FILE NO/S: 1685 of 2000, 3069 of 2000, 3639 of 2000, 3964 of 2000

HEARING DATES: 26 March 2001, 27 March 2001, 28 March 2001

JUDGMENT OF: His Honour Deputy President Judge JP McCusker

Judicial Determination - Whether applicant is a "worker" for the purposes of the Workers Rehabilitation and Compensation Act 1986 - If found that applicant is a "worker" for the purposes of the Act, then who was his employer at the relevant time - Issue of control over applicant - Contract between 1st and 2nd respondents - Cases discussed - Found applicant employed under contract of services by the 2nd respondent - Workers Rehabilitation and Compensation Act 1986.

Hollis v Vabu Pty Ltd (2001) HCA 44

Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 at 429

Reid v. Zoanetti (1943) SASR 92

Babsari Pty Ltd v Wong [1999] QSC 326; (2000) 2 QdR 576

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

R v Allan; Ex Parte Australian Mutual Provident Society (1977) 16 SASR 237 at 247

Price v Grant Industries Pty Ltd (1978) 21 ALR 388 at 393

Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389

MacFarlane v Glasgow City Council [2000] UKEAT 1277_99_1705; (2001) IRLR 7

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385

Lenzoot Haulage Pty Ltd v Sinclair (1986) 42 SASR 506 at 512

Massey v Crown Life Insurance Co [1977] EWCA Civ 12; (1978) 1 WLR 676

Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd [1931] HCA 53; (1931) 46 CLR 41

Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at 217

JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66

1 The parties seek judicial determination of the following issues, (AB 5):-

"1. Whether the applicant is a `worker' for the purposes of the Workers Rehabilitation and Compensation Act 1986 (`the Act').

2. If the applicant is a `worker' for the purposes of the Act was his employer at the relevant date, ie. 14 January 2000, Port Augusta Fire Equipment Services or Fire Equipment Services of South Australia?"

2 The applicant, now aged 38, was employed surveying and maintaining fire equipment when he was approached by Darren McNamee in March 1999, (AB 45). McNamee asked him to work, `with Fire Equipment Services'. A meeting was arranged with Tony Park and Kelvin Vogelsang of Fire Equipment Services South Australia, (hereafter referred to as FESSA). This was the highlight of the engagement process. The worker gives the following evidence (AB 45):-

"... Darren McNamee asked me on several occasions to come and work with Fire Equipment Services. I considered his offer and took time to travel with him to Adelaide for an interview with Fire Equipment Services. I think we got to Adelaide relatively early in the morning but I was kept at the office throughout the day until 5.00 pm when I was actually seen. I had a ten minute conversation and they left it in the hands of Darren McNamee because he was their Regional Coordinator for the upper north area. Any dealings to be done were done through Darren. So we left Adelaide and I discussed his proposal and offer to come and work for him on the return trip. After one or two days I accepted Darren McNamee's proposal and I resigned from my position with Spencer Gulf Fire Services."

3 In oral evidence the worker enlarged on the details of that meeting. He described the nature of the work he had been doing with Spencer Gulf Fire Services and how he came to meet McNamee in early 1999 (14 - 15). McNamee told him of a need for someone to service the Whyalla and surrounding areas because the person doing the work at the time, a Mr Robert Bohrnsen, was leaving (15). Following a series of approaches, the worker finally agreed to go along with McNamee and leave his then employee. It was at this stage he was taken by McNamee to Adelaide to meet Park and Vogelsang of FESSA (16).

4 The meeting was held at FESSA's premises at Deacon Avenue, Richmond. Cooke understood they were to meet the, "chiefs of Fire Equipment Services in Adelaide" (16). In fact, Park was the Chief Executive Officer of FESSA (216) and Vogelsang, the Service Manager (215). I find the purpose of this meeting was to finalise the worker's engagement. The contract was made at that time with agreement that minor details would be worked out with McNamee after.

5 The worker's evidence was that after a long wait the meeting was relatively short. He described what occurred (17):-

"A. Your Honour, what was stated to me from Tony Park: due to previous problems that they had experienced with Robert Bohrnsen of Whyalla that they no longer were going to go down the path of handing out individual contracts. They were going to stop that practice and had appointed Darren McNamee as being the regional coordinator or spokesperson for them, and if I accepted their offer of employment to join Fire Equipment Services South Australia I would have to then talk it out or finetune it with Darren. They put it in the hands of Darren to handle me coming on board."

6 Mr Cooke repeated this description under cross-examination, (65):-

"Q. There you mentioned that you were `approached by Darren McNamee, who wanted me to come on board and work with Fire Equipment Services.' Now, were they the words that he actually used or was there some other way that he communicated to you about coming onto this work.

A. No. From my recollections, that's the way Darren approached me - was to come on board and work for Fire Equipment Services.

Q. So when Mr McNamee said that he wanted you to come on board, what meaning did you give that.

A. The meaning is like to commence employment with Fire Equipment Services."

7 He returned to a description of this matter, (70 - 72):-

"Q. But FESSA never gave you instructions on how to perform the services or what order to carry out the jobs, did it.

A. No, because, again, Darren was placed as the regional coordinator so Adelaide had already informed me that they didn't want a saturation of phone calls; only wanted to deal with one person and that person they appointed in that role was Darren McNamee.

Q. This was canvassed with you at the meeting you had initially with Kelvin Vogelsang and Mr Park in Adelaide when you were first coming into this work.

Q. In your evidence you said that you were told that they no longer wanted to hand out individual contracts and would instead appoint a regional coordinator who would handle - now, correct me if I'm wrong - all the work requirements. Is that what you said earlier today.

A. Yes. I said that they delegated Darren as being their regional coordinator. Because of the previous person that they had issued out an individual contract to wasn't doing their - following the correct policies, that they stopped all contract work and that any dealings that had to be done would done through Darren McNamee.

A. Now, how I interpreted that was that I was not being employed as a contractor but I was just being employed as an employee but still going under the direction of Darren as a supervisor.

Q. That was - what you're saying - your interpretation but you weren't ever told that you were being employed by FESSA, were you.

A. I believe I was, yes. That was the whole nature of me going down to Adelaide, according to Darren.

Q. That you would be contracted by Mr McNamee rather than have any direct contractual relationship with FESSA.

A. Because I still had dealings with Adelaide. I still had dealings and directions from Adelaide as much as what I was receiving from Darren. Darren, obviously, was giving me the larger direction. If you're saying that - solely contracted to Darren or whatever, then I would have no involvement in Adelaide whatsoever.

Q. It's true that you received no letter or no written document from FESSA to confirm that FESSA had appointed you as their employee.

Q. So you've had nothing in writing from FESSA to ---

8 The worker was challenged as to his description of employer in the initial claim (AB 7, 11), though claims were subsequently made against FESSA (AB 27). I understand from his answer (74) he did not distinguish the two as the respondent would have it, but rather saw the true situation as being a single organisation with McNamee as the supervisor of the Northern Region. While it is important not to attribute much from the experience of another person at another time with the events as described by the worker, his experience conforms with the understanding of the situation described by Mr Iles in his evidence (90, 91). I formed a good impression of the accuracy of the worker and prefer his version of events where in conflict with other testimony.

9 McNamee described himself in evidence as the person "in charge of the northern region" (92). He described taking the worker to Adelaide and having a brief discussion with the Chief Executive Officer of FESSA (93). It appears following that meeting, FESSA agreed to the worker's engagement (93). Under cross-examination by Mr Lines, counsel for FESSA, McNamee advised as follows (99-100):-

"Q. At page 75, the second to last answer, Mr Vogelsang mentions the reason for you and Mr Cooke coming to Adelaide for that visit, namely to put a face to the name and show him, that is Russell Cooke, backup that would be behind him. Do you agree that was the purpose of the meeting.

A. The purpose of the meeting was for them to meet Russell and agree upon his commencement of work because they made the final decision that he was going to be representing their company.

Q. You will see on the bottom of page 76 that Mr Vogelsang says that FESSA didn't have the final say on the hiring of Russell Cooke and it said that if you had really wanted Russell Cooke to be hired by you that that was up to you. Do you agree with that.

A. That's maybe what he said but it was not the understanding that I had.

Q. Just turn to page 79, once again the same record of interview. At question 52 Mr Vogelsang is asked about whether FESSA had the right to fire him - I think referring to Mr Cooke - and Mr Vogelsang's answer is, `No, not at all.' Do you agree with that.

A. If Mr Cooke's employment was to be terminated it would have been under their recommendation.

Q. Under their recommendation but you would be the one who would ---

A. As the regional coordinator I would have been given that task, yes, by them."

10 McNamee insisted that he did not employ Cooke (96) and further that Cooke was not one of his staff (98). McNamee described himself as a proprietor, not an employee (97). Moreover in his statement (AB 59), he said he regarded Cooke as subcontracting his labour (98). Caution should be taken regarding these statements, vulnerable as they are, to parties who may not have addressed the issue at the time, wishing for a certain outcome on the arrangement ex post facto. Careful attention should be paid to contemporaneous evidence not so capable of reinterpretation over time. I will return to this issue when discussing the authorities.

11 McNamee agreed Bohrnsen's performance was a topic of discussion at the Adelaide meeting (103). As well as making the final decision whether the worker was or was not to be engaged, FESSA wanted to ensure the standards of work were maintained at a suitable level in the Whyalla area. It was in that context that Bohrnsen had been discussed. However it is noted that the Bohrnsen arrangement was different from that entered with the worker (105). McNamee seems to have acknowledged that an earlier requirement of FESSA that the worker be trained in Adelaide was waived on his advice given the worker's experience with Spencer Gulf Fire Services. That issue though was for FESSA to decide, not McNamee (123).

12 A significant matter, because it involves an inference, is the evidence of Cooke that McNamee told him he was covered for workers compensation by FESSA (18). McNamee confirmed this in evidence (94), though putting it in terms of "my assumption that FESSA were looking after that". I say an inference because it involves a circuitous deduction. I will return to that in discussion of the authorities. I prefer the evidence of McNamee to the testimony of the second respondent's witnesses where in conflict.

13 Vogelsang remembered the Adelaide meeting with a variation of emphasis (216 - 217). He stated:-

"Q. Can you tell us from your recollection as to the reason for that meeting.

A. I believe Darren McNamee had if not appointed Mr Cooke at that time he was certainly about to and it was a chance for him, or Russell Cooke, to come down and meet with the management of FESSA and also the storeman, have a look at the surroundings, the equipment that would be performing the work and the level of stock that was in the store at that time.

Q. Now, do you have a memory of what was discussed in particular during the meeting.

A. Basically it was to discuss what had happened previously at FESSA with regard to servicing the country regions, the problems that we'd experienced and we'd also discussed that that was the reason that Mr Cooke was required to come on underneath Darren McNamee of Port Augusta Fire Equipment Services.

A. The problems that we'd faced previously were - having several contractors in that area it was necessary to copy everything and send it to three or four different places. That proved unreasonable. And in keeping track of the technicians working in the country area, it would be made much easier by having them come under the umbrella of one person. And we looked to do that in the north region and also in the South-East.

Q. Yes. Now, at page 78 of that trial book you refer to problems that you'd faced with Mr Bohrnsen.

A. He was the previous contractor for the Whyalla area and he was then taken on under the wing of Mr McNamee.

A. It was work performance and we had discussed the options of terminating his employment and that's when Mr McNamee broached the subject of him coming on underneath Port Augusta Fire Equipment Services.

Q. Did you discuss the terms of the engagement with Mr Cooke.

A. They were discussed that he would be required to come on as an employee of Darren McNamee, Port Augusta Fire Equipment Services and not of FESSA."

14 It is important in examining this evidence to distinguish the subjective and objective parts of the testimony. Vogelsang continued describing his understanding and, in particular (218-219):-

"Q. If FESSA had been dissatisfied with the work or performance of Mr Cooke, after he commenced working with Mr McNamee, what would FESSA have done about that.

A. We would have directed those talks through Darren McNamee of Port Augusta Fire Equipment Services."

The circumstances of the work done by the worker in the Pitjantjatjara Lands is at odds with this claim of dealings with the worker only through McNamee. Also I do not accept the claim that the worker was explicitly told he was employed by McNamee, not FESSA. That is a reconstruction to suit interest.

15 Under cross-examination Vogelsang gave some indication to the level of subjective assumption in his understanding (220):-

"Q. When Mr McNamee gave evidence, he told this tribunal that as far as he was concerned the technicians had been engaged by FESSA but he was coordinating the work that FESSA wanted them to do and was making sure they had the requisite work and equipment.

Q. Was anything done or said to indicate to Mr McNamee that the technicians were, in effect, engaged by FESSA but he was to coordinate them.

A. Not to my memory. Any of those discussions would have taken place with Tony Park, the CEO.

Q. So you simply had an understanding of what was happening but you weren't involved in any ---

16 Regarding the trip to Adelaide, Vogelsang conceded it had other aspects of importance to FESSA than those he initially claimed (223 - 224):-

"Q. Is the reason that Mr McNamee brought down to Adelaide to speak to people at FESSA, Mr Cooke and others, that FESSA wanted to have a direct hands on control of those who were doing the work.

Q. Well, what did it matter then who Mr McNamee was engaging, if he was responsible for it.

A. Basically, as I stated before, if the person that was selected looked like a bikie sort of type, then we would say to Mr McNamee, `Is this the type of person that you want representing FESSA and yourself out amongst the customer base.'

Q. You were concerned about the fact that the technicians were all under the umbrella of FESSA.

A. They were all representing FESSA. They were all in FESSA uniform driving a FESSA van.

Q. And if a technician said, `No, I'm not going to wear the uniform,' that wasn't going to work.

17 The worker was told by McNamee that he had to work 40 hours per week (AB 46). Whether it was also said by Park or Vogelsang is unclear, but it was required by FESSA (18, 66). If he worked beyond the 40 hours he would be paid accordingly (22). He would submit details of his hours and the rate of pay claimed each fortnight (AB 102). This method was advised by McNamee (24). McNamee would send this data on to FESSA (AB 111). FESSA would pay McNamee in accordance with it.

18 The worker would only ever charge for his personal hours even if he was working with other technicians (29). There was some flexibility permitted in the hours worked in any given week so long as the minimum requirement of 40 hours was met (47). But the worker was forbidden to assign the work. In other words he had to perform the duties personally (48). His statements to that effect were not challenged in cross-examination. Moreover any suggestion that he could assign would be completely at odds with the reason for FESSA checking him out in Adelaide before he commenced duties.

19 The rate of pay was $16.00 per hour up to 150 k.m. radius from Whyalla and $22.00 per hour outside that radius (AB 46). This rate was confirmed at the Adelaide meeting (17). He understood the increased rate outside a 150 km radius compensated for out of pocket expenses (23).

20 The rate was set by FESSA (101). McNamee was paid $25.00 an hour for being the regional coordinator (124). Mr Pavan, the Commercial Manager for FESSA at the time, expressed surprise that the worker was paid $16.00 an hour, the same amount as FESSA passed to McNamee (195). That surprise is hard to credit given the invoices submitted by McNamee to FESSA (viz 111). Moreover Mr Pavan initially stated he did not know how the rates were set (195). His ability in this regard improved during his time in the witness box. He stated (203 - 204):-

"Q. Do you have any knowledge as to how those rates were initially struck.

A. Yes. When I looked at the contract, I went to see Tony Park about it and we had a discussion about it, and basically it was based on our enterprise bargaining agreement. Fire Equipment Services South Australia had an enterprise bargaining agreement with its employees, and the rate for a level 3 tech or an increment 3 tech was about $12.73 an hour. I can't remember exactly what it is. That was the rate.

A. 12.73. I think it equates to about 26 or 27 thousand dollars. I'm not exactly - I can't remember exactly. That was the rate that we were paying our employees in the city and, through negotiations with Darren McNamee and Tony Park, they arrived at a figure of $16 for the people who worked in his area. They came up with a premium for the $22/hour rate, which is approximately $6 - it was around about a 30 per cent premium, it was decided, for going out in the remote areas a bit. It's a bit harder work; it's a bit tougher sometimes; they might have to actually sort of rough it one night. So they agreed that $22 an hour would be that, and then for the coordinator they later on agreed to a higher rate of 25. ..."

21 The suggestion by Pavan of a remote area allowance is only part of an acceptable explanation. The need to account relatively for the absence of sick leave, annual leave, superannuation and the like might well be another rationalisation to account for the differential of $3.00. It is evident that the rate was comparable with the rate paid under the enterprise bargaining agreement to employees.

22 Vogelsang confirmed that the $25.00 rate struck for McNamee was because of his position as Regional Coordinator (218). It was because of the responsibility inherent in his place within FESSA's overall operation. Moreover it explains why McNamee took no money from the amounts allocated by FESSA to the technicians. It confirms McNamee's testimony (101).

23 The engagement of the worker was labour only (94). FESSA provided a Toyota Hilux vehicle and all expenses associated with it. FESSA also provided government number plates on that vehicle (19, 23). The vehicle bore the FESSA logo including the representation of the State coat of arms. FESSA supplied uniformed clothes to work in and the basic tools needed, though the worker chose to supplement these with some he purchased himself (22). The worker was also supplied by FESSA with fire blankets and other items to sell to customers. He was never required to purchase that stock by FESSA.

24 Exhibits A1 and A2 are reproduced. They speak for themselves. I note the use of the State emblem and presume the regular procedures were involved in its usage: see Unauthorised Documents Act 1916-1988.

The second respondent's witnesses made it plain that it wished the public to believe that dealing with the worker was the same as dealing with the Metropolitan Fire Service. Pavan described it as "a marketing tool". FESSA had no concern if people understood the worker, and in fact McNamee, were employees (198). He stated (199):-

"Q. And you did say you didn't want people to know the arrangement between you and any individual. Why was that.

A. Well, maybe that's not quite the right way of putting it. What we didn't want is for - the idea was we didn't want people being - or we didn't want question marks being raised about whether somebody was a contractor or an employee.

A. Sometimes it is a perception in the marketplace that if somebody is subcontracted or that they're not actually part of the organisation, that they're not going to do the same job as, if you like, the core of the organisation."

26 This representation of the worker as a member of FESSA was deliberate (201). The Fire Brigade is a trusted image (201, 210). The situation was described by Vogelsang as follows (231):-

"Q. And did you and Mr Park talk to them about the ethos of the business; the way that you wanted to have a particular image and style.

A. Yes, it was certainly discussed that we had previously been part of the Metropolitan Fire Service and that everybody who was out there was required to portray that."

27 The worker registered a business name, "Whyalla Fire Equipment Services". He says he was told to do so by McNamee (18) and it was a requirement for payment. McNamee assisted with the filling out of the necessary forms (AB 154). McNamee says the issue of tax minimisation was first raised by the worker (93). McNamee's reply was only a recommendation (106) and singularly to minimise tax. But McNamee paid the $100.00 to have the business registered (110). From the documentation in the trial book it seems it was employed as if one business was dealing with another business irrespective of the opposite representation being conveyed to the public. In Kammerman's case it was Tony Park who suggested the registration of a business name (144). However Kammerman was advised to the contrary by his accountant. In this, the case has significant similarity to the facts in Hollis v Vabu Pty Ltd (2001) HCA 44. The Court there suggested this as ineffective to prevent a contract of services.

28 I turn to considerations of the right to control. The worker testified that the right of control which was thereafter exercised lay with FESSA. It was exercised either direct or through McNamee (22, 23). The former was particularly so when the worker was required to work in the Pitjantjatjara Lands (24). He was told to do that job by Vogelsang. McNamee was bypassed (25). Vogelsang instructed him to stay in Alice Springs with the vehicle when it broke down. Vogelsang told him he was to take the four wheel drive rather than the Volkswagon on that trip (117). Vogelsang determined where he would stay (26) and supplied a satellite phone to meet occupational health and safety considerations (27).

29 While McNamee did advise urgent matters there was a general routine and the worker was able to operate fairly independently (37, 40). To a great degree things were left to his own discretion (38, 41). This was balanced by an expectation on the part of McNamee of what the worker would attend to in any given period (47). Moreover when McNamee allocated work he did so on sheets issued to him by FESSA (70). Notwithstanding this flexibility, the arrangement indicates the right to say when and where the work was to be performed, albeit not invoked frequently.

30 Another indication of control arose from the insistence as to signage of vehicle and clothes. This was part of the design to have the customers believe they were dealing with the Fire Brigade. In this there is some dichotomy in the second respondent seeking to have it both ways. That is, give the world the understanding these workers were under the control of the Fire Brigade in the normal way but wanting this holding out to mask the truth. That the right of control lay with FESSA is in my conclusion evident (216). McNamee was FESSA's man to see its wants were attended to.

31 The worker did not have PAYE taken from his earnings (AB 46). He was not paid superannuation or other benefits such as sick leave or holiday pay. His tax returns were included in evidence (AB 125, 137, 145). FESSA did not issue a group certificate to him though he requested one (48). There is no question that, true to his stated objective to minimise his tax (18, 43, 93), he has sought deductions (52). That capability was limited because FESSA gave him most of the materials and equipment he needed (55). It does not appear from the evidence of his accountant that he understood himself to be other than an employee (167). That was the way Mr Bond handled the matter (174).

32 As related above the worker understood he was covered for workers compensation. However in January 2000 he became aware the workers compensation cover was no longer acknowledged by the second respondent (58, AB 152). This led to a deal of alarm on the part of the workers and a meeting between McNamee and Park, with talk of the downing of tools in response (118). Despite that, FESSA insisted there would be no WorkCover coverage henceforth. This is of some interest as FESSA was declaring the situation regarding certain of the worker's terms and conditions, rather than McNamee. One might expect otherwise if the contract was singularly between McNamee and the worker.

33 The second respondent stressed the agreement between McNamee and FESSA as support for its case. I set out that agreement (AB 84 - 85):-

Mr Darren Cleve McNamee Trading As Port Augusta Fire

The purpose of this agreement is to allow Fire Equipment Services South Australia (FESSA) and the contractor mentioned above to continue working together while a formal contract is prepared and implemented.

Brief descriptions will be provided as to the requirements FESSA wish the contractor to fulfil in the interim. The issuance of this agreement does not imply that a formal contract will be awarded to any contractor for any period of time, either now or in the future, nor does it imply in any way that FESSA or the Government of South Australia is offering employment.

Duties of Position To undertake the duties of a FESSA, Service Technician for the purpose of servicing, installing and sales of new fire equipment.

Term of Agreement At the sole discretion of FESSA or until a formal agreement is entered into.

Remuneration The Contractor will invoice FESSA weekly at the rate of $16.00 per hour while working for FESSA, payment terms will be 14 days.

Additionally when working in FESSA designated remote areas the weekly rate will be increased to $22.00 per hour.

Conditions FESSA will expect the Contractor the (sic) perform in the region of 60-70 services per normal working day (allowing for travel).

All complete service records are to be sent to FESSA weekly (Friday PM Post) with invoice for time.

The Contractor or Contractors staff must be adequately trained and competent to carry out their duties in relation to this agreement.

All work must be carried out to Australian Standards and other relevant codes of practice.

Conflict of Interest The Contractor will agree via their own insurance to make good, any loss or damage to FESSA property or to FESSA clients property.

The Contractor must not engage in any activity in direct or indirect competition with FESSA. All sales must be processed through FESSA.

The Contractor must not promote any other business while working for FESSA.

34 McNamee understood from the terms of this agreement that he was an independent contractor (98). FESSA had refused to enter a permanent agreement with McNamee (98). However it is hard to connect the agreement between FESSA and McNamee with some necessary inference regarding the worker. Moreover there were apparently other agendas operative at the time, clouding the exact position of the second respondent (193, 194, 218, 224).

35 Following the memorandum from Park to McNamee (AB 152), McNamee advised the technicians that FESSA would not accept responsibility for work injuries. There is some debate as to when they were advised (86, 158). When Iles was informed he became disenchanted with that action (87). His connection with the operation then tailed off (82). He was present when the worker was hurt on 14 January 2000 (83). The point of this is an argument raised by the first respondent that it involved either an election or in some way an acknowledgment that the true situation was contract for services. I reject it as providing any approach to the resolution of the issue of the nature of the contract. There was nothing the worker did that could be so interpreted (61, 252).

36 Lastly I record that Iles assumed, at least after the issue over the workers compensation cover, that he was a contractor (88). Kammerman specifically chose to operate as a sole trader (143) and not as an employee. I do not know the circumstances of Venning or the other people, if any, representing Fire Equipment Services throughout South Australia.

37 Despite the order of questions posed (AB 5) I choose to approach the second question first. That is whether a contract was entered into between the worker and the second respondent. The law has generally preferred the objective indications of agreement rather than assertions by one or both of the parties that no agreement was actually intended: Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 at 429. In Reid v Zoanetti (1943) SASR 92 Mayo J expressed the position as follows (98):-

"... If two persons so conduct themselves that by their overt acts, they would reasonably lead each other to think they intended to assume reciprocal legal obligations toward each other, the fact that either or both do not so intend, will not prevent a binding contract being made, if mental reservations be not communicated; ...

Where matters dealt with are property or business, and not merely social or domestic, the presumption in the absence of some clear indication must be, where there is offer and acceptance supported by consideration, that the ensuing agreement is intended to be of a binding nature."

38 That principle said, I have also taken note of the judgment of Chesterman J in Babsari Pty Ltd v Wong [1999] QSC 326; (2000) 2 QdR 576. As there demonstrated, the subjective intentions of the parties are not always irrelevant when considering whether a contract was made. In that case the intentions did not coincide (par 41). The Judge thought a rigorous application of the objective theory would represent a resounding triumph of form over substance (par 45). He stated (par 46):-

"It is to be observed that it is the plaintiff, not one of the parties to the `agreement', who insists that the objective phenomenon of agreement has resulted in an enforceable guarantee. The parties to that contract have a different view of it. It does not seem right that legal theory can impose on parties contractual obligations (or benefits) which both, without artifice, disavow. Where the parties accept neither of them intended to contract on the terms that the other intended to constitute the bargain, a stranger cannot insist that they are bound because the mistake is not obvious to outsiders. There is no inconvenience in not holding parties to an agreement that neither intended to make."

39 In the case before me however, the circumstances are quite different. The person bringing the worker and FESSA together, namely McNamee, clearly regarded them as parties principal to the contract subsequently entered into. The meeting at Adelaide was to make that contract. FESSA was not prepared to enter the contract until it had met and approved the worker. It set the terms which the worker could accept or reject. McNamee was its northern manager or "Regional Coordinator" for those conducting its operation in the far north. That was an administrative consideration. I conclude a contract was entered into between the worker and FESSA for the worker to work as its technician in the Whyalla area at that Adelaide meeting.

40 The legal principles applicable to determining the character of the relationship, whether of services or for services, have till lately depended on the judgments in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16. Having dealt with the various indicia and expressed views as to the significance that might be attached to it, the decision confirmed the critical question. Wilson and Dawson JJ stated the matter as follows (37):-

"Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. ..."

41 That said, the judgment in Stevens v Brodribb did not weaken the significance of certain features of a contract of services. Control, or more precisely, the right of control in the nature of the ultimate authority over the person in the performance of that persons work, remains a significant indicia (per Mason J at 24, see also Bray CJ in R v Allan; Ex Parte Australian Mutual Provident Society (1977) 16 SASR 237 at 247.)

42 Another important matter is the principle that the essence of a contract of services is that it is for the supply of the work and skill of the person: see Price v Grant Industries Pty Ltd (1978) 21 ALR 388 at 393; Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389. This issue leads to the issue of assignment and its significance: see MacFarlane v Glasgow City Council [2000] UKEAT 1277_99_1705; (2001) IRLR 7. In Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 the Privy Council, having concluded the written agreement there enabled the respondent to delegate the whole of the performance of his work to one or more sub agents, concluded this power of unlimited delegation was almost conclusive against the contract being a contract of service, (at 391). That must have some significance for the converse proposition.

43 While these indicia together with the exclusivity of the services may stand out among the various indicia related above, the correct approach is that no one indicia leads to any necessary inference. What has to be considered is the "totality of the relationship", Stevens v Brodribb at 29.

44 In Lenzoot Haulage Pty Ltd v Sinclair (1986) 42 SASR 506 at 512 King CJ took as a rule the following statement by Lord Denning MR in Massey v Crown Life Insurance Co [1977] EWCA Civ 12; (1978) 1 WLR 676 in the following terms:-

"The law, as I see it, is this: if the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it ... On the other hand, if the parties relationship is ambiguous and is capable of being one or the other [ie either service or agency], then the parties can remove that ambiguity, by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them."

45 In Hollis v Vabu Pty Ltd (2001) HCA 44 the respondent conducted a business named Crisis Couriers. It had some 25 to 30 bicycle couriers and a number of other motor cycle and motor vehicle couriers. The appellant was struck by a cyclist who was unidentified save for displaying the "Crisis Courier" logo. The real issue was whether Vabu could be held accountable in the circumstances. That, in turn, involved arriving at a conclusion as to whether or not the unidentified cyclist was an employee of the respondent.

46 Several features of the engagement were noted by the Court. Vabu set the rates of remuneration of the bicycle couriers and there was no scope for negotiation of those rates. Vabu allocated the work with no scope for bidding for individual jobs and the work was allocated by a radio operator at Vabu's base. Vabu assumed all responsibility for the direction, training (if any), discipline and attire of the couriers. It provided its bicycle couriers with numerous items of equipment which remained Vabu's property. This included the only means of communication between Vabu and the bicycle couriers. The couriers were required to wear Vabu's livery at all times, partly due to Vabu's desire to advertise its services. Requirements such as insurance and deductions from pay, therefore, were imposed by Vabu without opportunity for negotiation. The bicycle couriers were in a "take it or leave it" situation.

47 Documents in evidence, originating from Vabu, set down stringent conditions operating on the couriers in the performance of the work (see par 23). No payments of annual leave or sick leave were provided and no superannuation deductions were made.

48 In the course of analysis the majority made particular reference to the description of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd [1931] HCA 53; (1931) 46 CLR 41 in the following terms (par 39):-

"[t]he work, although done at [the principal's] request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal."

49 The Court went on to link that notion with the notion of Windeyer J in Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at 217 of the distinction being "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own".

50 The Court reached the conclusion the couriers were not independent contractors, but rather employees. They were not running their own business or enterprise, nor did they have independence in the conduct of their operations. There was insignificant investment in capital and equipment by them and unique skills in operating that equipment. In particular, (par 48 onwards):-

"First, these couriers were not providing skilled labour or labour which required special qualifications. A bicycle courier is unable to make an independent career as a free-lancer or to generate any `goodwill' as a bicycle courier. The notion that the couriers somehow were running their own enterprise is intuitively unsound, and denied by the facts disclosed in the record.

Secondly, the evidence shows that the couriers had little control over the manner of performing their work. They were required to be at work by 9.00 am and were assigned in a work roster according to the order in which they signed on. If they signed on after this time, they would not necessarily work on their normal `channel'. Couriers were not able to refuse work. It was stated in Document 590 that `ANY DRIVER WHO DOES SO WILL NO LONGER WORK FOR THIS FIRM.' The evidence does not disclose whether the couriers were able to delegate any of their tasks or whether they could have worked for another courier operator in addition to Vabu during the day. It may be thought unlikely that the couriers would have been permitted by Vabu to engage in either activity.

Thirdly, the facts show that couriers were presented to the public and to those using the courier service as emanations of Vabu. They were to wear uniforms bearing Vabu's logo. Vabu stated in Document 792 that `DRIVERS SHOULD ALWAYS BE AWARE THAT THEY ARE A DIRECT REPRESENTATION OF THE COMPANY. THEIR ATTITUDE AND APPEARANCE CAN ONLY BE SEEN AS A DIRECT REFLECTION OF OUR ORGANISATION.' Certain attire (`thongs, singlets, swim shorts, torn jeans and other unclean or torn attire') was not permitted. Further, Vabu required that all couriers `should be clean shaven unless that person is bearded'.

Couriers were required to wear Vabu livery partly from Vabu's wish to advertise its business. ... Rather, the effect of Vabu's system of business was to encourage pedestrians to identify the couriers `as a part of [Vabu's] own working staff'; ..."

51 The Court then dealt with inter alia the superintendence of the couriers' finances and the fact that the claims were to be submitted within a particular time frame and in a particular form. It also pointed to the absence of any ability to bargain the rate of remuneration as might occur in genuine market conditions. Insurance was controlled by Vabu and in ways that discouraged the reporting of incidents. Leave was strictly controlled. The fact that the company provided tools and equipment that place the responsibility for repairs on the couriers merely indicated a situation of employment more favourable than not to the employer. Finally the Court said (para 57):-

"... this is not a case where there was only the right to exercise control in incidental or collateral matters. Rather, there was considerable scope for the actual exercise of control: Stevens v. Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29. Vabu's whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction of the various deliveries. The couriers had little latitude. Their work was allocated by Vabu's fleet controller. They were to deliver goods in the manner in which Vabu directed. In this way, Vabu's business involved the marshalling and direction of the labour of the couriers, whose efforts comprised the very essence of the public manifestation of Vabu's business. It was not the case that the couriers supplemented or performed part of the work undertaken by Vabu or aided from time to time; rather, as the two documents relating to work practices suggest, to its customers they were Vabu and effectively performed all of Vabu's operations in the outside world. It would be unrealistic to describe the couriers other than as employees."

52 In approaching the matter I acknowledge that conclusions are rarely hard and fast in the ultimate. There are cases where the circumstances move the pendulum more towards the employee end of the range and circumstances moving the pendulum more towards the independent contractor end. And there are those that lie mid distance between the extremes. This is well recognised in the authorities: see JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66.

53 Mr Cole has urged me to conclude that the worker was not an employee (235). But he admitted incongruities in the "organisation" Mr Pavan sought to describe and which I have discussed above (235). He submits, and I believe rightly, that McNamee's true role in the organisation was of supervision at site for FESSA (236). He pointed to the fact that McNamee took none of the wages of the technicians to himself, but merely acted as the conduit between FESSA and the technicians (240). He argued that FESSA, having been at such pains to represent the worker as its employee to the general public, should hardly now be denied success in that endeavour. Whatever else, he was not employed by McNamee (254). In all reality FESSA in charge of all relevant aspects, the supply of the van, the uniforms, the cards (Exhibits A1 and A2) and the rate of pay (256). This was taken to another stage with the worker's trip to the Pitjantjatjara Lands when, if any pretence had existed, it was then dispensed with (257).

54 Mr Lines argued against any contract of services between FESSA and Mr Cooke (260). He argued that the wearing of logos and driving FESSA vehicles did not amount to the existence of such a contract with the company owning the logo. Moreover the temporary contract FESSA had with McNamee (AB 84) made plain the relationship. McNamee's relationship with FESSA was one of independent contractor. That imposition between the worker and FESSA contradicted the contract of services (265) (but contra Hollis v Vabu).

55 In my conclusion whether this matter is approached by way of characterisation or by comparative facts and reasoning as exemplified in Hollis v Vabu the result is the same. The matter for consideration is the totality of the relationship between the parties. Upon that consideration, is this a person acting as the servant of another or on his own behalf? Is this person conducting a trade or business on his own account? The situation here does not support the latter in any plausible sense. I find the worker is employed under a contract of services with the second respondent. Therefore the issues are answered accordingly:-.

"1. Whether the applicant is a `worker' for the purposes of the Workers Rehabilitation and Compensation Act 1986 (`the Act')."

"He is a worker under the Act."

"2. If the applicant is a `worker' for the purposes of the Act was his employer at the relevant date, ie. 14 January 2000, Port Augusta Fire Equipment Services or Fire Equipment Services of South Australia?"

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with Form 11 within 14 days of the delivery of this decision and must be served on all parties.