WorkCover Queensland v. Whiteman

[2007] QCA 123

SUPREME COURT OF QUEENSLAND

CITATION:

WorkCover Qld v Whiteman [2007] QCA 123

PARTIES:

WORKCOVER QUEENSLAND
(applicant/appellant)
v
WILLIAM GRANT WHITEMAN
(respondent)

FILE NO/S:

Appeal No 8496 of 2006
SC No 491 of 2005

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

13 April 2007

DELIVERED AT:

Brisbane

HEARING DATE:

22 March 2007

JUDGES:

McMurdo P, Holmes JA and Cullinane J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER:

1.  The appeal is allowed and the declaration made on 8 September 2006 is set aside
2. The application by the appellant for declarations that the respondent was not a worker within the relevant legislation on 15 November 2002 and that he was not a person entitled to seek damages pursuant to the Act be dismissed
3.  That the appellant pay the respondent’s costs of and incidental to the appeal to be assessed

CATCHWORDS:

WORKERS’ COMPENSATION – ENTITLEMENT TO COMPENSATION – PERSONS ENTITLED TO COMPENSATION – WHO IS A WORKER OR EMPLOYEE – GENERALLY – where the respondent sought to claim compensation from the appellant for work related injuries – where respondent was employed by two companies at the time of the accident, of which he was a director of one company – whether employed jointly – whether the trial judge erred in finding that the respondent was a worker within the definition of a “worker” under s 12 of the WorkCover Queensland Act 1996 (Qld) – whether exclusion in definition of worker applies

Property Law Act 1974 (Qld), s 55
WorkCover Queensland Act 1996 (Qld), s 12, schedule 2

COUNSEL:

M Grant-Taylor SC for the appellant
A R Philp SC, with P C Lafferty, for the respondent

SOLICITORS:

MacDonnells Law for the appellant
Roati & Firth Lawyers for the respondent

1. McMURDO P: I agree with Cullinane J.

1. HOLMES JA: I agree with the reasons of Cullinane J and the order he proposes.

1. CULLINANE J: The appellant WorkCover appeals against a declaration made by the Supreme Court at Cairns on 8 September 2006 that the respondent was at 15 November 2002 (the date upon which he sustained an injury) a worker (as that term is defined in the relevant WorkCover legislation) employed by a company, Hinchinbrook Island Ferries Pty Ltd.

1. In fact as senior counsel for the appellant pointed out, what was before His Honour was an application by the appellant seeking a declaration that the respondent was not a worker within the meaning of the relevant legislation when he sustained personal injury on 15 November 2002, and a further declaration that the respondent was not a person entitled to seek damages pursuant to the WorkCover legislation.

1. The declaration sought by the appellant was based upon the proposition advanced by it that the respondent was at the relevant time employed by another company, Hinchinbrook Island Resort Pty Ltd of which he was also a director.  Although in the judgment His Honour did not expressly deal with the matter in terms of the declaration sought, his reasons for judgment necessarily involved the rejection of the claim advanced by the appellant in its application.

1. The respondent made a claim for compensation in the course of which he described his employer as Hinchinbrook Island Ferries Pty Ltd and his occupation as general manager and vessel master.  The application related that he had been so employed for some ten years.

1. In support of the declaration which the appellant sought, it placed evidence before the Court showing that the respondent’s wages were paid by a company Hinchinbrook Island Resort Pty Ltd.  Payroll summaries placed before the Court showed that the respondent was included in the employees of Hinchinbrook Island Resort Pty Ltd, but not included in the employees of Hinchinbrook Island Ferries Pty Ltd.

1. At all material times the respondent was a director of Hamilton Island Resort Pty Ltd.

1. The issue before the Court was whether the respondent was a worker within the meaning of s 12 of the WorkCover Queensland Act1996 (Qld) (“the Act”) as amended. More particularly the issue was whether he was someone who fell within the exclusion to that definition contained in s 1(a) of part 2 of schedule 2 to the Act. This provides:

“Part 2 – Persons who are not workers

A person who performs work under a contract of service with

(a)         a corporation of which the person is a director;  or ---”.

1. The consequence of the respondent falling within this exclusion would be that he would not be entitled to compensation and he would not be entitled to maintain an action for damages.

1. The brief statement of the facts outlined above would if uncontradicted result in a declaration that the respondent was not a worker at the relevant time.

1. There was however evidence before the Court which painted a somewhat different picture. 

1. On the hearing of the application none of the deponents were called for cross-examination.

1. The material showed that the respondent had at an earlier time conducted a ferry business to Hinchinbrook Island.  He sold this business to the owner of a resort on Hinchinbrook Island.  This occurred in 1989.  According to an affidavit of the respondent when he sold this business the owner of the resort retained “Hinchinbrook Island Ferries” as a separate company.  The reason this was done was to maintain the validity of certain licences.

1. It can be said that throughout the material, reference is made to the two businesses without any attempt to precisely identify the entity which owned or conducted each at any given time.  References appear which do not identify whether a corporate body or some unincorporated body is intended to be referred to.

1. For some time after the sale of the business the respondent managed the ferry business and submitted invoices in the name of a company Whiteman Investments Pty Ltd to “Hinchinbrook Island Ferries” which distinguished between the period each year he worked for the ferry business and the period he worked for the resort business.

1. In May 2000 he entered into an agreement to manage both businesses. This appears at page 180 and page 181 of the record.  The agreement is said to be between “Hinchinbrook Island Ferries” (Green Blaze Pty Ltd and Whiteman Enterprises Pty Ltd) and William Whiteman – Whiteman Investments Ltd.

1. The agreement goes on to relate that it would be for five years and require the respondent to provide ongoing management services as general manager of both “the ferry company and the Hinchinbrook Island Resort.”  A base salary of $50,000 per annum was to be paid.

1. No explanation was given as to the role of the various companies mentioned in the agreement and no attempt was made on either side to have this clarified.

1. It is probably fair to say that both parties were inclined to take the position that by the time of the injury the agreement had ceased to have much relevance to the respondent’s employment.  By this time different entities owned the different businesses and a different remuneration regime was in place.

1. The appellant contended that if the agreement did continue to govern the relationship it provided for a single contract of service between the respondent on the one hand and the respective owners of the two businesses on the other hand.  Some emphasis was placed upon the fact that a single wage was provided for. 

1. However I do not think that the agreement is any way inconsistent with two separate contracts of service embodied in a single contractual document. As will be seen the owner of the resort is not a party but it appears to be a party for whose benefit the contract has been made and it would be enforceable by it, pursuant to s 55 of the Property Law Act1974 (Qld).

1. Two separate businesses were involved and the management of each would obviously involve separate tasks.

1. The appellant also relied upon the matters referred to in paragraph 5 of these reasons as establishing that the respondent was employed by Hinchinbrook Island Resort Pty Ltd at the relevant time. This was an alternative argument to that based upon the terms of the contract, and can probably be said to be its primary argument.

1. It seems to me that of particular relevance to the respondent’s employment at the time that he sustained his injury was the evidence of one Colleen Johns, who was described as the payroll officer with Hinchinbrook Island Ferries.  It is obvious from her affidavit as a whole that she was referring to Hinchinbrook Island Ferries Pty Ltd.  She commenced in that position on 8 July 2002.  The respondent contended that her evidence was of little if any relevance because the respondent’s engagement as manager pre-dated this.  However, Ms Johns deposes that she has personal knowledge of the respondent’s employment with “Hinchinbrook Island Ferries and Hinchinbrook Island Resort.”  Again it is obvious from reading her affidavit as a whole that she is referring to the two companies.  According to Ms Johns there is an arrangement by which the respondent’s wages are paid by Hinchinbrook Island Resort Pty Ltd and a proportion is subsequently recouped from Hinchinbrook Island Ferries Pty Ltd (something which is supported by some of the records placed before the Court by the appellant).  She says she is responsible for this arrangement. She says that she makes the decision which company pays the wages to individual employees and then recoups the part of it from the other company where an employee works for both. She says that this is done to simplify things and to reduce paperwork. She says that in her own case she does work for both companies and her wage is paid by Hinchinbrook Island Ferries Pty Ltd which recovers a proportion from Hinchinbrook Island Resort Pty Ltd.  This is the reverse of the situation with the respondent.

1. Ms Johns says that she was given no directions from management about these matters but acted on her own initiative.

1. Her evidence was neither objected to, nor challenged. 

1. She deposes to the fact that from her knowledge of the respondent’s employment, she believed that he performed the vast majority of his work for Hinchinbrook Island Ferries Pty Ltd, notwithstanding that his wages were paid by Hinchinbrook Island Resort Pty Ltd.

1. The respondent also swore that he provided separate management services to each company, with the majority of his time being devoted to being ferry master for Hinchinbrook Island Ferries Pty Ltd at the time of his accident. This evidence was not challenged. It is clear Hinchinbrook Island Ferries Pty Ltd was conducting the ferry business at this time.

1. At the time the appellant was injured he was with some guests at a beach some significant distance away from the resort.  The appellant and the guests had travelled to this area on one of the ferries of Hinchinbrook Island Ferries Pty Ltd.  In his reasons His Honour stated that there was no challenge to the suggestion that the work in which he was engaged when injured was of the kind performed for that company.  There was no challenge on the material which was placed before His Honour as to the circumstances in which the respondent was injured. 

1. His Honour made the critical findings at paragraph 11 of his reasons:

   
   

   “Here however, there is an express agreement which provides directly that the respondent will be the general manager of Ferries; that he will be paid a salary; that he will be entitled to annual holidays, sick leave and superannuation; that he will have to work to achieve performance targets and that his minimum hours of work will be 40 hours per week. The agreement provides that he is to work for both businesses.  There is no delineation between the two so as to suggest that one would be the sole employer and the other having some different relationship.  The fact that the company staff adopted a procedure for paying the respondent’s remuneration which was not reflective of the dual employment was not inconsistent with that being the position. Nor was such procedure determinant of the relationship of employer/employee. As to whether at any particular time the respondent was performing duties for one company rather than another, this again is a question of fact.  The respondent indicated that initially he performed tasks only for Ferries.  I am satisfied by reason of the express terms of the agreement, the manner in which the respondent performed work for Ferries and the fact that his wages were proportionally paid by Ferries, he was, at all material times, employed by Ferries.”

1. These findings in my view were open on the evidence before His Honour.  He regarded as significant, the whole history of the matter from the time of the Respondent’s initial engagement as manager of both businesses pursuant to the agreement, the manner in which the respondent performed the work for both businesses, and the manner in which he was remunerated.  He justifiably thought it significant that the amount recovered by Hinchinbrook Island Resort Pty Ltd from Hinchinbrook Island Ferries Pty Ltd represented a proportion of the wages paid.    The matter may have been somewhat different if the monies recouped were referable to the loan of the respondent’s services by an employer to another entity to perform particular tasks on an ad hoc basis.

1. The appellant is faced with findings of fact adverse to it, on a matter where it carries the onus of proof. In my view His Honour’s findings were justified by the evidence which was placed before him.

1. The appeal should be allowed, but only to the extent of setting aside the declaration which His Honour made, since this was not the matter to be determined upon the application before him but otherwise dismissing the appellant’s application.

1. I would make the following orders:

1.  The appeal is allowed and the declaration made on 8 September 2006 is set aside.

2. The application by the appellant for declarations that the respondent was not a worker within the relevant legislation on 15 November 2002 and that he was not a person entitled to seek damages pursuant to the Act be dismissed with costs.

3.  That the appellant pay the respondent’s costs of and incidental to the appeal to be assessed.