The Palace Gallery Pty Ltd v WorkCover Premium Review Panel

Supreme Court of South Australia
(Full Court: Application for Judicial Review)
THE PALACE GALLERY PTY LTD v WORKCOVER PREMIUM REVIEW PANEL AND ORS
[2014] SASCFC 60
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Bampton)
11 June 2014
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - ERROR OF LAW
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION - WORDS TO BE GIVEN MEANING AT PARTICULAR DATE
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION - WHOLE ACT TO BE CONSIDERED
WORKERS' COMPENSATION - INSURANCE AND LEVIES - LEVIES
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - PERSONS ENTITLED TO COMPENSATION - WHO IS A WORKER OR EMPLOYEE - CONTRACT OF SERVICE OR INDEPENDENT CONTRACTOR - PARTICULAR CASES - OTHER CASES
The Palace Gallery Pty Ltd (the Palace) seeks judicial review of a decision of the WorkCover Premium Review Panel (the Panel) on its liability to pay a WorkCover levy on the remuneration it pays the DJs and showgirls engaged at its venue. The Palace contends that the Panel erred in law in determining that it was liable to pay the levy, and that the error is jurisdictional and therefore that the decision is vitiated.
The issue needing determination is whether the Panel erred in law finding that the DJs and showgirls fall within the extended definition of “worker” under the Workers Rehabilitation and Compensation Act 1986 (SA) as they met the criteria set out in regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1999 (SA). The proper interpretation of regulation 5(1)(f) is central to the determination of this application. The Palace contended that the phrase “any materials supplied” under regulation 5(1)(f) must be construed as a composite expression.
Held (Kourakis CJ and Gray J, Bampton J agreeing):
It is clear that the purpose of regulation 5 is to extend the persons to whom the Act applies beyond the common law employees (Kourakis CJ at [35], Gray J at [61]).
The disputed items are not ‘materials’ within the meaning of that term in regulation 5(1)(f). The word ‘materials’ refers to items on which a worker works and which are, in whole or in part, consumed or transformed by the work performed. (Kourakis CJ at [36], Gray J at [62]). However, ‘plant, tools and equipment’ are items with which a worker performs their labour in order to effect that transformation (Kourakis CJ at [36], Gray J at [63]). The DJs and showgirls work with the disputed items in their performances but are not engaged to work on, or transform, them (Kourakis CJ at [37], Gray J at [63]).
The application for judicial review is dismissed as the Palace has failed to show that the Panel erred in law in finding that the disputed items were not materials.
Workers Rehabilitation and Compensation Act 1986 (SA) s 66; Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1987 (SA); Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1999 (SA); Workers Rehabilitation and Compensation Regulations 2010 (SA); Supreme Court Civil Rules 2006 r 200, referred to.
Vardon v Promotion and Grievance Appeals Tribunal (SA) [2007] SASC 63; Deputy Commissioner of Taxes (SA) v Elder's Trustee and Executor Co Ltd (1936) 57 CLR 610; Re MacManaway [1950] AC 161; Grain Elevators Board (Vic) v Dunmunkle Corp (1946) 73 CLR 70; Allina Pty Ltd v Commissioner of Taxation (1991) 28 FCR 203; Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348, considered.

THE PALACE GALLERY PTY LTD v WORKCOVER PREMIUM REVIEW PANEL AND ORS
[2014] SASCFC 60
Full Court: Kourakis CJ, Gray and Bampton JJ

KOURAKIS CJ: The plaintiff, The Palace Gallery Pty Ltd (the Palace), operates an eponymously named striptease entertainment venue in Hindley Street, Adelaide. The Palace seeks judicial review of a decision of the WorkCover Premium Review Panel (the Panel) on its liability to pay a WorkCover levy on the remuneration it pays the DJs and striptease entertainers (the showgirls) it engages at its venue. The Panel is the delegate of the WorkCover Board under s 72M of the Workers Rehabilitation and Compensation Act 1986 (SA) (the Act).
The WorkCover levy is a percentage of the aggregate remuneration paid to an employer’s workers.[1] The definition of a “worker” for the purposes of the Act extends beyond the common law definition of an employee. In issue in this action is the application of that definition to the DJs and showgirls engaged by the Palace.
[1] Workers Rehabilitation and Compensation Act 1986 (SA) s 66(2).
On 3 March 2011 the WorkCover Corporation of South Australia (WorkCover) determined that for the financial years ending 2007, 2008 and 2009 the Palace was liable to pay the WorkCover levy on the remuneration it paid to its DJs and showgirls. On 14 June 2011 the Palace applied for a review of that decision. The decision was affirmed by the Panel on 25 June 2013.
The Palace contends that the Panel erred in law in so determining. The Palace also contends that the error is jurisdictional and that the decision is therefore vitiated. The latter contention is not disputed. The issue to be determined therefore is whether the Panel erred in law in finding that the DJs and showgirls fall within the extended definition of “worker”.
The Act
Section 3(1) of the Act defines “worker” as:
worker means—
(a)     a person by whom work is done under a contract of service (whether or not as an employee);
(b)     a person who is a worker by virtue of section 103A;
(c)    a self-employed worker,
and includes a former worker and the legal personal representative of a deceased worker;
Contract of service is, in turn, further defined by s 3(1) of the Act to mean:
(a)     a contract under which one person (the worker) is employed by another (the employer);
(b)     a contract, arrangement or understanding under which one person (the worker) works for another in prescribed work or work of a prescribed class;
(c)     a contract of apprenticeship;
(d)     a contract, arrangement or understanding under which a person (the worker)—
(i)receives on-the-job training in a trade or vocation from another (the employer); and
(ii)     is during the period of that training remunerated by the employer;
The controversy between the parties arising out of that definition is whether the DJs and showgirls were employed under an arrangement which falls within subparagraph (b) of the definition of contract of service.
WorkCover relies on the class of work prescribed by reg 5(1) of the Workers Rehabilitation and Compensation Regulations 2010 (SA)[2] (the Regulations) which, with respect to entertainers, provides in part:
[2] The relevant parts of reg 5(1) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1999 (SA) as in force between 2006 and 2009 were revoked by clause 1 of Schedule 5 to the Workers Rehabilitation and Compensation Regulations 2010 (SA) and are reproduced in the same terms in the current regulations.
5—Contract of service and other terms (section 3 of Act)
(1)For the purposes of the definition of contract of service in section 3(1) of the Act (but subject to this regulation and regulation 6), the following classes of work under a contract, arrangement or understanding are prescribed classes of work:
…
(f) performing as a singer, dancer, musician, ventriloquist, acrobat, juggler, comedian or other entertainer at a hotel, discotheque, restaurant, dance hall, club, reception house or other similar venue, but excluding work as an actor, model or mannequin, or as any other type of entertainer, in performing as part of a circus, concert recital, opera, operetta, mime, play or other similar performance, where—
(i)the work is performed by 1 person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50;
The evidence before the Panel showed that the DJs supplied:
·     headphones;
·     vinyl records, DVDs and CDs;
·     laptop;
·     a music mixing software installed on a DJ’s laptop known as “Cerato Box” or “Serato Box”;
·     connection cord;
·     wipes and sprays; and
·     on about one occasion in each year one particular DJ from interstate would fire t-shirts into the crowd with a C0₂canon.
The Panel found that the wipes and sprays used by the DJs were materials, but that the value of the materials used in a single performance did not exceed $50. The Panel found that the t-shirts given away by the interstate DJ were not materials supplied by the DJ. Finally, the Panel found that the other items were in the nature of tools, plant or equipment and were not materials. It is only the last conclusion which is in issue in these proceedings.
The Panel was satisfied that the showgirls supplied their own:
·     elaborate dresses exceeding $1000 in value;
·     other apparel valued in the hundreds of dollars;
·     stage makeup and hair products valued in the hundreds of dollars;
·     music CDs; and
·     various substances applied to their bodies during the course of their routines.
The Panel concluded that the hair products, stage makeup and body substances supplied by the showgirls were materials but only insofar, and to the extent, that they were used in a single performance. The Panel was not satisfied that the value of those materials used up in a single performance exceeded $50. The Panel found that the remaining items, and in particular the costumes and CDs, were in the nature of tools, plant or equipment and were not materials. Again, it is the last finding which is in issue.
The grounds of review
The errors of law on which the Palace relied were set out in the affidavit filed in support of the summons for judicial review as follows:
7At paragraphs 72-98 of the Reasons, my client contends the Learned Panel fell into error in its reasoning that the items outlined in paragraphs 23, 26, and 39 of the Reasons did not constitute a supply of materials in excess of $50 pursuant to sub section (iv) of the relevant Regulation; and in particular:
7.1    all of the items referred in paragraph 23 of the Reasons constituted “tools, plant and equipment” [See paragraph 85 of the Reasons];
7.2    all of the items referred to in paragraph 26 of the Reasons were either “equipment” or “neither equipment nor materials” [See paragraphs 86-88 of the Reasons];
7.3    the items referred to in paragraph 39 of the Reasons were “tools, plant and equipment” [See paragraphs 89, 90, 91, and 93 of the Reasons].
Rule 200(3) of the Supreme Court Civil Rules 2006 requires that the originating process for an action for judicial review be accompanied by an affidavit setting out the relief sought and the grounds on which the applicant seeks that relief. Judicial review cannot be sought on grounds on which there has not been a grant of permission to appeal.[3] Of course, a plaintiff may file a further affidavit raising additional grounds after initiating an action for judicial review and may obtain a grant of permission to proceed on those additional grounds subject to the application of general case management principles. The Palace did not adopt that course in this action.
[3] Vardon v Promotion and Grievance Appeals Tribunal (SA) [2007] SASC 63.
It will have been observed that the grounds relied on in the supporting affidavit complain only of the finding that certain items used by the DJs and showgirls were not materials for the purposes of reg 5(1)(f)(iv) of the Regulations. I will refer to those items as the disputed items. However, the Panel also decided another issue adversely to the Palace. That issue was whether the period for which the value of supplied materials was to be calculated was limited to each nightly performance (a sessional engagement) or extended to the period over which the performers were rostered to give a performance (the roster period). The Tribunal found:
[63]We also think that the contract period, over which the $50 materials limit is to be measured, must be each individual engagement. The evidence does not justify any other conclusion. The “re-negotiations” referred to by Mr Rossi probably extend to negotiations about the availability of the performers for particular engagements, and the evidence does not show how frequent this was, but we doubt it was less frequent than weekly, and possibly more frequent. Negotiations about availability seem to have taken place with respect to each individual performance. Mr Tropeano referred to internal documents in the nature of rosters, but we do not know how often these were prepared and have not seen them. We also do not know how many times a week a particular performer might have appeared, or how variable that might be. The need for contractual certainty points back to each engagement being a separate contract.
It was on that factual finding, that the DJs and showgirls were engaged on a sessional basis, that the Tribunal reached the conclusion that the value of the material supplied by them under the terms of their engagements did not exceed the prescribed amount. The Palace’s written submissions argued that the Panel’s determination should also be quashed on the ground that the Panel erred in making the factual finding that the relevant period was limited to each sessional engagement.
The period of engagement for the purposes of reg 5 is a question of fact for the Panel. The Panel does not fall into jurisdictional error when it makes a decision which is rationally supported by the evidence before it even if this Court would have made a different factual finding. The Palace accepts that that is so but argued in its outline that the finding is vitiated by two errors of law on which it is based. The first is that in its references to “the contract period” and “a separate contract”, the Panel wrongly limited itself to a consideration of the period to which the parties were contractually bound and failed to consider whether or not there was a non-contractual arrangement or understanding for the purposes of reg 5(1)(f)(iv) which extended beyond a sessional engagement. Secondly, the Palace argued that because the Act provides that the WorkCover levy is payable for “a financial year”[4] and because an employer is obliged to give an estimate of the remuneration paid in each financial year,[5] the period over which the value of the materials must be calculated for the purposes of reg 5(1)(f) is, as a matter of law, the relevant financial year.
[4] Workers Rehabilitation and Compensation Act 1986 (SA) s 66(13).
[5] Workers Rehabilitation and Compensation Act 1986 (SA) s 66(2a).
The paragraphs of the Panel’s reasons impugned in paragraph [7] of the affidavit in support deal exclusively with the characterisation of the items used by the performers as tools, plant or equipment. The paragraphs of the Panel’s reasons dealing with the term of the engagements are not mentioned. The challenge to the finding as to the relevant period was not raised in the affidavit filed in support of the summons for judicial review. The permission granted to the Palace to serve the proceedings was limited to those grounds raised in paragraph [7]. The Palace therefore required a grant of permission to challenge the finding on the period of the engagement but only sought that permission during the hearing. The Court refused permission. My reasons for joining in that order follow.
I commence with the ground that the Panel restricted its consideration to the term of any contractual engagement.
First the Palace’s application for permission could hardly have been made at a later hour. Secondly, the Palace’s prospects of success were poor. A fair reading of the Panel’s reasons shows that the references to a contract in [63] of its reasons was a shorthand reference to the compound phrase “contract arrangement or understanding”. There is little reason to think that the Panel, as a specialist tribunal, would have ignored the other terms. Moreover, the Panel’s references to the submissions of the Palace’s then counsel suggest that he too had used a similar shorthand. Thirdly, there is no indication in the reasons of the Panel that the Palace had made any submission which sought to distinguish between a contract on the one hand, and an “arrangement or understanding” on the other, for the purposes of identifying the relevant period. The Palace’s counsel in this action was not able to assure the Court that such a submission had been made. Fourthly, there is no obvious basis in the evidence to find that there was a non-contractual arrangement or understanding as to engagements which extended beyond the period of any contractual arrangement. Indeed, the evidence strongly supports a conclusion that there was no arrangement or understanding, contractual or otherwise, extending beyond the sessional engagement.
I joined in the order refusing permission on the second ground for the following reasons. First, the application for permission was again made at the last possible moment. Secondly, the prospects of success were poor. The submission appeared to conflate the liability to pay a levy for the aggregate remuneration over a financial year with the periods of engagement of individual workers. Employees may be employed permanently or casually, and may be employed for all or for only a part of a financial year. Independent contractors falling within the extended definition in the Regulations might also be engaged for varying periods of time within a financial year. The financial year for which an employer must account to WorkCover for the levy charged on the remuneration paid for engagements of varying terms cannot be determinative of the period of engagement. Indeed, reg 5(1)(b)(iv) which deals with contracts, arrangements and understandings to perform certain classes of cleaning work, expressly contemplates that the period over which the value of materials supplied will be calculated may be less than a month. Thirdly, again the Palace could not show that any such submission was put to the Panel.
It remains therefore to consider the grounds propounded in the Palace’s supporting affidavit which impugned the Panel’s decision that the disputed items were not materials.
Analysis
It is necessary to set out reg 5(1) in full before turning to consider the Palace’s submissions on the meaning of the term “materials” in reg 5(1)(f)(iv). At the relevant time, reg 5(1) provided:[6]
[6]    The Regulation as in force from 1 December 1994, No 241 of 1999, gazetted 25 November 1999.
5—Contract of service and other terms (section 3 of Act)
(1)For the purposes of the definition of contract of service in section 3(1) of the Act (but subject to this regulation and regulation 6), the following classes of work under a contract, arrangement or understanding are prescribed classes of work:
(a)     building work, other than wall or floor tiling, where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed—
(A)4 per cent of the total amount payable, or reasonably expected to be payable, under or pursuant to the contract, arrangement or understanding; or
(B)     $50,
whichever is the greater; and
(v)the value of any one tool, or any single item of plant or equipment, owned or leased by the worker for work purposes (whether or not it is used in the performance of the particular work) does not exceed –
(A)in 1999 - $12 000;
(b)in a subsequent year – an amount (calculated to the nearest multiple of $100) that bears to $12 000 the same proportion as the Consumer Price Index for the September quarter of the immediately preceding years bears to the Consumer Price Index for the September quarter, 1998;
(b)     cleaning work, where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)    —
(A)in the case of window cleaning work—the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed—
-if the term of the contract, arrangement or understanding is not more than one month—$25;
-if the term of the contract, arrangement or understanding is more than one month—an average of $25 per month;
(B)in any other case—the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed—
-if the term of the contract, arrangement or understanding is not more than one month—$50;
-if the term of the contract, arrangement or understanding is more than one month—an average of $50 per month;
(c)     driving a motor vehicle used for the purposes of transporting goods or materials (whether or not the vehicle is registered in the driver's name) where the driver is paid under the Local Government Employees Award or the Adelaide City Corporation Award and where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50;
(d)     driving a taxi‑cab or similar motor vehicle used for the purpose of transporting members of the public where the driver does not hold or lease a licence issued in relation to the vehicle and where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50;
(e)     driving or riding for fee or reward a vehicle, other than a commercial motor vehicle, for the purpose of transporting by road goods or materials (including money) where the driver or rider does not simultaneously own or operate more than one vehicle for work purposes and where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50; and
(v)the goods or materials being transported are not owned (and have not been previously owned) by the driver or rider (as the case may be), or by the employer;
(f)     performing as a singer, dancer, musician, ventriloquist, acrobat, juggler, comedian or other entertainer at a hotel, discotheque, restaurant, dance hall, club, reception house or other similar venue, but excluding work as an actor, model or mannequin, or as any other type of entertainer, in performing as part of a circus, concert recital, opera, operetta, mime, play or other similar performance, where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50.

Regulation 5 was first made as reg 4 of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1987 (SA). Thereafter, it was amended from time to time and the terms in which the classes of work were prescribed were refined.
The Palace contends that in ascertaining the meaning of any of the particular words of reg 5 in force at the material time, it is necessary to refer back to the regulation as it stood when those words were first used and that subsequent amendments to the regulation must be ignored in determining the meaning of those words in their application to the Palace’s circumstances. For example, and relevantly to the Palace’s submissions in this action, the use of the phrase “materials supplied, or reasonably expected to be supplied by the worker”, appeared in reg 5 in its original form in 1987, whereas reg 5(1)(a)(v), which refers to “plant and equipment” was first made in 1991. Accordingly, on the Palace’s submission, it would be an error to construe the words “materials supplied” by contrasting it with the phrase “plant and equipment”.
In support of that submission the Palace relied on Deputy Commissioner of Taxes (SA) v Elder’s Trustee and Executor Co Ltd[7] and Re MacManaway.[8] Those authorities stand for the principle that an interpretation of a statutory provision which is implicit in a subsequent statutory amendment, cannot affect the judicial construction of the original statutory provision in its operation before the amendment was made. That principle reflects the accepted objective theory of statutory construction and the constitutional separation of powers between the Parliament and the courts. The courts are the sole interpreters of, and attributors of meaning to, the statutes enacted by the Parliament, and they do so by giving the words of the statute their ordinary meaning in their context in accordance with established rules of construction. In that way, the law is given reasonable certainty, a certainty which would be destroyed if the courts were to revise, with retrospective effect, that meaning by reference to subsequent legislative pronouncements.
[7] (1936) 57 CLR 610.
[8] [1950] AC 161.
The principle is subject to this limited qualification. A subsequent amendment may inform the construction of the original words of a statute to the extent, at least, that the original provision should not be given a meaning which renders the amendment mere surplusage.[9] However, courts recognise that a subsequent amendment which appears to have been unnecessary, may have been enacted to remove doubt.[10] In my respectful opinion, the qualification appears to reflect a misapplication of the principle of statutory construction that courts will strive to give meaning and effect to every part of a statute. That principle applies to the construction of a statute, as a whole, as it stands at a particular point in time. In undertaking that task a court may find that a number of the statute’s provisions, when read together, support a particular construction which might also have been given to one of those provisions even if it had stood alone. However, that circumstance does not render the other provisions surplusage; it is simply the manifestation of a more laborious drafting style. Be that as it may, the question whether or not a particular construction will render otiose some words of a statute is not the same as asking whether it was necessary to make a particular amendment. The latter question may well be answered negatively even though all of the words of the amended Act have work to do.
[9] Grain Elevators Board (Vic) v Dunmunkle Corp (1946) 73 CLR 70, 85-86.
[10] Allina Pty Ltd v Commissioner of Taxation (1991) 28 FCR 203, 212; Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348.
More fundamentally, the principle on which the Palace relies concerns the proper approach to the construction of a particular legislative provision as it stood before the making of a statutory amendment. A very different approach is required when what is in issue is the meaning of the words of a statute as in force after the amendment is made. In the latter kind of case it must be recognised that the amendment may, by implication, alter the meaning and therefore the prospective operation of the statute. The question of construction raised in this action is of the latter kind.
The legislative history of a statute is an important aid to its construction but it is an important principle of statutory construction that the meaning of legislation, as in force from time to time, must be ascertained from the words of its provisions, in their current statutory context, and so that the statute operates as a coherent whole.[11] That principle of statutory construction would be subverted if a piecemeal, isolated, historical construction were given to each provision. Indeed, at a practical level, the process of statutory construction would become a herculean task requiring the clearing of mounds of discarded and superseded legislation accumulated over many more years than the three decades of Augean stable waste which was cleverly removed in the legendary fifth labour.
[11] D.C. Pearce and R.S. Geddes, Statutory Interpretation in Australia, 7^th ed, [401]-[406].
It follows that reg 5(1)(f)(iv) must be construed in the context of the whole of reg 5 as it stood in each of the financial years in issue. It is to that task which I now turn.
I commence by accepting that the natural meaning of the word “materials” is wide enough to include tools, plant and equipment. I also accept that the use of the phrase “tools, plant or equipment” in reg 5(1)(f)(ii) serves the purpose of emphasising that work is performed personally even if performed with the aid of tools, plant or equipment. The word “materials” would not have served that purpose as well because it includes items on which work is performed, with or without, the aid of tools. However, it should immediately be observed that the very inaptness of the word “materials” for that purpose suggests the very distinction in meaning between “plant, tools and equipment” on the one hand and “materials” on the other, on which the question of construction turns.
The difference in meaning between tools and materials is not one which arises out of the terms of reg 5 alone. It is a common distinction in the organisation of the classes of work prescribed by reg 5. It is particularly well known and understood in the building industry. A tradesperson’s hammers, saws, spanners or trowels are aptly described as tools. On the other hand, fasteners, cement, pipes and household fittings are commonly referred to as materials. In everyday discussions about the performance of building work, plant, tools and equipment are not generally referred to as materials.
For the reasons given in [25]-[30], I hold that it is permissible to have regard to reg 5(1)(a)(v) to construe the word “materials” used in reg 5(1)(f)(iv) and the equivalent placita of the other subparagraphs. No part of reg 5 is rendered surplusage by doing so.
Regulation 5(1)(a)(v) is premised on the distinction in common usage to which I have referred. It proceeds on the basis that not all of a builder’s tools, plant and equipment are materials because if the word “materials” in reg 5(1)(a)(v) included all plant, tools and equipment, placitum (v) would rarely serve a useful purpose. If materials included all plant, tools and equipment it is only when the total remuneration payable under a contract or arrangement exceeded $420,000 that the value of plant, tools and equipment prescribed by placitum (v) would have any effect. Similarly, the classes of driving work prescribed in reg 5(1)(c) and (e) contemplate that a driver who enters into an arrangement to drive a vehicle for the prescribed purpose may own his or her car, but still supply materials valued at less than $50. It follows therefore that for the purposes of the driving work prescribed by those subparagraphs, the driver’s car, which plainly enough is plant or equipment supplied by the worker, is not “materials” for the purposes of subplacitum (iv) of each of those subparagraphs.
Viewing the matter in the broad, it is clear that the purpose of reg 5 is to extend the persons to whom the Act applies beyond common law employees. If the word “materials” included all plant, tools and equipment brought onto a job by persons engaged to perform building work or cleaning work, or who are engaged as drivers or entertainers, the regulation would hardly have advanced that purpose by one iota. The tradesperson’s tools and scaffolding, the cleaner’s buckets and ladders, and the driver’s vehicles, would easily exceed the amount prescribed for materials. Even the lone guitarist engaged to perform for several hours in the corner of a hotel lounge who enters into an arrangement of a kind which would otherwise be governed by reg 5(1)(f) would fall outside its protective scope because of the value of his or her guitar. Indeed, it is difficult to imagine many tradespersons, cleaners, drivers or entertainers who would use equipment of one kind or another, which in aggregate was valued at less than the prescribed amount for materials, who would not be common law employees in any event.
It can be accepted that the regulation does not necessarily enact a strict dichotomy between “plant, tools and equipment” and “materials”. There may be some items used by a worker in the prescribed classes of work which could be properly described both as materials and plant, tools and equipment. However, the word “materials” generally refers to items on which a worker works and which, for that reason, are in whole or in part consumed or transformed by the work performed. Plant, tools and equipment are generally items with which a worker performs his or her labour in order to effect that transformation, but which, wear and tear aside, are not consumed by that work.
I acknowledge that it may sometimes be difficult to apply the broad definition I have formulated to particular items. However, to return to this case, the disputed items are closely analogous to the tradesperson’s tools and the guitarist’s guitar. They are used over many performances and for different engagements. The showgirls and DJs work with the disputed items in their performances but are not engaged to work on, or transform, them. I hold that the disputed items are not materials within the meaning of that term in reg 5(1)(f).
Finally I record that for the reason given in [32], I would have read down the word “materials” to mean items on which a person in the prescribed classes of work laboured to the exclusion of mechanical aids with which the labour was performed even if the subparagraphs of the regulation dealing with “plant, tools and equipment” had not been made.
Conclusion
The Palace has failed to show that the Panel erred in law in finding that the disputed items were not materials.
I would dismiss the Palace’s action.
GRAY J.
This is an application for judicial review.
The plaintiff, The Palace Gallery Pty Ltd, describes itself as Adelaide’s premier gentleman’s club, providing the highest quality in live exotic entertainment in a luxurious and sexy environment. The Palace Gallery engages the services of disc jockeys and showgirls. The question for determination is whether disc jockeys and showgirls are engaged under a “contract of service” within the meaning of the Workers Rehabilitation and Compensation Act 1986 (SA).
On 5 August 2010, the second defendant, WorkCover Corporation of South Australia, conducted a levy audit of the Palace Gallery in respect of the period 1 July 2006 to 30 June 2009. WorkCover determined that entertainers engaged by the Palace Gallery, being disc jockeys and showgirls – described as dancers, were deemed to be workers under the Workers Rehabilitation and Compensation Act as they met the criteria set out in regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1999 (SA). As a consequence, WorkCover imposed a fine on the Palace Gallery pursuant to section 73 of the Act. WorkCover ordered that the returns of the Palace Gallery in respect of the 2009 to 2010 financial year and the remuneration figures for future financial years be adjusted to include those relating to the deemed workers, that is, the disc jockeys and showgirls.
On 14 June 2011, the Palace Gallery applied for a review of the determination pursuant to section 72 of the Workers Rehabilitation and Compensation Act, as in force at the time of the application. That review was conducted by the WorkCover Premium Review Panel as a delegate of the WorkCover Board of Management.
A book of documents, including a written statement from the Managing Director of the Palace Gallery, Antony Tropeano, was placed before the Panel. In addition, Mr Tropeano gave sworn evidence in support of the review application. The book of documents included two contract of service questionnaires completed by Mr Tropeano and provided to WorkCover. One questionnaire concerned disc jockeys in which Mr Tropeano, inter alia, provided the following information:
…
4Describe type and nature of work to be performed by the contractor in detail.
Mixing music.
…
9Is it necessary for the contractor to use plant and equipment? [Yes box ticked.]
If yes, list equipment used and who owns it.
They use mixing equipment, most of which is brought in by the dj’s. They also supply all of their own music to be mixed.
10Does principal provide the floor space, power, telephone etc for the contractor?
Principal provides a bench for mixing equipment and power. No telephone.
11Are materials provided by contractor to perform the task? [Yes box ticked.]
If yes, please give details.
Contractor provides all their own music to mix their set.
…
14How many hours per week does the contractor work?
2-5 (varies according to contractor).
…
18If relationship between the principal and contractor is to cease, how is arrangement terminated?
Either by Principal not re-booking the contractor, or the contractor not accepting a job from principal.
…
21Can the contractor refuse to do work required? [Yes box ticked.]
If yes, provide an example.
They can simply not accept a job/set offered to them.
…
The other questionnaire concerned showgirls, in which Mr Tropeano provided the following information:
…
4Describe type and nature of work to be performed by the contractor in detail.
Dancing for entertainment.
…
6Is the work performed on a continuing basis or is there a specified period to complete job? [Specific period box ticked.]
…
9Is it necessary for the contractor to use plant and equipment? [Yes box ticked.]
If yes, list equipment used and who owns it.
Contractors use & supply their own music compilations, costumes and props for the show.
10Does principal provide the floor space, power, telephone etc for the contractor?
Floor space is provided – nothing else.
11Are materials provided by contractor to perform the task? [Yes box ticked.]
If yes, please give details.
Provide their own music, costumes and props.
…
13How is the contractor’s payment calculated? (hourly basis, or per item etc.). Please explain
Calculated per show performed.
…
18If relationship between the principal and contractor is to cease, how is arrangement terminated?
Either by principal not re-booking shows or contractor not accepting booking.
…
20What remedy is available if the contractor performing the work fails to do so in a satisfactory manner?
None – simply not re-booking show.
21Can the contractor refuse to do work required? [Yes box ticked.]
If yes, provide an example.
They can refuse a booking.
…
According to Mr Tropeano’s evidence, the engagement of disk jockeys and showgirls was oral and was effective on a booking-by-booking basis. No written records were kept of any booking. Each individual booking was a separate contract. The Palace Gallery was free to offer or decline to offer further bookings and the disc jockeys and showgirls were entitled to accept or reject any particular offer.
Mr Tropeano said that it was his practice to provide a document to the showgirls. A copy of that document was before the Panel. The document congratulated the showgirl on her selection to join the Palace Gallery team of entertainers. Information was provided about training, entertainers’ facilities, club rules, dress code, grooming and rostering. The document asserts that the showgirls work as independent contractors. The document makes reference to a start date and a review date, and provides a space for the signature of the showgirl and managing director. Mr Tropeano’s evidence makes it plain that this particular document was handed out to a selected showgirl. However, there was no suggestion that the document was signed either by the showgirl or the Palace Gallery. It is clear that the showgirls were engaged for a particular booking, not on the basis of an ongoing contract. There is nothing on the papers before this Court to suggest that any other case was advanced in respect of either disc jockeys or showgirls before the Panel. It is clear from the evidence of Mr Tropeano that payment for a particular booking would be negotiated having regard to the respective expertise and talents of particular disc jockeys and showgirls.
On 25 June 2013, the Panel determined that the assessment under review be confirmed, including the imposition of penalty interest. The Tribunal further determined that the fine that had been imposed should be reduced to $750.00. It is the confirmation determination that is the subject of the present proceeding.
During the course of the hearing before this Court, counsel for the Palace Gallery sought to argue that the arrangement with both the disc jockeys and the showgirls was an ongoing arrangement and not a booking-by-booking arrangement. Application was made to amend the grounds on which judicial review was sought to identify this as a ground of review. The application was refused during the course of the hearing. The above discussion concerning the nature of the contract identifies that such an argument was not advanced before the Panel. This was unsurprising given the content of the questionnaire on the contracts of service.
Central to the determination of this proceeding is the proper interpretation of regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations. Section 3 of the Workers Rehabilitation and Compensation Act defines “worker” to mean:
(a)a person by whom work is done under a contract of service (whether or not as an employee);
(b)a person who is a worker by virtue of section 103A;
(c)a self employed worker,
and includes a former worker and the legal personal representative of a deceased worker.
Section 3 defines “contract of service” to mean:
(a)   a contract under which one person (the worker) is employed by another (the employer);
(b)     a contract, arrangement or understanding under which one person (the worker) works for another in prescribed work or work of a particular class;
(c)   a contract of apprenticeship;
(d)     a contract, arrangement or understanding under which a person (the worker) –
(i)receives on-the-job training in a trade or vocation from another (the employer); and
(ii)is during the period of that training remunerated by the employer;
It is to be noted from subparagraph (b) of the definition extracted above that “contract of service” means “a contract, arrangement or understanding under which one person (the worker) works for another in prescribed work or work of a particular class”. Regulation 5 addresses prescribed classes of work and relevantly provides:
(1)For the purposes of the definition of contract of service in section 3(1) of the Act (but subject to this regulation), the following classes of work under a contract, arrangement or understanding are prescribed classes of work:
...
(f) performing as a singer, dancer, musician, ventriloquist, acrobat, juggler, comedian or other entertainer at a hotel, discotheque, restaurant, dance hall, club, reception house or other similar venue, but excluding work as an actor, model or mannequin, or as any other type of entertainer, in performing as part of a circus, concert recital, opera, operetta, mime, play or other similar performance, where—
(i)the work is performed by one person to the contract, arrangement or understanding (the worker) in the course of or for the purposes of a trade or business carried on by another person to the contract, arrangement or understanding (the employer); and
(ii)the work is performed personally by the worker (whether or not the worker supplies any tools, plant or equipment); and
(iii)the worker does not employ any other person to carry out any part of the work; and
(iv)the value of any materials supplied, or reasonably expected to be supplied, by the worker does not exceed $50;
(2)For the purposes of subregulation (1)—
(a) the value of any tool, plant or equipment owned or leased by a worker is the price that, at the time that the worker enters into the relevant contract, arrangement or understanding, the worker would reasonably be expected to pay if the worker were to purchase an equivalent, unused, tool or item of plant or equipment; and
...

The evident purpose of regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations is to extend the application of the Workers Rehabilitation and Compensation Act to persons who would not otherwise be workers by the application of common law principles. The extension of the Act provides entitlements to workers compensation to those persons who are deemed workers by application of the Act and regulation 5(1)(f). The regulation is not directed at increasing the levy payable by a deemed employer. It simply follows that the remuneration of deemed workers will be included in the calculation of the employer levy, whereas that will not be so for independent contractors engaged by the employer who are not deemed to be workers.
The Panel construed the word “materials” appearing in regulation 5(1)(f)(iv) to mean items consumed or used up on the job. In particular, the Panel reasoned:
We think some of the flavour of the distinction is that “materials”, which are used up on the job, involve a direct cost to the performer attributable to the individual contract, or performance, whereas tools, plant and equipment are used (but not used up) in the performance of the job and can be taken away at the end of the job (performance), more or less intact, and remain the performer’s property. Taking the purposive approach, we think this distinction is consistent with the provision of tools, plant and equipment being disregarded as a disqualifying factor, whereas the supply of materials, after a threshold is met, does bring a performer back into the category of an independent contractor.
The Panel then applied this construction of the regulation and found as a matter of fact that some items supplied by the disc jockeys are materials, referring to blank CDs and DVDs, wipes and sprays, and carbon dioxide gas. It also found as a fact that some items supplied by showgirls, being makeup, cream, strawberries, neon paint and shaving cream, were to be characterised as consumables and, hence, as materials. Having made the above findings of fact, the Panel further concluded that there was insufficient evidence to establish that the value of the materials in any particular case amounted to $50.00 or more. These findings then allowed the conclusion that the disc jockeys and showgirls were subject to a contract, arrangement or understanding with the Palace Gallery under which they engaged in work of a prescribed class and, as a consequence, they were engaged in a contract of service with the Palace Gallery and were deemed to be workers under the Workers Rehabilitation and Compensation Act.
The Application for Judicial Review
The Palace Gallery contended that the phrase “any materials supplied” appearing in regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations must ultimately be construed as a composite expression. It was said that the Panel had correctly noted that the word “supply” is a very wide expression, as is the word “materials”. It was said that the use of the word “any” before materials was indicative of an intention to use the term in a broader rather than a narrower sense. It was suggested that the word “supply” in its ordinary meaning would include supply in connection with “tools, plant and equipment” as used in regulation 5(1)(f)(ii).
The Palace Gallery submitted that the word “materials” should be given a similarly wide and flexible meaning. It was accepted that the word “materials” was capable of being used to refer to a consumable, however, it was contended that it need not be restricted to such a meaning. It was then contended that the meaning of the word “materials” was sufficiently broad to encompass “tools, plant and equipment” as well as “consumables”.
The Palace Gallery refuted the suggestion that the use, on the one hand, of the phrase “tools, plant and equipment” and, on the other, of “any materials supplied”, in regulation 5 of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations indicated that it was intended that the two phrases carry different meanings. It was submitted that both expressions are made up of ordinary English words in common usage and that in their ordinary common usage their meanings would ultimately overlap. It was contended that there was no sufficient reason from the terms of regulation 5(1)(f) to read down “materials” so as to exclude “tools, plant and equipment”.
In relation to showgirls, it was suggested that there is no meaningful difference between a showgirl who wears a costume, being in the nature of equipment, and a showgirl covering herself with strawberries and cream, in this case, materials to be used up or otherwise described as consumables.
Regulation 5(1)(f) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations is to be construed and applied by reference to the purpose of the regulation in extending the coverage of workers compensation to persons otherwise not entitled. In my view, it would be an error to construe the word “materials” and the phrase “any materials supplied” in a way which had the effect of narrowing the extension of workers compensation entitlements.
As the word is commonly used and understood, “materials” means items which are in the nature of consumables and are used to carry out the job required. This meaning is consistent with the low dollar amount threshold provided by the regulation and with the purpose of extending the coverage of workers compensation. The meaning proposed by the Palace Gallery is too broad having regard to the ordinary use of the word “materials”. Furthermore, adopting that meaning would have the effect of reducing the coverage of workers compensation.
It is to be noted that the use in contradistinction throughout regulation 5(1) of the phrase “tools, plant or equipment” and the phrase “any materials supplied” was deliberate and intended to address, on the one hand, items of permanence and availability for repeat use and, on the other, items to be used up and properly treated as consumables. The application of the usual rules of statutory construction allow the conclusion that Parliament intended there to be a substantive difference in the two phrases.
I agree with the reasons of Kourakis CJ that when the full terms of the regulations are reviewed, in particular the use of the same phrases when dealing with building contracts, they confirm the interpretation advanced by the Panel.
Conclusion
For these reasons, I would dismiss the application for judicial review.
BAMPTON J: I agree with the reasons of the Chief Justice for the Court’s refusal to grant permission to the plaintiff to challenge the WorkCover Premium Review Panel’s finding that the disc jockeys and the showgirls worked intermittently pursuant to separate contracts.
I would dismiss the application for judicial review for the reasons given by the Chief Justice and Gray J.

[2014] SASCFC 60

11 June 2014

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