Jorma Ropponen v John J O'Brien [1987] ACTSC 7 (20 February 1987)

SUPREME COURT OF THE ACT

JORMA ROPPONEN v. JOHN J. O'BRIEN
S.C No. 135 of 1984
Workmen's Compensation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Workmen's Compensation - Whether injured person working under a contract of service or for services - Whether deemed workman under extended definition - Workmen's Compensation Ordinance 1951, s.6(3) - Meaning of "work incidental to a trade or business regularly carried on by the contractor in his own name" considered - No new question of principle involved.

Tomas v. Tomas (1983) 67 FLR 281.

R. v. Allen; ex parte Australian Mutual Provident Society (1977) 16 SASR 237.

Jennings Industries Ltd. v. Negri (1982) 44 ACTR 9.

HEARING

CANBERRA
20:2:1987

ORDER

The appeal be dismissed.

The appellant pay the respondent's costs of and incidental to the appeal.

DECISION

This is an appeal from a decision of the then learned Chief Magistrate of the Court of Petty Sessions sitting as an arbitrator under the Workmen's Compensation Ordinance 1951 (the Ordinance). Before the learned arbitrator the appellant claimed compensation in respect of personal injury by accident said to have occurred on 20 November 1975 and to have arisen out of and in the course of his employment by the respondent. In the particulars annexed to the application for arbitration the appellant described himself as a carpenter employed "under the Respondent". The place of accident was given as Block 7, Section 42, Kambah at a home being constructed. The appellant claimed that at the time of the accident he was engaged in carpentry work when he fell to the ground from the top plate of the frame of a house then being constructed. He claimed to have fractured his heels, feet and ankles and to have been totally incapacitated for some two years and partially incapacitated thereafter.

2. By its answer the respondent denied liability generally but at the hearing there was no contest about the occurrence of the accident nor any denial of the fact that the appellant suffered physical injury which continued to hamper him significantly.

3. The questions which were considered by the learned arbitrator were:-

(a) Was the appellant working at the relevant time

under a contract of service for the respondent?

(b) If not, was he to be deemed a workman by virtue of
the operation of s.6(3) of the Ordinance? and

(c) If the answer to either of questions (a) and (b)
was "yes", the amount of compensation payable.

4. The learned arbitrator decided that the appellant was, at the time of the accident, an independent contractor under a contract for services.

5. As to question (b), he said:-

"I have no doubt on the basis of the findings
I have earlier made that at all times when
the applicant was working for the respondent
he was engaging in work incidental to a trade
or business regularly carried on by him in
the name of R and J Ropponen. I appreciate
that the Ordinance speaks of a trade or
business 'carried on by in his own name' but
I consider that the use of his name in the
name of the partnership is sufficient to
attract the exclusion contained in the words
in parenthesis. All the evidence indicates
to me and I so find that at all relevant
times the partnership was actively seeking
contracts from builders."

6. He concluded, therefore, that the appellant was not a "deemed" workman under s.6(3).

7. The appellant appealed on the grounds that the learned arbitrator had erred in his answer to each question.

8. Section 6(1) of the Ordinance defines a workman, so far as is material, as follows:-

"Any person who has entered into or works
under a contract of service . . . with an
employer, whether by way of manual labour
. . . or otherwise, and whether the contract is
expressed or implied, oral or in writing . . ."

Sub-section 6(3) of the Ordinance is as follows:-

"(3) Where a contract to perform any work
exceeding $10 in value (not being work
incidental to a trade or business regularly
carried on by the contractor in his own name)
is made with the workman who neither sublets
the contract, nor employs workmen, the
contractor shall, for the purposes of this
Ordinance, be deemed to be a workman employed
by the person who made such contract with the
contractor."

9. In Tomas v. Tomas (1983) 67 FLR 281, at pp 282-3, Blackburn CJ analysed sub-section 6(3) in the following words which I would respectfully adopt:-

"The conditions which bring the subsection
into play are therefore as follows. The
first requirement is that there should be a
contract to perform work exceeding ten
dollars in value. The second requirement is
that the work should not be incidental to a
trade or business regularly carried on by the
contractor in his own name. Hereafter I
refer to the words of exclusion which are in
brackets as 'the excluding phrase'. (I
propose to adopt the same course.) The third
requirement is that the contractor does not
sub-let the contract. The fourth requirement
is that the contractor does not employ
workmen."

10. As in Tomas v. Tomas the argument in this appeal relates chiefly to the second of the requirements, the excluding phrase.

11. I turn to the evidence. The learned arbitrator was not impressed by the appellant's evidence or that of his brother.

12. In 1974 the appellant commenced working with the respondent. He worked with his brother doing carpentry work on houses which the respondent was building, on the basis of a fixed price for each house. Money was received weekly from the respondent in the form of a cheque in payment of progress payments, the claim for them being made to the respondent's foreman. There was evidence, apparently accepted by the learned arbitrator, that a foreman employed by the respondent would come round to the jobs on which the appellant was working to see whether everything was going properly, to give directions concerning any changes that had to be made and to see whether the appellant and his brother had material to do the work they were required to. The material for the work carried out by the appellant was supplied by the respondent except for nails for the nail guns they used. The cost of the nails was reimbursed by the respondent on an invoice sent to the respondent with the weekly claim for progress payments.

13. I set out a passage from the learned arbitrator's reasons:-

"Cross-examined by Mr Sheils the applicant
agreed that there were times throughout 1974
and 1975 when he and his brother rejected
offers of work made by the respondent because
they were engaged on work for other
builders. On other occasions he agreed that
they would take up an offer from the
respondent but only on the basis that the
work would have to be deferred for a short
time while the Ropponens were finishing a job
for someone else. The applicant further
agreed that there were times when the
respondent had no work to offer and he and
his brother would seek work elsewhere.

It is common ground that the respondent did
not deduct any instalments of tax from moneys
paid to the applicant nor did the applicant
receive any pay for holidays or sick leave.
The applicant also agreed that in the two
years following the accident in question in
these proceedings he received accident pay
benefits from a company with which he had
effected insurance."

14. The learned arbitrator found that while the appellant was working for the respondent he and his brother were actively seeking other work by answering advertisements and by letting it be known around the trade and in the Finnish community that they were seeking work as carpenters. The learned arbitrator also accepted that the appellant and his brother had entered into a partnership before working for the respondent so that tax would not be deducted from moneys paid to them. They received a cheque for payment each week payable to both and the cheques made payable in that fashion continued to be paid long after the appellant had had his accident. Mr J.J. O'Brien of the respondent noted that after the accident the appellant's brother had others helping him but he did not concern himself with that as he considered it a matter for Mr Reino Ropponen. The learned arbitrator found Mr O'Brien's evidence to have largely confirmed that of Mr Reino Ropponen concerning the way in which work by the appellant and his brother was arranged. He found that in practice what was done was that Mr O'Brien would telephone offering the work which would sometimes be accepted and sometimes not.

15. The learned arbitrator took as his starting point on the questions whether the appellant was working under a contract of service or a contract for services remarks made by Bray CJ in R. v. Allen; ex parte Australian Mutual Provident Society (1977) 16 SASR 237 at p 248, when the learned Chief Justice considered the indicia which must be considered in deciding into which category a particular contract falls. The learned Chief Justice said:-

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

16. The learned arbitrator then turned to the evidence which had a bearing on the question of control. He said:-

"I find as a fact that throughout the period
the Ropponens did work for the respondent
they were working for others. I am satisfied
that they took the work offered by the
respondent or rejected it as they saw fit,
the decision in most cases being governed by
their work obligations to others. I am
satisfied that the course of dealing between
the parties was such that there was usually
no need or no room to do any bargaining about
price. As Reino Ropponen said the price was
set by the respondents and the Ropponens took
it or not as they pleased. I further find
that at the end of each week the Ropponen
brothers put a price on the work they had
done towards completion of the contract and
were given a progress payment against the
full contract price. There is no evidence
that there was ever any argument about the
settling of these claims for progress
payments.

As is typical in these cases there was an
amount of questioning of the applicant and
his brother about their time keeping when
working for the respondent no doubt directed
to showing that like the centurion of old the
applicant came when he was bade and departed
when ordered so to do. The evidence before
me did not go any distance towards
demonstrating control over the comings and
goings of the applicant. He kept the hours
that those in the building industry normally
kept and questions like 'where were you
yesterday?' seem to me to amount to scarcely
more than a solicitous enquiry. I am
satisfied that provided the work for the
respondent was done with reasonable dispatch
the applicant was never under any threat of
losing his work and he never felt under any
obligation to be always available during
working hours or to be accountable to the
respondent for his comings and goings and
absences.

However the point on which most time was
spent was that of control of the actual work
that was done on each building site by the
applicant. I am satisfied that very little,
if anything was said to the applicant himself
about the method of work, by reason, I
suppose, of the fact that Reino Ropponen
seemed to be the leading spirit in the
Ropponen team. But even accepting that
things said to Reino in the form of
directions were also said vicariously to the
applicant as his partner I do not see them as
showing any great deal of control over the
applicant in the performance of his work.
Naturally someone in the position of the
respondent may point out that a change has
been made to the plan of a house. This would
be a sensible precaution when the applicant
was accustomed to work on the same type of
house on a repetitive basis. . . . And of
course at the end of the day the respondent
had to be recognized as being master of the
works and to have things done as he wished
and further he was entitled to come around
and say that he found something
unsatisfactory and required it to be done
again. I think it may reasonably be said
that the degree of control exercised by the
respondent in this case was really colourless
in considering the question of contract of
service against one for services.

In fact it seems to me that some of the
evidence relied upon by the applicant to
support a finding of a contract for service
really supports the opposite conclusion. In
the employer-employee relationship if a
master comes around and requires a servant to
re-do a piece of work he would not expect, in
this day and age at least, that the workman
would do it in his own time and without
payment."

17. In my opinion the learned arbitrator was correct in holding, on the facts found by him (all of which were based on evidence he found credible) that the contract between the appellant and the respondent was one for services and not of service. The situation is much different from that considered in Jennings Industries Ltd. v. Negri (1982) 44 ACTR 9. There the respondent was effectively working solely for the appellant as a carpenter. Here the appellant was a member of a partnership and, with his brother, held himself out as available to work for anyone who might offer it to him on acceptable terms. The situation in this case is more nearly akin to that in Tomas v. Tomas (supra) as to which see also the report of the judgment of the Full Court of the Federal Court of Australia when the matter was considered on appeal. [1983] FCA 320; (1983) 74 F.L.R. 137.

18. The reasoning in the decision of the Full Court of the Federal Court of Australia in that case is also, in my opinion, decisive of whether the appellant comes within the excluding phrase. In my opinion he does not for the reasons which are set out in that case in the judgments of Woodward and Gallop JJ. I am satisfied on all the evidence that the appellant was doing work which was incidental to a trade which he regularly carried on in his own name as that phrase ought properly to be understood.

19. The appeal is therefore dismissed with costs.