Toll Transport Pty Ltd v Eftimovski - [2022] NSWPICPD 14

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	Toll Transport Pty Ltd v Eftimovski [2022] NSWPICPD 14
APPELLANT:	Toll Transport Pty Ltd
RESPONDENT:	Boro Eftimovski
INSURER:	Toll Holdings Limited
FILE NUMBER:	A1-W1496/21
PRESIDENTIAL MEMBER:	Deputy President Elizabeth Wood
DATE OF APPEAL DECISION:	11 April 2022
ORDERS MADE ON APPEAL:	1. The name of the appellant (the respondent at first instance), where necessary, is amended to read “Toll Transport Pty Ltd”. 2. The Member’s Certificate of Determination dated 12 August 2021 is confirmed.
CATCHWORDS:	WORKERS COMPENSATION – Calculation of the respondent’s pre-injury average weekly earnings as defined by cl 2 of Sch 3 to the Workers Compensation Act 1987 – factual findings – Najdovski v Crnojlovic [2008] NSWCA 175; Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505; Raulston v Toll Pty Ltd [2011] NSWWCCPD 25 applied
HEARING:	On the papers
REPRESENTATION:	Appellant:
Mr M Hammond, counsel
Colin Biggers and Paisley
Respondent:
Mr C Tanner, counsel
Santone Lawyers
DECISION UNDER APPEAL
MEMBER:	Ms R Homan
DATE OF MEMBER’S DECISION:	12 August 2021

INTRODUCTION AND BACKGROUND

Mr Boro Eftimovski (the respondent) performed courier work for Toll Global Express Courier, a business unit of Toll Transport Pty Ltd (the appellant). The arrangement between the respondent and the appellant was that the respondent would work as a “contract delivery driver” and payment for this work was made by direct deposit into a bank account on a weekly basis. The respondent was in a partnership with his wife, Mrs Eftimovski and, after business expenses were deducted, half of the partnership net profits were paid to Mrs Eftimovski in accordance with the partnership agreement.
The respondent injured his left shoulder on 21 May 2020 when he slipped from the back of his van. He claimed workers compensation payments from the appellant. The appellant disputed liability. The respondent lodged proceedings in the former Workers Compensation Commission (Matter No 5744/20) and the matter proceeded to arbitration. In those proceedings, the appellant conceded that the respondent was a worker employed by the appellant within the meaning of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). The Arbitrator found the appellant liable for the injury and ordered the appellant to pay the respondent’s treatment expenses pursuant to s 60 of the Workers Compensation Act 1987 (the 1987 Act).
On 15 March 2021, the appellant issued a Work Capacity Decision pursuant to s 43 of the 1987 Act, in which it was determined that the respondent’s pre-injury average weekly earnings were $457.15 per week. The respondent commenced these proceedings, asserting that his pre-injury average weekly earnings were $2,224.00 per week.
The matter proceeded to arbitration and the Member issued a Certificate of Determination in which she determined that, for the purposes of s 36 and s 37 of the 1987 Act, the respondent’s pre-injury average weekly earnings were $1,803.00. She noted that the figure was subject to indexation in accordance with s 82A of the 1987 Act and applied the relevant indexation number to that amount. She ordered the appellant to pay the respondent weekly payments at various rates in accordance with ss 36 and 37 of the 1987 Act, and consistent with her findings as to the respondent’s capacity for work.
The appellant appeals the determination in respect of the calculation of the respondent’s pre-injury average weekly earnings, but not the determination as to the respondent’s capacity for work.

ON THE PAPERS

Section 52(3) of the Personal Injury Commission Act 2020 provides:
“(3) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act and enabling legislation without holding any conference or formal hearing.”
Both parties are content for the appeal to be determined on the basis of the documents before me and the submissions made by the parties. I have had regard to Procedural Directions PIC2 and WC3, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents. I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met and the decision is not interlocutory in nature.

PRELIMINARY MATTER

In the Application to Resolve a Dispute (ARD) lodged by the respondent, the appellant (the respondent nominated in the ARD) was pleaded as “Toll Transport Pty Ltd.” The appellant filed a Reply to Application to Resolve a Dispute (reply), nominating its proper name as “Toll Global Express Courier.” The same nomenclature was adopted in the Appeal Against Decision of Member (appeal). Following lodgment of the appeal, the Commission made two separate enquiries with the appellant as to the correct name of the appellant and, in response, the appellant maintained that “Toll Global Express Courier” was the proper description of the appellant. A direction was issued, again indicating that the name adopted did not appear to be a legal entity and was not consistent with the respondent’s bank records, which were annexed to the ARD. Finally, the appellant confirmed that the correct name of the appellant was “Toll Transport Pty Ltd”, the name of the respondent identified in the previous proceedings and nominated by the respondent in these proceedings. It is thus necessary, with the consent of the parties, to amend the name of the appellant (the respondent at first instance), where necessary, to read “Toll Transport Pty Ltd.”

THE EVIDENCE

The respondent made a statement dated 29 July 2020. He described his obligations under the contract with the appellant and indicated that he did not perform work for any other entities. He also described in detail how the injury occurred. The respondent’s statement did not touch upon the issues relevant to the calculation of his pre-injury average weekly earnings.[1]
[1] ARD, pp 1–4.
On 12 February 2021, the appellant requested particulars from the respondent in relation to the partnership arrangements in place between the respondent and his wife.[2] The appellant enquired as to:
(a)    Mrs Eftimovski’s work duties;
(b)    the hours Mrs Eftimovski worked, and
(c)    her hourly rate.
[2] ARD, p 72.
In the same correspondence, the appellant also requested a copy of Mrs Eftimovski’s individual taxation return from 2019 and payment summaries from the partnership for the financial year ending 2020.
On 2 March 2021, the respondent replied to the appellant’s request.[3] He advised that Mrs Eftimovski performed some deliveries, as well as various office-based activities and was paid $34 per hour, working 15 to 20 hours per week. The respondent attached the relevant taxation return and advised that the partnership did not receive a payment summary.
[3] ARD, p 73.
Bank records showing weekly payments made by the appellant into the account were in evidence.[4] There were no details on those records of the name of the account holder.
[4] ARD, pp 88–92.
A summary of the weekly payments into that account for the financial year 1 July 2019 to 30 June 2020 was annexed to the appellant’s reply and showed total courier payments of $78,069.47 and $7,807.09 in GST payments.[5] The heading on that document read “Pay Advice Summary By Pay Date.” The document identified that the payments were in respect of the driver “Boro Eftimovski (0747)”.
[5] Reply, pp 39–40.
The respondent’s taxation return[6] and the partnership taxation return[7] for the financial year 2018 to 2019 were annexed to the ARD. The taxation return disclosed a total income of $26,272 and a taxable income of 23,772. The distribution from the partnership was reported in the taxation return as $24,093. The partnership taxation return disclosed a total of business income of $88,492.00, and depreciation, motor vehicle and other expenses totalling $40,306.00, leaving a net income of $48,186.00.
[6] ARD, pp 46–53.
[7] ARD, pp 36–42.
Mrs Eftimovski’s taxation return for the financial year ending 30 June 2019 was also in evidence, which disclosed a taxable income of $25,854.00 and a taxable income for the respondent of $23,754.00.[8]
[8] ARD, pp 58–65.
In order to explain the appellant’s calculation of the respondent’s pre-injury average weekly earnings, it is convenient to summarise the relevant parts of the Work Capacity Decision dated 15 March 2021.[9] In that decision, the appellant determined that the respondent had a current work capacity for 4 hours per day, 3 days per week from 5 January 2021, and the respondent’s pre-injury average weekly earnings were $457.15. The appellant advised that the calculation was made on the basis of the income generated by the partnership, which was $88,492.00, from which expenses were deducted of $48,186.00. That figure was then reduced to $23,772 as the respondent’s share of the business income, with Mrs Eftimovski’s taxable income being $23,776. In the decision, the respondent explained that as Mrs Eftimovski was performing work for the partnership and drawing an income, the money she received could not be included in the respondent’s income. The appellant referred to the arbitral decision of the former Workers Compensation Commission of Al Saedi v ST CH Products Pty Ltd[10] and to Chalmers v Cadbury Schweppes Pty Ltd,[11] which dealt with business expenses. The appellant concluded, therefore, that after the expenses had been deducted from the partnership income and Mrs Eftimovski’s dividend was also deducted, the respondent’s pre-injury average weekly earnings were $457.15 per week.
[9] ARD, pp 24–32.
[10] [2016] NSWWCC 20 (Al Saedi).
[11] [2005] NSWWCC 157 (Chalmers).

THE MEMBER’S REASONS

The Member noted the issues in dispute were how the respondent’s pre-injury average weekly earnings figure should be calculated and the quantum of the respondent’s weekly entitlement. She reviewed the evidence and the Work Capacity Decision and summarised the submissions made by each party, which included reference to the presidential decision of Gerob Investments Ballina Pty Limited t/as Beach Life Homes v Compton.[12] The Member quoted the legislation relevant to a calculation of the respondent’s pre-injury average weekly earnings and his weekly entitlements.
[12] [2007] NSWWCCPD 180 (Compton).
The Member observed that it was necessary to determine the respondent’s gross weekly earnings and in order to do so, she could only take into account the respondent’s earnings during the 52 weeks immediately prior to the injury. She noted that the taxation returns in evidence did not assist as they were for the period ending 30 June 2019, and the injury occurred on 21 May 2020. She also noted that the pay advice summary did not cover the entire period as it only commenced on 1 July 2019. The Member concluded that the best available evidence was the amount paid into the respondent’s bank account over the relevant period, which the respondent submitted totalled $103,158.16. She acknowledged that the appellant did not dispute that figure and that the respondent conceded that GST payments should be deducted. She deducted the amount of GST payments which had been included in that figure and observed that after GST was deducted, the total income was $93,780.00. The Member referred to the respondent’s ultimate submission that the correct figure for his pre-injury average weekly earnings was $1,803.00. She also referred to the appellant’s assertion that the figure should be $457.15, which was the weekly average of the amount declared to the Australian Taxation Office for the financial year ending 2019. The Member rejected the figure put forward by the appellant as it was based on the earlier, irrelevant financial year. She then considered whether there should be a different method of calculating the correct figure because of the partnership arrangement between the respondent and Mrs Eftimovski, noting that the amount of $24,093 was distributed to Mrs Eftimovski and also that $40,306 was deducted from the total amount to account for business expenses and depreciation.
The Member did not accept that the amount distributed to Mrs Eftimovski should be deducted, as it did not reflect earnings for work performed. She added that there was no basis upon which to deduct the expenses claimed in the partnership taxation return, noting that the appellant relied upon Al Saedi. The Member observed, however, that Al Saedi concerned an issue as to whether the injured person was a “worker” or “deemed worker” and the business expenses were only taken into account for the purposes of determining that issue. The Member noted that this case did not involve that issue and in the prior proceedings it was conceded that the respondent was a “worker” within the meaning of the 1998 Act. The Member discussed the definition of “worker” within the meaning of s 4 of the 1998 Act and cl 5 of Sch 1 to the 1998 Act, which clause deals with the concept of “deemed worker.”
The Member referred to Compton, quoting the following passages from that decision:
“It was not disputed that Mr Compton was in partnership with his wife and that he split his income 50:50 with her. The Arbitrator’s finding was that Mr Compton did not employ labour. That finding was consistent with the evidence and is not challenged. The importance of the Appellant Employer’s submission that Mr Compton ‘conducted his business affairs in partnership with his wife’ (emphasis added) is dependent on whether he conducted a business. For the reasons set out below … I do not believe Mr Compton conducted a business. The fact that he directed that his earnings be paid to a partnership was not determinative of the issue of worker ...”.[13]
And:
“Mr Compton’s wife performed no work in the partnership save for keeping the books. Mr Compton performed all of the income producing work. Without his work the partnership would have had no practical existence. Though it is not expressly covered in the evidence, it is doubtful that Beach Life Homes would have contracted with the partnership if Mr Compton had not been a part of it. Effectively Mr Compton worked as a sole practitioner, but he dealt with his income in a tax effective manner on the advice of his accountant. The Appellant Employer’s dealings were always with Mr Compton.”[14]
[13] Compton, [52].
[14] Compton, [59].
The Member also referred to the decision of Senior Arbitrator Snell, as he then was, in Mortimer v JFTA Pty Limited,[15] in which the then Senior Arbitrator observed:
“On the evidence in the current matter, in my view the respondent contracted with the deceased, rather than with the partnership. The only member of the partnership who supplied any services to the respondent was the deceased. The hours that were remunerated were those worked by the deceased. The applicant did not need to be on the site, she went there to accompany the deceased.
…
The fact that the deceased was a member of a partnership which had an ABN, and that the partnership earnings were divided equally between the deceased and the applicant, are also factors which tend to militate against a contract of service. However, as in [Compton], all of the income producing work was carried out by the deceased. The partnership, by the relevant time, appears to have been nothing more than an arrangement ‘for tax purposes’. It is quite unlikely the respondent would have contracted with the partnership, other than to secure the services of the deceased. The existence of the partnership is ‘not determinative of the issue of worker’ (see [Compton] at [52]).”[16]
[15] [2015] NSWWCC 303 (Mortimer).
[16] Mortimer, [81], [84].
The Member pointed out that in both Mortimer and Compton, the injured party was held to be a “deemed worker.” She considered that neither case assisted with the question of how the pre-injury average weekly earnings were to be calculated as that issue either did not arise in the case or the issue was determined under a different legislative framework. The Member also referred to and reviewed the facts in Chalmers and noted that, in that case, the Arbitrator was not satisfied that Mr Chalmers suffered any incapacity for work and the current legislative framework that applied to a calculation of weekly entitlements did not apply in that matter. She concluded that the cases discussed did not assist her.
The Member referred to the particulars provided to the appellant as to the duties performed by Mrs Eftimovski and her hourly rate. She observed that, unlike Compton and Mortimer, this evidence tended to suggest that Mrs Eftimovski did engage in income producing activity and supplied administrative assistance to the respondent, but even though that evidence was pertinent to the question of whether the respondent was a “deemed worker,” that issue was not before her.
The Member concluded that all of the payments made by the appellant into the respondent’s bank account, except for the GST payments, were income received by the respondent for work performed in the employ of the appellant. The Member added that the fact that Mrs Eftimovski performed some of the work and that the monies were paid into a partnership did not change the nature of those payments. She considered that her approach was consistent with Compton and Mortimer.
The Member said that there was no evidence that the respondent worked in any other employment and no evidence of any non-monetary benefit. She considered that she was satisfied that the respondent’s pre-injury earnings for the relevant period totalled $93,780.00, and the average of those earnings was $1,803.00, which was the respondent’s pre-injury average weekly earnings for the purposes of ss 36 and 37 of the 1987 Act. She noted that s 82A of the 1987 Act provided for indexation of that amount and that after applying the relevant indexation number, from 1 April 2021 the indexed pre-injury average weekly earnings figure was calculated to be $1,855.00 per week.
The Member then proceeded to determine the respondent’s capacity for work. She determined that he had no capacity for work during the period 22 May 2020 to 30 October 2020 and from 4 December 2020 to 4 January 2021, and otherwise he had a capacity to work 12 hours per week in suitable employment. The Member assessed the respondent’s ability to earn in accordance with s 32A of the 1987 Act as $268.00 per week.
The Certificate of Determination issued on 12 August 221 records:
“The Commission determines:
1. The pre-injury average weekly earnings figure is $1,803
The Commission orders:
2. The respondent to pay the applicant weekly compensation as follows:
(a)pursuant to s 36(1) from 22 May 2020 to 20 July 2020 at the rate of $1,713 ($1,803 x 0.95);
(b)pursuant to s 37(1) from 21 July 2020 to 30 October 2020 at the rate of $1,442 ($1,803 x 0.80);
(c)pursuant to s 37(3)(a) from 31 October 2020 to 3 December 2020 at the rate of $1,174 ($1,803 x 0.80 less $268);
(d)pursuant to s 37(1) from 4 December 2021 to 4 January 2021 at the rate of $1,442 ($1,803 x 0.80);
(e)pursuant to s 37(3)(a) from 5 January 2021 to 31 March 2021 at the rate of $1174 ($1,803 x 0.80 less $268); and
(f)pursuant to s 37(3)(a) from 1 April 2021 to date and continuing at the rate of $1,216 ($1,855 x 0.80 less $268).”

GROUNDS OF APPEAL

The appeal is limited to the Member’s determination that the respondent’s pre-injury average weekly earnings figure is $1,803.00. The appellant brings two grounds of appeal, namely that:
(a) Ground One: The Member made a legal error in ascribing an evidentiary onus upon the appellant with respect to Mrs Eftimovski’s earnings and activities, and
(b) Ground Two: The Member made legal and factual errors in calculating the respondent’s pre-injury average weekly earnings.

LEGISLATION

Sections 36 and 37 of the 1987 Act provide for the rate of weekly payments to be paid during the first 130 weeks of weekly compensation. Those sections relevantly provide as follows:
“36    Weekly payments during first entitlement period (first 13 weeks)
(1)     The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the first entitlement period is to be at the rate of 95% of the worker’s pre-injury average weekly earnings.”
And:
“37    Weekly payments during second entitlement period (weeks 14–130)
(1)    The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the second entitlement period is to be at the rate of 80% of the worker’s pre-injury average weekly earnings.
(2)    The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for not less than 15 hours per week is entitled during the second entitlement period is to be at the lesser of the following rates—
(a) 95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
(3)     The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the lesser of the following rates—
(a) 80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.”
The term “pre-injury average weekly earnings” referred to in ss 36 and 37 is defined in cl 2 of Sch 3 to the 1987 Act. The clause relevantly provides:
“2      Meaning of ‘pre-injury average weekly earnings’
(1)     Pre-injury average weekly earnings, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note—
See also clauses 3–5 relating to modifications of pre-injury average weekly earnings by agreement and in relation to apprentices, trainees and persons aged under 21 years.
(2)     Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).
(3)     …
(4)     If the amount of a worker’s pre-injury average weekly earnings is less than any minimum amount prescribed by the regulations as applicable to the worker, the amount of the worker’s pre-injury average weekly earnings is taken to be that minimum amount. Different minimum amounts may be prescribed for different classes of workers, including part-time and full-time workers.”
The word “earnings” is defined in cl 6 of Sch 3 to the 1987 Act as follows:
“6      Meaning of ‘earnings’
(1)     The earnings received by a worker in respect of a week means the amount that is the income of the worker received by the worker for work performed in any employment during the week.
(2)     The income of a worker does not include—
(a) any minimum amount paid to a superannuation fund or scheme in respect of the week to avoid an individual superannuation guarantee shortfall, within the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth, for the worker, or
(b) the monetary value of any non-monetary benefit provided to the worker for the performance of work by the worker, or
(c) any payment in respect of loss of earnings under a scheme to which the workers compensation legislation relates or under any other insurance or compensation scheme, or
(d) any payment made without obligation by the employer.
(3)     However, the monetary value of a non-monetary benefit of a worker is to be included as part of the income of the worker for the purposes of the calculation of the weekly payments of compensation payable to the worker if the worker is not entitled to the use of the benefit.
(4)     The Workers Compensation Guidelines may make provision for or with respect to the matters to be taken into account for the purposes of determining whether a benefit has been provided to a worker or whether the worker is entitled to the use of a benefit.”

SUBMISSIONS

Ground One

The appellant’s submissions

The appellant refers to the Member’s conclusion that she was not satisfied that the distribution of the partnership moneys to Mrs Eftimovski was income received for work performed in “employment” and submits that the finding imposes an evidentiary onus on the appellant in relation to Mrs Eftimovski’s activities. The appellant asserts that two errors are created by the finding.
The appellant says that the first error is that the respondent bore the onus of proving his case and the Member’s approach was effectively that the respondent should succeed unless the appellant’s submissions were accepted. The appellant says that it is incorrect that the lack of evidence adduced by the appellant as to Mrs Eftimovski’s activities entitled the Member to make a finding in the respondent’s favour. The appellant contends that it was incumbent upon the respondent to prove his case and thus the Member reversed the onus of proof.
The appellant submits that the Member ought to have explained why it was that she accepted the respondent’s submissions over those of the appellant despite the lack of evidence to support the respondent’s position, rather than draw conclusions in favour of the respondent on the basis of an absence of evidence.
The appellant asserts that the second error is that if the evidence in respect of Mrs Eftimovski’s activities was lacking, then the conclusion based upon that part of the evidence should have fallen in the appellant’s favour, rather than against the appellant. The appellant refers to the Member’s conclusion that, other than the evidence that Mrs Eftimovski performed some activities and was paid an hourly rate, there was no evidence that Mrs Eftimovski was “employed” by the partnership or the respondent. The appellant submits that, in circumstances where Mrs Eftimovski was the respondent’s witness, the appellant had done all it reasonably could to obtain evidence, so that it was an error for the Member to make a finding against the appellant on the basis of a lack of evidence.

The respondent’s submissions

The respondent submits that this ground of appeal is misconceived. The respondent says that the appellant’s argument relates to the arrangements between the respondent and Mrs Eftimovski, rather than the rights and obligations of the parties to the contract of service and the payments made by the appellant as remuneration for the work done. The respondent asserts that, in accordance with the respondent’s contractual rights, the remuneration payable by the appellant for the respondent’s work was enforceable by the respondent.
The respondent contends that the Member was correct to observe that the evidence did not establish that the money received by Mrs Eftimovski as a partnership distribution constituted income received for work performed in any ‘employment’.”[17] That is, work performed by Mrs Eftimovski either for the partnership or the appellant.
[17] Eftimovski v Toll Transport Pty Ltd [2021] NSWPIC 288 (reasons), [101].
The respondent submits that the evidence of the amounts paid to the respondent by the appellant did not establish that the appellant paid less than those amounts or that the respondent received less. The respondent asserts that the Member’s determination was consistent with that evidence, she did not cast the onus onto the appellant and thus the Member did not err as alleged.

Ground Two

The appellant’s submissions

The appellant refers to its submissions made to the Member and submits that the evidence established that Mrs Eftimovski performed work for the partnership and the partnership contracted with the appellant. The appellant asserts that the arrangement that Mrs Eftimovski worked 15 to 20 hours per week and was paid $34 per hour for performing administrative duties and delivery work clearly established that Mrs Eftimovski worked for the partnership with the respondent, and the partnership was contracted to the appellant. The appellant contends that the arrangement did not constitute a taxation sham or a taxation minimisation arrangement. The appellant points out that the respondent was not doing all of the work of the partnership or for the appellant. The appellant asserts that, given the evidence as to the arrangements concerning Mrs Eftimovski, the Member’s finding that the amount of gross payments made to the partnership (apart from the GST payments) constituted the respondent’s earnings was wrong.
The appellant refers to Compton and its submissions to the Member as to why that authority was not on all fours with this case. The appellant cites Roche DP’s observations in that case at [59] wherein Roche DP said:
“Mr Compton’s wife performed no work in the partnership save for keeping the books. Mr Compton performed all of the income producing work. Without his work the partnership would have had no practical existence. Though it is not expressly covered in the evidence, it is doubtful that Beach Life Homes would have contracted with the partnership if Mr Compton had not been a part of it. Effectively Mr Compton worked as a sole practitioner, but he dealt with his income in a tax effective manner on the advice of his accountant. The Appellant Employer’s dealings were always with Mr Compton.”
The appellant points to the duties performed and the hours worked by Mrs Eftimovski, for which she was paid $34 per hour, and says that Mrs Eftimovski was an active participant in the partnership. The appellant submits that the Member erred in fact in not accepting that evidence. The appellant quotes from the Member’s reasons, wherein she accepted that Mrs Eftimovski took an active part in the partnership, which raised questions relevant to the “deemed worker” provisions, which were not an issue for determination. The appellant further quotes from the Member’s reasons, wherein she observed:
“It is possible that much of Mrs Eftimovski’s time was taken up attending to the other duties identified. It is not possible to ascertain how many hours were spent per week by the applicant, as opposed to Mrs Eftimovski, in performing income producing work.”[18]
And:
“It is suggested that Mrs Eftimovski merely ‘assisted’ the applicant in miscellaneous respects, enabling the applicant to be more efficient in discharging his duties as a worker in the employ of the respondent, and relieving him of tasks he would otherwise be required to perform in order to earn the remuneration payable to him each week.[19]
[18] Reasons, [97].
[19] Reasons, [99].
The appellant submits that there was no evidence adduced to support the Member’s observations, particularly no evidence in statement form from either the respondent or Mrs Eftimovski that supported the Member’s conclusions as to those probabilities and possibilities, and thus the Member was in error in so concluding.

The respondent’s submissions

The respondent submits that this ground of appeal is based on the erroneous premise that Mrs Eftimovski was performing work for a partnership and the partnership contracted to the appellant. The respondent asserts that this premise fails to take into account that the appellant concedes that the respondent was a worker and thus the respondent has rights pursuant to a contract of service with the appellant. The respondent says that the respondent’s rights fall within the workers compensation legislation, which does not make provision for arrangements between partnerships. The respondent refers to the resolution of the previous proceedings which was conducted on the basis of an admission that the respondent was a worker and a finding that the respondent suffered an injury which arose out of his employment.
The respondent contends that the appellant’s submissions about the contract between the appellant and the partnership are inconsistent with the concession that the respondent worked under a contract of service and the determination that the respondent’s injury arose out of his employment. The respondent asserts that “[p]artnerships are not employed by commercial entities like the appellant.”[20]
[20] Respondent’s submissions, [7.9].
The respondent submits that the appellant’s records, which were before the Member, constituted evidence of the remuneration paid for the work performed in accordance with the contract of service, which rates of remuneration were agreed between the appellant and the respondent. The respondent contends that the Member was correct in her determination of the respondent’s entitlements to weekly compensation and that the appellant has failed to show error on the part of the Member.

THE RELIEF SOUGHT

The appellant submits that the Member’s Certificate of Determination should be set aside and instead, there be a determination that the respondent’s pre-injury average weekly earnings figure is $457.15. Alternatively, the appellant seeks to have the matter remitted to another non-presidential member for re-determination.
The respondent submits that the appeal is without merit and should be dismissed.

CONSIDERATION

The appellant does not challenge the Member’s determination in relation to the respondent’s capacity for work. The appellant also does not refer to, or make submissions in respect of, the Member including in the calculation of the respondent’s pre-injury average weekly earnings the amount deducted in the taxation returns for business expenses and depreciation. The allegations of error are that:
(a) the Member reversed the evidentiary burden when she determined that she was not satisfied that the distribution to Mrs Eftimovski constituted income received for work performed in employment (Ground One), and
(b) the Member’s decision was factually wrong because the evidence established that Mrs Eftimovski performed work for the partnership and the partnership was contracted to the appellant (Ground Two).

Ground One: The Member made a legal error in ascribing an evidentiary onus upon the appellant with respect to Mrs Eftimovski’s earnings and activities

The appellant asserts that the pre-injury average weekly earnings figure should have been $457.15. The Member rejected that submission because firstly, the calculation was made using the amounts referred to in the 2018-2019 financial year, which did not relate to the 52‑week period immediately prior to the injury. The Member was correct in that regard. The Member then turned to consider whether the manner in which the figure was determined was affected by the partnership agreement between the respondent and Mrs Eftimovski.
The appellant refers to the “lack of evidence” adduced by the respondent to support his case. The Member’s reference to the lack of evidence was predicated by her consideration of the legislation relating to a question of “worker” within the meaning of s 4 of the 1998 Act and “deemed worker” as provided by cl 2 of Sch 1 of the 1998 Act. She noted that she was not required to determine that question because it was conceded by the appellant that the respondent was a worker in accordance with s 4 of the 1998 Act. The Member noted that, in accordance with s 4, a worker was a person who works under a contract of service with an employer. Thus, there was no issue that the respondent was working under a contract of service with the appellant.
The Member’s observations in relation to the lack of evidence further pertained to the consideration of whether the moneys paid on a weekly basis by the appellant to the respondent were in part a payment of income referrable to the work performed by Mrs Eftimovski. That proposition was essentially the appellant’s case. In the context of the evidence adduced in the Pay Advice Summary, which identified the driver as “Boro Eftimovski (0747)”, it was up to the appellant to adduce sufficient evidence to establish the fact that that income was also referrable to the work performed by Mrs Eftimovski. For instance, the appellant might have adduced evidence of the appellant having entered into an agreement between itself and both the respondent and Mrs Eftimovski.
As the respondent correctly points out, the appellant’s argument relates to the arrangements between the respondent and Mrs Eftimovski, rather than the rights and obligations of the parties to the contract of service and the payments made by the appellant as remuneration for the work done. There was no evidence in the financial records of Mrs Eftimovski receiving any income other than the partnership dividend which the Member considered did not reflect payment of income for work performed. That conclusion was open to her.
The Member therefore did not reverse the onus of proof and this ground of appeal fails.

Ground Two: The Member made legal and factual errors in calculating the respondent’s pre-injury average weekly earnings

The appellant submits that the evidence established that Mrs Eftimovski worked for the partnership and the partnership contracted to the appellant. On the contrary, there was no evidence that the partnership contracted to the appellant and the respondent’s statement suggests that the interactions with the appellant were conducted by the respondent alone. The fact that Mrs Eftimovski drew a dividend from the business partnership establishes only that Mrs Eftimovski was party to an agreement (the partnership agreement) with the respondent. There was no evidence of Mrs Eftimovski being a party to any arrangement with the appellant. Such evidence would be inconsistent with the concept of the respondent being in a contract of service with the appellant, who made weekly payments for the work done by “Boro Eftimovski (0747)”.
The Member considered the decision of Roche DP in Compton and then Senior Arbitrator Snell in Mortimer, in which Senior Arbitrator Snell said that the existence of a partnership was not determinative of the question of “worker.” She concluded that she did not draw any assistance from the decision in Chalmers because that case did not require a calculation of the pre-injury average weekly earnings as was required in this case and that Compton and Mortimer were decisions about evidence pointing to the issue of “worker.” The Member was correct to determine that those decisions were not on point in relation to what should and should not be included in the calculation of the respondent’s pre-injury average weekly earnings. The appellant in fact submitted that Compton was not on all fours with this case, which is consistent with the Member’s conclusion in any event.
The appellant has not provided any basis upon which it can be established that the Member committed legal error, either in her consideration of the authorities referred to, or in her application of the relevant legislation.
The appellant asserts that the Member erred in her factual determinations, contending that the Member’s considerations of the “possibilities,” quoted at [43] above, were unfounded. The Member concluded that, while there might be other possibilities, it was not possible to ascertain the hours spent per week by the respondent, as opposed to Mrs Eftimovski, in performing income producing work. That conclusion was clearly available to the Member.
The appellant contends that the arrangement between Mrs Eftimovski and the respondent was not a tax minimisation strategy. Given that the partnership net profit was distributed equally between the respondent and Mrs Eftimovski in accordance with accounting practices, the dividend had the obvious characteristic of appropriate taxation minimisation, rather than evidence of income received for work done.

In response to the appellant’s allegations of error, the respondent submits that the appellant’s record, that is the Pay Advice Summary, was evidence of the remuneration paid for the work performed in accordance with the contract of service, which rates of remuneration were agreed between the appellant and the respondent. The document is clear evidence of that fact.
The Member’s evaluation of the available evidence involved findings of facts. The principles applicable to an appeal from a primary judge’s findings of fact were discussed by Basten JA (with Allsop P agreeing) in Najdovski v Crnojlovic[21] as follows (citations omitted):
“Once primary facts have been found and relevant inferences drawn, the ultimate conclusion may depend upon an evaluative judgment which may not be amenable to precise justification. The constraints which apply to a review of such a judgment recognise that views may reasonably differ as to the appropriate result and that error will not be found if the result is within the appropriate range. It may be that error is demonstrated in failing to reveal a process of reasoning where, although relevant and material facts have been found, the basis for the final conclusion remains impenetrable. There may be occasions in which such a result will demonstrate a failure to fulfil that part of the judicial function which requires revelation of the reasoning process, but more commonly such a case will be resolvable on the basis that the findings of fact are not as they appear or that there is otherwise an unrevealed error of principle.”[22]
[21] [2008] NSWCA 175 (Najdovski).
[22] Najdovski, [22].
In determining whether a member has erred in respect of a finding of fact, the principles stated by Barwick CJ in Whiteley Muir & Zwanenberg Ltd v Kerr[23] are relevant and have been consistently applied in the Commission. Those principles were summarised by Deputy President Roche in Raulston v Toll Pty Ltd[24] as follows:
[23] (1966) 39 ALJR 505.
[24] [2011] NSWWCCPD 25, [19]–[20].
“…
(a) [A Member], though not basing his or her findings on credit, may have preferred one view of the primary facts to another as being more probable. Such a finding may only be disturbed by a Presidential member if ‘other probabilities so outweigh that chosen by the [Member] that it can be said that his [or her] conclusion was wrong’.
(b) Having found the primary facts, the [Member] may draw a particular inference from them. Even here the ‘fact of the [Member’s] decision must be displaced’. It is not enough that the Presidential member would have drawn a different inference. It must be shown that the [Member] was wrong.
(c) It may be shown that [a Member] was wrong ‘by showing that material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the [Member] is so preponderant in the opinion of the appellate court that the [Member’s] decision is wrong.

The decision of Allsop J (as his Honour then was) in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 Drummond and Mansfield JJ agreeing) is also instructive in the context of the need to establish error. His Honour observed (at [28]):
‘in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.’”

The appellant has not established that material facts have been overlooked or given undue or too little weight in deciding the inference to be drawn, or that the available inference in the opposite sense to that chosen by the Member was so preponderant that the Member’s decision is wrong. Nor can it be said that there were other probabilities that outweighed those chosen by the Member sufficient to show that the Member was wrong. Ground Two of the appeal fails.

CONCLUSION

The appellant has failed to identify any error of fact or law in the Member’s findings and her ultimate conclusion as to the respondent’s pre-injury average weekly earnings. The appeal fails.

DECISION

The Member’s Certificate of Determination dated 12 August 2021 is confirmed.

Elizabeth Wood
DEPUTY PRESIDENT

11 April 2022