Vince Petitto Pty Ltd v Rubino [1995] NSWCC 29; (1995) 12 NSWCCR 378 (12 October 1995)

[1995] NSWCC 29; (1995) 12 NSWCCR 378 (Matter No. 13325/95)

VINCE PETITTO PTY LTD v. RUBINO

Compensation Court of New South Wales: Armitage J

12 October 1995

Entitlement to and liability for compensation - Persons entitled to compensation - Who is a "worker"? - Persons deemed to be workers - Contractors - Contract to do work incidental to trade or business - Variation to contract - Additional work not incidental to trade or business - Contractor injured doing additional work - Whether deemed worker when injured - Workers Compensation Act 1987, Schedule 1, clause 2(1)

W.J. Roche, for the applicant

C.J. Wynard, for the respondent

Ex tempore

ARMITAGE J: This is an application for review brought pursuant to the Compensation Court Act 1984, section 36 in relation to a judgment and consequent award of Commissioner Grayson given on 27 July 1995. The applicant, by his application for determination filed on 21 July 1994, claims weekly payments of compensation and medical expenses on the basis of total incapacity said to result from an injury on 28 July 1993 at Gordon in the State of New South Wales when in the employ of the respondent as a labourer, according to his application for determination, he was removing a sign and fell approximately 7.5 metres resulting in various injuries, the nature of which it is unnecessary to detail.

p380

The reason that is so is that it is agreed for the purpose of the present application that, if the one point upon which the parties are in dispute in this review application is resolved in favour of the worker, the worker is entitled to an award as made by the Commissioner on the basis of total incapacity from 13 August 1994 to date and continuing and for medical expenses pursuant to section 60 as awarded by the Commissioner.

The one matter in dispute on this review, which is brought by the unsuccessful respondent before the Commissioner, Vince Petitto Pty Ltd, is whether or not the worker, the applicant before the Commissioner, was in fact, at the time of injury, a "worker" or "deemed worker" within the meaning of the Act. As will be seen from the Commissioner's judgment, he concluded that the applicant was a "deemed worker" within the meaning of Schedule 1, clause 2 to the Workers Compensation Act 1987, which is similar in its terms to the former section 6(3A) of the Workers Compensation Act 1926 so that decisions upon that section are relevant to the interpretation of Schedule 1, clause 2.

Proceedings commenced before the Commissioner on 21 March 1995 by way of the taking of part of the applicant worker's evidence in chief. It is sufficient to indicate that he gave evidence at page 1 of that transcript of the occurrence of the accident in question, which occurred at a building site at Gordon on 28 January 1993, when he said that he suffered a number of injuries which, it is conceded by the applicant for review today, entitle the worker to an award on the basis of total incapacity as granted by the Commissioner, provided that the issue of "worker" or "deemed worker" is determined in the worker's favour in the review application. It is unnecessary to examine those injuries for this reason, as I have said.

The Commissioner's decision was not that the applicant before him was, at the time of injury, a "worker" in the ordinary sense as defined by the Act, but rather that he was a "deemed worker" within Schedule 1, clause 2. The basis for that conclusion, briefly, was not that the applicant, at the time of injury, was not a person who performed work incidental to a trade or business regularly carried on by him in his own or any other name within the meaning of clause 2(1) of Schedule 1 to the Act, but rather that the work which the applicant was actually engaged in at the time of injury was not incidental to such trade or business.

Clause 2(1) of Schedule 1 to the Act, which is similar in its terms to the former section 6(3A) of the Workers Compensation Act 1926, reads:

"2. (1) Where a contract:

(a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor's own name, or under a business or firm name); or

(b) to perform any work as an outworker,

is made with the contractor, who neither sublets the contract nor employs workers, the contractor shall, for the purposes of this Act, be deemed to be a worker employed by the person who made the contract with the contractor."

It therefore becomes relevant to consider, as was submitted by Mr Roche, counsel for the applicant employer on the present application, not only what the terms of the contract, if any, between the applicant and the respondent before the Commissioner were, but also if the applicant before the Commissioner was carrying on a business regularly in his own or any other name, whether the work in which the applicant before the Commissioner was engaged at the time of injury was incidental either to that business or to the original contract in which he had engaged, if indeed there was any contract at all, with the respondent before the Commissioner.

The submission of Mr Roche, with which I agree, was that the original contract between the applicant before the Commissioner, whom I shall call Mr Rubino, and the respondent before the Commissioner, which I shall call Vince Petitto Pty Ltd, was made to perform work incidental to a business regularly carried on by Mr Rubino.

The business of Mr Rubino is described in the transcript of the first day of hearing before the Commissioner, 21 March 1995, as involving the digging of foundations and pouring of concrete. However, further light was cast on this from time to time in cross-examination. On the second day of hearing before the Commissioner, 16 June 1995, Mr Rubino conceded various forms of work that he carried on in a business as being a concreter, handyman, builder or formworker.

The status of admissions of this kind is discussed in Pitcher v. Langford (1991) 23 NSWLR 142 where, at 160, Handley JA observes that admissions of mixed fact and law are in the ordinary course admissible and entitled to considerable weight. This observation must be contrasted with what Gleeson CJ said in Connelly v. Wells (1994) 10 NSWCCR 396 at 399, where his Honour remarks:

"... Sometimes, when a dispute has arisen as to the legal nature of their relationship, the parties to the relationship will assert, in or out of court, their individual intentions or understandings on that question. For reasons that are explained in Australian Broadcasting Commission v. XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 650 and which I shall not repeat, such assertions are usually unhelpful and legally irrelevant. In the present case, for example, the respondent, a young man whose occupation was that of farm labourer and mechanic, was cross-examined at some length as to whether he believed he was an employee of the appellant. Since he had probably not made a close study of the relevant authorities, his personal opinions on that issue of law were unlikely to have been of assistance to the trial Judge."

These observations were picked up and approved by Kirby A-CJ in Dalgety Farmers Ltd v. Bruce (1995) 12 NSWCCR 36 at 49 where his Honour quoted part of the above passage and observed that the admissions of the applicant or anyone else for that matter in proceedings of this kind are not necessarily determinative of the questions involved. The same point is made by Handley JA in Mulhall v. Roberts, Court of Appeal, No. 40009/94, 19 July 1995, unreported at 11 and 12 of his Honour's judgment.

One must therefore approach the admissions said to be made by the applicant before the Commissioner, Mr Rubino, against interest as well as statements made by him in his own interest as to his perception of the nature of his relationship between himself and Vince Petitto Pty Ltd and other matters against the background of the whole of the evidence, rather than regarding them as determinative of the issues in this case.

Nevertheless, I am satisfied that before and at the time of his commencement of work for Vince Petitto Pty Ltd, Mr Rubino was carrying on a business in his own name, and that this business was that of concreter, and that from time to time in that business he performed the work of a builder or formworker or handyman.

The next question is the nature of the contract, if any, between Mr Rubino and Vince Petitto Pty Ltd. This is described in the evidence of Mr Rubino. On the first day of hearing before the Commissioner, 21 March 1995, it seems to emerge, firstly, that there was a previous relationship between Mr Petitto, the principal of Vince Petitto Pty Ltd and Mr Rubino.

It seems that, consequent on that previous relationship, Mr Rubino was approached by Mr Petitto and was required to work on a job at Gordon, wrongly described as being on "Prince's Highway", by which I gather is meant "Pacific Highway". The work is described by Mr Rubino as being "patching or repairing" to part of the building, to a patio outside and to a verandah inside. It involved laying concrete and "patch up" work and what the transcript described as "moving a few tables", which both counsel before me thought, although no formal amendment was made, may be a misprint for "tiles" and also doing some tiling.

Mr Rubino said that the tiling was not really his business but "the concrete it's all my business". He said that he was using concrete or cement for the patch up work. He said that he got the job as a result of a telephone call from Mr Petitto. He said he normally rendered accounts and it subsequently emerged in the evidence (and neither counsel disagreed with this interpretation) that the accounts or invoices were not rendered by Mr Rubino until the end of the job, because at the beginning of the job neither party knew how long it would take, and the price was determined on the basis, inter alia, of how long the job took.

Mr Rubino said that 20 per cent tax was deducted by Mr Petitto and that this was done by means of the "PPS system". In relation to that matter, there is a useful and authoritative discussion by Bainton A-JA, in Scerri v. Cahill, Court of Appeal, No. 40508/84, 1 August 1995, unreported, in which his Honour analyses what is called the "PPS system" and observes that this is not necessarily indicative of the carrying on of a business by the person who pays tax in this way. In this regard, also see Kirby P in Articulate Restorations Pty Ltd v. Crawford (1994) 10 NSWCCR 751 at 761.

Passing to the occurrence of the injuries, Mr Rubino said that a Mr Morris Crammery was the supervisor employed by Mr Petitto on the job in question. Mr Rubino said that he thought Mr Crammery instructed him on that job to remove the sign. It is this activity, of course, in which Mr Rubino was injured.

I observe in passing that Mr Crammery was not called by the respondent, Vince Petitto Pty Ltd, before the Commissioner to rebut what the applicant said in this regard. It seems reasonable to suppose that had Mr Crammery been in a position positively to assist the respondent's case in this respect, he would have been called by the respondent, and that its failure to call him therefore allows an inference that his evidence would have not so assisted the respondent's case: cf Jones v. Dunkel [1959] HCA 8; (1959) 101 CLR 298.

On the second day of hearing before the Commissioner, Mr Rubino said in chief that the removal of the sign was not part of his ordinary "job" in the concrete business he was in, but that he had done it before. He also said on the same page that all the jobs he had done for Mr Petitto had been in his capacity as a concreter, and said at that point that he had never been asked to remove a sign before. I infer that he meant by that observation he had not been asked by Mr Petitto to remove a sign before when doing work for him, that is Mr Petitto, although he might have done it for others. Again, Mr Petitto was not called to rebut this.

There was a gap in Mr Rubino's recollection as to the happening of the actual injury, as it is revealed in the transcript of 21 March 1995 that the last thing Mr Rubino remembered, before apparently falling off a wall, a distance of 7 metres, and suffering the subject injuries while removing the sign, was having a drink with a fellow worker, Mr Ingegnari, before commencing the task.

As I have said, the occurrence of the event occasioning Mr Rubino's injuries and the extent of the subject injuries is not disputed before me, so that gap in the recollection of Mr Rubino does not appear of any consequence for purposes of the present application before me.

Both counsel were in agreement in their submissions, as I apprehended them, that the questions for determination by me in determining the application of clause 2 of Schedule 1, were, firstly, the exact scope of the business regularly carried on by Mr Rubino in his own name - it being agreed that he carried on such a business at all material times - and, secondly, the exact scope of the contract between Mr Rubino and Mr Petitto's company Vince Petitto Pty Ltd, and, thirdly, whether or not the activity being carried on by Mr Rubino at the time of the subject injuries was in performance of the contract between himself and Vince Petitto Pty Ltd and incidental to the trade or business regularly carried on by Mr Petitto in his own name.

Mr Roche in his submissions draws attention to the admissions which I have already detailed above by Mr Petitto to the effect that his business was not only that of a concreter but also that of a builder and formworker and handyman. He says that patently the work of removing the sign was incidental to the business of a handyman, if not incidental to the other parts of the business carried on by Mr Rubino.

Mr Wynyard, counsel for Mr Rubino today, submits that at no stage in cross-examination was Mr Rubino taxed with any questions as to what he meant by the word "handyman" and that appears to be so. Mr Wynyard also submits that at no stage during cross-examination was Mr Rubino asked whether he saw the sign removal work in which he was injured as being part of his business as a "handyman" or as being within the scope of his original contract with Vince Petitto Pty Ltd and that appears also to be so. Certainly Mr Roche does not submit otherwise.

Mr Wynyard also draws attention to the evidence of Mr Rubino that he was not going to do any concreting, tiling or patching in the area where the sign was to be removed, and that he was only going to take the sign down.

Mr Wynyard also draws attention to the evidence of Mr Rubino in cross-examination in which Mr Rubino said that he did work as a handyman which was independent of his concreting work but that this was "always into the building like - like clean up or level backyard when it's finish" and that this might involve the following:

"When the house is finish, you go in there lay footpath and then say do the backyard, clean it, level it all up and - that's handyman."

Mr Rubino was then asked whether he ever did any handyman work which was not connected to his business of concreting and he said that he did not. Much depends on inference from the totality of the evidence of Mr Rubino as to what "handyman" work meant in the context of his business.

There are indications to suggest that this meant labouring work or physical work generally and others to suggest that this meant physical work, but only work connected to concreting work, albeit in the loosest fashion. I have, I hope, fairly summarised the evidence as to these indications, but balancing them as best I can and approaching admissions made by Mr Rubino against his interest as well as statements made by him in his own interest with caution in the way required by the authorities, I am of the view that the evidence on balance disposes to the view that the "handyman" work in which Mr Rubino generally engaged was incidental to his main business which was that of concreting, of the type required to clean up a site after a concreting job was completed.

Passing to the second question, which is the scope of Mr Rubino's contract with Vince Petitto Pty Ltd, I have already quoted Mr Rubino's evidence about it, which was the only evidence available - there being no evidence called from Mr Petitto, in particular - and I have summarised that evidence above. I conclude from that evidence that the original engagement of Mr Rubino by Vince Petitto Pty Ltd was for valuable consideration, as is not contested by either party before me today, and amounted to a contract to perform concreting work and patch up work and tiling work to parts of the building at the site in question. It does not therefore seem to me on the probabilities that this contract envisaged the performance of general labouring work which was not incidental to the activities of concreting, and/or tiling, and/or patching, and/or repairing the building and its surrounds.

I have already observed, and I observe again, that it was open to Vince Petitto Pty Ltd, the respondent before the Commissioner, to call evidence from Mr Petitto, in whose knowledge the matter undoubtedly lay, for it was he who made the telephone call to Mr Rubino, as to what was said in the telephone conversation between himself and Mr Rubino, and what was envisaged by him as being the nature of the contract, in so far as such evidence could be given admissibly, at the time it was entered, and no such evidence was called.

The same inference pursuant to Jones v. Dunkel (supra) can be made that the evidence of Mr Petitto would not have been of positive assistance to the respondent's case before the Commissioner in this respect, and the evidence of Mr Rubino as to the nature of the contract can therefore more readily be accepted, and I do accept it.

I observe in passing that it was conceded at the commencement of proceedings today by both parties that the credit of the applicant before the Commissioner, Mr Rubino, was not in question and that I was therefore not impeded in my consideration of the issue in this case by the fact that I had not seen or heard Mr Rubino, and therefore the principles in Abalos v. Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 as considered in Australian Gas Light Co v. Samuels (1993) 9 NSWCCR 616 did not impede my consideration of the issues in this application.

For the reasons I have given, I do not consider on the probabilities that the removal of the sign, in circumstances where no repair work to a building, no concreting, no patching and no tiling were to be performed in the immediate area where the sign stood, was work incidental to the terms of the original contract between Mr Rubino and Vince Petitto Pty Ltd, as I have set out above.

The third question is whether the work removing the sign was incidental to a trade or business regularly carried on by Mr Rubino, for, if it was, the inference is available that, notwithstanding that the original contract might not have envisaged the performance of such work, Mr Petitto nevertheless on behalf of his company engaged Mr Rubino at some stage of the performance of Mr Rubino's contract to perform such work and that, it being within the scope of Mr Rubino's trade or business, such work then fell within the bracketed exception in clause 2(1)(a) of Schedule 1 to the Act.

I am, however, satisfied on the probabilities from the evidence of Mr Rubino, which I have summarised above, that his trade or business which he regularly carried on involved only "handyman" work which was incidental to his main trade as a contractor or builder or formworker, and not "handyman" work that was not so incidental.

I am fortified in this conclusion by the fact that at no stage in cross-examination by counsel then appearing for the respondent before the Commissioner (who does not appear on the review application by the employer today), was Mr Rubino asked what he meant by "handyman" work when he admitted that such work was part of his trade or business, nor was it put to him in cross-examination that the sign removal work upon which he was injured was part of the "handyman" work which was part of his trade or business.

Mr Rubino simply was never given the opportunity to rebut the suggestion put in submissions by the applicant for review today that the sign removal work was part of such "handyman" work. Arguably the rule in Browne v. Dunn (1893) 6 R 67 was infringed. Without coming to a definite conclusion about that, it is certainly the case that the only stage at which Mr Rubino was asked what he meant by "handyman" work as part of his trade or business was in re-examination, when his evidence was, as I have summarised above, to the effect that such work was connected with his business as a concreter, and involved cleaning up or levelling a backyard when the job was finished, and he then gave, as an example of a job which was finished, the laying of a footpath, which activity would obviously require some degree of cleaning up once the job was concluded. It seems to me that this sort of "handyman" work being spoken of by Mr Rubino at that point is the sort of cleaning up work that would be required at the conclusion of concreting, and/or building, and/or formwork-type work, and which therefore would be inevitable and incidental to the performance of such work.

It seems to me in these circumstances that the removal of a sign was an activity quite other than work incidental to concreting and/or building and/or formworking and therefore work not incidental to the business regularly carried on by Mr Rubino in his own name.

I instruct myself as to the proper approach to be taken to paragraph (a) of clause 2(1) of Schedule 1 to the Act by reference to what was said by Dixon J, as he then was, in Humberstone v. Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389 at 401-402. I derive particular assistance from what his Honour said at 402 in relation to the policy of the provision which was as follows:

"But a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so."

The category in which the present case appears to me to fall is not that where the person concerned does not have a general business or is not a general practitioner of his trade, but rather where the person concerned has a general business or trade, as is the case to my mind with Mr Rubino, but where the particular work done at the time of injury was outside the course of the general business or trade of the contractor, in this case Mr Rubino.

This case was further considered in Turner v. Stewardson, Stubbs & Collette [1961] 35 WCR (NSW) 169 at 176 by the Full Court of the Supreme Court of New South Wales where their Honours (Evatt CJ, Herron and Collins JJ) observed that the decision in Humberstone was upon a similar provision in the Victoria legislation to section 6(3A) of the 1926 Act which was being considered in Turner (supra) and, at 177 in Turner, their Honours make the same distinction between people who do not carry on a trade or business at all and people who do carry on a trade or business, where the work is not incidental to such a trade or business.

As to the question of what is "incidental", I was referred by Mr Roche to National Insurance Co of New Zealand Ltd v. Watts [1971] 45 WCR (NSW) 331 where what was being considered was whether the demolition of a building to obtain scrap metal was incidental to the business of a scrap metal dealer and where the Court of Appeal (Jacobs, Asprey and Holmes JJA) considered facts that, in my view, demonstrate a far closer relationship between the work said to be incidental to the business and the nature of the business than is the case in the present fact situation. Obviously the demolition of a building to obtain scrap metal is work connected with scrap metal and, with great respect to their Honours, it is obviously correct to suppose that the obtaining of scrap metal, whether by the demolition of a building or by purchasing it from other persons or in some other way, is incidental to the business of a person who sells scrap metal.

It is not necessarily incidental to the business of a person who conducts a business as a concreter or formworker or builder or handyman (such handyman work being, as I have determined, incidental to the previous three categories of business) to perform general labouring work.

That Mr Rubino had previously performed general labouring work for Mr Petitto as the evidence discloses is nothing in point. It is quite possible for a person to perform work pursuant to a contract of one kind for a person, and then later to perform different work pursuant to a contract of another kind in the way that was discussed in such authorities as Davis v. Pioneer Concrete Pty Ltd [1976] 1 NSWLR 562. For that matter it is quite possible, for all I know, that Mr Rubino performed labouring work at other times for Mr Petitto or his company pursuant to a contract of service. These matters are not determinative as to the nature of the contract entered into on this occasion between the parties, nor of the work performed under it.

The matter is finally balanced, but it seems to me that the sign removal work in which Mr Rubino was injured, for the reasons I have already set out, and approaching on the matter on the basis prescribed by Dixon J in Humberstone (supra), was not incidental to the performance of the work required of Mr Rubino by the original contract between himself and Vince Petitto Pty Ltd, nor incidental to the trade or business regularly carried on by Mr Rubino in his own name, so that Mr Rubino was a "deemed worker" within Schedule 1, clause 2(1) at the time of injury.

In those circumstances, as the decision of the Commissioner was to the same effect, I simply confirm it. I therefore confirm the award and orders of the Commissioner, dismiss the application for review and order the appellant employer to pay the respondent worker's costs of this review. I cannot depart from this review application without acknowledging the considerable assistance of both counsel in the case.

I am asked at this point by Mr Roche to determine under which contract, if any, Mr Rubino was working at the time he was injured. It is, I would have thought, already implicit in what I have said that I consider that the correct analysis of what occurred is, firstly, that Mr Rubino was engaged by Mr Petitto acting on behalf of his company, Vince Petitto Pty Ltd, to perform work involving concreting, and/or repairing, and/or patching, and/or tiling of a building at the site at Pacific Highway, Gordon where the injuries occurred.

Secondly, it is my view that at the stage where Mr Rubino was required by Mr Petitto's supervisor, Mr Crammery to remove the sign, a variation of the original contract between Mr Rubino and Vince Petitto Pty Ltd took place, negotiated by Mr Crammery, who had, as supervisor, actual or ostensible authority from the company to do so, with Mr Rubino, whereby Mr Rubino agreed to perform extra and different work pursuant to the contract.

Another way of viewing this situation, which has the same result, is to regard the conversation between Mr Rubino and Mr Crammery as involving a novation of the original contract, such that a new and different contract was formed, but on the whole I think the correct analysis is rather that an additional term of the original contract was at that point agreed upon, in a form of a variation negotiated between Mr Crammery and Mr Rubino, whereby Mr Rubino agreed to perform the sign removal work. As I have said, I do not consider that the original contract envisaged the performance of the sign removal work, and that it was not therefore an original term of such contract that Mr Rubino would perform such work.

Conceptually therefore, the situation is the same as it would have been had Mr Rubino been telephoned by Mr Petitto or Mr Crammery at the time the sign removal work was to begin, and had been asked to perform the sign removal work, he, Mr Rubino, having performed no other sign removal work for Mr Petitto or his company before that time (as was indeed Mr Rubino's evidence). The question would have been the same, that is to say, whether the contract to perform the sign removal work was incidental to the trade or business regularly carried on by Mr Rubino, and the answer would have been the same as in the present fact situation, which is that such work was not so incidental.

It is for those reasons that I have concluded that the work of sign removal in which the applicant was injured was incidental neither to the original contract performed between himself and Mr Petitto on behalf of his company, nor to the trade or business regularly carried on by Mr Rubino, but was performed as a result of an additional term to the original contract agreed upon between Mr Rubino and Mr Petitto's supervisor, Mr Crammery, at the time the latter made the request of Mr Rubino to remove the sign. It is for these reasons that I have dismissed the application for review and ordered the applicant employer to pay the respondent worker's costs.

Application dismissed

Solicitors for the applicant: Gadens Ridgeway

Solicitors for the respondent: PW Turk & Associates