Taarnby v Mungoorbada Aboriginal Corporation
[2022] FedCFamC2G 120
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Taarnby v Mungoorbada Aboriginal Corporation [2022] FedCFamC2G 120
File number(s): DNG 12 of 2021 Judgment of: JUDGE YOUNG Date of judgment: 17 February 2022 Catchwords: INDUSTRIAL LAW - FAIR WORK - application for summary dismissal - where the applicant provided services to the respondent corporation - where it is not clear whether the applicant is an employee or an independent contractor - where the contract is not clear - where oral evidence is required - application is dismissed Legislation: Fair Work Act 2009 (Cth) s 342 Cases cited: Ace Insurance Limited v Trifunovski [2013] FCAFC 3.
Roy Morgan v The Federal Commissioner of Taxation [2010] FCAFC 52.
CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1.
Division: Division 2 General Federal Law Number of paragraphs: 18 Date of hearing: 17 February 2022 Place: Darwin Solicitor for Applicant: Barry Nilsson Lawyers Counsel for the Applicant: Mr Liveris of Counsel Solicitor for the Respondents: Nicole Dunn Lawyers Counsel for the Respondents: Mr Barry of Counsel ORDERS
DNG 12 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CHRISTOPHER TAARNBY
ApplicantAND: MUNGOORBADA ABORIGINAL CORPORATION (ABN 13 837 964 081)
First Respondent
SUSAN GEORGE
Second Respondent
SHANDEL DICK
Third Respondent
LARRY HOOSAN
Fourth RespondentFREDERICK JACKSON
Fifth Respondent
ORDER MADE BY:
JUDGE YOUNG
DATE OF ORDER:
17 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The application in a case filed on 28 October 2021 be dismissed.
2.The matter is referred to the Registrar for mediation pursuant to Division 23.2 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth), such mediation to take place on a date and time to be fixed in consultation with the Registry.
3.The matter is otherwise adjourned to 12 August 2022 at 9:30am.
4.Costs be reserved.
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
Ex Tempore
JUDGE YOUNG
This is an application for summary dismissal of part of the applicant’s pleading. The applicant, Mr Taarnby, entered into a relationship – and I will deliberately use a neutral word at this stage – with the respondent, Mungoorbada Aboriginal Corporation (“Mungoorbada”) where Mungoorbada was provided with what had been described in the documents as “CEO services.”
The pleading from Mr Taarnby refers to two contracts referred to by Mr Taarnby as the “first” and “second” contract. The first contract is really only an invoice and is a skeletal document that is somewhat inconsequential. The second contract (“the Contract”) referred to was said to run from 24 February 2020 to 31 August 2020 when Mr Taarnby’s services were no longer required by Mungoorbada.
The Contract is a document that contemplates that a company, Meaford Pty Ltd (“Meaford”), will provide CEO services to Mungoorbada. Meaford is identified in the Contract as the supplier of the services which are referred to in Recital A. Recital A lists the structure and nature of the respondent’s duties. The respondent is an Aboriginal Corporation from Robinson River which is responsible for the management of the Community.
The Contract is clearly between Meaford and Mungoorbada. On the face of the Contract, there is no reference to Mr Taarnby being a party, though he signed it as a director of Meaford.
It is clear enough, that at least in a formal way, what is intended by the Contract between Meaford and Mungoorbada is the provision of services and the payment for those services. However, the Contract expressly refers to Mr Taarnby’s role in the delivery of those services, the CEO services. At paragraph 3.3 of the Contract, the respondent agrees to act on the recommendations put forward by Mr Taarnby, “who will be performing the role of CEO of Mungoorbada Aboriginal Corporation.”
At paragraph 4, the Contract provides that the supplier,
Meaford, in the form of director, Chris Taarnby will provide Contract CEO services, including contracts and operational management for Mungoorbada Aboriginal Corporation.
The list of obligations undertaken by Meaford are recorded in paragraphs 4.1.1 – 4.1.16 of the Contract and appear to expressly involve Mr Taarnby personally providing those services. There is no contemplation in the Contract of any person other than Mr Taarnby personally providing those services.
On reading of the Contract, one might suspect that a significant purpose behind that structure is to take advantage of the corporate tax rate, rather than personal tax rates. That is a speculation, though it is conceivable that was in the mind of Mr Taarnby. In a way that is irrelevant. However, I will point out that a corporate structure for this relationship can be adopted for a number of reasons. That was emphasised by counsel for the applicant, Mr Liveris, in his reference to two Full Court of the Federal Court decisions, Ace Insurance Limited v Trifunovski [2013] FCAFC 3 and Roy Morgan v The Federal Commissioner of Taxation [2010] FCAFC 52. The court in the case of Roy Morgan and Buchanan J in Ace Insurance, contemplated that the existence of a corporate structure, particularly one for payment for services, did not exclude the possibility that the natural person who performed the task was, in those cases, an employee.
I consider that this contract provides for a corporate structure for payments by Mungoorbada but clearly contemplated that Mr Taarnby, personally, will perform the various tasks required of the CEO. In my view, this is a form of contract that may well be amenable to the same analysis that was adopted by the Full Court of the Federal Court in those cases.
The applicant’s claim, which is rather lengthy and possibly prolix, couches his claim in two ways. First, he says that he is an employee of Mungoorbada and secondly, in the alternative, that he is an independent contractor. The significance of that is that Meaford as a corporation could not seek to take the benefit of the general protection provisions in the Fair Work Act 2009 (Cth). Section 342(3) of the Fair Work Act contemplates that adverse action may be taken by a person against either an employee or an independent contractor.
The strikeout application does not seek to strikeout the pleading relating to Mr Taarnby’s claim that he was an employee of Mungoorbada. Mr Barry, counsel for the respondent, said that each of those claims raise somewhat different issues. In relation to whether or not the applicant was an employee of Mungoorbada, there would be factors such as the matters raised at paragraph 53 of the statement of claim. That is, indicia of a person being an employee. I will not go through them, but the indicia include control and other conventional matters which have traditionally considered by the courts in deciding whether or not a person is an employee. This is an approach most recently reflected in the High Court decision of CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1.
Mr Barry conceded that the position that Mr Taarnby is an employee may be arguable. However, Mr Barry said that the claim in the alternative, that he is an independent contractor, is not maintainable. In other words, that there is no reasonable prospect of that claim succeeding.
It appears to me that no clear determination as to whether Mr Taarnby was an employee or independent contractor can be arrived at simply by considering this Contract. It seems that the contemplation of the Contract is that Mungoorbada will pay Meaford, but the CEO services will be provided by Mr Taarnby personally. This relationship may be consistent with an contract of service, but it may also arguably be consistent with a contract for services.
In CFMEU v Personnel Contracting Pty Ltd, Mr Barry pointed out quite properly, a passage from the summary of the judgment of Kiefel CJ and Keane and Edelman JJ which says:
The characterisation of that relationship as one of employment or otherwise must proceed by reference to the rights and obligations of the parties under that contract. These rights and obligations are to be ascertained in accordance with established principles of contractual interpretation.
I think the limitation of that interpretation in relation to this case, is that the fact that the Contract does not appear to me to be inconsistent with a contract of service or a contract for services existing between Mr Taarnby and Mungoorbada.
As Gordon J said in CFMEU v Personnel Contracting Pty Ltd:
One "general principle" of construction of contracts is that "it is not legitimate to use as an aid in the construction of [a] contract anything which the parties said or did after it was made.”
She continued at paragraph 177:
Of course, the general principle against the use of subsequent conduct in construing a contract wholly in writing says nothing against the admissibility of conduct for purposes unrelated to construction, including in relation to: (1) formation – to establish whether a contract was actually formed and when it was formed; (2) contractual terms – where a contract is not wholly in writing, to establish the existence of a contractual term or terms.
It appears to me that approach must also apply to the question of whether there is some other contract existing in the context of this case, that is, between Mr Taarnby and Mungoorbada. If so, the kind of contract that it is, either a contract of employment or contract for services, appears to me at least in part, may turn on the oral evidence of the parties.
I am not satisfied that the existence of the Contract and the terms of the Contract provide a definitive or clear answer to those questions. I am not satisfied that there is no reasonable prospect of success in relation to that part of this claim. The application is dismissed.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Young. Associate:
Dated: 24 February 2022
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