Tomas, Stjepan v Tomas, Anton

[1983] FCA 353

Re: STJEPAN TOMAS
And: ANTON TOMAS AND DUSKO PERAIC (1983) 74 FLR 137
No. ACT G24 of 1983
Workmen's Compensation

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Woodward(1), Gallop( ) and Neaves( ) JJ.

CATCHWORDS

Workmen's Compensation - contract for services - "work incidental to a trade or business regularly carried on by the contractor in his own name."

Workmen's Compensation Ordinance 1951 (ACT) s.6(3)

Workers' Compensation - Contract for services - "Work incidental to a trade or business regularly carried on by the contractor in his own name" - Workmen's Compensation Ordinance 1951 (A.C.T.), ss 6(3), 26.

HEADNOTE

The appellant, a bricklayer, had bargained for a fixed price for every one thousand bricks laid on a house being constructed by the respondents.

Later he sustained personal injury while working on the house.

His application for workmen's compensation was heard by a magistrate as arbitrator and resulted in an award in his favour.

The respondents appealed to the Supreme Court which found that the weight of evidence was in favour of the contention that the appellant was a contractor and not an employee at the time he was injured and that the work he was doing was incidental to a trade or business which he regularly carried on, and allowed the appeal.

The appellant appealed to the Full Court of the Federal Court.

Held: The appellant was not a "workman" nor a "deemed worker" within the meaning of the Workmen's Compensation Ordinance 1951 (A.C.T.), and the appeal should be dismissed.

Ruiz v. Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1; Wolmar v. Travelodge Ltd (1975) 26 FLR 249; McCormack v. Federal Commissioner of Taxation (1979) 143 CLR 284 and Uranerz (Aust.) Pty Ltd v. Hall (1980) 54 ALJR 378, applied.

Humberstone v. Northern Timber Mills (1949) 79 CLR 389; Zuijs v. Wirth Bros Pty Ltd (1955) 93 CLR 561; Higgins v. Jackson (1976) 135 CLR 174; David Jones (Aust.) Pty Ltd v. Arauner (unreported decision delivered 9 November 1982); Turner v. Stewardson (1961) 78 WN (NSW) 1036; Warren v. Coombes (1979) 142 CLR 531; A.M.P. Society v. Allan (1978) 52 ALJR 407; Mersey Docks and Harbour Board v. Coggins and Griffith (Liverpool) Ltd (1947) AC 1; Queensland Stations Pty Ltd v. Federal Commissioner of Taxation (1945) 70 CLR 539; Performing Right Society Ltd v. Mitchell and Booker (Palais de Danse) Ltd (1924) 1 KB 762; Federal Commissioner of Taxation v. J. Walter Thompson (Aust.) Pty Ltd (1944) 69 CLR 227, referred to.

HEARING

Canberra, 1983, September 6; November 29. #DATE 29:11:1983

APPEAL.

Appeal to the Full Court of the Federal Court of the A.C.T. against a decision of the Supreme Court on the definition of "workman" in the Workmen's Compensation Ordinance 1951 (A.C.T.).

P. L. R. Sheils, for the appellant.

T. J. Studdert Q.C. and D. G. T. Nock, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Romano & Verduci.

Solicitors for the respondent: Wood Fussell & Co.

M.P.S.

ORDER

The appeal be dismissed with costs.

Orders accordingly.

JUDGE1

In this case the question for determination is whether the appellant, at the time of his injury, was a workman within the meaning of the Workmen's Compensation Ordinance 1951 of the Australian Capital Territory.

It is first claimed, on his behalf, that he was working "under a contract of service . . . . with an employer . . . " . The learned Stipendiary Magistrate, sitting as arbitrator under the Ordinance, said on this issue

" . . . on what is before me I am not persuaded by the applicant that the applicant was an employee in the ordinary sense and there was no evidence upon which I would find that it was more probable than not that the relevant right to control was established before me."

In the Supreme Court, Blackburn C.J. also came to the conclusion that

"the weight of the evidence is in favour of the (contention) that the respondent was a contractor and not an employee at the time when he was injured."

There was ample evidence to support these findings. In a case such as this, where one would not expect to find any detailed control of the work of a skilled tradesman, it is necessary to look for other indicators in order to determine whether the contract is one of service by an employee or for the services of a contractor.

In the first place the appellant, in a statement prepared by an insurance investigator but checked and witnessed by his then solicitor said

"I have been a self-employed bricklayer since I arrived in Australia (1969). I have worked for wages on a few occasions for different builders . . . . . when I seek work as a bricklayer I work either on day labour for $100 per day or so much per 1000 bricks laid. I normally supply my own tools and the builder supplies the materials . . . . I normally work with a labourer and we work as a team . . . . we act as a partnership and divide the money equally between us . . . . we work under the control of the main contractor on the job".

All this was consistent with the appellant's oral evidence. In particular he made it clear that, in the case of the contract in question, he bargained on behalf of his labourer friend and himself for a fixed price for every thousand bricks, the money earned to be divided between them. When he saw the site in question he indicated that he did not want to go on with the contract because the scaffolding it would require would make the job unprofitable. The builder then agreed to provide and erect the scaffolding. The builder made no tax deductions from amounts paid to the appellant.

In my view these circumstances pointed clearly to the appellant being a contractor rather than an employee. This however is not the end of the matter. S.6(3) of the Ordinance provides

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

The learned arbitrator found that the appellant was deemed to be a workman in accordance with this provision. In doing so he said,

"In my view he is not carrying on a business or trade within the meaning of the section. He is an ordinary person who has a skill as a bricklayer who works in effect on a piece rate basis."

In saying this the arbitrator seems to imply that to come within the exception the worker must be the sort of person who conducts his business from premises and advertises his services. It is not enough to be an "ordinary person", self-employed and skilled, paid for services at a rate rather than at a total contract price. But if this were so, the same would apply to many house painters, cleaners, repairers and others who are clearly going from job to job, carrying on a trade or business in their own name. It is necessary to identify a more refined distinction between those who fall within the words of exemption and those who do not.

The intent of the provision has been explained by Dixon J., as he then was, in the case of Humberstone v Northern Timber Mills (1949) 79 CLR 389 @ 401-2. His Honour's explanation was later approved in Zuijs v Wirth Bros. Pty. Ltd. (1955) 93 CLR 561. His Honour said of a parallel provision in Victorian legislation,

"I think that the purpose of the exception or exclusion expressed by the words in question was to confine the benefit of the conclusive presumption which it establishes to persons who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name as carrying on such a trade or business and who do not in the course of that trade or business, as an incident of its exercise, undertake the work by entering into the contract. The provision will thus cover men who work for the principal but have no independent business or trade and men who though carrying on an independent trade or business undertake a contract outside the scope or course of that trade or business. The word "trade" is capable of including any handicraft and in that sense it may seem to lack the element of systematic practice or holding out which the idea of openly conducting a distinct or independent trade or business and seeking custom implies. But a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so."

It is to be noted that the Victorian legislation, after the words "in his own name", adds the words "or under a firm or business name." The difference is not material to Dixon J's analysis.

There can be no doubt that in the present case the appellant, to use Dixon J's language, was a general practitioner of his trade who performed work successively for his customers in the course of trade carried on systematically. His relationship with the builder was not special or particular or outside the general practice of his trade.

Higgins v Jackson 1976 135 CLR 174 later made clear that it is not only the worker who holds himself out to the public by advertising who falls within the words of exemption.

In my opinion the principles laid down in these authorities were properly applied by the learned Chief Justice in the Supreme Court to the facts of this case and the appeal against his judgment should accordingly be dismissed with costs.

JUDGE2

On 18 March 1982 the appellant sustained personal injury while working as a bricklayer on a house being constructed by the respondents in Castleton Crescent, Gowrie. By application dated 14 May 1982 the appellant applied for arbitration of his claim for workers' compensation on the basis of total incapacity from 16 April 1982. The application was heard by Mr W.K. Nicholl, Stipendiary Magistrate, as arbitrator on 2 July 1982.

On 8 July 1982 the arbitrator made an award in the appellant's favour on the basis of total incapacity for work from 18 March 1982. The respondents appealed to the Supreme Court of the Australian Capital Territory by notice of appeal dated 29 July 1982. On 18 May 1983 the Chief Justice allowed the appeal, set, aside the award of the arbitrator and ordered that the appellant pay the costs of the appeal and of the arbitration proceedings. The present appeal is from that judgment.

The grounds of appeal to this Court are:
- The learned Judge was wrong in law in finding that the Appellant was not a workman within the meaning of the provisions of Section 6(3) of the Workmens Compensation Ordinance 1951 of the said Territory.
- The learned Judge was wrong in law in not accepting the evidence accepted by the learned arbitrator in the lower Court.
- The learned Judge's interpretation of the operation of Section 6(3) of the Workmens Compensation Ordinance 1951 was wrong in law and not supported by the authorities.
- Further and in the alternative that the learned Judge was wrong in not finding that if the workman was not a deemed employee in accordance with the provision of Section 6(3) of the Workmens Compensation Ordinance 1951 there was sufficient evidence which satisfied the necessary indicia to bring the workman within the general provisions of workmen of the said Ordinance.

The appeal to the Supreme Court was made pursuant to section 26 of the Workmen's Compensation Ordinance 1951 which is in the following terms:

"26.(1) Where a committee or the Court gives a decision or makes an order or award with respect to any matter which may be or is required to be settled by arbitration under this Ordinance, any party to the arbitration may appeal from the decision, order or award to the Supreme Court.

(2) The provisions of Division 2 of Part XI of the Court of Petty Sessions Ordinance 1930-1972 apply to and in relation to an appeal under sub-section (1) as they apply to and in relation to an appeal from an order of the kind referred to in paragraph (h) of section 208 of that Ordinance and, in the application of those provisions to and in relation to an appeal from a decision given, or an order or award made, by a Committee, the decision, order or award of the Committee shall be deemed to be a decision, order or award of the Court."

As this Court said in David Jones (Aust) Pty Limited v. Ursula Arauner (unreported decision delivered 9 November 1982) the nature of appeals under section 26 of the Workmen's Compensation Ordinance is the same as appeals in civil cases from the Court of Petty Sessions to the Supreme Court. An appeal under section 26 is a rehearing (Ruiz v. Canberra Rex Hotel Pty Limited (1974) 5 ACTR 1) and the Supreme Court is entitled to draw its own inferences of fact from the evidence given before the arbitrator (Wolmar v. Travelodge Limited (1975) 8 ACTR 11).

The only substantial issue before the arbitrator and on appeal before the Supreme Court was whether the appellant was, at the relevant time, a workman within the meaning of the Workmen's Compensation Ordinance. By section 6(1) of the Ordinance "workman" is defined as follows:

"'workman' means any person who has entered into or works under a contract of service or apprenticeship with an employer, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing, but does not include -

(a) a person whose employment is of a casual nature and who is employed otherwise than for the purpose of the employer's trade or business; . . . . . . . .

(c) an outworker; or

(d) any person employed in the service of the Commonwealth."

There is also a deeming provision in section 6(3) in the following terms:

"6(3) Where a contract to perform any work exceeding Ten dollars in value (not being work incidental to a trade or business regularly carried on by the contractor in his own name) is made with the contractor, who neither sublets the contract, nor employs workmen, the contractor shall, for the purposes of this Ordinance, be deemed to be a workman employed by the person who made such contract with the contractor."

The arbitrator found that the appellant was not a workman as defined in section 6(1), but he also found that he was deemed to be a workman by the operation of section 6(3). On the hearing of the appeal before the Supreme Court the respondents, who were the appellants in that court, supported the first of these decisions and attacked the second. Although there was no cross appeal the arbitrator's decision that the appellant (the respondent in the Supreme Court) was not "an employee in that sense" was also under review on the hearing of the appeal in the Supreme Court.

In his reasons for judgment the Chief Justice identified the distinction between the defined meaning and the deeming provision. He expressed the view that the key words in the definition are "a contract of service . . . with an employer" whereas section 6(3) relates to a contract to perform any work. He pointed out, correctly in my view, that if there is a contract to perform work, the person who so contracts cannot be a "workman" because he does not work under a contract of service but under a contract for services.

He then identified the criteria which bring section 6(3) into play, namely a requirement that there be a contract to perform work exceeding $10 in value; that the work not be incidental to a trade or business regularly carried on by the contractor in his own name; that the contractor not sub-let the contract; and that the contractor not employ workmen.

The central argument in the appeal to the Supreme Court related to the second requirement, i.e. that the work not be incidental to a trade or business regularly carried on by the contractor in his own name. The Chief Justice was correct in his identification of the criteria which bring the sub-section into play in accordance with the authorities on comparable legislation (see Humberstone v. Northern Timber Mills (1949) 79 C.L.R. 389; Zuijs v. Wirth Bros Pty Ltd (1955) 93 C.L.R. 561 and Turner v. Stewardson (1961) W.L.R. 176; Higgins v. Jackson and Others (1976) 135 C.L.R. 174). The appellant did not contend otherwise on the appeal to this court. He submitted that the proper inference from the facts established was that the appellant was either a workman as defined or was deemed to be a workman by the operation of section 6(3).

Section 27 of the Federal Court of Australia Act 1976 provides that in an appeal this Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and in its discretion to receive futher evidence. As previously indicated, the appeal to the Supreme Court was a rehearing and the evidence relied upon was confined to the evidence given before the arbitrator. Consequently, that is the evidence "given in the proceedings out of which the appeal (to this Court) arose" and pursuant to section 27 this Court has power to draw inferences of fact. It is appropriate therefore to examine the evidence before the arbitrator.

The relevant material established that the appellant had been a bricklayer for 23 years and had been self-employed since arrival in Australia on 14 November 1969. He regularly worked for himself, quoting between $230-$250 per thousand bricks laid. He had been working in that fashion for 12 months prior to his accident on 18 March 1982. On one occasion during the previous 18 months he had worked for a daily wage of $80.

On or about 11 March 1982 the appellant had a discussion at the local soccer club with one of the respondents about doing some bricklaying work for him. They discussed a price of $230 per thousand bricks. Before accepting the offer to do the work the appellant made an inspection of the job site and, having done so, told the respondent Tomas that scaffolding would be required in order to do the job, whereupon the respondent agreed to provide the scaffolding. The respondent erected the scaffolding with some help from the appellant and gave the appellant directions about mixing the bricks according to colour and the gaps between the bricks. The appellant always worked with the same bricklayer's labourer and before accepting the job he told the respondent that he was not interested in undertaking the work unless he had his regular team mate. On those terms both were engaged to perform the work.

Up to the time when the accident happened the appellant had laid between 5,000 and 5,500 bricks. He was paid by cheque with no deductions for tax. His labourer was paid the same amount also by cheque. After the accident the completed and made further payments to the appellant and his labourer by cheque in equal amounts in payment for the work completed. While the appellant was doing the job he was not given any further directions by the respondents and he worked without supervision. He fixed his own time for starting and finishing work. The respondents provided all the materials and the appellant provided his own working tools.

From this material the Supreme Court found that the appellant appreciated the difference between undertaking a contract and working as an employee for a wage; that his regular course of business was to undertake contracts for laying bricks by personally making oral agreements with builders; that that was what had happened in the case of the particular job in the course of which he was injured; that the money he received for the job was his total entitlement without the deduction of tax, which would have been appropriate for an employee; and that when he worked he laid bricks to the requirement of the principal but not under his control or supervision. Accordingly the Supreme Court found that the weight of the evidence was in favour of the contentions that the appellant was a contractor and not an employee at the time when he was injured, and that the work he was doing was incidental to the trade or business which he regularly carried on.

The Magistrate did not make all the findings of fact to which I have referred but they were made by the Supreme Court on evidence which was really uncontradicted. In accordance with well-established authority, this Court should accept those findings of fact, there being no question of credibility involved (McCormack v. Federal Commissioner of Taxation (1979) 23 A.L.R. 583 and Uranerz (Aust.) Pty Limited v. Hale (1980) 30 A.L.R. 193).

The appellant contends that this Court, however, should draw different inferences from those facts on the basis that this Court is in as good a position as the Supreme Court to decide on the proper inferences to be drawn from the facts established by the findings of the Supreme Court (Warren v. Coombes and Another (1979) 142 C.L.R. 531).

It is clear that there was a contract between the appellant and the respondents at the time when the appellant was injured. For the purposes of this appeal the true nature of the contract must be confined to a choice between a contract of service or a contract for services. Various tests have been applied in the reported cases in answer to the question whether a person works under a contract of service or is an independent contractor working under a contract for services.

In AMP Society v. Chaplin (1978) 18 ALR 385, Lord Fraser, in delivering the opinion of the Judicial Committee, cited the following passage from the judgment of Bray C.J. in that case, at 387:

"It seems to me, then, that at the present time there is no magic touchstone. The court has to look at a number of indicia and then make up its mind into which category the instant case should be put. It is a question of balancing the indicia pro and con. But the power of control over the manner of doing the work is very important, perhaps the most important of such indicia."

It is necessary to examine all the facts of the relationship between the parties before determining whether or not a payment is wages in the ordinary sense of remuneration for services rendered. The appellant contended that the sums paid by the respondents were paid to the appellant as a piece-worker under a contract of service. In my view, however, this argument fails. The agreement about payment and the payments for work done were more consistent with a contract for services with an independent contractor than payment of wages under a contract of service.

The right to control test which has been adverted to in so many reported cases as one of the indicia of a contract of service is absent in the present case. The respondents certainly specified the work to be done by the appellant, but the appellant was not subject to the control and direction of the respondent as to the manner in which the work was to be done. It was a case of the appellant agreeing to produce a given result without being subject to the control of the respondents in the actual execution of the work. Hence the appellant was an independent contractor (see Humberstone v. Northern Timber Mills (supra); Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd (1947) AC 1, (1946) 2 All ER 345; Queensland Stations Pty Ltd v. FC of T (1945) 70 CLR 539; Performing Right Society Ltd v. Mitchell and Booker (Palais De danse) Ltd (1924) 1 KB 762; FC of T v. J Walter Thompson (Aust) Pty Ltd (1944) 69 CLR 227; Zuis v. Wirth Bros Pty Ltd (supra); and Pollock on Torts 15th ed, at 61 and 62 Mills: Workers Comensation, p.129-149).

The Supreme Court was correct in its conclusion that the appellant was an independent contractor working under a contract for services and not a workman as defined under a contract of service at the date of the subject accident.

As stated earlier the central argument in the appeal to the Supreme Court in respect of the alternative submission that the appellant was a deemed worker within the meaning of section 6(3) was that the work being performed by the appellant was not incidental to a trade or business regularly carried on by the appellant in his own name. The Supreme Court carefully reviewed the evidence on this subject and concluded that the weight of the evidence was in favour of the contentions that the respondent was a contractor and not an employee at the time when he was injured and that the work he was doing was incidental to the trade which he regularly carried on. This was the correct conclusion on the evidence. Accordingly the appellant was not a deemed worker within the meaning of section 6(3).

I would dismiss the appeal with costs.

JUDGE3

The appeal should be dismissed with costs.

I have had the advantage of reading the reasons for judgment prepared by Woodward and Gallop JJ. I agree with the reasons given by their Honours for concluding that the appellant, at the time of his injury, was not a workman within the meaning of the Workmen's Compensation Ordinance 1951 of the Australian Capital Territory.