Programmed Maintenance Services P/L v Savage [2003] NSWCA 20 (24 February 2003)

Last Updated: 26 February 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: Programmed Maintenance Services P/L v Savage [2003] NSWCA 20

FILE NUMBER(S):

41075 of 2001

HEARING DATE(S): 04/02/03

JUDGMENT DATE: 24/02/2003

PARTIES:

Programmed Maintenance Services Pty Limited

v

Graham Savage

JUDGMENT OF: Meagher JA Beazley JA Ipp JA

LOWER COURT JURISDICTION: Compensation Court

LOWER COURT FILE NUMBER(S): CC 48175 of 2000

LOWER COURT JUDICIAL OFFICER: Walker J

COUNSEL:

A: J D Hislop QC & M Best

R: P Webb QC & R Scruby

SOLICITORS:

A: Sparke Helmore

R: David Landa Stewart

CATCHWORDS:

Employee - independent contractor - Compensation Court Rules p 13 - Notice of Submission to an Award - non-acceptance - continuation of trial.

LEGISLATION CITED:

s 37 Workers Compensation Act 1987

DECISION:

Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 41075 of 2001

MEAGHER JA

BEAZLEY JA

IPP JA

Monday, 24 February 2003

PROGRAMMED MAINTENANCE SERVICES PTY LIMITED v GRAHAM SAVAGE

FACTS

The appellant was a painting maintenance company, which, in organising its business, kept a core staff of permanent painters who were paid wages, as well as a pool of approved painters who worked on specific projects when engaged to do so by the appellant. The respondent, an experienced painter, was not a member of the appellant's core staff, but was engaged by the appellant from time to time to work on specific projects.

In 1997, the respondent was injured while carrying out his duties as a painter. In proceedings commenced in the Compensation Court (which were begun simultaneously with proceedings in the District Court alleging negligence on the part of the appellant), the respondent claimed compensation from the appellant. In an amended application he also sought a declaration of liability that at the time of his injury he was a `worker' (within the meaning of the Workers Compensation Act 1987).

On 13 June 2001 the appellant filed a `Notice of Submission to an Award'. It was not accepted by the respondent, whereupon the trial judge (pursuant to Compensation Court Rules p 13 r 8) continued to hear the case, eventually making an award of compensation to the respondent. It is from this award that the appellant has appealed.

HELD per Meagher JA (Ipp JA agreeing)

i. Whilst the judgment at first instance does not disclose the trial judge's reasons for continuing to hear the matter after the `Notice of Submission to an Award' was declined by the respondent, there were several reasons open to the judge to do so. For example, the `Notice' was expressly limited to an award "under s.40", and this was never amended by the appellant. An award under that section would have been substantially less valuable to the respondent than an award under s.37; hence the trial judge should not have compelled the respondent to accept it.

ii. The appellant's ground of appeal concerning the trial judge's ruling on the `Notice of Submission to an Award' must fail, because the trial judge's discretion to continue to hear the matter was a discretion governed and activated by the rules in p 13.

iii. The second ground of appeal, viz., that the trial judge erred in law in finding that the respondent was employed by the appellant, must fail because it involves an attempt to appeal against the judge's reasons, not his orders.

iv. There is no scope, in the third ground of appeal, for the appellant to complain about any costs orders made by the trial judge, as no submissions on that subject were made either before or after the orders themselves.

HELD per Ipp JA (Beazley JA agreeing)

i. The trial judge exercised his discretion to continue to hear the matter so that he would be able to deal with the declaration that the respondent sought (as well as the monetary amounts that had been claimed). Proceeding from the assumption that the trial judge had jurisdiction to make the order sought, the trial judge was entitled to exercise his discretion to order that the trial proceed.

ORDERS

That the appeal be dismissed with costs.

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 41075 of 2001

MEAGHER JA

BEAZLEY JA

IPP JA

Monday, 24 February 2003

PROGRAMMED MAINTENANCE SERVICES PTY LIMITED v GRAHAM SAVAGE

Judgment

1 MEAGHER JA: This is an appeal from some decisions (to choose neutral language) of Judge Walker QC in the Compensation Court by an "employee" (using that term, for the present, in its extended sense). It has many curiosities. Mr Savage, the respondent, sued the appellant because he had suffered on 16/3/1997 an injury to his left leg while "carrying out his duties as a painter". By his original claim he asked for, inter alia, "$1202.07 gross per week from 26/07/2000 and continuing under sections 36, 37, 38 and 40". Section 37 of the Workers Compensation Act 1987 deals with total incapacity, section 40 with partial incapacity. In an amended application he also sought "[a] declaration of liability that the applicant was a worker within the meaning of the Act on 16 March 1997."

2 Two features of the case which are common ground are (1) that the pecuniary amount which the Judge had jurisdiction to order was not $1202.07, but various sums ranging from $400.20 to $421.00, and (2) that there was no difference between the amounts payable under s.37 and s.40. This was agreed by both parties.

3 It was also agreed that, simultaneously with his Compensation litigation, Mr Savage was suing the appellant in the District Court in a common law action of negligence. All too clearly, this fact was known to Judge Walker.

4 Mr Savage was an experienced painter. The appellant was a painting maintenance company servicing large industrial and institutional clients. In organising its business it kept a core staff of permanent painters who were paid wages, as well as a pool of approved and company trained painters who worked on specific projects when they were needed. Mr Savage was not a member of this core staff. Rather, he would enter into "a fresh written contract in respect of each project" that he would work on for the appellant. It was on such a project that he was working on 16 March 1997 when he sustained his injury.

5 The Compensation Court case had advanced but a short distance when, on 13 June 2001, the appellant filed a document headed "Notice of Submission to an Award", the essential part of which is contained in the following words:

"The Respondent admits it is liable to pay to the Applicant compensation as follows: -

(i) Weekly payments pursuant to s.40 at the rate of $400.20 per week from 26 July 2000 to 30 September 2000; at the rate of $404.50 from 1 October 2000 to 31 March 2001; and at the rate of $413.80 per week from 1 April 2001 to date and continuing as adjusted; and..."

6 One will notice that the submitted payments are said to be pursuant to s.40, i.e. made on the basis of a partial incapacity.

7 For a judge to have jurisdiction to make an award at all, he has to be satisfied that the applicant worker is either a "worker" as defined in the relevant legislation, or a "deemed worker". By the "submission" the appellant obviously conceded that Mr Savage fitted one or the other of the descriptions, but a mere perusal of the document does not disclose which is conceded. If he was within one of these descriptions he was entitled to exactly the same monetary sums as he would be entitled to if he came within the other description.

8 It should also be noted, as regards the monetary sums nominated in the "submission": (1) they were the same as the amounts claimed by Mr Savage, once one estimates the claim for $1202.07, and (2) they were the same as those ultimately awarded by his Honour.

9 In these circumstances, it may be surprising that Mr Savage did not accept the offer contained in the "submission", but accept it he did not. Neither in the proceedings before his Honour, nor in this Court, did he, in my view, demonstrate overtly a sensible reason why he refused the appellant's offer; but reading between the lines it seems clear that he wished the case to proceed so as to extract from his Honour the declaration sought in his amended application, to which I have already referred, armed with which he would have a weapon of res judicata to brandish in the District Court. Further, in the compilation of damages in the District Court action an award of compensation for partial disability would be less advantageous than an award of total disability, although little emphasis was placed on this consideration.

10 His Honour acceded to Mr Savage's request that the case continue. It is difficult to understand why his Honour took this course. Nor does either a transcript of the argument or his Honour's judgment on the point disclose the reason. Moreover, much of the argument seems to stray so far from rational legal thought that one is almost non-plussed. For example, there is a statement by his Honour (twice repeated): "There is, of course, a very significant distinction between a declaration by a judge and a declaratory order", which students of equity will find teasing. Whilst his Honour did not express any convincing reason to continue the litigation, there were several available. For example, the submission was expressly limited to an award "under s.40", and this was never amended. An award under that section would be substantially less valuable to Mr Savage than an award under s.37, and his Honour should not have compelled Mr Savage to accept it.

11 The orders (called "rulings") made by his Honour on this interlocutory application are as follows:

1. Mr Best's application for me to make an award pursuant to Compensation Court Rule 26.1 is dismissed.

2. The respondent's employer to pay the applicant's costs of the application on a full hearing basis.

3. The respondent's document submitting to an award be sealed in an envelope in accordance with Compensation Court r 13. 8.5 [sic].

12 The reference to p 13 r 8 is a reference to the only one of the Rules made under the Act which deals with the process of submitting to an Award. It states that if a party files a notice stating that he is willing to submit to an award of compensation in "the terms set out in the Notice", and that offer is not accepted by the other side, "the proceedings shall be continued as though the original notice had not been filed".

13 His Honour then continued to hear the case as if no submission had been made, and in the process indulged in a lengthy examination of the cases dealing with the distinction between an employee and an independent contractor. Eventually, the orders which his Honour said he would make were the following:

1. The respondent pay to the worker weekly benefits pursuant to s 37 from 20 July 2000 and continuing at the maximum statutory rate payable from time to time for a worker with two dependent children.

2. The respondent pay the applicants [sic] interest on the arrears in weekly benefits at the rate of 3 per cent per annum.

3. The respondent pay the applicants [sic] medical expenses pursuant to s 60.

4. The respondent pay the applicants [sic] costs.

However the formal orders made by the Court were, relevantly, as follows:

1. That the respondent pay the applicant, on the basis of total incapacity, weekly compensation at the rate of -

(1) $400.20 from 20th July 2000 to 30th September 2000

(2) $404.50 from 1st October 2000 to 31st March 2001.

(3) $413.80 from 1st April 2001 to 30th September 2001.

(4) $421 as adjusted from 1st October 2001, such weekly payment to continue in accordance with the provisions of the Act.

2. That the respondent pay the applicant interest on arrears of the abovementioned weekly compensation at the rate of 3% p.a.

3. That the respondent pay the applicant's section 60 expenses.

4. That the respondent pay the applicant's costs forthwith after they have been agreed or assessed.

The only difference of any relevance between the two sets of orders (i.e. those proposed and those actually made) is that in the former the word "worker" is used, in the latter the word "applicant".

14 In the course of his Honour's reasons, his Honour decided that Mr Savage was an employee not an independent contractor. This is made quite clear in his Honour's reasons, although it is not reflected in the Court's order.

15 The appellant appeals on three matters. The first concerns his Honour's interlocutory judgment (or "ruling") on the submission. In my view, this must fail. Faced with a party who refused to accept the submission, governed by rules which seemed to indicate that the matter should proceed, restricted to a submission which required that an award be made "under s.40" and imbued with a desire to explore the juridical basis on which his order should rest, who can say that his Honour's discretion in dealing with the submission went astray?

16 There are two other aspects of his Honour's interlocutory orders which require mention. The first is that if Mr Savage's motive were, in whole or in part, to obtain at the end of the case a declaration that he was an employee (or "worker"), it failed, because no such declaration was ever made, (either by way of a judicial declaration or by way of a declaratory order). The second is that the submission made by learned counsel for the appellant that the interlocutory orders should be set aside and the orders set out in the submission itself made in lieu thereof cannot possibly succeed, because the orders made by his Honour are precisely the same as those contained in the submission (except for the reference to s.40).

17 There was a second ground of appeal, viz., that "the trial judge erred in law in finding that the respondent was employed by the appellant". This ground must fail because it involves an attempt to appeal against the judge's reasons, not his orders.

18 Nor, in my view, is there any scope in the third ground of appeal for the appellant to complain about any costs orders, since no submissions on that subject were made either before or after the orders themselves.

19 The appeal should be dismissed with costs.

20 BEAZLEY JA: I agree with Ipp JA.

21 IPP JA: I agree with Meagher JA that the appeal should be dismissed with costs.

22 In his amended application for determination, Mr Savage claimed compensation of $1,202.07 per week from 26 July 2000 "and continuing". He also claimed a declaration that he was a worker within the meaning of the Workers Compensation Act 1987.

23 By the "Notice of Submission to an Award" filed on 13 June 2001, the appellant, in effect, admitted that it was liable to pay to Mr Savage the maximum amount of compensation payable to him under the Act. Despite this notice, Mr Savage submitted to the trial judge, Judge Walker QC, that the trial should proceed. He relied partly on the need to resolve the remaining question, set up by his claim for a declaration, namely, whether he was a worker within the meaning of the Act.

24 The appellant submitted to Judge Walker that there was no power vested in the Workers Compensation Court to make a declaration that an applicant was a worker. His Honour held however that the Court had the requisite jurisdiction. There is no appeal from this finding.

25 I make no comment whatever upon his Honour's views on the jurisdictional question, but note that he exercised his discretion to order the trial to proceed so that he would be able to deal with the declaration that Mr Savage sought (as well as the monetary amounts that had been claimed). On the assumption that Judge Walker had jurisdiction to make a declaratory order, I think that he was entitled, on this ground alone, to exercise his discretion to order the trial to proceed on the basis that Mr Savage was entitled to have this issue resolved. Curiously, the orders made by the judge make no mention of a declaratory order, although there is a finding in the body of his reasons that Mr Savage was a worker. It may be that it was through oversight that no declaratory order was made. Whatever the position may be in this regard, I do not think that it detracts from the validity of the decision made.

26 Furthermore, as Meagher JA points out, an award under s 40 "would be substantially less valuable to Mr Savage than an award under s 37 and his Honour should not have compelled Mr Savage to accept [the "Notice of Submission to an Award"].

27 As regards costs, I agree with the remarks of Meagher JA in paragraph 17 above.

28 Accordingly I agree with the orders proposed by Meagher JA.

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LAST UPDATED: 25/02/2003