18 days of work prior to 1 June 2018. The applicant agreed that there was no employment contract in place between himself and the first respondent. There was no discussion as to working hours. The applicant agreed that there was a gap in his attendance between 8 June and 1 August 2018 but was unable to recall what he did in that period.
The applicant agreed that at no time did he provide the first respondent with his Tax File Number and that he did not receive an employment letter or payslips from the first respondent. The applicant agreed that he was in control of his work hours. The applicant also agreed that he used his own tools, and did not wear any uniform or have any logo that identified him with any business associated with the respondents.
In re-examination, the applicant agreed that he was now self-employed and worked job to job. The applicant stated that he kept a diary as he was not being paid. The applicant agreed that in the claimed 18 days prior to 1 June 2028, while he worked 18 days at Dundas, he did not work every day at the site.
Mr Rizk’s evidence was troubling in many respects. He was unable to recall any detail of events during the period in question other than what was contained within his Affidavit, claiming it was too long ago to remember. The Court had considerable concerns as to his credibility and the reliability of his evidence as a result. The Court also had concerns as to the reliability of Exhibit 3, being the the diary, which it was claimed evidenced the days worked and payments received. First, the material was set out in one page only and was not in the form of a diary that showed hours worked on each day in a daily entry format. Second, each of the entries appeared to be made using the same pen, which one would not normally expect from a diary that contained entries over a period of nearly 3 months.
The lack of any detail for the period prior to 1 June 2018, which in which it is claimed that 18 day’s work was performed, but has no details of the days upon which the work was done is also troubling. The Court does not accept that the diary was completed daily, rather it has the ring of a document done at a later date at one time. The Court does not accept Exhibit 3 as a reliable and accurate record. This conclusion also affects the credibility and reliability of the applicant’s other evidence.
RESPONDENT’S EVIDENCE
Evidence of Mr Basseal
Mr Basseal affirmed his sole Affidavit on 9 August 2021. He states that the first respondent never had any employees, and only contracted the services of professionals to complete the development of the premises in Dundas.
In February 2018, Mr Basseal affirmed that he had a telephone conversation with Mr Boustany and asked him if he knew of a Carpenter. Mr Boustany mentioned the name of the applicant, on the basis that he had constructed the stairs at his (Mr Boustany’s) home and had done a good job.
Mr Basseal claims he had a conversation in late February 2018 in which Mr Rizk stated that he had his own Australian Business Number and worked on a daily rate of $400.00 including GST. If cash was being paid, he was willing to go down to $350.00 per day.
Mr Rizk completed work at Mr Basseals’ home on a sporadic basis, sometimes arriving in the middle of the day and working for a couple of hours. Mr Basseal states that he had no control over the hours or days worked. At the completion of the work on his home, Mr Basseal claims he paid Mr Rizk $1400.00 in cash.
During the period 26 March until 14 April 2018, Mr Basseal claims that he worked at his Dundas duplex site in Dorahy Street Dundas. Mr Rizk attended regularly to complete finishing carpentry including skirtings, door jams and doors. Mr Basseal claims the verbal agreement in place was that the daily rate would be $400.00 including GST. Payment will be made after a minimum of two days’ work and on completion of the works, a tax invoice would issue, for the total amount paid. Mr Rizk was paid in cash for each day that he worked.
In May 2018, M Rizk called and asked if there was any further work that he could undertake. He attended on 17 May in completed one day’s work commencing at 7:30 AM and concluding at 5:00 PM. Mr Rizk told him he would only accept payment in cash.
In or around 24 May 2018, Mr Rizk agreed to install some roof flashing at the premises in Dundas. Mr Basseal claims that he made multiple attempts to contact Mr Rizk to get the work done, however, it was not until 9 September 2018 that Mr Rizk contacted Mr Basseal stating that he was desperate for work and would get the work done he just needed payment in advance. Mr Basseal deposes that he sent through $500.00 to Mr Rizk as an advance payment to get the work done. Attached to his Affidavit are copies of text messages between the applicant and Mr Basseal together with an extract showing an amount of $500.00 being paid to Mr Rizk together with other messages in relation to the payments of amounts, including to assist with the replacement of a car battery.
Mr Basseal gives considerable evidence of Mr Rizk failing to attend to undertake work notwithstanding promises he would do so, for example of 13 September 2018. Mr Basseal states that as at 25 September Mr Rizk ‘lost the contract’ with the work being completed by another tradesman.
In cross examination Mr Basseal agreed that he was the sole Director of the first respondent and responsible for the operations of the business. He agreed that he had not produced, in response to a subpoena, records for a period of four months including January, February and September 2018.
Mr Basseal said he was unable to recall why he did not ask Mr Rizk for his ABN, and that he never found out if Mr Rizk had an ABN. He agreed that if Mr Rizk was an independent contractor, he would have been required to have had a relevant carpentry license. He agreed he was unable to produce any invoices from Mr Rizk.
In terms of days worked at the Dundas property prior to 1 June 2018, he disagreed that Mr Rizk worked 18 days and that it was perhaps five or six days in March or April 2018. He was unable to recall the name of the Carpenter he used to finish off the project but denied he had made up the story of an alternative Carpenter. It was put to him that in fact there were hundreds of text messages between himself and Mr Rizk in addition to those reproduced in his Affidavit but disagreed.
Mr Basseal revealed that he had a very casual attitude towards the keeping of relevant business records, particularly in regards to goods and services tax. His failure to obtain from Mr Rizk an Australian Business Number and the fact that he agrees he paid amounts in cash to Mr Rizk, speaks of a cash agreement between the parties with no documentation being kept.
Given the concession by Mr Rizk, that he ‘strung’ Mr Basseal out in the hope he would be paid money he felt was owing, this supports the assertion by Mr Basseal that he had no effective control over the work done by Mr Rizk. The Court accepts the evidence that Mr Rizk would attend the Dundas site effectively when he felt so inclined to do so.
Evidence of Mr Boustany
Mr Boustany’s evidence is contained in an Affidavit affirmed 10 August 2021. He states that he was never a manager of the first respondent, but was a close friend of Mr Basseal and helped him out on the Dundas project from March 2018 by being present at the site and making sure that work was progressing on schedule. He confirms that around late March 2017, Mr Rizk attended his home in Merrylands and constructed a set of timber stairs for him as part of a renovation project. Mr Rizk was paid $1400.00 in cash for this work.
In around February 2018, he introduced Mr Rizk to Mr Basseal on the basis that he was a Carpenter and could do fit out work on the Dundas site. Between late March and early April 2018, Mr Rizk did not show up on the job site and was un-contactable for a period of two weeks. Mr Boustany denies ever employing Mr Rizk in any capacity personally, or through any company that he controls.
In cross examination, he agreed that between March and September 2018, he did not have any other form of employment. He denied that he was a full-time Project Manager for the Dundas building site. He denied being responsible for any payments but agreed that on one occasion, he did give Mr Rizk $15.00 to enable him to buy fuel. He also agreed that he gave him $200.00 in cash to enable Mr Rizk’s son to register for a TAFE course. He agreed that he may have delivered one or two payments on behalf of Mr Basseal.
In terms of being on-site at Dundas, Mr Boustany agreed that till September, he would have attended once or twice every fortnight. He was unable to say how we came into possession of stormwater certificates that were attached to his Affidavit. He denied that he got them because he was managing the project. He agreed that he attended Kelso doors with Mr Rizk to purchase supplies, but disagreed that he personally paid $5000.00 in cash, for the items purchased.
FAIR WORK CONTRACTOR OR EMPLOYEE: THE LAW
In Jin v Premium Travel Pty Ltd [2023] FedCFamC2G 22, at [9], [16] – [19] the Court had the following to say in relation to the determination of whether a person was an employee or contractor where no written contract existed:
[9] It is common ground that the applicant did not enter into any written employment contract with Premium. It is thus necessary to look at the parties conduct to determine the nature and terms of the contact the applicant entered into: (see; Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 at [83] (“Personnel Contracting”)).
[16] In a case such as the present in which the parties did not reduce their agreement to written form, it was submitted that its terms must be ascertained objectively from the parties conduct which requires an analysis of “the totality of the relationship between the parties” by reference to the indicia identified in the authorities, most notably Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 13 (“Stevens”), Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and Personnel Contracting at [61] and [56] – [57].
[17] In Stevens at [24], Mason J said that a prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. The importance of control lies not so much in its actual exercise, as in the right of the employer to exercise it. Other indicia include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and the provision for holidays, the deduction of income tax and the delegation work by the putative employee.
[18] Wilson and Dawson JJ in Stevens at [36] stated that it was appropriate to apply the control test in the first instance because it is the surest guide to whether person is contracting independently or serving as an employee. Other indicia which need to be considered include in relation to a contract of service, rather than a contract for service, the right to have a particular person to do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged, the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him/her of their own place of work or own equipment, the creation by them of goodwill or saleable assets in the course of their work, the payment by them from their remuneration of business expenses of any significant proportion and the payment to them of remuneration without the deduction for income tax.
[19] The applicant also relied upon Ace Insurance Limited v Trifunovski (2013) 209 FCR 146 at [37] where Buchanan J observed:
It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done.
WAS MR RIZK AN EMPLOYEE OR CONTRACTOR?
As there was no written contact of employment, the Court needs to determine if a contract of employment existed, based on the conduct of the parties. It is common ground that payment was made to Mr Rizk in cash. Both parties compliance with such matters in regards to taxation, can be best described as casual. Mr Rizk conceded at no time did he provide a Taxation File Number, superannuation details or invoices. He states he did not have an Australian Business Number and was not licenced as a carpenter.
While the Court is satisfied that Mr Rizk performed work for the respondents, he conceded in cross examination that he was in control of his hours and days he worked. The Court is satisfied based on the evidence of both Mr Rizk and the first respondent Mr Basseal, that the company exercised no effective control over Mr Rizk, his obligation to work or indeed the hours that he actually worked.
The Court prefers the evidence of Mr Basseal and Mr Boustanny, to the extent that it supports that of Mr Basseal over that of Mr Rizk. Their accounts appear to be supported by various text and other messages. Mr Rizk relies only on his Affidavit evidence and the diary sheet. No explanation has been given by text or other messages exchanged between the parties have not been provided as supporting evidence. Further, Mr Rizk’s inability to answer almost any question put to him in cross examination significantly undermined his credibility and reliability. The standard answer was that it was too long ago and he could not recall. The Court does not accept this as an adequate explanation in all the circumstances of this case.
The legal representative for Mr Rizk conceded in oral submissions that Mr Rizk was not a great witness but that he was not a liar. He claimed that if the diary was a fabrication, he would have done a better job at the fabrication of the document. It was submitted that there was nothing to say that Mr Rizk did not perform the work claimed, particularly, as Mr Basseal was unable to tell the Court who the alternative carpenter was.
The Court notes that in order for the applicant to succeed, he must first establish that he was an employee. The legal representative for Mr Rizk contended that he was heavily supervised by Mr Boustany who was consistently present on site. The suggestion that Mr Rizk was remonstrated for not attending site when expected to the Courts mind, is not consistent with an employee-employer relationship, rather, it is inconclusive as to whether it was an employee-employer relationship or that of an unreliable subcontractor.
The Court has examined carefully the text messages that had been produced by both Mr Basseal and Mr Boustany, but does not find them persuasive that an employee-with employer relationship existed as compared to one of a subcontractor hired to do certain work on a cash basis.
Not being satisfied that an employee-employer relationship existed between the parties the application must fail. The Court also notes that no alternative contractual matter has been pleaded by Mr Rizk and the Court is unable therefore to determine whether or not in fact there may have been work performed but which was not paid.
The Court also notes that even if it had been satisfied that an employee-employer relationship existed between the applicant and the first respondent, the Court would have had considerable difficulty finding accessorial liability on behalf of Mr Boustany, noting that he was not an officer or employee of the first respondent.
CONCLUSION
Accordingly, the application is dismissed.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Associate:
Dated: 7 July 2023
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