WORKCOVER AUTHORITY OF NEW SOUTH WALES v DEPENDABLE TAXI TRUCKS AND COURIERS (SYDNEY) PTY LTD and ORS SUPREME COURT OF NEW SOUTH WALES COMPENSATION COURT OF NSW - MORONEY CCJ PRIESTLEY, MEAGHER and HADLEY JJA 3 May 1994, 17 June 1994 [1994] NSWCA 352 WORKERS COMPENSATION ACT 1987 s20(1) — in this case the application of s20(1) should have been considered — work for which contractor was engaged was work undertaken by principal in the course of its trade or business — work done was pursuant to contract — requirements of s20(1) fulfilled — WorkCover Authority to pay Mr Anevski's costs. The worker was injured when he fell from his truck while unloading it at the premises of Rapid Metal Developments (Aust) Pty Ltd (RMD). The work was being done at the request of Dependable Taxi Trucks and Couriers (Sydney) Pty Ltd (Dependable). The worker claimed workers compensation from Dependable claiming that for relevant purposes he was a worker employed by Dependable. As Dependable did not have a policy of insurance under the Act covering Mr Anevski the WorkCover Authority of New South Wales was named as second respondent (under s140 of the Act). RMD was named as a third respondent, a claim being made against it under s20(1) of the Act. Moroney CCJ found the worker was relevantly employed by Dependable and that Dependable should pay compensation, but that as Dependable was not insured the WorkCover Authority should pay out of the statutory fund. In relation to the claim against RMD under s20(1) Moroney CCJ held that in view of his finding against Dependable it was not necessary to consider this alternate case. Held: (1) Once it was found the worker was employed by Dependable it became necessary to consider whether the requirements of s20(1) were fulfilled. As Moroney CCJ had not done this it was necessary for the court to consider whether the requirements of s20(1) were, on the evidence before the trial judge, fulfilled. (2) The proper inference from the evidence was that the delivery of goods from and to the premises of RMD was part of the work undertaken by RMD and that it was in the course of RMD's trade or business that it engaged Dependable for the execution of part of that work. (3) The evidence showed that the business relationship between RMD and Dependable involved Dependable doing things for RMD which were done pursuant to contract. (4) Hence, the requirements of s20(1) were fulfilled so that RMD was the party liable to pay compensation payable under the Act and Moroney CCJ should have made declarations, awards and orders accordingly. (5) As the worker was justified in resisting the appeal (which until the hearing of the appeal began challenged the finding in his favour that he had been relevantly employed by Dependable) and instructing solicitors and counsel for this purpose, and as the WorkCover Authority did not take advantage of RSC Pt51 R6(5) and invite the worker to enter a submitting appearance and take no active part in the proceedings, the WorkCover Authority should pay the worker's costs of the appeal. ORDERS (1) Declarations, orders and awards below set aside and in their place the following orders be made. (2) Declare that the first respondent (Dependable) was not insured as required by the Act at the time of the applicant's injury. (3) The claim against the second respondent (WorkCover) be dismissed. (4) The third respondent (RMD) pay the applicant weekly compensation at the rate of (a) $353.60 from 7 November 1989 to 7 May 1990. (b) $412.30 from 8 May 1990 to 30 September 1990, $431.30 from 1 2 UNREPORTED JUDGMENTS October 1990 to 31 march 1991, 437.00 from 1 April 1991 to 30 September 1991, $440.10 from 1 October 1991, such weekly payment to continue in accordance with the provisions of the Act. (5) The third respondent pay the applicant's medical and hospital expenses under s60. (6) The third respondent pay the applicant's costs forthwith after they have been agreed or taxed. So far as the costs of the appeal are concerned: (i) since Dependable took no part in the appeal, there should be no order concerning its costs; (ii) WorkCover should pay Mr Anevski's costs; (iii) RMD should pay WorkCover's costs of the appeal, but those costs should not include costs of the appeal paid to Mr Anevski by WorkCover. (iv) If qualified RMD should have a Suitors Fund Act certificate. Priestley JA On 7 November 1989 Mr T. Anevski was in the premises of Rapid Metal Developments (Australia) Proprietary Ltd (RMD), unloading some formwork from his truck. One of RMD's employees was using a fork lift to help unload the truck. It bumped the truck in some way and Mr Anevski fell from the truck and injured his back. Mr Anevski was doing what he was doing in RMD's premises at the request of Dependable Taxi Trucks and Couriers (Sydney) Pty Ltd (Dependable). Mr Anevski commenced proceedings in the Compensation Court against Dependable seeking workers compensation. He claimed that for the purposes of the Workers Compensation Act 1987 (the Act) he was a worker employed by Dependable. The full name of Dependable sufficiently describes, for present purposes, the nature of the business it carried on at the time of Mr Anevski's injury. In the compensation proceedings against it Dependable claimed that Mr Anevski was not a worker for purposes of the Act. It asserted that he owned his truck and was an independent contractor doing jobs for the company from time to time, but fully his own master in the way he did the jobs and in no way under the company's control as an employee. At the time of Mr Anevski's injury Dependable did not have a policy of insurance under the Act covering Mr Anevski, if he was indeed a worker for the purposes of the Act. A worker whose employer does not have a policy of insurance under the Act in respect of an injury to the worker for which the worker is entitled to workers compensation may by s140 of the Act make a claim under the Uninsured Liability and Indemnity Scheme which, if established, will be paid by the WorkCover Authority of NSW. The Authority was therefore named as the second respondent in Mr Anevski's proceedings for compensation. At some stage Mr Anevski added RMD as a third respondent to the proceedings. This was on the basis of s20(1) of the Act which provides: "If any person (in this section referred to as "the principal') in the course of or for the purposes of the person's trade or business, contracts with any other person (in this section referred to as "the contractor') for the execution by... the contractor of the whole or any part of any work undertaken by the principal, the principal is, if the contractor does not have a policy of insurance or is not a self-insurer at the time a worker employed in the execution of the work receives an injury, liable to pay any compensation under this Act which the principal would have been liable to pay if that worker had been immediately employed by the principal." By the time Mr Anevski's claim came on for hearing before Moroney CCJ it took the following form: "Application is hereby made, particulars whereof are set out herein, for the determination of the liability of and amount of compensation payable by, the respondents. WRIRKCOVER AUTHORITY OF NEW SOUTH WALES v DEPENDABLE TAXI TRUCKS AND COURIERS (SYDNEY) PTY LTD and ORS (Priestley JA) PARTICULARS As against first and second respondent - Schedule 'A'. As against third respondent - Schedule "B'. [Schedule 'A' was a claim in standard form against Dependable as first respondent alleging it was Mr Anevski's employer, that he had been injured in the course of his employment and claiming compensation and against the Authority as second respondent.] SCHEDULE 'B' PARTICULARS 1.(a) Name of worker (b) Address (c) Date and year of birth: 2. Name, place of business, and nature of business of Third Respondent: 3. (a) Name and address of insurer of Third Respondent (b) From whom such particulars obtained: 4. (a) Nature of employment of work at the time of injury: (b) If not directly employed by Third respondent (i) Name, address and business of direct employer (ii) How is Third respondent alleged to be liable for compensation: 5. Date and place of injury Nature of work on which worker was then engaged and cause of injury. 14... (a) Surname: ANEVSKI Other Names: TRAJAN (b) 6 Linthorpe Crescent, Glen Innes, North Island. NEW ZEALAND (c) 14 January 1948 RAPID METAL DEVELOPMENTS (AUSTRALIA) PROPRIETARY LIMITED, 330 EDGAR STREET, BANKSTOWN, NSW; Hire and Formwork and Scaffold (a) Switzerland Insurance Workers' Compensation NSW Limited, 169 Macquarie Street, Parramatta. (b) From the Third Respondent. COURIER DRIVER DEPENDABLE TAXI TRUCKS and COURIERS (SYDNEY) PTY LTD, UNIT 13, 20 LOYALTY RD NORTH ROCKS, NSW 2151. Under s20, the Third Respondent is an insured head contractor ('principal') liable to pay compensation to the uninsured sub contractor. (a) 7th November 1989 (b) The premises of Rapid Metal Developments (Australia) Pty Ltd at 330 Edgar Stree Bankstown. (c) Deliveries. (d) Forklift hit the truck in which the Applicant was standing causing him to fall. Dependable did not file an answer. The answer filed by the Authority, in its final form put all of Mr Anevski's claims in issue and, in para6, pleaded s20 of the Act, saying that in the circumstances of the operation of the section it was relieved of any liability to pay compensation. RMD's answer, in its final form, did not deny paral, para2, and para3 of Mr Anevski's particulars but otherwise put all matters in issue. At the hearing before Moroney CCJ, at which Dependable did not appear, the principal contest between the parties was whether Mr Anevski was a worker for the purposes of the Act. Further, if Mr Anevski were successful on this issue, the question raised by s20 of the Act would have to be decided. Moroney CCJ found the "worker" issue in favour of Mr Anevski. 4 UNREPORTED JUDGMENTS Once this position was reached, Mr Anevski was entitled to an award of compensation in his favour to be made either against Dependable or RMD. Which of these respondents was liable would depend on how the s20 question was resolved. However, Moroney CCJ dealt with this question as follows: "Having found the applicant a worker employed by [Dependable] it is not necessary for me to consider the alternate case that was sought to be made out against [RMD] pursuant to s20, and I make an award in favour of [RMD]." The orders, awards and declaration made by Moroney CCJ were: (1) that Dependable pay compensation to Mr Anevski in amounts fixed by Moroney CCJ; (2) that Dependable pay Mr Anevski's costs; (3) that Dependable was not insured as required by the Act at the time of Mr Anevski's injury; (4) that the Authority cause payment of the compensation and costs awarded against Dependable to be made out of the fund constituted under the WorkCover Administration Act 1989; (5) that Dependable reimburse the Authority such amount or amounts as may be paid out of the fund in respect of the compensation and costs awarded against Dependable in respect of the costs of Mr Anevski and the Authority; (6) that an award be made in favour of RMD. The Authority appealed against the orders against it. Its case was that on the facts before Moroney CCJ and as found by him, all the requirements of s20(1) of the Act were fulfilled and Moroney CCJ should have given effect to the subsection by ordering RMD to pay the relevant compensation. This was the only question for the court's consideration in this appeal. Dependable did not appear in the appeal. The court was satisfied that proper steps had been taken to give it notice of the pendency of the appeal. When counsel for the Authority made it plain at the beginning of his submissions that the trial judge's conclusion concerning the "worker" issue was not challenged it became clear that Mr Anevski was not in any danger of his compensation award being disturbed if the appeal succeeded. The only question was whether it would be paid by the Authority or RMD's insurer. Because of this, counsel for Mr Anevski made no submissions, except as to costs. The argument lay between the Authority and RMD. Counsel for RMD did not raise any question about Moroney CCJ's finding that Mr Anevski had been Dependable's worker for the purposes of the Act. Some questions were asked in the course of the argument in this court about the extent to which the s20 point was argued at first instance. It became common ground between all counsel that, although it does not seem that much attention was paid to the s20 question, some submissions were made dealing with it; for example, the court was told that written submissions were before the court on behalf of RMD contending that if Mr Anevski succeeded on the "worker" issue, then the proper outcome would be an award against Dependable and the Authority and that no award should be made against RMD. It was not submitted that this court should not deal with the point. As appears from the paragraph from Moroney CCJ's reasons earlier set out, he did not think it was necessary, once he found that Mr Anevski was a worker employed by Dependable, to consider the applicability of s20. However, it seems to me that it was necessary for him to do so. If the requirements of the section were made out then RMD was liable to pay the compensation to which Mr Anevski was entitled. The interaction of s20(1), the definition of "employer" in s138, and s140(1) of the Act meant, once Moroney CCJ had found that Mr Anevski was Dependable's worker, that the employer, for purposes of s140(1), WRIRKCOVER AUTHORITY OF NEW SOUTH WALES v DEPENDABLE TAXI TRUCKS AND COURIERS (SYDNEY) PTY LTD and ORS (Priestley JA) was RMD. Once that position was reached the Authority could only be required to pay a claim under the Scheme if RMD neither had a policy of workers compensation insurance nor was a self-insurer. There was no evidence that this was the situation and both the trial and the appeal were conducted on the footing that RMD did have the appropriate policy of insurance. Thus, once it was found that Mr Anevski was Dependable's worker it became necessary to decide whether the requirements of s20(1) were fulfilled, because if they were the Authority could not be liable to pay the relevant compensation. As a result, since Moroney CCJ did not consider the question which, in my opinion, he should have considered, it is necessary for this court to see whether the requirements of s20(1) were, on the evidence before the trial judge, fulfilled. This would be the case if RMD "in the course of or for the purposes of [its] trade or business contract[ed] with [Dependable] for the execution by... [Dependable] of the whole or any part of any work undertaken by" RMD. For RMD it was submitted (a) there was no evidence to support findings to this effect, (b) there was no or insufficient evidence that Mr Anevski was injured in the course of the execution of his duties with Dependable being part of "any work undertaken by" RMD, (c) that none of the Authority, Mr Anevski nor RMD (sic) adduced available evidence to establish Mr Anevski's entitlement to claim against RMD under s20 and (d) that RMD was not the principal of Dependable. The evidence relevant to the s20 question was as follows. Mr Anevski's duties with Dependable were to "Provide transportation of goods from our clients to designated delivery points" (AB 141). Dependable took a share of profit from each transportation job carried out by Mr Anevski for Dependable's clients. RMD was a client of Dependable's. The nature of RMD's business is known from the following. (a) Para2 in Mr Anevski's particulars of his application against RMD described the nature of the company's business as "Hire and Formwork and Scaffold". This was not put in issue by RMD's answer. (b) On 17 October 1989 Mr Anevski, for Dependable, picked up goods from RMD's Bankstown address and delivered them to Kern Constructions. (This is my interpretation of some difficult to read script at AB113.) (c) On 18 October 1989, 19 October 1989, 20 October 1989, 24 October 1989, 31 October 1989 and 2 November 1989 Anevski picked up goods from RMD's Bankstown address and delivered them to various premises. (d) These details appear in cryptic records kept by Mr Anevski. The records do not show what the goods were that he picked up on these occasions. The records show the amount to be charged to RMD for each pick up and delivery. (e) Then on 7 November 1989 his record shows he picked up materials from an address at Regents Park to deliver to RMD's Bankstown address. The amount charged was $32.17. (f) Although no note is recorded of what the goods were which he picked up on this occasion, he gave some evidence about it at the trial. He was asked whether when he was unloading the goods from the truck at RMD's premises, he was "unloading formwork". (The transcript records "firewood" but it is apparent that what he said must have been formwork.) At a later point in his evidence he was asked whether on 7 November 1989 he got an order from Dependable to go to premises at Regents Park, to pick up some formwork. He answered these questions yes. 6 UNREPORTED JUDGMENTS (g) There was also evidence from Mr Luff, Dependable's company secretary, in which he said that on 8 November 1989 Mr Anevski was performing a contract for Dependable. He went on: "We were obliged to pick something up and he was the chosen one. Q. Obliged to pick up something for whom. A. For Dependable. Q. Yes but Dependable was obliged to pick something up for whom - for which other company? A. For Rapid Metal Developments." This evidence was not objected to or challenged in cross-examination. From this evidence it seems clear enough that RMD was carrying on business at its Bankstown address and that in the course of its business it caused goods, probably formwork and the like, to be delivered to parties with whom it had business dealings, and further that it was part of its business on at least one occasion to be the recipient of goods delivered to its premises. The text of s20(1) relevant for present purposes is the same as that in s6(3)(a) of the Workers Compensation Act 1926 as amended. The words in the subsection, "work undertaken by the principal" were given an extensive meaning by the High Court in Frauenfelder v Reid (1963) 109 CLR 43. The expression was held not to be limited to work which the principal had contracted to do for someone else, but to cover also any work the doing of which was part and parcel of the business undertaking of the principal: see Dixon CJ at 47-48, Windeyer J at 50 and Owen J at 57. I think this court is bound to apply that construction. On this basis, it seems to me that the proper inference from the evidence I have referred to is that the delivery of goods from and to the premises of RMD at Bankstown was part of work undertaken by RMD and that it was in the course of RMD's trade or business that it engaged Dependable for the execution of part of that work. It was contended for Dependable that the evidence did not show that RMD had contracted with Dependable for the doing of the work but I think that the evidence in general and in particular that of Mr Luff shows that the business relationship between RMD and Dependable involved Dependable doing things for RMD which should properly be analysed as being done pursuant to contract. Counsel for RMD submitted that the evidence supporting the inferences which I have said I think should be drawn was very scanty and not really sufficient to enable this court to be satisfied, to the civil standard of proof, of the relevant inferences. However, as I have already indicated, to me the evidence seems sufficient for the inferences properly to be drawn. Counsel for RMD also sought to base a submission upon the structure of the Uninsured Liability and Indemnity Scheme. He said that the claim by Mr Anevski against the Authority should not have been allowed to be litigated until the provisions of s140-143 of the Act had been complied with. The Authority did not raise this point at first instance; nor did any other party. It does not, in my opinion go to jurisdiction and therefore I think nothing more should be said about it in these proceedings. It is of no assistance to RMD. In the result my opinion is that on the evidence in the case the requirements of s20(1) were fulfilled so that RMD was the party liable to pay the compensation payable under the Act and that Moroney CCJ should have made declarations, awards and orders accordingly. On this basis, I propose that the existing declarations, awards and orders be set aside and be replaced by declarations etc giving effect to my views about the liability of RMD. Before indicating what declarations etc I think should be made, there is a matter concerning an aspect of the costs of the appeal which I think should be mentioned. WRIRKCOVER AUTHORITY OF NEW SOUTH WALES v DEPENDABLE TAXI TRUCKS AND COURIERS (SYDNEY) PTY LTD and ORS (Hadley JA) The Authority's notice of appeal as filed sought orders setting aside the awards and orders in favour of Mr Anevski and remitting the proceedings to the Compensation Court for further hearing. Mr Anevski was directly interested in resisting these orders because their effect, if made, would be to terminate his weekly payments under the award made by Moroney CCJ. Although in due course he might succeed in obtaining a fresh award in the Compensation Court which might be retrospective, he could not be entitled to compensation payments in the meantime. The appellant did not abandon this stance until the hearing. Until then Mr Anevski was justified in resisting the appeal and instructing solicitors and counsel for this purpose. Had the Authority in its notice of appeal adopted the position it ultimately adopted at the hearing, it could have taken advantage of RSC Pt51 R6(5) and invited Mr Anevski to enter a submitting appearance and take no active part in the proceedings. If it had done so it would have saved itself the costs, other than those payable to a submitting respondent, which it must now be ordered to pay to Mr Anevski. The declarations, awards and orders which I propose are as follows: (1) Declarations, orders and awards below set aside and in their place the following orders be made. (2) Declare that the first respondent (Dependable) was not insured as required by the Act at the time of the applicant's injury. (3) The claim against the second respondent (WorkCover) be dismissed. (4) The third respondent (RMD) pay the applicant weekly compensation at the rate of (a) $353.60 from 7 November 1989 to 7 May 1990. (b) $412.30 from 8 May 1990 to 30 September 1990, $431.30 from 1 October 1990 to 31 march 1991, 437.00 from 1 April 1991 to 30 September 1991, $440.10 from 1 October 1991, such weekly payment to continue in accordance with the provisions of the Act. (5) The third respondent pay the applicant's medical and hospital expenses under s60. (6) The third respondent pay the applicant's costs forthwith after they have been agreed or taxed. So far as the costs of the appeal are concerned, in my view: (i) since Dependable took no part in the appeal, there should be no order concerning its costs; (ii) WorkCover should pay Mr Anevski's costs; (ili) RMD should pay WorkCover's costs of the appeal, but those costs should not include costs of the appeal paid to Mr Anevski by WorkCover. (iv) If qualified RMD should have a Suitors Fund Act certificate. Meagher JA I have had the opportunity of reading in draft the judgment of Priestley JA. I agree both with his Honour's reasons and with the orders he proposes. It would seem that in the Court below Moroney CCJ became so bemused by what he was pleased to call the "indicate" of the contract of employment that he overlooked the main issue in the case. Hadley JA I agree with Priestley JA. ORDERS (1) Declarations, orders and awards below set aside and in their place the following orders be made. (2) Declare that the first respondent (Dependable) was not insured as required by the Act at the time of the applicant's injury. (3) The claim against the second respondent (WorkCover) be dismissed. (4) The third respondent (RMD) pay the applicant weekly compensation at the rate of (a) $353.60 from 7 November 1989 to 7 May 1990. 8 UNREPORTED JUDGMENTS (b) $412.30 from 8 May 1990 to 30 September 1990, $431.30 from 1 October 1990 to 31 march 1991, 437.00 from 1 April 1991 to 30 September 1991, $440.10 from 1 October 1991, such weekly payment to continue in accordance with the provisions of the Act. 5 (5) The third respondent pay the applicant's medical and hospital expenses under s60. (6) The third respondent pay the applicant's costs forthwith after they have been agreed or taxed. So far as the costs of the appeal are concerned: (i) since Dependable took no part in the appeal, there should be no order 10 concerning its costs; (ii) WorkCover should pay Mr Anevski's costs; (iii) RMD should pay WorkCover's costs of the appeal, but those costs should not include costs of the appeal paid to Mr Anevski by WorkCover. (iv) If qualified RMD should have a Suitors Fund Act certificate. Representation: Counsel for the Appellant: P Menzies QC, J P Phillips Counsel for the Respondent (1): M Joseph 20 Counsel for the Respondent (2): J Sharpe Solicitors for the Appellant: Gills Delaney Brown Solicitors for the Respondent (1): Henniker and Beedles, Oak Flats 25 Solicitors for the Respondent (2): Moray and Agnew3545