Victorian WorkCover Authority v Game
[2007] VSCA 86
•11 May 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 3761 of 2006
| VICTORIAN WORKCOVER AUTHORITY and MALCOLM RANKING PTY LTD |
| v |
| ANNETTE GAME |
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JUDGES: | MAXWELL ACJ, NETTLE AND ASHLEY JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 23 April 2007 | |
DATE OF JUDGMENT: | 11 May 2007 | |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 86 | |
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Accident Compensation – Widow’s claim for compensation – Whether claimant’s late husband was working under a contract of service when fatal injuries sustained – Whether, upon facts found, it was open to primary judge to so determine – Whether judge erred by not asking himself whether arrangement under which deceased was performing work at the critical time was distinctly different to, or, objectively, was intended to differ from, arrangements under which deceased had worked as an independent contractor – Whether judge erred by determining that putative employer would have been vicariously liable for any negligent conduct of deceased, and then reasoning that deceased must have been employed under a contract of service – Deceased a member of a partnership at the time when he performed pertinent work – Whether judge found that the work was partnership work – Whether judge concluded that in performing that work deceased did so under an individual contract of employment – Whether judge’s reasoning internally contradictory – Whether judge’s reasons adequate – No error of law demonstrated – Appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr J Ruskin, QC and Mr P M E Wischusen | Wisewoulds |
| For the Respondent | Mr M O’Loghlen, QC and Mr R W Dyer | Robinson Gill |
MAXWELL ACJ:
I have had the considerable advantage of reading in draft the reasons of Ashley JA. For the reasons given by his Honour, I too would dismiss the appeal.
NETTLE JA:
I agree with Ashley JA, for the reasons which his Honour gives, that the appeal should be dismissed.
ASHLEY JA:
Lennox Game (“Mr Game” or “the deceased”) suffered fatal injuries on 15 October 2002 when, whilst digging a trench at premises in South Yarra in preparation for laying footings for a perimeter garden wall, the wall of a shed on the adjacent property collapsed on top of him. His widow claimed compensation pursuant to the provisions of the Accident Compensation Act 1985 (“the Act”) from Malcolm Rankin Pty Ltd (“Rankin”) the builder on the site.
The claim was put on the alternative bases that, at the pertinent time, Mr Game –
· Had entered into a contract of service with Rankin, or was working under such a contract.
· Was a person the circumstances of whose working fell within the description “or otherwise” which is found in the definition of “worker” in s 5(1) of the Act.
· Was deemed to have been working under a contract of service with Rankin by operation of s 8(1) of the Act.
The appellants – that is, Victorian WorkCover Authority and Rankin – denied that Mr Game, at the relevant time, was either a “worker” as defined or a working contractor within the meaning of s 8(1). They contended that at the pertinent time he was working as a member of a partnership which had contracted to do the footings job in the course of its extensive contracting business.
At trial, the respondent principally advanced her claim on the basis that her late husband had been working under a contract of service at the critical time. It was then common ground that determination whether Mr Game had been so employed – rather than being an independent contractor – required a “multi-factorial” approach in which almost invariably, consideration must be given to competing indicia. That said, it appears to have been agreed that control, or power of control,[1] remained of importance in the balancing exercise.
[1]That is, of the kind described in Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 at 571.
Counsel for the respondent drew this Court’s attention to the circumstance that the appellants had not contended below that there was no evidence to support a conclusion that Mr Game had been working under a contract of service at the pertinent time. Rather, the appellants had submitted that the necessary balancing exercise should be resolved against the claimant. The accuracy of what counsel told us – potentially a matter of some significance - was not challenged.
In the event, the learned County Court judge held that Mr Game was working pursuant to a contract of service with Rankin when he sustained his fatal injuries. So his Honour did not need to address the alternative bases upon which the claim had been laid; and he did not do so except for venturing a tentative view as to how s 8(1) might have operated in the circumstances.
By this appeal, brought under s 52(1) of the Act, the appellants seek to challenge his Honour’s conclusion.
The Notice of Appeal
Orders favourable to the respondent having been made on 26 June 2006, the appellants filed a Notice of Appeal on 11 August. It was the first of three Notices of Appeal. The second was dated 20 April 2007, and the third was dated 23 April 2007.
The appeal was heard on 23 April 2007. Respondent’s counsel did not oppose the appellants’ reliance on the third version of their Notice of Appeal, although he submitted, using the language of s 52(1) of the Act, that certain of the identified questions of law had not been “raised during [the] proceedings”.
There are eight grounds of appeal in the document dated 23 April 2007 (which it is convenient to describe simply as “the Notice of Appeal”). They raise five broad issues, which may be stated as propositions (conveniently, “proposition 1”, and so on) this way:
1. On the facts found, it was not open to the learned judge to find that at the critical time Mr Game was a “worker” as defined by s 5(1) of the Act. On those facts, it was not open to his Honour to conclude that Mr Game had been working under a contract of service.
2. The judge impermissibly reasoned backwards. He concluded that Rankin would have been vicariously liable for any negligent conduct on the part of the deceased because the latter was Rankin’s “representative”. This was itself an error of law. Then his Honour concluded that Rankin’s potential vicarious liability for Mr Game’s conduct bespoke the existence of a contract of service.
3. The judge erred in concluding that, save for governing the legal relations between the deceased and his partners, the fact that the deceased was working at the time of his death as a member of a partnership was otherwise irrelevant in determining his statutory status under the Act.
4. The judge expressed, in effect, necessarily conflicting conclusions: that Mr Game was working under a contract of service at the critical time; and that, if there had been cause to consider s 8(1) of the Act, he would have held that the work which Mr Game was performing was work “incidental to a trade or business [which he] regularly carried on.”
5. The judge gave insufficient reasons for his conclusion that the relevant relationship between Rankin and Mr Game was a contract of service.
Section 52(1) of the Act
Section 52(1) of the Act confers a right of appeal. But it is a confined right. It is a right of appeal “on a question of law raised during [the] proceedings” which culminated in the impugned judgment or decision.
The language of s 52(1) varies from, and is arguably more restrictive than, the language of ss 92 and 109 of the Magistrates Court Act 1989, and of s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 – each of which confers a right of appeal “on a question of law”, as the case may be, from a final order, or an order of the first instance entity.[2]
[2]As to which see my observations in Mond v Lipshut [1999] 2 VR 342 at 350–351, [40]–[51].
On the other hand, in Green v Victorian Workcover Authority[3] Tadgell JA said that s 52(1) should receive “much the same interpretation” as had been accorded s 52(1) of the Administrative Appeal Tribunal Act 1984 (Vic) in Transport Accident Commission v Hoffman & Ors[4]. In Hoffman, the statute permitted an appeal “on a question of law, from a decision of the Tribunal”. Young CJ and McGarvie J construed the provision as granting a right of appeal from a decision “on a question of law which is involved in the Tribunal’s decision.”[5] A question whether there was any evidence upon which the Tribunal could have reached its decision was, their Honours said, such a question.
[3][1997] 1 VR 364 at 370
[4][1989] VR 197.
[5]Ibid, at 199.
If, in the present case, the learned judge erred in one or both of the ways asserted in propositions 2 and 3, I do not doubt s 52(1) could properly be called into play. What would be involved would be the application of impermissible reasoning in the necessary balancing exercise.
Proposition 4 is of somewhat different character, but I think that s 52(1) would be thereby engaged. If it represented the fact, it would suggest that the reasoning process internally miscarried.
Proposition 5 has been held to raise a question of law. The more difficult matter is whether it can be made to fit s 52(1). Perhaps it can. The proceedings may be said to relevantly culminate in the impugned judgment or decision. The reasons for judgment precede the making of orders. So it might be argued that a question as to their sufficiency is a question of law which arises during the proceedings. Be that as it may, the issue need not be decided. For in the end, as will be seen, the issue of alleged inadequacy of reasons really disappeared.
That leaves the question whether the subject-matter of proposition 1 engages s 52(1). Its substance lies in the contention, which could have been advanced at trial – but was not - that the evidence was incapable of supporting a conclusion that Mr Game was working under a contract of service when he suffered his fatal injuries. That is starkly different to the submission – which was made – that, there being evidence both ways, the necessary balancing exercise should yield a conclusion unfavourable to the claimant.
The submission which was made necessarily implied the existence of evidence both ways. Counsel for the respondent conceded before us that the course of evidence would have been no different had the appellants pursued a “no evidence” case – which is not to say that final submissions at trial would not have been markedly different. But focussing only upon the respondent’s concession, I doubt it assists a conclusion that the principle expressed in Suttor v Gundowda Pty Ltd[6] should run in the appellants’ favour. The key is the language of s 52(1). If that provision is given a Hoffman-like meaning - which may be said to run counter to ordinary principles of statutory interpretation by treating considerably different statutory language as having substantially the same meaning - the probable consequence is that an evidentiary question is to be treated as having been raised during the proceedings when in truth it was not. What the evidence connotes in a particular proceeding is pre-eminently a matter for consideration by the trial judge. Matters of impression can be important, particularly where the arrangement between parties was an informal one.[7] If an appellant can raise a “no evidence” contention on a s 52(1) appeal, although it was not raised at trial, this Court will never know whether, inter alia, the judge at trial would have found some matter of impression to be important. It could not be said that the judge’s actual reasoning, set in a context defined by particular submissions, would have been the same had a different context been set. Nor could it be said that, by looking at a transcript, this Court would be in as good a position as the trial judge to pass upon a matter of impression. These considerations, having regard to the particular language of s 52(1), seem to me to stand in favour of that provision being given a more restrictive meaning than the provision considered in Hoffman.
[6](1950) 81 CLR 418
[7]See, for example, Vacik Distributors Pty Ltd v Kelly (1995) 12 NSWCCR 30 at 34F–G per Clarke JA.
So, if it mattered, as at present advised I doubt that the issue sought to be agitated by proposition 1 was, within the language of s 52(1), a question of law raised during the proceedings below. In expressing that conclusion I have not forgotten that the proposition (which accords with the language of grounds 1-3) is not couched in terms of there being no evidence to support the relevant conclusion, but rather in the language that the conclusion was not available on the facts found. So framed, the enquiry focuses on the question stated by Wilson and Dawson JJ in Stevens v Brodribb Sawmilling Company Pty Ltd.[8] Where it is not suggested that there was no evidence to support findings of fact, the question whether those findings are capable of supporting an ultimate conclusion is no different, in substance, to the question whether there was any evidence to support that conclusion.
[8](1986) 160 CLR 16 at 35.
Proposition 1 (Grounds 1-3)
Putting to one side, for the present, the assertions of specific error raised by propositions 2, 3 and 4, I consider that the facts found did enable the learned judge to reach the critical conclusion – which may be shortly described as a conclusion that, at the pertinent time, Mr Game was working under a contract of service and not pursuant to a contract for services. Put another way, there was evidence enabling the judge to reach that conclusion.
The argument to the contrary ran this way: For a number of years, Mr Game had conducted a bricklaying business in partnership – at first with his two sons, later with one son and another man, Dean Hardinge. The partnership was registered. It was managed by Mr Game. It made use of a well-equipped home office. It owned equipment. It quoted on jobs, and invoiced for work done. There were partnership books of account. It charged and paid GST. The books showed that distributions were made to the partners. Over the years it had worked for Rankin, and for other builders. The partners worked their own hours, and sometimes worked on different jobs at the same time. Most of the partnership’s work was bricklaying, charged per thousand bricks laid. Sometimes it did other work - demolition, patching, bagging and preparing footings. Sometimes, for bricklaying and other work, it charged an hourly rate. All this showed that the partnership conducted an independent contracting business.
Then, coming to the South Yarra job, the partnership had been engaged on bricklaying work. That work had temporarily come to an end. Rankin needed footings prepared for the perimeter wall. Its concreter was to have done the job, but he was presently unavailable. Mr Game had volunteered to do the job, on an hourly rate, as a way of keeping occupied. A bargain having been struck – it was not documented – Mr Game, his son and Hardinge had begun to dig the necessary trenches. They worked to plans provided by the builder, but were essentially unsupervised. They used their own hand tools. They made use, when necessary, of equipment provided by Rankin; but only to deal with particular problems.
In the event, the argument ran, the agreement under which Mr Game and the other men were preparing the footings was of the same kind as other agreements pursuant to which the partnership had done work for Rankin. The particular work was partnership work, carried out by the partners. So much was confirmed by an invoice presented by the partnership to Rankin after Mr Game’s death.[9]
[9]Counsel referred to an invoice dated 6 December 2002, under the letterhead “Len Game & Sons Bricklaying”, which itemized ten hours labour “at Hope Street” at $60 per hour, and which added GST to the raw sum.
It may be accepted, for present purposes, that Mr Game, his son and Hardinge conducted a bricklaying business in partnership as independent contractors as at October 2002. Let it be further assumed, although the learned judge made no pertinent finding, that at a time before the trenching work began the partners had engaged in bricklaying at the South Yarra site as independent contractors.
Nonetheless, it is conceptually possible that one man may work for another, at different times and undertaking different tasks, on the one hand under a contract for services, and on the other hand under a contract of service. So much, if it could have been doubted, is confirmed by Barnes v Dawson.[10]
[10][1962] NSWR 73.
Respondent’s counsel submitted that Barnes was not very useful. All that the Full Court of the Supreme Court of NSW had decided was that the trial judge had misdirected himself in the course of deciding that the appellant was not a worker at the critical time. But there the court in substance accepted that at different times the appellant could have worked for the respondent pursuant to a contract for services and under a contract of service; a conclusion that in a particular instance he had worked as an individual under a contract of the latter kind not being precluded by the circumstance that, temporally, he was a member of a partnership at those different times.
That leads on to consideration whether analysis of the nature of the relationship at the critical time should have proceeded from the starting point that Mr Game had earlier worked on the site pursuant to a contract for services;[11] with a question then being asked, in effect, whether the arrangement by which Mr Game came to be working as a trencher was of a distinctly different character to the arrangement which had preceded it? Or perhaps with a question whether the parties had revealed an intention – it could not be a subjective intention, for that would be irrelevant – to constitute a different kind of relationship to that which had hitherto existed.
[11]Assuming that such a finding was made, or should have been made.
Such an approach was taken by the primary judge in Barnes. It was critised by counsel for the appellant on the appeal in that case. The Full Court observed – but did not finally have to decide the point - that, standing alone, it might be that the misdirection was insufficient to attract its jurisdiction under the limited right of appeal which there applied.[12]
[12]Supra at 76, lines 25-45.
Here the situation is the obverse. The appellants contend, in effect, that the judge below should have approached the matter in such a way. I do not agree. Barnes suggests that the judge would have misdirected himself had he done so. Further, the adoption of such an approach would imply the applicability of something like a presumption of continuity; and would distract attention away from a steady focus on the circumstances of the particular engagement in favour of a search for similarities with, or differences from, the circumstances of the earlier engagement – a search which would likely be unhelpful because many pertinent circumstances are neutral – that is, compatible with a relationship of one or the other kind; or else do not deny that the relationship was of one kind rather than the other.
Focussing upon the engagement under which Mr Game was engaged in trenching work when he suffered his fatal injuries, but not ignoring the other work which he and the other men had performed on this site and elsewhere, the learned judge made findings of fact which included the following:
“•The deceased was killed while he was digging a trench as a footing for future brickwork at 87 Hope Street, South Yarra on 15 October 2002.
•This work was normally done by a concreter, but he was unavailable for several weeks. It was unusual for the deceased and/or his partners to dig the trench for footings.
…
•The deceased, in partnership, had performed bricklaying for the firstnamed defendant on numerous occasions during the previous five years or so, and during that time he or they had dug trenches for footings on four or five occasions.
…
•In respect of the digging of the trenches [on this occasion], there was no written agreement.
•The builder directed the deceased and his partners as to where, when and how the trenching work was to be done, which in turn was in accordance with engineering plans obtained by the builder and subject to a variation agreed to by the builder.
…
•The builder showed the deceased and his partners what work was to be done and whereabouts, including the detailed dimensions according to the plan formulated by the builder.
•The work was labouring work …
•It was agreed between the deceased and Mr Rankin that the men would be paid at an hourly rate.
•The deceased and his partners provided their own shovels.
•The builder provided the jackhammer necessary to deal with a concrete obstruction.
•The builder provided a brick saw required to deal with protruding bricks.
•The deceased and his partners were at all times subject to the direction of the builder in respect of the digging of the designated trenches on the basis of the hourly rate agreed.
•The deceased and his partners had no discretion in respect of the nature of the digging to be performed.
•The firstnamed defendant, as the building company, held the whole of the financial risk.
…
•The work performed by the deceased and his partners in digging the trench for the footings was an integral part of the firstnamed defendant’s business.
•While the deceased undertook to produce a specific result, namely the designated trenches, the deceased himself did not select the result, nor was he at liberty to achieve a result in a manner selected by himself. At all times the deceased was subject to the direction of the firstnamed defendant, the builder.”
All of those findings were supported by evidence.
Further to His Honour’s finding that Rankin directed the deceased and the other men when the trenching work was to be done, I should refer to his Honour’s note of a submission made for the defendants, and of his finding in connection with that submission:
“[It was submitted that] whether one, two or more of the partners went to a job was the decision of the partnership having regard to the job, not at the dictation of the builder. [Counsel for the defendant] submitted that the evidence supported a finding that the method of charging, whether the job was completed or left and later returned to at the convenience of the partnership, was in fact in the control of the partnership. Here, I comment that although in general terms that was the case, in respect of the work which the deceased was doing at the time that he was killed, it is not. The evidence is that Rankin, on behalf of the firstnamed defendant and the deceased, had agreed to an hourly rate being charged before the trench digging was commenced, and I infer that there was a clear understanding that the trench work would be continued until it was completed to Rankin’s satisfaction. That is the agreement as I find it to be.”
In the event, the judge’s findings of fact - almost all explicit, a few to be inferred - may be summarized this way: When Mr Game suffered his fatal injuries he, his son and Hardinge were undertaking work that was unusual for, but not unknown to, them. It was essentially labouring work charged at an hourly rate, and was to be performed continuously until it was completed. The agreement under which it was performed was not formally documented. The men provided little equipment of their own in performing that work. At times, the men made use of more sophisticated equipment which Rankin, directly or indirectly, provided. The work was to be done in accordance with engineering plans obtained by Rankin, but thereafter varied in one respect. Rankin showed them what work was to be done, and where. At all times, Mr Game was subject to the direction of Rankin – which is not to say that there was direction in fact. In carrying out the work, Mr Game and the other men undertook an integral part of Rankin’s business. They were to be understood as having done so as a part of Rankin’s organization, rather than as an independently functioning contractor.
Those findings, in my opinion, permitted a conclusion that Mr Game was working under a contract of service when he was injured. It was not decisive against such a conclusion that at the critical time that he was contemporaneously a member of a partnership, or that payment for the trenching work was made to the partnership – of which matters, see more later. Nor was it decisive against that conclusion that the plan by which the footings were to be constructed could be equated with plans such as might have been provided for bricklaying work to be done by the partnership, that Mr Game in fact decided the order of work, and that Mr Game and his colleagues had on infrequent occasions in the past undertaken footings work. Those considerations show only that the judge might have reached a different ultimate conclusion. It must be emphasized that it is not this Court’s task to agree or disagree with that conclusion; but rather to decide whether, on the facts found, it was open.
It might be argued, however, that his Honour did not rest his ultimate conclusion upon the findings of fact which I have set out above, but rather upon the matters to which he later adverted in the section of his reasons headed “Findings”. Those matters, it might be further argued, were more limited than the matters addressed by the findings of fact.
In my opinion, the reasons should not be understood in that way. Having made the findings of fact to which I have referred, the learned judge rehearsed the submissions of counsel. Then he made a number of “findings”. Whilst most of them were his analysis of particular submissions that had been advanced by the parties, some of them repeated, or built upon, earlier-stated findings of fact. The end point of the exercise was his Honour’s conclusion that Mr Game had been working under a contract of service at the critical time.
What I have just said does not mean that the earlier-stated and extensive findings of fact were not the primary source for his Honour’s ultimate conclusion. It should not be thought that the judge, having made a considerable number of findings capable of supporting his ultimate conclusion, then jettisoned them save to the extent that he later mentioned them in the “Findings” section of his reasons.
That takes me to the judge’s consideration, in that section, of particular submissions which pertained to the legal framework within which the case must be decided. He expressed these conclusions:
(1) The question whether, at a particular time, a person was a “worker” almost invariably requires consideration of competing indicia.
(2) The essence of a contract of service remains the supply of the work and skill of a man (or woman).
(3) A contract of service may exist despite more than one person being involved in providing the service.
(4) “The existence of the partnership simply affected the legal relations between the three partners in question, the deceased and the two survivors, but they were not the employees of each other.”
(5) Ultimate control of work is not the sole indicator in deciding whether one person is the servant of another.
(6) The absence of deduction of income tax is now of little significance in evaluating the true nature of the relationship between parties.
(7) Had Mr Game or his partners negligently caused harm to a next door neighbour whilst digging the trench, Rankin would have been vicariously liable, because the labouring work was “being done as the builder’s representative, standing in the place of the builder, and the builder could not disclaim responsibility for activities that in substance were the builder’s activities”.
(8) The fact that Mr Game “was then in partnership with others [did] not affect his status as a worker within the meaning of the Act”.
There could not be, and there was not, any argument about the correctness of what his Honour said about matters (1), (2), (3),[13] (5) and (6)[14]. In the event, unless the learned judge misdirected himself in his analysis of one or more of matters (4), (7) and (8) - which raise for consideration propositions 2 and 3 as I earlier stated them – or unless the judge arrived at necessarily conflicting reasons (see proposition 4), the combination of his Honour’s findings of fact, such additional findings as appear in the “Findings” section, and his Honour’s analysis of other submissions advanced by the parties show that his ultimate conclusion, favourable to the respondent, was open.
[13]Barnes is an example, albeit that the claim was remitted for reconsideration. So also is Graham v Bentley (1959) 76 WN (NSW) 603; and see, in earlier times, Short v J & W Henderson, Ltd (1946) 39 BWCC 62 (House of Lords, Scotland).
[14]Albeit that what his Honour said about matter (6) was stated in pretty strong language.
Proposition 2 (Grounds 4 and 5)
I have set out his Honour’s analysis at [37](7) above. Counsel for the appellants submitted that the judge had impermissibly reasoned backwards, and had misdirected himself in the course of doing so. His Honour had concluded that Rankin would have been vicariously liable for any negligence of Mr Game and his colleagues in undertaking the footings work on the false basis that their work was being done as “the builder’s representative”. Then he had reasoned that if Rankin would have been vicariously liable in such circumstances, it showed that Mr Game must have been employed under a contract of service. Adoption of a “representative” test, counsel submitted, involved misdirection. He cited Sweeney v Boylan Nominees Pty Ltd.[15]
[15][2006] HCA 19.
In my opinion there was no fault in the judge’s reasoning. The impugned passage in his reasons occurred in the course of his Honour saying that modern authorities showed that old criteria for discerning the presence or absence of an employment relationship no longer had the significance once attached to them. Other considerations might be pertinent. In the latter connection, his Honour accepted a submission made on behalf of the respondent. It is well to note the submission, both as made in writing, and as orally developed. Thus –
“If in the course of digging the trenches, the men had (for example) negligently caused harm to a next door neighbour, the builder would have been vicariously liable. That is so because, as discussed by the High Court in Hollis at [39]-[42], the labouring work was done by them as the builder’s representative, standing in place of the builder, and the builder could not disclaim responsibility for activities that, in substance, were the builder’s own activities.”
and
“[Counsel for the respondent] submitted there was a fundamental question which had to be answered. When the deceased was doing the work he was doing when he was killed, was he exercising a true independent function? That is to say, independent of the firstnamed defendant. Or was he more readily regarded as doing that work as the representative of the firstnamed defendant. He submitted that the preferable view was that the deceased was working as the representative for the firstnamed defendant in the sense used by Dixon J.[16] in Hollis v. Vabu.”
[16]This must mean, in the sense of the passage from the judgment of Dixon J which was cited in Hollis v Vabu.
In Hollis[17] the question was whether Vabu Pty Ltd, which operated a courier business, and engaged individual couriers to deliver articles, should be held vicariously liable when a person was injured by the negligent act of one such courier in the performance of his work. Liability was imposed, five members of the High Court concluding that the courier was the employee of the company.[18]
[17]Hollis v Vabu Pty Ltd (2001) 207 CLR 21.
[18]A sixth judge, McHugh J, held the company liable on a different basis. The seventh judge, Callinan J, dissented.
According to the majority judgment, the circumstances were not apt to pass upon the question whether, broadly, vicarious liability might attach to a principal for the negligent act of an independent contractor.[19] The matter before the Court was to be approached from the position that A would be vicariously liable for the negligence of B if their relationship was one of employer and employee.
[19]Ibid at 36, [32].
Then, having referred to a well-known passage in the judgment of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-Operative Assurance Co of Australia[20] their Honours pointed out that –
[20](1931) 46 CLR 41 at 48. It involved the conduct of an agent in the true sense.
“by itself, the circumstance that a business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is a employee.”
In Colonial Mutual, their Honours said, Dixon J had –
“fixed upon the absence of representation and identification with the alleged employer as indicative of a relationship of principal and independent contractor.”[21]
That conception – of representation and identification – was said by their Honours to have been picked up by Windeyer J in Marshall v Whittaker’s Building Supply Co[22] and by McHugh J in Northern Sandblasting Pty Ltd v Harris.[23]
[21]Ibid at 39, [40].
[22](1963) 109 CLR 210 at 217.
[23](1997) 188 CLR 313 at 366.
Their Honours summarized the position thus:
“In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise.”[24]
[24]Ibid at 40, [42].
It appears, in the event, that their Honours employed the concepts of representation and identification as a touchstone for deciding whether A should be treated as being a part of B’s business or rather as standing independent of it. A conclusion to the former effect would bespeak a relationship of employer and employee.
So understood, and bearing in mind the submission made to him, I think that the learned judge in the present case should be taken as having concluded that, in performing the footings work, Mr Game and his colleagues acted as part of Rankin’s business. By their actions, viewed in full context, there was pertinent representation and identification. In carrying out the work, Mr Game and the other men undertook an integral part of Rankin’s business; and undertook it as a part of Rankin’s organization, rather than as an independently functioning contractor. It followed, if the negligence of any of them had caused damage to an adjoining landowner, that Rankin would have been vicariously liable.
So analysed, although his Honour mentioned vicarious liability first in his reasons, he did not place the cart before the horse in his path of reasoning.
The question then arises whether the judge’s approach was erroneous in light of Sweeney, the decision in which was handed down after final submissions had been made but before his Honour had published his reasons for judgment. In my opinion, the answer to that question is “no”.
The joint judgment of Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ in Sweeney concluded that –
“Whatever may be the logical and doctrinal imperfections and difficulties in the origins of the law relating to vicarious liability, the two central conceptions of distinguishing between independent contractors and employees and attaching determinative significance to course of employment are now too deeply rooted to be pulled out.”[25]
[25]Supra, [33].
So it was, except in a case such as Colonial Mutual, where an independent contractor was held to be the agent, properly so called, of the principal, the latter then being held responsible for the slanders of the former,[26] that the imposition of vicarious liability would turn upon the two matters set out in the passage which I cited at [49].
[26]Colonial Mutual was so analysed by the majority in Sweeney at [22]-[24].
In the course of the majority judgment, their Honours noted that -
“ … the appellant’s contention that the respondent was vicariously liable for the negligence of the mechanic fastened upon a number of statements found in the reasons for judgment of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd. It was submitted that those statements supported the conclusion that the mechanic did the work he did ‘as a representative’ of the respondent. He was a ‘representative’, so the appellant submitted, because the mechanic ‘represented’ that he had an association with the respondent, and the respondent ‘represented’ that same association.”[27]
[27]Supra, [14].
That contention was rejected for a number of reasons. First, “the word ‘representative’ and its cognate forms are used in many different senses”.[28] Unless the meaning in which the term is used was defined, it did not reveal the nature of the relationship in a particular case. Second, and interrelatedly, “words like ‘agent’, ‘representative’, ‘for’, ‘on behalf of’, are often used … as statements of conclusion that mark the limits to which vicarious liability is extended”.[29] But so used, they do not explain why vicarious liability should or should not be imposed in the particular case. Third, the appellant’s contention was really that it was enough that the actions of the negligent individual, A, were intended to benefit the defendant, B, or were undertaken to advance some purpose of B. But proof of such a matter did not suffice to impose vicarious liability on B.[30] Their Honours said that -
“ … the wider proposition that underpinned the argument of the appellant in this case, that if A ‘represents’ B, B is vicariously liable for the conduct of A, is a proposition of such generality that it goes well beyond the bounds set by notions of control (with old, and now imperfect analogies of servitude) or set by notions of course of employment.
These bounds should not now be redrawn in the manner asserted by the appellant. Hitherto the distinction between independent contractors and employees has been critical to the definition of the ambit of vicarious liability. The view, sometimes expressed, that the distinction should be abandoned in favour of a wider principle, has not commanded the assent of a majority of this Court.”[31]
[28]Ibid, [16].
[29]Ibid, [19].
[30]Ibid, [13]. See, to the same effect, Hollis, supra, at 39, [40].
[31]Ibid [26], [27].
Their Honours did not disapprove what had been said in the passage in Hollis which I cited at [44 ]. In that case, the Court had –
“ … amplified the application of the distinction between independent contractors and employees to take account of differing ways in which some particular enterprises are now conducted.”[32]
Then followed an analysis of why Hollis had been decided as it had.[33]
[32]Ibid, [29].
[33]Ibid, [30], [31].
In all, Sweeney makes it very clear that simply to describe A as the “representative” of B in performing particular work, or to say that A or B “represented” that such was their association, is of itself an insufficient basis on which to found vicarious liability;[34] and that use of such a word does not provide the necessary analysis whether the relationship between A and B was one of employer and employee; and, if so, whether A was acting in the course of the employment at the relevant time.
[34]Except, perhaps, if the description of A as the representative of B sufficiently exposes the existence of a relationship of principal and agent, properly so-called.
In my opinion, the judge below did not reason in a proscribed way. It is plain that at all times the principal issue between the parties was whether, at the critical time, Mr Game was working as an employee or as an independent contractor. It is plain also that his Honour knew that this was the principal issue. Ultimately, he resolved it in the respondent’s favour. In my opinion, his Honour’s reasons could not be sensibly read as meaning that, according to his understanding, Rankin would have been responsible to a third party for any negligence of Mr Game in undertaking the footings work regardless whether the latter was then his employee or an independent contractor, it being enough that Mr Game’s work was intended to benefit Rankin, or was undertaken to advance some purpose of Rankin; so that, there being such a potential liability, it necessarily followed – which it could not - that Mr Game had then been working under a contract of service. To read the reasons in the fashion contended for by the appellants would be to ignore his Honour’s stated acceptance of a submission reliant on Hollis. In the event, in saying that the work was done as “the builder’s representative”, and that the activities undertaken were “in substance … the builder’s own activities” it seems to me that his Honour was seeking to focus on the distinction between employees and independent contractors described by Windeyer J in Marshall.[35]
[35]Supra, at 217.
Proposition 4 (Ground 6)
There is no doubt, at the time when Mr Game sustained his fatal injuries, that there was a subsisting partnership. If the partnership, qua partnership, had contracted to do the footings work, it would have been very relevant to the question whether, when injured, Mr Game was working under a contract of service with Rankin. On the other hand, the existence of the partnership did not mean that Mr Game and his colleagues could not have entered into contracts of service with Rankin as individuals in respect of the footings job. Nor did it necessarily follow, assuming that Mr Game negotiated the arrangement, that Rankin contracted with the partnership rather than that it entered into a separate contract of service with each man. Further, if Mr Game did enter into an individual contract of service, he was not precluded from agreeing with his partners that his earnings should be credited to the partnership account.
In my opinion, contrary to the contention advanced for the appellants, the learned judge’s acceptance of the submission that “the existence of the partnership simply affected the legal relations between the three partners in question” should not be taken to reflect a finding, in effect, that the partnership, as a partnership, contracted to do the footings work. It is compatible with his Honour having accepted, Mr Game having entered into a contract of service with Rankin in respect of that work, that the financial implications for the partnership, so far as his earnings were concerned, was a matter for discussion by the partners. The same may be said of his Honour’s later observation that “the fact that [Mr Game] was then in partnership with others, does not affect his status as a worker within the meaning of the Act”; whilst his Honour’s chronicle of events at [13] in his reasons, accurate so far as it went, does not carry the matter now under consideration any further.
So to understand what his Honour said in my opinion conforms with the submission advanced for the respondent at trial, which was as follows:
“If the builder had engaged the deceased, alone, to work as a labourer on an hourly rate, we submit that the deceased would clearly have been a ‘worker’, working under a contract of service. The fact that the deceased worked with the other two men does not convert a contract of service into something else. The fact that the three men were in partnership, likewise, does not affect the characterisation of the legal relationship between the builder and the deceased. The partnership simply affected the legal relations, inter se, of the three men, such that they divided the remuneration equally and were not employees of each other.”
The submission seems to me to have amounted to this: The three men were engaged under contracts of service, not just Mr Game. The fact that Mr Game worked with the other two men did not mean that the contracts were other than contracts of service. Neither was the contemporaneous existence of the partnership a reason to deny the existence of individual contracts of service in respect of the particular work. Against the background that there was a subsisting partnership, the aggregate amount payable for the work was to be split three ways. It was not the situation that the whole amount was payable to Mr Game, as an independent contractor, and that the other men were employed by him.
Although it is a matter distinct from the question what meaning should be given to his Honour’s remarks about partnership in connection with the footings work, I should refer to the invoice for the work which was sent to Rankin some time after Mr Game’s death. I do not think that much, if anything, could be made of it in determining the nature of the engagement pursuant to which the work was done; and I doubt, even if admissible as an admission, that it could be of utility. As to the first of those matters, the better view appears to be, and it is the law in this State, that evidence as to the conduct of parties subsequent to the making of a contract is not relevant to the interpretation of the contract.[36] As to the second of them, even if the invoice, because it related to work done at a time when the partnership subsisted, was able to be treated as an admission, then as an admission of what?[37] Further, if it could be an admission that the work had been done by the partnership, it was not an admission carrying the imprimatur of the by-then deceased Mr Game.
[36]FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 at 347-350 per Brooking J. See also, amongst many instances where FAI Traders has been cited with approval, Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235, Thiess Contractors (NZ) Ltd v Howtrac Rentals Pty Ltd [2002] VSCA 195 at [18] per Callaway JA, and Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, footnote 12 at 163 per Heydon JA.
[37]See FAI Traders at 351, per Brooking J.
Proposition 4 (Ground 7)
The learned judge found that Mr Game was working under a contract of service when he suffered his fatal injuries. For that reason he did not need to consider the application of s 8(1) of the Act, the starting point of which is that the claimant was not so employed, but was rather an independent contractor.
The gist of s 8(1) is that a person who is an independent contractor will be deemed to be working under a contract of service in either of two situations: First, where although he is a contractor, he does not regularly carry on a trade or business in his own name or under a firm or business name. Second, where although carrying on such a trade or business, the work which he is performing at the critical time is not incidental to that trade or business.[38]
[38]See Humberstone v Northern Timber Mills (1949) 79 CLR 389 per Dixon J at 401-402, Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 at 573 – 574 per Dixon CJ, Williams, Webb and Taylor JJ, Becker v Carthew and Davies [1952] VLR 248 and Higgins v Jackson & Ors (1976) 135 CLR 174, all decided in the context of provisions similar to s 8 (1) of the Act.
The second of those situations does not mean that a man or woman employed under a contract of service to undertake particular work – and so a “worker” as defined by s 5(1) – ceases to be a worker as thus defined if the work performed under the contract of service happens to be work incidental to a trade or business regularly carried on by that person as an independent contractor. It follows that, when the judge in this case tentatively opined that if Mr Game had not been working under a contract of service he may well have failed in reliance upon s 8(1), he was saying only that if Mr Game had been working pursuant to a contract for services at the critical time (which he was not), the subsection might have operated against the respondent. That created no internal inconsistency in his Honour’s reasons such as the appellants contended for.
Proposition 5 (Ground 8)
In my opinion, the appellant’s contention that the learned judge failed to give adequate reasons for his decision – it largely went away in argument - should be rejected. It seems to have proceeded from an erroneous starting point - that is, that the only findings pertinent to his Honour’s conclusion that Mr Game was working under a contract of service at the critical time were those set out in the section of his Honour’s reasons headed “Findings”. But that was not so, as I have attempted to explain. I consider that the judge’s reasons sufficiently disclosed his path of reasoning to his ultimate conclusion.
Conclusion
In my opinion, the appeal should be dismissed.
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