Consideration
36 The appeal grounds and the nature of this appeal by way of a rehearing, along with the primary judge's reasons and conclusions and the competing arguments in this appeal summarised non-exhaustively above, calls for this Court to do a real review of the evidence that was before the primary judge, noting that his Honour enjoyed no advantage over this Court in that regard, given that all of the evidence and other material below was documentary. That said, in order for such an appeal to be successful, it is well-established that a finding of error is indispensable, that a mere disagreement on a finding of fact is ordinarily insufficient, but that a disagreement will suffice when only an error of law is involved: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 261 FCR 301 at [45] per Perram J, with whom Allsop CJ and Markovic J agreed.
37 In an intermediate situation, such as this case in which there is an interplay between evidence based on documents, fact finding including by assessment and inference, and the application of the facts as found to the law, a finding of error is both factually and legally evaluative in nature. That is especially so when different factors favour a conclusion one way or the other, and the judicial task lies in deciding which should prevail in the final analysis. This is readily amenable to appellate review. In this sort of situation, the nature of the appellate court's task is of the kind described by Perram J in part of [49] of Aldi Foods Pty Ltd v Moroccanoil Israel Ltd:
When an appellate court comes to review such conclusions it must be guided not by whether it disagrees with the finding (which would be decisive were a question of law involved) but by whether it detects error in the finding. On the one hand, error may appear syllogistically where it is apparent that the conclusion which has been reached has involved some false step; for example, where some relevant matter has been overlooked or some extraneous consideration taken into account which ought not to have been. But error, on the other hand, may also appear without any such explicitly erroneous reasoning. The result may be such as simply to bespeak error. Allsop J said in such cases an error may be manifest where the appellate court has a sufficiently clear difference of opinion: Branir [Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 (Allsop J, Drummond and Mansfield JJ agreeing)] at [29].
38 In this case, the question of whether or not the primary judge erred turns on the assessment that his Honour made of the competing indicia, and the conclusion he reached in deciding which should prevail. That process has been assisted by the competing arguments by opposing counsel summarised above, but hindered to an extent by the trial being conducted on a pre-Personnel Contracting basis, with the evidence being evaluated by his Honour on a post-Personnel Contracting basis, including by reference to closing submissions. The further submissions post-Personnel Contracting came sometime later. That sequence of events created an inherently difficult situation for his Honour, increasing the risk of error.
39 Applying the law as stated in Personnel Contracting, unclouded by the manner in which the trial was conducted, we have reached a different conclusion.
40 In our opinion, the primary judge gave too much weight to factors emerging from the way the contract was performed that evidenced only a limited degree of exercise of control, rather than the existence of a contractual right of control, such as the periodic requirement to attend meetings.
41 At the same time, we consider that the primary judge gave insufficient weight to the significance of the almost complete freedom that Mr Bennett had by reason of the contractual arrangements themselves. Mr Bennett was not required to devote all his time and activities during working hours to the performance of his duties for EFEX. Nor was he required to keep a record, or provide EFEX with a report, of the hours he worked. He was not given directions about how to carry out his tasks. He had the freedom to decide when and where he would meet clients or prospective clients. He was not required to attend the office except for meetings with Mr Brogan or South Australian branch meetings, which took place fortnightly. Nor was he required to seek approval from EFEX or Mr Brogan to attend private appointments. Thus, he could and did work out at a gym during business hours and attend university as he wished without seeking permission to do so. Like Mr Brogan, he had "free reign" about how he achieved sales. EFEX was only concerned with results, that is, that he met his sales targets.
42 Secondly, the EFEX business/own business evidence dichotomy can now be seen to be more slender when confined to contractual analysis, at best cutting both ways on that more confined analysis. Presenting as a member of an organisation to clients or customers in a case such as this carried some understandable weight, viewed through the prism of the now proscribed multifactorial analysis, but says little, let alone anything decisive, about the nature of the legal relationship in place. An independent contractor with even the clearest of written contracts to that effect may still present as a representative of the organisation by way of business cards, uniform, email address and job title, especially in any kind of services role. That much is now apparent in a range of service occupations of the kind identified by Gordon J in Personnel Contracting at [181].
43 The practical preclusion of the performance of other work as a matter of available time is also often going to be intractably neutral when it comes to the more limited ascertainment of contractual rights and obligations than it had under a multifactorial analysis not confined to the terms of the contract. That is especially so when there was no contractual prohibition on subcontracting of tasks, in particular those of an administrative or otherwise rote or routine nature. As the High Court reminds us in Jamsek, an "expectation" that a person direct the bulk of their time to work for a particular customer, and a practical inability to perform work for others given that time constraint, might say little more than the fact that the customer has high demands for such services: see Jamsek at [54]-[55].
44 While Mr Bennett made no significant contribution of capital or assets and accrued no saleable rights or assets, that is far from decisive in a sales job of a kind in which that is inherently unlikely. More tellingly, Mr Bennett provided his own vehicle and mobile telephone, being essential tools of trade for any person in a sales role, with the associated expenses being paid out of trust funds and no contractual right to reimbursement from, or contribution, by EFEX. We accept that such matters will not always be a decisive indication that a person is an independent contractor (see Hollis v Vabu [2001] HCA 44; 207 CLR 21 at [22], [56]; Personnel Contracting at [2]). As Mr Bennett properly conceded at trial, however, they weighed in favour of a finding that he was an independent contractor: J[124]. The same reasoning applies to Mr Bennett paying for client entertainment without any contractual right to seek any reimbursement.
45 Finally, perhaps the most important source of error concerned the remuneration and taxation arrangements. Under the prior multifactorial analysis this often assumed little weight, or its significance was diminished when balanced against other considerations of a less inherently contractual nature, especially if only implemented as an afterthought to reduce tax rather than a reflection on the contractual relationship. Here, the reasoning in Tattsbet Ltd v Morrow at [70] is more to the point than the reasoning in Ace Insurance Limited v Trifunovski at [37]. That is because, in the present case, the taxation arrangements were a consequence of the terms of the contract from the outset. They formed part of the earliest pre-contractual discussions. They went directly to contract formation, and can properly be seen to be a design feature of that contract as a core term or condition, albeit not reduced to writing. They were not just manifestations of opinion, nor set up later for incidental financial advantage, such as by some kind of artificial or at least questionable income splitting. At the very outset, before Mr Bennett commenced work for EFEX, he set up a trust for the very purpose of the impending commencement of work under the contract with EFEX, so that payment could be made in that way for the services he performed.
46 The inescapable conclusion is that Mr Bennett held the fruits of the contract with EFEX in his capacity as trustee of the Bennett Enterprises Trust, benefited from the tax arrangements attendant on that fact, and this was known and agreed to by EFEX. Indeed, the contract was offered on that express basis. Mr Bennett used the trust structure to hold income from EFEX, pay his business costs and take advantage of certain tax benefits in ways broadly analogous to the use of partnerships by independent contractors in Jamsek, where they were held to indicate that the impugned workers were conducting their own business: see Jamsek at [63].
47 Mr Bennett's submission that regard to the trust structure and tax arrangements must follow characterisation of the relationship is misplaced in a context where these were foundational terms of the contract. For the reasons already discussed, the establishment of the trust was not just an expression of the parties' opinion about Mr Bennett's relationship with EFEX. It was not really an opinion at all. It was a manifestation of the very nature of the contract that was agreed upon and entered into. The post-contractual conduct of issuing invoices in the name of the trust, of receiving payment into the trust bank account, and of paying expenses out of that bank account was conduct that was consistent with the nature of the contract itself as one of principal and independent contractor.
48 The taxation and remuneration arrangements alone were a significant basis for displacing the indicia of an employment contract. The limited right of contractual control exercised, as opposed to being shown to be contractually bestowed, did not provide any significant support for a contrary conclusion. The correct characterisation is that the relationship between the parties was that of principal and an independent contractor, not employer and employee. Only the clearest of written contracts to the contrary could readily have displaced that.