Tyagrah Holdings Pty Limited v Workers Compensation Nominal Insurer

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Tyagrah Holdings Pty Limited v Workers Compensation Nominal Insurer & Anor [2022] NSWPIC 708
APPLICANT:	Tyagrah Holdings Pty Ltd
first RESPONDENT:	Workers Compensation Nominal Insurer
second respondent:	Paul Raymond Koval
Member:	Cameron Burge
DATE OF DECISION:	12 December 2022
CATCHWORDS:	WORKERS COMPENSATION - Claim pursuant to section 145(3) of the Workers Compensation Act 1987 (1987 Act) challenging notice requiring repayment of compensation payments made by nominal insurer to a worker; applicant placed worker, deemed worker, injury, notice and reasonableness of payments in dispute; there is no issue the applicant was uninsured at the date of injury; it also alleged it was an exempt employer pursuant to section 155AA of the 1987 Act; Held – the second respondent was a worker, or a deemed worker employed by the applicant at the time he suffered injury to his left shoulder on 12 March 2019; the applicant was not an exempt employer at the time of the injury; the claim made by the second respondent was reasonably accepted by the first respondent and the payments made pursuant to that claim were reasonable; the issuing of a prior section 145 of the 1987 Act notice which was withdrawn does not prevent the payments listed in that prior notice from being contained in and subsumed by the notice at issue in these proceedings; award for the respondents.
determinations made:	1. At all material times, the second respondent was a worker or deemed worker employed by the applicant. 2. The second respondent suffered an injury to his left clavicle in the course of his deemed employment with the applicant on 12 March 2019. 3. At the date of injury, the applicant did not hold a relevant policy of workers compensation insurance. 4. The first respondent has paid compensation to the second respondent by way of weekly benefits and treatment expenses in connection with the injury. 5. The payments referred to in [4] above were reasonable. 6. On 8 April 2022, the first respondent issued on the applicant a valid notice pursuant to s 145(1) of the Workers Compensation Act 1987 seeking reimbursement for monies paid by it to the second respondent. 7. The applicant was not an exempt employer for the purposes of s 155AA of the Workers Compensation Act 1987. 8. Award for the respondents.

STATEMENT OF REASONS

BACKGROUND

Tyagrah Holdings Pty Ltd (the applicant), brings those proceedings pursuant to s 145(3) of the Workers Compensation Act 1987 (the 1987 Act) and challenges a notice served on it by the Workers Compensation Nominal Insurer (the first respondent) pursuant to s 145(1) of the 1987 Act seeking repayment of compensation paid by the first respondent to Paul Koval (the second respondent).
The applicant alleges the second respondent was not a worker nor deemed worker of it and also contends it was an exempt employer for the purposes of s 155AA of the 1987 Act, on the basis it had reasonable grounds for believing that the total amount of wages it would pay would not exceed $7,500.
Additionally, the applicant alleges that the amount paid by the first respondent to the second respondent was not properly paid and that the claim by the second respondent was improperly accepted.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a) whether the second respondent was a worker or deemed worker employed by the applicant on 12 March 2019;
(b) if the answer to (a) above is in the affirmative, whether the applicant was an exempt employer pursuant to s 155AA of the 1987 Act, and
(c) whether the acceptance by the first respondent of the second respondent’s claim and the payments made by the first respondent to the second respondent in answer to the second respondent’s claim were appropriate in the circumstances.
Additionally, a jurisdictional issue was raised as to whether the first respondent’s notice was a valid one, and accordingly, whether the Personal Injury Commission (Commission) had jurisdiction to hear an Application with respect to it.

PROCEDURE BEFORE THE COMMISSION

The parties attended a hearing on 15 September 2022. I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
At the conclusion of the hearing, directions were made for the lodging of written submissions, which the parties complied with.
The parties were informed of my intention to determine the matter without further hearing upon receipt of their written submissions.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Miscellaneous Application (the Application) and attached documents;
(b)    Reply of the first respondent and attached documents;
(c)    Reply of the second respondent and attached documents, and
(d)    applicant’s Application to Admit Late Documents (AALD) dated 15 September 2022 and attached documents.

Oral evidence

There was no oral evidence called at the hearing.

FINDINGS AND REASONS

Preliminary finding – jurisdictional issue

For the second respondent, Mr Goodridge of counsel raised the question of whether the Commission has jurisdiction to hear this Application, as part of the payments sought to be reimbursed pursuant to the s 145 notice at issue were the subject of an earlier notice which was withdrawn.
The second respondent noted there is nothing in s 145 of the 1987 Act which allows or provides for the withdrawal of a notice. Both the applicant and first respondent submitted, there was no issue as to the Commission’s jurisdiction.
On balance, I believe the Commission has jurisdiction to hear this Application. Whilst this is the case, there were earlier proceedings which when the applicant and first respondent which resulted in a previous s 145 notice being withdrawn and the matter discontinued, the current s 145 notice has been contested by the applicant within the prescribed time, as required in s 145 of the 1987 Act.
The Commission’s jurisdiction is set out in s 145(4) of the 1987 Act. The section empowers the Commission to make such orders as it thinks fit in respect of “such Application”. In my view, “such Application” is the Application set out in s 145 (3) that is an Application by a person on whom the s 145 notice is served, for a determination as to the person’s liability in respect to the payment concerned.
For these reasons, I am of the view the Commission has jurisdiction to hear the matter and we will proceed to determining it on the substantive merits of the case.

Whether the second respondent is a worker or deemed worker of the applicant

For following reasons, I am of the view the second respondent was a worker employed by the applicant.
“Worker” is defined in s 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) as follows:
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing) …”
The essential feature of the definition in s 4 is the “contract of service” between the “employer” and the “worker”. This relationship must be distinguished from that of the “contract for services”, which is generally referred to as the rendering of services by an independent contractor. Put simply, the difference is between a person who serves his employer in the employer’s business and a person who carries on a trade or business of his own. The onus is on the worker to prove the employment contract.
The agreement between the applicant and second respondent was oral. That being so, the recent decisions of the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Limited [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 which place a greater emphasis upon the terms of written agreements do not apply in this matter. Rather, it is necessary to examine the relationship between the applicant and second respondent through the prism of the various indicia of employment which have their genesis in Stevens v Brodribb Sawmilling Co Pty Ltd (1996) 160 CLR 16 (Stevens).
In that matter, the High Court set out a number of relevant indicia. These include, but are not limited to, the following:
(a) The mode of remuneration;
(b) The provision and maintenance of equipment;
(c) The obligation to work;
(d) The timetable of work and provision for holidays;
(e) The deduction of income tax;
(f) The right to delegate work;
(g) The right to dismiss the person;
(h) The right to dictate the hours of work, place of work and the like, and
(i) The right to the exclusive services of the person engaged.
It is important to remember that it is the “totality” of the relationship that must be considered. The factors set out in Stevens are merely a guide to establishing the nature of the relationship.
In this matter, I am conformably satisfied the second respondent was a worker employed by the applicant. He was paid an hourly rate, used the applicant’s equipment in attending to his duties, carried out those tasks assigned to him by the applicant’s director Mr Hunter and did so at the times and places Mr Hunter said he wanted them completed. Whilst the second respondent rendered invoices, had an Australian Business Number and paid his own income tax and superannuation, the evidence in my view discloses there was no facility to enable the applicant to delegate the work and that the applicant had the right to the exclusive services of the applicant at the time he was engaged.
On balance, I accept the submissions of the first and second respondents that the second respondent was a worker employed by the applicant.
However, should I be incorrect in my views regarding the nature of the contractual relationship in issue, there is no doubt in my mind the second respondent was in any event a deemed worker.
The deemed worker provisions are set out in Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). Clause 2 of that schedule provides:
(1) “Where a contract-
(a)To perform any work exceeding $10.00 in value (not being work incidental to a trade or business regularly carried on by the contract or in the contract design name, or under a business or firm name), or
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
There is no issue the second respondent had been carrying out work for the applicant for several years before the injury on 12 March 2019. Among the documents and evidence before the Commission, there are a number of invoices rendered by the second respondent to the applicant for work which could be characterized as landscaping, groundskeeping or maintenance. Those invoices were made out to the applicant by the second respondent. They contrast with invoices rendered by the second respondent to a related entity of the applicant, Bracton Holdings Pty Ltd (Bracton). The work carried out by the second respondent for Bracton was in the nature of IT support.
There is no question in this matter the second respondent was contracted to perform work exceeding $10 in value. Nor is there any evidence the applicant carried out that work incidental to a trade or business carried on by him in his own name or under a firm or business name.
Whilst it is true the second respondent had an ABN, his uncontested evidence is that number was pre-existing and had been dormant for many years, but was reinstated by the second respondent at the behest of the applicant when he began carrying out work for it. That evidence is uncontested, and I accept it. In those circumstances, I am of the view the applicant having an ABN is not fatal to his potential status as a deemed worker.
Likewise, there is no evidence the second respondent either sublet the contract or employed any worker.
In my view, the evidence in this matter is clear. The applicant provided invoices for work greater than the sum of $10, and the work was not carried out incidental to a trade or business regularly carried on by him in his own name, nor did he sublet the work nor employ someone to carry it out for him.
This being the case, in my view, the second respondent meets the requirements of being categorised as a deemed worker of the applicant. The facts of this matter fall squarely within those discussed by Dixon J in Humberstone v Northern Timber Mills (1949) 79 CLR 389 at [401]-[402]. In that passage, his Honour dealt with analogous provisions in Victorian legislation and in relation to the notion of someone carrying on a business of their own said:
“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 business.”

Whether the applicant was an exempt employer pursuant to s 155AA of the 1987 Act

Section 155AA of the 1987 Act provides:
“(1) An employer is an ‘exempt employer’ during a financial year while the employer has reasonable grounds for believing that the total amount of wages that will be payable by the employer during the financial year to workers employed by the employer will not be more than the exemption limit for that financial year.”
An employer who meets the above criterion, which relevantly for the purposes of these proceedings is a threshold of $7,500, is deemed to have obtained from the first respondent a policy of insurance for workers compensation purposes.
I reject the applicant’s contention that it is an exempt employer. The test for determining whether a putative employer has reasonable grounds for believing it was exempt is an objective one: Kula Systems Pty Ltd v Workers Compensation Nominal Insurer [2018] NSWWCCPD 10.
The onus of proof in relation to this issue is on the nominal insurer. In this matter, I am not satisfied the applicant had reasonable grounds for believing the total wages paid in the financial year would be less than the exemption limit.
At this point, it is necessary to address the evidence of Mr Hunter, director of the applicant. Mr Hunter’s evidence was, in my view, inconsistent. He at first asserted there was no employment relationship and that he had not given the provision of workers compensation insurance for the applicant any thought, as it does not have any employees. He then said in his statement that he did not take out insurance because he was of the view the applicant’s employment bill would be less than the threshold amount of $7,500. Plainly these two statements cannot stand together, and I do not find Mr Hunter’s evidence on this point to be reliable.
In examining the objective evidence, for the financial year ending 30 June 2018, a total amount of $8,575 was paid by the applicant to the first respondent, that is an amount $1,000 above the relevant threshold. Moreover, the invoices attached to the evidence in this matter demonstrate that by the date of injury on 12 March 2019, the applicant had already paid the second respondent prior to injury for the financial year ending 30 June 2019 the sum of $8,595.
Even if I accepted Mr Hunter’s evidence that he believed the applicant would not have met the $7,500 threshold for the financial year of the injury at issue, the evidence discloses that by halfway through that year the threshold had already been exceeded. Given this was the case, if Mr Hunter had turned his mind to the threshold as he says in his statement, he ought reasonably to have known by that time the threshold had been exceeded and the applicant would not qualify as an exempt employer.
Given the second respondent’s invoices were paid by Mr Hunter in the name of the applicant, on any objective measure, it cannot in my view be said the applicant had a reasonable basis, that it would have an employment bill of less than the relevant threshold amount of $7,500.

Whether the second respondent suffered an injury, whether the claim was appropriately accepted and payments properly made

It is appropriate to deal with each of these matters together, as there is a substantial evidentiary overlap between them.
The applicant’s submissions referred to “an event” happening on 12 March 2019. The evidence overwhelmingly supports the first respondent having suffered an injury, including an invoice rendered by him to the applicant on 13 March 2019 and found at page 126 of the second respondent’s Reply noting that he left work because he had suffered an injury.
On 12 March 2019, the applicant attended Byron Bay Hospital and the version of events given by him relating to his injury is completely consistent with that asserted by him in this matter. That is, he was working on the applicant’s premises when he suffered a fall from the back of the utility vehicle and injured his shoulder.
In my view, there can be no suggestion that anything other than an injury was suffered by the second respondent on the date in question. He continued to have treatment to his shoulder from that date, and notwithstanding there was a supervening event of a bike accident in 2020, the fact remains the medical evidence overwhelmingly demonstrates the condition in his shoulder following the injury at issue had not abated.
The applicant submitted the second respondent did not have treatment between the injury at issue and the bike accident. The evidence, however, demonstrates this is not the case. On 18 December 2019, he consulted his general practitioner (GP) Dr Hissink to review his left shoulder following an ultrasound.
On 1 October 2019, a letter was sent from Dr Gaze, treating specialist to Dr Hissink reporting on the second respondent’s left shoulder injury against a history completely consistent with that given in his statement and to Byron Bay Hospital. Dr Gaze noted the second respondent had restriction of movement, felt a clicking sensation in the shoulder and numbness around the shoulder joint some six months post a grade 3 dislocation.
Attached to the Application are photographs forwarded by the second respondent to Mr Hunter which show the deformity in his shoulder. Those photographs were taken after the injury at issue and before the later bike accident. In my view, they also support the proposition the applicant had suffered injury to his left shoulder in the injury at issue rather than in the later bike accident in 2020.
The medical and lay evidence in this matter is overwhelming. The second respondent plainly suffered his shoulder injury on 12 March 2019 while working for the applicant. The suggestion the injury was caused by the 2020 bike accident is not made out. There is not a shred of evidence which suggests the injury at issue instead arose as a result of the later bike accident.
It is this injury for which the second respondent has received payments from the first respondent, and notwithstanding the broad brushed submission from the applicant to the effect the payments made were not reasonable, no substantive case has been put forward to support that contention. The list of payments reveal benefits paid to the second respondent in respect of the injury which the contemporaneous medical records show was suffered on the date alleged by him.

This being so, I am of the view not only that the second respondent suffered an injury as claimed, but that the payments made by the second respondent were in relation to that injury and not the later fall from a bike. There is a report from Dr Robinson, independent medical examiner (IME) for the first respondent in which mention is made of the Byron Bay Hospital records referring to the second respondent injuring his shoulder in the bike accident. That history is clearly incorrect, as the hospital records in evidence clearly show the March 2019 injury to the left shoulder was sustained when the second respondent fell out of a utility, a version completely consistent with his own evidence.
In my view, the evidence in this matter is overwhelming. It clearly establishes the alleged injury took place and that the second respondent received treatment for it. There is nothing, in my opinion, which grounds any suggestion the injury took place in the subsequent bike accident. Additionally, the evidence plainly discloses ongoing treatment on the left shoulder from the date of injury, and there is nothing to suggest such treatment was unreasonable or that the first respondent’s payments to the second respondent were anything other than appropriate and reasonable in the circumstances.

SUMMARY

For the above reasons, the Commission will make the findings and order set out on page 1 of the Certificate of Determination.

[2022] NSWPIC 708

12 December 2022